Bryan Caplan — What Is Anarcho-Capitalism?

1. 1. Schools of Thought in Classical Liberalism, Part 6: Anarcho-Capitalism (video): Dr. Nigel Ashford explains the philosophies of two anarcho-capitalists, Murray Rothbard and David Friedman. 
   2. How Commerce Protects Us — Deirdre McCloskey — Learn Liberty (videos): Professor Deirdre McCloskey argues that consumer protection agencies are unnecessary because businesses are incentivized to create safe products. 
   3. You Are An Anarchist. The Question Is: How Often? (FEE article): Professor Ben Powell argues that some governments are so brutal, that almost everyone would agree that it would be better to have no government. 

Bryan Caplan: Anarcho-Capitalism is the idea that the so-called minimal functions of the state are actually more than you really need. It is not only imaginable, but it really could work to privatize the last lingering functions of government like police, courts, and the law itself. Again, this is an idea that sounds really crazy, so the way that I usually like to explain it is right now people may say, “Well, government clearly has to have a monopoly over police. Monopoly over courts. Monopoly over law.” I say, “Government has a monopoly over these things right now.” Right now, there’s actually more private security guards than police.
Dave Rubin: Really?
Bryan Caplan: That’s true.
Dave Rubin: Interesting.
Bryan Caplan: There are more people hired by business and communities to go and do policing than there are police, in the official sense. For courts, there is a huge area of private adjudication. There’s arbitration. Any time you have a problem with your credit card, do you sue the company that’s involved? No. You call the credit card company, and they have their own internal adjudication system for handling things like this.
Similarly for law itself, there are many private organizations that have their own rules that they apply. Again, mentioning private arbitration. One of the main reasons people use private arbitration is that they don’t use regular laws. They use their own laws, which are designed to work better than the government’s law, so you can get your issue resolved in a few days instead of weeks or years.
Usually with private arbitration, they have the arbitrator actually be someone who knows what he’s doing. They have someone who is, in fact, an expert on this area of business rather than giving it to a generalist and 12 people who were too dumb to get out of jury duty. Just beginning, realizing wow, there’s a lot of private alternatives that already exist right now to government providing these services, that at first glance a lot of people had the reaction of society would burn in flames if there were private police or private courts or private law.
Look around. It’s not burning now, and there’s already a very large role for the private sector. When I think about Anarcho-Capitalism, I always say, “Well let’s start with what we’ve got. You realize that that is not going to lead to anything bad.” There’s very good reasons why people are using these private alternatives right now which is, they’re better. They’re worth the money. You actually get better quality, not only for a lower price but remember, these are private companies competing with free government services.
They’re still carving out a big market niche for themselves because so many people are so dissatisfied with these services they get provided free by the government. Then think about how much further can we take these? One obvious one to me is, if you go to government courts and they say, “Well, actually if this is a private contract, you just have to have an arbitration clause and it’s not our problem.” If you want adjudication, put an arbitration clause. All we do, there’s a dispute. It shows the contract. It says this is the arbitrator. Rubber stamped. That’s it.
Dave Rubin: Maybe as an intermediate step, you would keep criminal stuff in the public system.
Bryan Caplan: Exactly.
Dave Rubin: And remove some of this stuff that’s purely legally based.
Bryan Caplan: Exactly. Then, when you start thinking about all the things that you can hand over to the private sector, it is much larger than what it occurs at first. Then the Anarcho-Capitalist idea is really, once we have privatized all the things that at first it seemed like you couldn’t, but we keep going further and further and further. Then you’re left with almost nothing. Then the question is, could you just get rid of that last bit?