Waylaid Dialectic

August 18, 2011

Nasty, Brutal and Shot

Filed under: Institutions,Random Musings — terence @ 6:39 am

A few years ago I engaged in one of the most futile activities possible on the internet: arguing with Libertarians.

Of all the things I learnt about Libertarianism while doing this, one of the more interesting/amusing was being made aware of the existence of a sub-genre, Anarcho-Capitalism, whose adherents’ thirst for liberty was so strong that they would tolerate no state at all but who, at the same time, were still rather keen on property rights. Their solution to the question, ‘How can you have property rights without the institution of the state to define and enforce them?’, was fantastic: employ competing private militias to do the job. Contract people to enforce contracts and make the market work.

To my mind this seemed rather implausible. One of those ideas that was so silly that all you could say for it was that it would never actually happen.

Of course, I was wrong. From an excellent review by Misha Glenny:

Mafia groups typically act as informal policemen who make themselves available as arbitrators to buyers and sellers in markets that the state is either unwilling or unable to regulate. In Sicily itself, Diego Gambetta and others have traced the origins of the mafia back to the first half of the 19th century, when they acted as middlemen whose function was to ensure fair play in the agricultural markets of central and western Sicily (to this day the mafia has only a limited presence in eastern Sicily, which shows how difficult it is to expand zones of criminal influence). They would guarantee the price of cattle or fruit at market and see to it that buyer and seller stuck to their agreement. They would be paid for their services, but if one of the players failed to pay his dues, the mafia would in all likelihood resort to violence – or, at the very least, the credible threat of violence.

Across the world, mafias police both legal and illegal markets. It could be restaurants, it could be drugs, though it’s quite rare for them to give up their core protection service to try their hand as restaurateurs. Drugs, because prohibited, are far more lucrative. Mafias determine who has access to the market and have little reason not to exploit their advantage (it doesn’t follow that mafiosi are necessarily good drug dealers). This is where a mafia’s participation in an illegal market and its protection of that market begin to blur, but the distinction is important in trying to understand how the underground economy works. A mafia seeks to exploit an absent or weak state. It assumes the state’s policing responsibilities and usurps some of its monopoly on violence…

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