I think that libertarian anarchists ought to take thoughtful criticismslikeDave Waller's seriously. How will anarchism handle the problem ofwealthycriminals It seems like anarchism makes the utopian demand thateveryonevoluntarily play by the rules. The comment is made more persuasive by examples from modern Columbia, medieval serfdom, and other situationswherethe wealthy have received and continue to receive unequal justice. I think that there are two levels of reply to criticisms of this sort. 1.
First, the wealthy have extra influence under GOVERNMENT, too. Indeed, thesis precisely what the Columbian and medieval situations were: wealthy individuals use their wealth to control or capture the government, thenuseit to bend the rules for their benefit. In order to criticize anarchism, it is not merely necessary to point outthatsuch a system permits the wealthy to evade the law. Why Government, even minarchy, must face the same problem. Surely minarchy free of corruption is just as utopian as anarchism free of murder-for-hire. In order for the argument from wealth to work, it would be necessary to show thatgovernmenthas a COMPARATIVE ADVANTAGE over competitive defense agencies withrespectto equality under the law.
2. Second, GIVEN the general level of human depravity, anarchismprobablydoes have a comparative advantage over government. Holding constant the level of human badness, we can merely look at the situation in terms of incentives. Under minarchy, the government faces only periodiccompetitionin the form of voting; and voting is notoriously a pure public good, so voters will probably be unable to carefully monitor the government for corruption. If people find that the wealthy are securing unequal justice, their only alternative is to move to another country. In contrast, under anarchism there can be multiple suppliers of defense services in a single area.
And the benefits of switching to an honestagencyaccrue to the consumer who switches whereas the benefits of informedvotinggo to everyone equally. Now if a defense firm's consumer is wronged by a wealthy criminal, won " ttheyjust abandon him No, for at least two reasons. First, a defense firmisreally selling an insurance policy, a policy to defend the rights oftheirclients IF they are wronged. If word gets out that the firm abandonsitsclients when they come to demand the help they are entitled to, their insurance policy will be basically worthless. In essence, firms would want to protect clients even though the expected value of their case is negative, because otherwise their name brand would be seriously hurt.
The second reason why the rich would have trouble securing unequaljusticecomes from the incentives of the rich person's firm. In insurance economics, there is a concept known as "adverse selection." This means that unlessaninsurer properly screens its customers, the most likely people to buy insurance are those who are most likely to demand benefits. For example, chronically sick people are most likely to buy health insurance, high-risk drivers are most likely (other things held constant) to buy auto insurance, and so on. But if most people buying insurance come from high-risk groups, then their premiums would have to be extremely high. Now what would happen if a defense firm acquired a reputation fordefendingwealthy clients to the death It would face an adverse selection problem ofthe worst sort. Every criminally inclined wealthy person would want to signup.
The firm would have to pay out huge payoffs, either in the form of settlements to other firms, or to pay the cost of fighting wars witheveryhonest firm. The cost of the policy would have to rise almost to thelevelof the cost of the crimes. However wealthy a client might be, there isa huge deterrent against accepting him as a customer regardless of his criminal behavior. In contrast, honest firms could sell very cheap policies, because thelargemajority of their clients would never require the services.
This isjusta standard application of insurance economics, which tells us that thefirmsthat adequately monitor their clients can offer cheap premiums, even if benefits are high, since the probability of payout is low. Firms that indiscriminately defended wealthy criminals, in contrast, would have to charge very high premiums, since the probability of payout is high. Finally, since the number of honest people of ordinary means far exceeds thenumberof wealth criminals, the total number of trained police on the side ofjusticewould vastly outnumber the number on the side of criminals. Much more could be said, but the incentive system of free-marketanarchismdefinitely seems better able to control the problem of wealthy criminalsthatgovernment or even minarchy. We don't need to assume that everyoneunderanarchism is good, because we can show that for ANY level of goodness, the incentives of anarchism are better than for minarchy. -Bryan Caplan Department of Economics Princeton University.