Peace Requires Anarchy


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Henry Hazlitt’s “Economics in One Lesson”

I recently finished reading Henry Hazlitt’s popular 1946 book Economics in One Lesson.

The book is based on Frederic Bastiat’s famous 1850 essay What Is Seen And What Is Unseen, also translated as That Which Is Seen And That Which Is Not Seen. Bastiat’s essay (which I read a few months ago and commented on in a blog post) and Hazlitt’s book both examine the effects of various government interventions in the economy. Specifically, both authors show that for every intended, positive, seen effect that a government policy has, there is almost always an unintended, detrimental, unseen effect that inevitably comes along with it. Further, both authors come to the conclusion that when one takes all off these effects into account, one can see that the government economic policies considered almost always harm the economy as a whole.

To be brief with this blog post I’ll just say that Bastiat’s essay is shorter and, in my opinion, more educational and enjoyable than Hazlitt’s book. (I am sure that there are people who would disagree, but it is not my objective here to prove them wrong. I am just stating my view for anyone who might be interested.) Thus, if you are only going to read one of the two works I recommend that you do not read Hazlitt’s “Economics in One Lesson” and do read Bastiat’s classic essay “That Which Is Seen and That Which Is Not Seen” instead.

While you are at it I also recommend Frederic Bastiat’s 1850 essay The Law, which I also thought was a very good read.

Now I will comment on Hazlitt’s political views that he expressed in “Economics in One Lesson” by comparing them to the political views Bastiat expressed in “The Law.” Most of Hazlitt’s book consisted of the economic critiques of government policies mentioned previously. He did not make any libertarian rights-based arguments against these policies that I recall, but instead argued against them purely by examining their economic effects on various groups of people. At multiple points throughout the book, however, Hazlitt paused from his critiques to make it clear to his audience that he was not opposed to all government action:

A certain amount of public spending is necessary to perform essential government functions. A certain amount of public works—of streets and roads and bridges and tunnels, of armories and navy yards, of buildings to house legislatures, police, and fire departments—is necessary to supply essential public services. With such public works, necessary for their own sake, and defended on that ground alone, I am not here concerned. I am here concerned with public works considered as a means of “providing employment” or of adding wealth to the community that it would not otherwise have had.

While both Bastiat and Hazlitt are regarded as classical liberals, Bastiat, unlike Hazlitt, did not explicitly express his support of a limited coercive government in the manner that Hazlitt did above, at least not in either of his two essays that I read. On the contrary, Bastiat’s political views seemed to be entirely anarchical except for the fact that he explicitly supported something which he called a “government.” Specifically, Bastiat expressed his support of a “government whose organized force was confined only to suppressing injustice.”

In my blog post on Bastiat’s “The Law” I replied to his statement about his notion of a “just government.” I argued that what Bastiat meant by a “government” is not something that we would consider a “government” by today’s definition. I argued that if Bastiat was indeed using the term “government” to refer to a voluntarily-funded organization, as opposed to an organization that coercively imposes taxes on people, then perhaps despite his explicit support of “government,” we could still consider him an anarchist. The term “philosophical anarchist” may be a more appropriate term to describe Bastiat to distinguish him from other theorists, such as Gustave de Molinari, who described how market mechanisms could provide “governmental” services in a free, anarchical, market society.

Hazlitt’s words quoted above make it clear that he was not an anarchist. His words make it clear that the government he supported was not the possibly “voluntary government” that Bastiat may have supported, but rather was a coercive monopolistic government that imposes involuntary taxes on people much like the many governments that rule people across the globe today.

To be fair to Henry Hazlitt and his book, though, he did not attempt to defend his views in support of government in “Economics in One Lesson,” but rather rightly said that such a discussion was beyond the scope of the book. I thus can’t criticize his book on the grounds that he did not defend his claim that a certain amount of public spending is “necessary.”


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Gustave de Molinari’s “The Production of Security”

In the words of Roderick Long, “The first explicit defender of Market Anarchism was the 19th-century economist and social theorist Gustave de Molinari.”

In his 1849 essay, translated as The Production of Security, Molinari made, in the words of Murray Rothbard, “the first presentation anywhere in human history of what is now called ‘anarcho-capitalism’ or ‘free market anarchism.'”

While it is true that there were anarchists before Molinari who were pro-market, such as “William Godwin in England, Josiah Warren in America, and Pierre-Joseph Proudhon in France,” Roderick Long points out that “what Molinari pioneered, in 1849, was an explanation of how market mechanisms could replace the traditional ‘governmental’ function of the State – protection against aggressors…. Thus I don’t see anything properly describable as market-based anarchism (as opposed to merely market-friendly anarchism) prior to Molinari.”

It is worth noting that Molinari’s case against the state’s monopoly on security in The Production of Security is not so much a moral argument as it is an argument of economic efficiency.

As Rothbard writes, “In contrast to all previous individualistic and near-anarchistic thinkers, such as La Boetie, Hodgskin or the young Fichte, Molinari did not base the brunt of his argument on a moral opposition to the State. While an ardent individualist, Molinari grounded his argument on free-market, laissez-faire economics, and proceeded logically to ask the question: If the free market can and should supply all other goods and services, why not also the services of protection?”

In the following excerpt from his essay Molinari describes one of the main advantages of having a market for security (as opposed to a monopoly on security—what most people think of as “governments” today):

[The producers of security’] clientele will naturally be clustered around the center of their activities. They would nevertheless be unable to abuse this situation by dictating to the consumers. In the event of an abusive rise in the price of security, the consumers would always have the option of giving their patronage to a new entrepreneur, or to a neighboring entrepreneur.

This option the consumer retains of being able to buy security wherever he pleases brings about a constant emulation among all the producers, each producer striving to maintain or augment his clientele with the attraction of cheapness or of faster, more complete and better justice.

If, on the contrary, the consumer is not free to buy security wherever he pleases, you forthwith see open up a large profession dedicated to arbitrariness and bad management. Justice becomes slow and costly, the police vexatious, individual liberty is no longer respected, the price of security is abusively inflated and inequitably apportioned, according to the power and influence of this or that class of consumers. The protectors engage in bitter struggles to wrest customers from one another. In a word, all the abuses inherent in monopoly [government] or in communism crop up [see the part of Molinari’s essay titled “Monopoly and Communism” for his definition of these terms].

Read Molinari’s full essay here.

Market Anarchism is the doctrine that the legislative, adjudicative, and protective functions unjustly and inefficiently monopolised by the coercive State should be entirely turned over to the voluntary, consensual forces of market society.”