Making Sense of Private Security (heavy AC content)

[hmkpoker]

Civilized private security was the most difficult concept to understand before I finally decided to call myself a market anarchist. I think that pretty much all of the libertarian minarchists on this forum want total privatization of everything and nearly-purely-free market, but would still prefer to keep a central government monopoly on force. And for very good reason. Security and force are two things that seem almost by definition to not belong in the free market. After all, if you're allowed to do whatever you want as long as you don't hurt anyone else, then how the heck do you run a business that is designed to exercise force against the unwilling? A security force, by its very nature, must act forcefully (regardless of whether it is defensive or justified) against a target that wishes not to be acted upon. Moreover, there is no state to intervene when a certain fellow decides to become a contract killer, except for the force of other security firms. He who has the biggest army makes the rules; the contrary of other businesses. Quite a dilemma indeed.

It does, at least in my mind, make very sound, logical sense. Here are three concepts for the reader to digest to hopefully understand how it works:

1) Force is enacted by the profit motive, not by bureaucracy. It shouldn't take much argument for me to express just how phenomenally expensive war is. Soldiers/police must be trained, paid well, given a lot of expensive resources, and eventually go on to engage in activities that don't create, but destroy tons of scarce, valuable capital...including, most importantly, human lives. The war in Iraq has cost more money than any free market oligopoly could ever want to spend, and has shown very little increased revenue for its expenses. No self-maximizing capitalist would ever want to go through with such a phenomenal waste, only to be disliked for his effort of wasting his fortune.

When an individual spends his own money for his own purposes, he spends it much differently than spending someone else's money for someone else's purposes. Consider the following quote by Milton Friedman:

"There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you're doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I'm not so careful about the content of the present, but I'm very careful about the cost. Then, I can spend somebody else's money on myself. And if I spend somebody else's money on myself, then I'm sure going to have a good lunch! Finally, I can spend somebody else's money on somebody else. And if I spend somebody else's money on somebody else, I'm not concerned about how much it is, and I'm not concerned about what I get. And that's qovernment. And that's close to 40% of our national income.

With war being such a phenomenally costly and unprofitable activity, is there any reason to suspect that it would be initiated by a voluntary society?

2) Defense is more profitable than offense. Call this a hunch, but I am very willing to assert that, between the choices of purchasing defensive security (protection against oncoming harm) and purchasing offensive terrorism (initiating force against others), the demand for defense would be substantially higher. Defense is very useful, while terrorism is only valuable to individuals with high time preferences and an unhealthy dose of sadism (who would be unlikely to have as much money in the first place). This, combined with defense being naturally less expensive than offense (it is much easier to defend a property than to attack it), defense would be a greatly preferred course of action. A large number of people choosing defense over offense creates a stalemate of force. That stalemate is peace.

Keep in mind also that insurance companies do not want disasters to happen! Car insurance companies lose five figures when someone gets into a wreck and health insurance companies lose even more when a patient gets a costly operation. They don't want any of these things to happen any more than you do; they want low rates of incidence (which allow them to make more competitive rates with less variance) and high rates of income. Consumers, who pay these rates, still don't want to deal with unfortunate incidents either. Most of us would prefer that we did not suffer injury or accident, even if we are to be paying insurance premiums. The profit motive exists for the defense insurance companies to reduce destructive incidents if at all possible; not increase them.

3) Checks and Balances. But isn't everyone "free" to set up their own mercenary business and take hits on anyone that some two-bit joe paid them to kill? Well, yes and no. Yes in the sense that there is no state to prevent them from doing so, but that is a very limited way of looking at this situation.

Consider a pack of zebra in the Serengeti. They usually herd together, without straying too far from the group. It would be silly to think that they do so simply because they all happen to simultaneously and coincidentally agree that one place is the best spot to reside, so what prevents them from straying away? After all, there is no zebra state. No tax-funded zebra government keeps everyone within jurisdiction. The zebra stay together, of course, because straying makes an individual a very easy target for a hungry lion. Zebras who choose to exercise this freedom are naturally selected against, and what is ultimately naturally selected is a group of behavioral norms that ensure the zebras' continued genetic existence. Even without a state coordinating their activities, they continue to survive.

These are the same checks on a potential contract killer. If you and your community had very good reason to believe that your neighbor was a terrorist, your defensive security would be quick to make sure that the threat was averted.

Cliff notes: The civility of private defense is explained by examining the forceful behavior that we could predict from a profit motive rather than a bureaucracy.