This paper is mainly a commentary on David Friedman‘s book The Machinery of Freedom.  Where it expands into comments on Anarcho-Capitalism (one name for the social system Mr.Friedman expounds) it is still based wholly on his book. I have heard a talk given by an Anarcho-Capitalist to the Walsby Society, but my recollections of that are covered by The Machinery of Freedom.
The theme of the book is that many of the functions now performed by government – law, social security, education, police, national defence and the provision and maintenance of roads, for example – could be more effectively and more economically performed by private enterprise.
One’s first reaction is that this is nonsense. One expects the argument to collapse at a touch of criticism. But it is a lot more solid than at first appears. I will not repeat Mr. Friedman’s defence of any of his propositions – this paper is intended to induce the reader to study Mr. Friedman’s book for himself – but I give the reader my assurance that, met on their own ground and taken individually, his arguments are surprisingly difficult to refute. I am not sure that, taken in this way, I am able to refute any of them.
Mr. Friedman, however, does not come forth as a philosopher and, accordingly, arguments difficult to refute are not all we are entitled to expect from him. He comes forward as the proponent of a social system, and we are therefore entitled to require that the assumptions on which his arguments are based shall be consistent with what is known of human societal behaviour. If his system requires that men behave in a manner of which the evidence shows them to be incapable, then, however irrefutable his individual arguments, however consistent, elegant, sensible, efficient, economic and desirable his system, his efforts are misdirected.
It must be said at once that to anybody accustomed to grappling with serious analyses of society – Marxism for example – The Machinery of Freedom is a featherweight. Take its description of the employer-employee relationship under existing capitalism:
The vast majority of income is the result of human action. It is created by identifiable groups of people working together under agreements that specify how this joint product is to be divided. (p. vx)
Mr. Friedman does not accept the Marxist viewpoint; indeed, his account of that viewpoint is so bizarre that it is not surprising he rejects it:
Marx argued as follows… The capitalist who, having contributed nothing to production, takes part of the product is obviously stealing from – exploiting – the real producers, the workers. (p. 6l)
This is, at best, over-simplification of an argument which, although not central, is still relevant to Mr. Friedman’s theme. It inclines the reader to treat with reserve Mr. Friedman’s account of other arguments, opposed to his own, with which the reader himself may be unfamiliar. In order to do justice to Mr. Friedman’s arguments one must be prepared to overlook a tendency to sacrifice seriousness for the sake of vividnesss.
For members of the Walsby Society the first concern (the first, not the only concern), when faced with an unfamiliar political position, is to locate it on the ideological scale. I will try to locate Anarcho-Capitalism, with reasons, before going on to a more direct consideration of Mr. Friedman’s main argument.
When the position in question is one which lays great stress on freedom then the problem is whether it associates with the ideology which appears in politics as Liberalism or with that which appears in politics as Anarchism. Its description of itself as one or the other is not necessarily decisive – Anarcho-Capitalism is described, by its proponents, as both. Mr.Friedman associates himself with Anarchism on p. 204 and says “I am an Adam Smith Liberal” on p. 204. The two positions are sufficiently far apart on the ideological scale for their organised political expressions to be quite distinct, but there are superficial similarities (such as frequent use by both of the words “freedom,” “liberty,” individual”) which have the result that a personal, idiosyncratic, expression of one may be mistaken for an expression of the other. (It is a point on which I, having once described Bertrand Russell as an Anarchist, have particular need to be careful).
This is not the place for a discussion on Anarchism or Liberalism. All we need is some means of distinguishing them which will provide ground for allocating The Machinery of Freedom to one position or the other, and for this purpose their familiar dominant ideological features are adequate. Liberalism displays political collectivism and economic individualism. Anarchism displays the converse features, political individualism and economic collectivism.
David Friedman’s book appears, at first sight, to be a treatise on the desirability and efficiency of economic individualism and thus to be associated not with Anarchism but with Liberalism:
The central idea of libertarianism is that people should be permitted to run their own lives as they wish. We totally reject the idea that people must be forcibly protected from themselves. A libertarian society would have no laws against drugs, gambling, pornography – and no compulsory seat belts in cars. We also reject the idea that people have an enforceable claim on others, for anything more than being left alone. A libertarian society would have no welfare, no Social Security system. People who wished to aid others would do so voluntarily through private charity, instead of using money collected by force from the taxpayers. People who wished to provide for their old age would do so through private insurance. (p.xiii)
This seems explicit enough. Unrestricted competition and devil take the hindmost. No public safety-nets. Work, beg, or die. It seems to be pure economic individualism. But one has learnt to be suspicious of anything, in societal affairs, which appears to be purely this, that or the other, and as one reads on, about the way the unrestricted competition of Anarcho-Capitalism would operate, a curious feature emerges. There are no losers. Everybody has always access to the means of production and an income sufficient to buy food, clothing, medical care, housing, insurance and the services of a security firm. There are no unemployables; no children begging in the streets; nobody starving. One begins to wonder whether the unrestricted competition, with no public safety-nets, that does not produce these effects, is so unrestricted after all.
Mr. Friedman is concerned more with consumption that production. He does not have a great deal to say about the way his people obtain their incomes. One is rather left to assume, both from the name of the system, “Anarcho-Capitalism,” (or “Radical Capitalism”), and the constant, drumming insistence that the overwhelming need is to get rid of government interference, that the productive system will be organised (apart from the elimination of government interference) much as it is today. But then there appears, almost as a casual aside:
Instead of firms, the normal form of organisation would be workers’ co-operatives, controlled by their workers (p.133)
I shall have more to say later about this statement and its immediate context. For the moment, the point is that a productive system, in which “the normal form of organisation” is workers’ co-operatives, is not a competitive system in the same sense as the capitalism we have known. A necessary feature of capitalism is competition between workers for access to the means of production. Eliminate that, ensure, by whatever means, that workers are not obliged to find a purchaser for their labour-power, and the system you have is no longer one of capitalist competition. I remarked earlier that Mr. Friedman presents Anarcho-Capitalism as a competitive system in which there are no losers. We now see that not only are there no individual losers, there is no class of losers. There is no proletariat, no working-class which, being excluded from ownership of the-means of production, is obliged to sell its labour-power. All who wish are able to set up, or to join, workers’ co-operatives controlled by their workers, and to operate them successfully. Such a system may well be a great improvement on capitalism but it is not, in the sense that capitalism is, a competitive system. It is a co-operative system. It displays not economic individualism but economic collectivism, and it separates Anarcho-Capitalism from Liberalism and associates it with Anarchism.
Mr. Friedman agrees that the system which he describes as capitalist and competitive (and which for the sake of his argument needs to be accepted as such) would be described by some in other terms, He says a society based on workers’ co-operatives is:
a society which some socialists would call socialist but which I would regard as both capitalist and free (p. 133)
He introduces his workers’ co-operatives without flourish or fanfare, Indeed, he hardly introduces them at all; they just appear. They “would be” the normal form of organisation. The society which some would call socialist “could exist” (p. 133). Mr. Friedman shows no awareness that he is here blandly assuming the establishment of something for which the Left have been struggling for a century or more.
I said earlier that if Mr. Friedman’s work is based on assumptions concerning human behaviour which the evidence shows to be invalid then his efforts are misdirected. Mr. Friedman assumes human societal behaviour to be such that a collectivist economic system, in the form of workers’ co-operatives controlled by their workers, would be generally accepted in a society in which there existed no authoritarian government to compel acceptance. The history of the Left-wing movement shows this assumption to be invalid; economic collectivism is acceptable only to a minority of intellectuals. As Harold Walsby puts it:
Despite the fact that the socialist, communist and anarchist theories were formulated and disseminated in their modern forms nearly a century ago… despite this, in no country anywhere in the world, so far, has there ever been a government (elected on the basis of universal suffrage and free choice of political party – the multi-party system) with a mandate for carrying out the fundamental principles of any of these theories (Domain of Ideologies, p. 26).
Basing myself on the results of ideological study I am driven to contradict Mr. Friedman. In a non-authoritarian society any economically collectivist system, such as workers’ co-operatives controlled by their workers, would not be the normal form of organisation, Mr. Friedman’s assumptions concerning human societal behaviour are invalid, and his efforts misdirected. Misdirected, not wasted. They do, as we shall see, serve a societal function, but not the function Mr. Friedman believes himself to be performing.
The introduction of workers’ co-operatives, however, is something on which Mr. Friedman does not lay great stress. The ideologist knows that it is precisely in these things which are taken for granted, regarded as not requiring demonstration, that the significant features of an argument are often found, but the Anarcho-Capitalist might regard an emphasis upon this as unfair criticism. Let us turn to something Mr. Friedman does emphasise.
One of his prominent themes is that the functions now performed by the police would be more economically and more efficiently performed by private security firms (and he successfully refutes the arguments which leap to mind showing this to be impossible). He gives the annual cost per head of police service in America as forty dollars and says, reasonably enough, that it would be good business for everybody, even the poorest, to pay that amount or more for efficient protection from a private agency. He does not show that a private agency could provide efficient protection for this sort of figure, but let that pass; our concern is with his description of the way the system would work.
One obvious test of such a system is a dispute between subscribers to two agencies. To this situation there are two types of solution, the competitive and the co-operative, or the individualist and the collectivist. In the former a decision will be reached on the basis of which side can dispose of the greater power of one sort or another, military, economic, political, moral or whatever; the parties will, in whatever manner, fight it out between themselves. After the bold words about unrestricted competition it is this sort of solution one would expect Mr. Friedman to envisage, but no. The solution he envisages is the co-operative one. It is assumed that each protection agency will have found it good business to undertake, in advance, to submit such cases to arbitration. Mr. Friedman answers many of the obvious difficulties here, and I am prepared to assume he could answer them all, that he could prove the system workable. The point, however, the point of whose significance Mr. Friedman is unaware, is that a system which works in this way is not displaying economic and competition, but economic collectivism and co-operation. The arbitrator represents the common interest, the collectivity, and it is the his word, not the result of competition concerned, that is decisive. (This voluntary agreement to accept arbitration is something different from the present situation where all are compelled to accept the decision of a court).
When one examines the “competition” of Anarcho-Capitalism it melts in the hand. Beneath the surface appearances the system is not one of competitive economic individualism but one of co-operative economic collectivism. It is indeed, as Mr. Friedman says, “a society which some socialists would call socialist.”
Mr. Friedman’s ground for opposing the economic operations of government, as they are the governmental method that government appears the collectivity but as carried on today, is twofold. One is that is inefficient and uneconomical. The other is in the economic field not as representing, a societal individual operating to the benefit of some organisations, groups or classes against the collectivity. Mr. Friedman is on the side of the collectivity.
Mr. Friedman speaks approvingly of “men achieving their ends by voluntary association, co-operation, through mutual exchange in a free society.” (p. 116)
Anarcho-Capitalism, then, is not, as Mr. Friedman sometimes (but not always) presents it, a system based economically on competitive individualism. It is a system of economic co-operation and collectivism.
We were also to enquire whether Anarcho-Capitalism was, politically, collectivist or individualist. The answer here is self-evident. Mr. Friedman presents reasoned arguments and expects each reader to examine them critically and make up his own mind about them. He assumes that in the political field, the field of ideas, people behave individually and not collectively. He assumes they think for themselves, do not accept authorities or follow leaders.
Anarcho-Capitalism locates ideologically with Anarchism and not, in spite of Mr. Friedman’s claims, with Liberalism.
For those acquainted with ideological theory this classification says all that need be said about the possibility of Anarcho-Capitalism being established as a system of society. It will, like Anarchism, remain confined to a minority of intellectuals, a minority small enough for its mere numbers to exercise no considerable societal influence. Those larger numbers who may be attracted by the superficial association with quickly disappear when they come to recognise Liberalism will what it really is they are handling – or, alternatively, they may practically establish the Liberalism and suppress the Anarchism. Oil and water do not stay mixed for long.
To present Anarcho-Capltalism as a system which can be supported by orthodox Liberals is to introduce confusion. I am not wholly certain that Mr. Friedman is entirely free of a desire to preserve such confusion and to derive benefit from it for Anarcho-Capitalism. In the Introduction to his book (and repeated on the back cover) we find:
… the institutions of private property are the machinery of freedom…
The phrase “the institutions of private property” carries a specific meaning familiar to all interested in social theory. It is a meaning which does not include workers‘ co-operatives controlled by their members as the normal form of organisation. Private property in the means of production is one principle on which a social system may be based workers’ co-operatives controlled by their workers is another such principle. One of these principles is supported by Liberals and the other by Anarchists. Mr. Friedman seems to be trying to get one foot in each camp, and they are so far apart that he is likely to injure himself in the attempt.
I now turn from ideological considerations toward a direct consideration of the sort of society that would result from adoption of Mr. Friedman‘s proposals. The main theme of The Machinery of Freedom (and, I understand, of the Libertarian Anarchist movement) is that the operations of government are harmful to society.
The functions now performed by government, it is maintained, can be more efficiently performed by private enterprise:
Government exists, ultimately, because most people believe that it performs necessary functions, the most fundamental of all these functions is protection against violence and disorder. (p. 218)
This is not so. The provision of protection against violence and disorder is a function of government, but it is not the “most fundamental” function.” It exists, so to speak, on the same level as other functions such as education and national defence. The most fundamental function of government is none of these. It is the making of decisions. The other activities of government amount to enforcement of the decisions it has made. They ensure that its decisions are made in fact, in reality, in society, and not merely in words or in theory, The provision of protection against violence and disorder is not a fundamental function but a consequential one; it follows from the decision that violence and disorder, above a certain level, shall not be permitted.
Libertarian Anarchism would have each of us make his own decisions in spheres where that function is now performed by governments. Mr. Friedman regards this as a right of which we are now deprived and which his system would restore to us. It may be a right, but it is not only that. It is also an obligation, and an onerous one, of which we are at present relieved. Under Anarcho-Capitalism there are to be no public polices. Each of us is to choose the private protection agency that suits him best. Mr. Friedman points out that such agencies can operate in many different ways. One may use only passive defences – locks and alarms. Another may take no preventive measures but concentrate upon establishing the reputation that it ensures punishment for those who harm its clients. There is a large number of possible methods. It is for me to choose between them.
In order to choose responsibly I must make a study of protection agencies, I must study their records of success and failure and compare these with their respective charges, I must also study crime, I must know what are the probabilities that a person in my situation, familial, societal, economic, geographical, will suffer from this or that type of crime, in order to select the appropriate defence, and these studies, of protection agencies and of crime, are not a once-for-all requirement, they are a continuing necessity. Crimes and criminals change, and so do protection agencies. Mr. Friedman says:
I must spend time and money determining which protection agency will best serve me – but having decided what I want, I get what I pay for. (p. 216)
Do I? Mr. Friedman has said nothing of any arrangements to prevent protection agencies changing hands, and the successor reducing standards and costs to cash in on the reputation of his predecessor. His implication that this is a once-for-all decision is another instance of his tendency toward oversimplification.
In case it is felt that I am making an unnecessary fuss over this issue, let me make it clear what would hang on my choice between protection agencies. I might come home to find not only my valuables stolen, but my wife raped and my children murdered. This will be entirely my responsibility, for it was I who selected the protection agency which proved unable to prevent this particular calamity.
To judge from Mr. Friedman’s answers to other objections, his reply here would be that I am more likely to suffer in this way under government protection than under even badly chosen private protection. This may be so. But government, in compelling me to accept the public security services, gives me something which freely-chosen defences, however effective, can never offer. It gives me freedom from personal responsibility for events outside my control. If, under the present system, the worst does happen to my house and my family, I shall not spend the rest of my life with the knowledge that it was I alone who set up the situation which produced this result.
To take another example, Mr. Friedman suggests that under Anarcho-Capitalism each of us would be able to choose the code of laws under which he was to live. I assure the reader that his explanations make such a system seem far more plausible and practical than it appears at first sight; let us accept that it would work. I am to choose the code of laws, and the system of penalties, under which I, and those coming in contact with me (let us ignore the difficulties here) are to live.
This presents me with the same problems as did the choice between protection agencies, but in a more general form. Firstly the difficulty of making a rational choice. Let us suppose (there is nothing in The Machinery of Freedom against the supposition), that one of the systems of law offered me is that ruling in Britain today. In order to make a rational choice I must know what I am choosing or rejecting; I must know British law. Where shall I begin my studies? With the earliest Statute Law now in force? It may, for all I know, be one passed under Edward III, so I shall need to learn Latin – or is it Norman French? Or shall I begin in more recent times, with the last two hundred volumes of “Law Reports in all the Courts”? Without starting in some such fashion and continuing until I know all of British law I cannot rationally decide whether it is or is not the system to choose. And I must, of course, also make a similar study of any other systems offered me before I am qualified to choose between them.
Let us not be difficult. Let us assume that by some miracle of compression two systems of law have been produced, each of which covers everything a system of laws needs to cover, and each of which is so short and simple that I can know and understand its I am able to make a rational choice between them. One is permissive, the other repressive. Am I, having chosen the repressive system, to see my son rotting in jail for a minor offence and to know that I alone chose the system of law that put him there? Or am I, having chosen the permissive system, to live out my life as a cripple, after attack by a thug who would, had I chosen repressive law, have been in jail at the time for a previous crime?
I have spoken only of security and law, but similar consequences, no less unacceptable, would follow from adoption of Mr. Friedman’s suggestions for education and medicine. I have referred repeatedly to his oversimplifications. The one which dwarfs all others is his assumption that each of us is capable of making rational choices between different systems of law, medicine, education and security. He shows no awareness of the immense amount of relevant knowledge available in each of these fields master of which would be necessary for a rational choice. Even in pre-Renaissance society it was only the exceptional person who could be fully acquainted with all of these fields, but Mr. Friedman placidly assumes that each one of us is capable of this achievement today. At times, when he assumes ready availability of all the information needed to make the rational decisions which Anarcho-Capitalism would require of us, he seems to assume we live in a village society. Only there might his assumption he justified, that reliable information on the character,reliability and efficiency of each person and organisation is readily available to all.
Quite often, when some suggestion of societal reform is put forward, one feels compelled to reply that it is doubtless very desirable and very sensible, but it cannot work because of the limitations which other people suffer from; “they” will not understand it, or will not be able to operate it. That is not the case here. It is I myself who do not want the responsibility for which, under Anarcho-Capitalism, would be loaded all the decisions onto my personal, private shoulders. I am not, and never shall be, competent to make a rational decision on all of the enormous range of problems which arise in societal life. (And, this being so, I am not competent either to choose among those who may offer to decide various groups of problems for me.)
The question arises: How, then, do we make the decisions which, even under the present system, we do make for ourselves? Broadly speaking, we use two methods. One is that of rational decision; there are fields in which each of us, as they say, “knows what he is doing” and is qualified to make a responsible choice. But there is also another class of decisions, those which are not made of our own direct knowledge but which are based, partially or wholly, on what we are told, on assurances given us which we are unable to test or check. In many of our decision we have no option but to defer to the specialist, the expert, and this would be no less so under Anarcho-Capitalism. To free us of government is not to render us universal savants. At present many of our decisions are made for us, willy-nilly, by government; the limitations of our own knowledge is irrelevant. Under Anarcho-Capitalism the range of problems for our personal decision would be greatly increased, but there is no reason to expect that our knowledge would be effectively greater. Then, as now, many of our decisions would have to be made for us by others; no longer by government, but by the experts and specialists in the various fields.
What difference, then, would Anarcho-Capitalism make? It would impose on each of us the duty, the responsibility and the burden of choosing, as each problem arose, a specialist or expert to whom to submit. Each of us would know, as he chose, that if his choice proved disastrous the responsibility was his alone. He would know, also, that his choice could not be a rational one, for if I am not fully informed on a subject – and therefore competent to I make my own decisions – then I am not qualified to make a rational choice between those who claim to be experts.
Mr. Friedman regards government as a burden we carry, and it undoubtedly is so; it is, even, a burden which can on occasion become intolerable, so that we must reject it whatever the cost. But government is, also, the second greatest invention ever made by man, second only to society. Life under government is the concrete form of the paradox of freedom, that it lies in the acceptance of necessity. By resigning to government the task of making the interminable sequence of decisions involved in the functioning of the societal machinery I free myself for living. Under Anarcho-Capitalism I would be free to make my own decisions, to decide for myself all issues of security, law, medicine and education as they affected myself. It is, at first sight, an attractive situation, but only until I begin seriously to envisage what is involved in trying to make a rational decision, on my own responsibility and accepting the consequences of it, on every problem which may affect me in all these field so when I begin to examine the “freedom,” which Libertarian Anarchism offers me it is quickly seen to be no freedom but an intolerable bondage to an unending sequence of problems. Anarcho-Capitalism would have each of us, in the name of freedom, stretched on the rack of decision.
When all this has been said, one is left with the fact that The Machinery of Freedom is a readable, intriguing and provocative book (and I personally will forgive Mr. Friedman much for his verses “Paranoia” on pages 271-2). One cannot escape a feeling that the viewpoint it expresses is in some way valid. I said earlier that Mr. Friedman’s efforts were misdirected but not wasted, that his arguments performed a function even if it was not what he thought it was, as a prescription for a new society the book does not stand up, but read as a criticism of our present society it is, to use no stronger expression, a valuable kick in the pants. After reading it one can no longer so easily take present arrangements for granted, what David Friedman has done is to perform, with uncommon vivacity, the ideological task of the Anarchist, the criticism of existing society.
 The Machinery of Freedom, Guide to a Radical Capitalism by David Friedman. Harper Colophon Edition. New York 1973. Obtainable from Radical Libertarian Alliance Book Service, [address] At the end of 1975 the price was £1.25 plus 13p postage, Paperback, 239 pages.