Can Values Be Measured?

That depends on what we mean by “measurement”. They cannot be measured the way we measure physical object – length, weight, etc. But they certainly can be ranked.

Ayn Rand, in Introduction to Objectivist Epistemology, calls this “teleological measurement”. We rank values according to their relation to a goal or an end. So, for example, food, clothing and shelter have to be highly valued, since they are necessary for the mere preservation of life. Friendship, a happy marriage and a rewarding career are valued because they enhance our life and well-being. (You can think of other examples yourself.) But they cannot be measured with ordinal numbers; they have to be measured by cardinal numbers You can say that one value is more valuable than another, but you cannot express that numerically.

I came to think about this when reading Eugen von Böhm-Bawerk’s Basic Principles of Economic Value. He writes:

… let us imagine a small boy who wants to by fruit with a small coin in his possession. He can buy either one apple or six plums. Of course, he will compare the eating pleasures afforded by both kinds of fruit. To make his decision, it is not enough to know that he prefers apples over plums. He must decide with numerical precision whether the enjoyment of one apple exceeds the enjoyment of six or fewer plums. To approach the situation from a different angle, let us consider two boys, one with the apple and the other with the plums. The latter would like to acquire the apple and, therefore, offers his plums in exchange. After deliberating on his eating pleasures, the former rejects four, five, and six plums for his apple. But he begins to waver when seven plums are offered, and finally makes the exchange at a price of eight. Doesn’t his trade reveal a numerically conclusion that the pleasure of one apple exceeds that of a plum at least seven times but less than eight times?

I laughed when I read this – not because there is anything wrong with it but because it is ingenious. (Böhm-Bawerk is often ingenious!)

Well, in this case there is a possibility to numerically fix values and to do it by ordinal numbers. But it cannot be as exact as when we measure length or weight. It is an approximation, although within strict limits; in this example between seven and eight. It hardly applies to the values I mentioned in the beginning. Actually, it applies only to values that are exchanged, i.e. economic values. (Friends and spouses are not bought and sold!)

It does apply when it comes to budgeting our money – choosing what food or clothes to buy or what house or apartment to live in. Here we do reason the way the boy in Böhm-Bawerk’s example reasons, weighing for and against and arriving at a price we can afford for whatever alternative suits us best.

And there may be other implications that I haven’t been able to figure out yet. So take this post only as a stray observation!

(See also Ayn Rand and Böhm-Bawerk on Value.)

Happy New Year!

A Happy New year to my readers!

Click here to see the complete report.

The Concept of Self-Ownership

Self-ownership is often regarded as an axiom, if not the basic axiom, of Libertarianism. There are many formulations of it; the oldest one that I know of is by John Locke, who said that

… every man has a property in his own person: this no body has any right to but himself. The labour of his body, and the work of his hands, we may say, are properly his. (Second Treatise on Government, Ch. 2, Sect.27.)

Quite as often, one hears Objectivists object to this; the common objection is that this make the right to property the basic right, while it is in fact a derivative of the right to life. And this, in its turn, just goes to show that Libertarians have no concept of a proper hierarchy of knowledge.

In a recent podcast, Leonard Peikoff answers a question about self-ownership, where he says:

Ownership is a concept that implies a relationship between you and an external object; there is the owner and the object possessed. How can you own yourself? Who is the owner who is doing the owning of the owner?

And he goes on to explain that the idea originally comes from some “frightened conservative”, by which term I have to assume that he refers to John Locke. The podcast is less than two minutes long, so you can easily listen to the rest of his answer.

So let us turn to Ayn Rand’s own writings. In his “money speech”, Francisco d’Anconia has this to say:

Money rests on the axiom that every man is the owner of his mind and his effort. (For the New Intellectual, p. 89; italics mine.)

So not only does Ayn Rand say that self-ownership is a valid concept, she says that it is axiomatic! The axiom of self-ownership is not some Libertarian perversion; it is part of the “official Objectivist doctrine”! It is part of what she herself published or approved of during her lifetime.

Stuart Hayashi has written a Facebook note, giving some other quotes from Ayn Rand on this subject. I quote:

“What greater wealth is there than to own your life and spend it on growing?”
–Ellis Wyatt, Atlas Shrugged, Pt. 3 of book.

“For centuries, the battle of morality was fought between those who claimed that your life belongs to God and those who claimed that it belongs to your neighbors — between those who preached that the good is self-sacrifice for the sake of ghosts in heaven and those who preached that the good is self-sacrifice for the sake of incompetents on earth. And no one came to say that your life belongs to you and that the good is to live it.”
–John Galt, Atlas Shrugged,,_the.html

“But the ability to say ‘Yes’ or ‘No’ is the essence of all ownership.  It’s your of your own ego.  Your soul, if you wish.”
–Howard Roark to Gail Wynand, The Fountainhead. (All italics mine.)

It seems that the “frightened conservative” Leonard Peikoff is talking about is none other than Ayn Rand herself! (And pardon the sarcasm!)

$ $ $

But what does it mean to say that self-ownership is axiomatic? An axiom is fundamental and irreducible; it stands at the beginning of knowledge and cannot and need not be traced back to something even more fundamental. In Ayn Rand’s words:

An axiom is a statement that identifies the base of knowledge and of any further statement pertaining to that knowledge, a statement necessarily contained in all others, whether any particular speaker chooses to identify it or not. An axiom is a proposition that defeats its opponents by the fact that they have to accept it and use it in the process of any attempt to deny it. (“Galt’s speech”, quoted from The Ayn Rand Lexicon.)

It is not hard to see how this applies to the well-known axioms of “existence, identity and consciousness”. But I am at a loss to see how it applies to self-ownership. Does it simply mean that one cannot disown oneself, no matter how hard one tries?

I think it is possible to see self-ownership as a corollary of identity. It is simply part of a man’s identity that he is himself and owns himself.

$ $ $

Parenthetically: In 1987 I gave a lecture titled The Objectivist Validation of Individual Rights, which was basically an attempt to summarize Objectivism and relied heavily on Leonard Peikoff’s “basic course”. In an appendix, I wrote the following:

As for the alleged axiom of “self-ownership”, I agree completely with Tibor Machan’s criticism [which was the same as Peikoff’s criticism above]. The term is meaningless on the face of it, if taken literally. If you use the term at all, you must realize it’s a metaphorical usage. Historically, I think it goes back to a statement by John Locke that “every man has a property in his own person” – which is fine, as a rhetorical device but would not serve as a formal axiom.

[PS 2009: Today, I am uncertain about this paragraph. Francisco d’Anconia, in his money speech, says: “Money rests on the axiom that every man is the owner of his mind and his effort.” So it seems that Ayn Rand (I assume that Francisco speaks for her) endorses the idea of “self-ownership” as an axiom. I have never seen or heard this particular point being discussed further by either Ayn Rand herself or other Objectivists. I’m trying to figure out how this relates to the rest of Objectivism.]

$ $ $

Nevertheless, and regardless of what Ayn Rand wrote about the subject, I can see a problem with the concept of self-ownership:

If you own an object, there are various things you can do with the object:

  • You can sell it.
  • You can lend it out.
  • You can give it away.
  • You can bequeath it to you heirs.

But can you do this with yourself? With your person, your body, your mind?

To bequeath yourself to your heirs would be pretty pointless. What can they do with you after your death, except giving you a decent funeral? – which they will probably do anyway, regardless of what is stated in your last will and testament.

Can you give yourself away? Well, in a marriage, the spouses in a sense give themselves away to each other, but that is metaphorical language.

Can you lend yourself out? Again, metaphorically, you can lend another person a service –­ as in the expression “lend me your ear”, meaning “listen attentively to what I am saying”. But in a literal sense, no.

Can you sell yourself? Well, I have heard Libertarians argue that a man should be free to sell himself into slavery (i.e. that he should be free to renounce his freedom). For example, person A might have a debt to person B that is so huge that he sees no possibility to pay it back; then he might agree to instead work as a slave to person B for the rest of his life. (Such a situation is rare, but it is at least possible.)

Can you sell your mind? Well, you may perform some work of an intellectual nature for an employer, but what you are selling is then not your mind, but some of the products of your mind. What you do with your mind in your leisure time is none of your employer’s concern.

And, of course, people are selling their souls all the time – most often for a ridiculously low price.. But is this expression to be taken literally?

Also, you can misplace an object you own; but if you misplace your person, you are in serious trouble.

So there is a difference between owning an object and “owning one’s self” – and this far, Leonard Peikoff is actually right in the quote in the beginning of this post (except for the nonsense about “frightened conservatives”).

Not that I think this is terribly important (after all, it revolves around the question whether “self-ownership” should be taken literally or metaphorically) – but it seems to give rise to endless discussions among Objectivists. Objectivists are very keen on explaining to other Objectivists that they have misunderstood Objectivism.

Personally, I will put this in a file and save it for my forthcoming treatise Nit-Picking Objections to Objectivism.

Update December 7: This post has been cross posted at For the New Intellectual.

$ $ $

Update December 6: Nit-picking objections notwithstanding, I like this Auberon Herbert quote:

To abandon self-ownership is to become corrupt and servile in spirit, and for the servile and corrupt there are no great things possible. You cannot carve in rotten wood; you cannot lead to greatness those who have renounced the essence of their own manhood or womanhood.

Short and simple refutation of Thomas Piketty

This story is currently making its rounds on Facebook:

There is a rich man and a poor man.
The rich man makes $1000 a day.
The poor man makes $10 a day.
The difference in their income is $1000 – $10 = $990 a day.

The rich man builds a factory.
Now the rich man makes $2000 a day.
He gives the poor man a job at the factory.
Now the poor man makes $100 a day.
The difference in their income is $2000 – $100 = $1900 a day.

A politician decides the “income gap” has grown too large.
He taxes the rich man $1000 a day, gives it to the poor man.
The rich man can no longer afford to run the factory.
He closes his factory. The poor man loses his job.

Everything is as it was before.
And the politician takes credit for “closing the income gap”.

George Reisman has written a slightly more elaborate and detailed criticism of Piketty. But this short story encapsulates one of the main points of his criticism. Piketty claims that when the “capital/income ratio” goes up (in this story from $990 to $1900), it means that the capitalists are making money at the expense of the wage earners. The story tells us that the exact opposite is true.

Is the Customer Always King?

Also published as a Facebook note.

If you have read The Fountainhead (and I assume you have, if you are interested enough to read this blog), you may recall what Howard Roark says to the Dean in the first chapter:

I don’t intend to build in order to have clients. I intend to have clients in order to build.

An economist of the “Austrian” school, Mark Skousen, has taken issue with this, because it (allegedly) violates the principle of “consumer sovereignty”. He writes, among other things:

But the goal of all rational entrepreneurship must be to satisfy the needs of consumers, not to ignore them! Discovering and fulfilling the needs of customers is the essence of market capitalism. Imagine how far a TV manufacturer would get if he decides to build TVs that only tune into his five favorite channels, the consumer be damned. It wouldn’t be long before he would be on the road to bankruptcy.

There are so many things wrong with Skousen’s view that one hardly knows where to begin. But a good answer was provided by Stuart Hayashi in a Facebook note. (Also on Stuart’s own blog, Stu-Topia.) Stuart explains “Say’s Law of Markets”:

An actual understanding of Say’s Law of Markets recognizes that both sides of a voluntary trade are equally important to the trade, and that both sides of the trade are consumer and producer simultaneously. […] Consider the barter economy. Suppose I have a paperback book you want, and you have a flash light I want. We trade one for the other. In that bartering, who was the producer and who was the consumer? The truth is that each party was both the producer and consumer. That relationship does not change when we introduce money into trading.

And later:

Therefore, we can look at it this way. Howard Roark is not necessarily the subordinate to his client, Austen Heller. Rather, Howard Roark is a customer who is purchasing money from Austen Heller. Roark’s payment to Heller is that Roark be able to design Heller’s house in the manner that Roark prefers. If Heller considers that to be an unworthy form of payment, Heller does not have to accept it.

My own thoughts:

Is the owner of a pub serving beer in order to have customers? Or does he want customers in order to serve beer? Is a shoemaker, or a tailor, or a baker, making shoes, clothes, or bread in order to have customers, or does he want customers in order to make shoes, clothes, and bread?

This may sound like a nonsense question, for what difference does it make? Yet, it has a simple answer: the customer wants his beer etc., and the pub owner, shoemaker, tailor or baker simply wants to make a living.

So how does this differ from the Roark example? Well, Roark has something more on his mind than just making a living. He has a vision of what the world should look like – or at least what the buildings in the world should look like – and this takes precedence over making a living. True, he also has to make living – and he is willing to take a job in a quarry if he cannot survive by building.

And this is true of artists, composers, inventors – of all innovators. True, all of them need to make a living – they do sell their paintings, or symphonies, of inventions – but this is certainly not their sole motivation or even their main motivation. If they cannot sell their works – if the general public is not yet ready for them – they take a side job and wait for acceptance of their works.

But those innovators, if we are to follow Skousen’s logic, violate the principle of “consumer sovereignty”, simply because they create goods for which there is initially no demand!

Take any technological advance – from the invention of the wheel in pre-historic times to today´s computers and mobile phones: there was never any consumer demands for them before they even existed![1]

And is there today any consumer demand for vacation trips to Alpha Centauri (given that there is some inhabitable planet surrounding it)? Certainly not. Nobody has yet invented a space ship that can take us there – even less one that can travel so fast that we have a chance to arrive there within our life-time (and get back again, before the vacation is over and we have to get back on our job).

But let me take an example of actual consumer sovereignty: Last time I went to a pub in my home town, I was so badly treated by its personnel that I decided never to go back. So I exercised my consumer sovereignty by simply going to another pub. There are lots of pubs to frequent! But if pubs had been newly invented, and there were only one pub to frequent, this would not have been possible.

Consumer sovereignty is the power of the consumer to buy or abstain from buying. And, of course, this is a valid principle – within its context. The context here is that the consumer can choose between goods and services that already exist. It does not pertain to goods and services that are still to be invented.

And Howard Roark’s buildings (which were not just copies of other buildings) did not exist before he built them.

[1]) See, in this connection, Why Steve Jobs Didn’t Listen to His Customers by Gregory Ciotti. A couple of quotes:

A lot of times, people don’t know what they want until you show it to them.

How can people tell you what they want if they haven’t seen it before?

Any innovative company struggles with how much to listen to customers. Most realize that you cannot trust them to tell you what your next new product will be.

If I had asked people what they wanted, they would have said faster horses. – Henry Ford

Murray Rothbard on the Soviet Union

My latest blog post, Murray Rothbard on Organized Crime, was shared by a couple of persons on Facebook – and in one comment, I was accused of “cherry picking”, because I chose only one article and took it as representative of Rothbard’s entire view.

Cherry picking” is an inductive fallacy which consists in taking the inductive generalization one wants to reach for granted and then only giving examples that supports this generalization and ignoring or suppressing evidence that points in another direction. Proper induction, of course does not start with a generalization; the generalization is the end product of the induction. (This fallacy could also be called “inductive circularity”: it begs the question, just like deductive circularity does.)

As an aside, I was not accused of “cherry picking” for linking to several books and pamphlets by Rothbard, leading to the inductive generalization that he was a great economist. But if Rothbard has made major mistakes as an economist (as opposed to a political thinker), I have not discovered them; so I can hardly be accused of deliberately ignoring or suppressing them.

Anyway, I will now “cherry pick” some things that Rothbard has written about Communism and the Soviet Union in particular.

In his pamphlet Left, Right, & the Prospects for Liberty (first published in 1965) one can read the following:

Libertarians of the present day are accustomed to think of socialism as the polar opposite of the libertarian creed. But this is a grave mistake, responsible for a severe ideological disorientation of libertarians in the present world. […] Socialism, like Liberalism and against Conservatism, accepted the industrial system and the liberal goals of freedom, reason, mobility, progress, higher living standards [for} the masses, and an end to theocracy and war; but it tried to achieve these ends by the use of incompatible, Conservative means: statism, central planning, communitarianism, etc. Or rather, to be more precise, there were from the beginning two different strands within Socialism: one was the Right-wing, authoritarian strand, from Saint-Simon down, which glorified statism, hierarchy, and collectivism and which was thus a projection of Conservatism trying to accept and dominate the new industrial civilization. The other was the Left-wing, relatively libertarian strand, exemplified in their different ways by Marx and Bakunin, revolutionary and far more interested in achieving the libertarian goals of liberalism and socialism: but especially the smashing of the State apparatus to achieve the “withering away of the State” and the “end of the exploitation of man by man.” (P. 15f; italics mine.)

So Libertarianism (of the Rothbardian variety) has the same ultimate goal as Bakunin and Marx: the smashing, or withering away, of the State. Bakunin and Marx are allies in this struggle. (While thinkers like Ludwig von Mises and Ayn Rand, who did not want to smash the State, only to reduce it to its proper functions, are not allies but rather enemies. Rothbard would not call Mises an enemy, but this is the clear implication.[1])

It was in reaction to this collapse that Lenin broke out of the Second International, to re-establish classic revolutionary Marxism in a revival of Left Socialism. […] In fact, Lenin, almost without knowing it, accomplished more than this. […] There were, indeed, marked “conservative” strains in the writings of Marx and Engels themselves which often justified the State, Western imperialism and aggressive nationalism […] Lenin’s camp turned more “left” than had Marx and Engels themselves. Lenin had a decidedly more revolutionary stance toward the State, and consistently defended and supported movements of national liberation against imperialism. The Leninist shift was more “leftist” in other important senses as well. For while Marx had centered his attack on market capitalism per se, the major focus of Lenin’s concerns was on what he conceives to be the highest stages of capitalism: imperialism and monopoly. Hence Lenin’s focus, centering as it did in practice on State monopoly and imperialism rather than on laissez-faire capitalism, was in that way far more congenial to the libertarian than that of Karl Marx. (P. 22f.)

In other words: Bakunin and Marx are regarded as allies, because they were against the State; but Lenin is even more of an ally, since he was even more against the State!

There is, of course, one big question that Rothbard should have had the sense to ask of himself: How come those state haters and would-be state-smashers, Marx and Lenin even more, founded what is probably the most totalitarian and most oppressive state in all of history? Rothbard has no explanation for this – unless you call this an “explanation”:

… the Communists did not attempt to impose socialism upon the economy for many years after taking power: in Soviet Russia until Stalin’s forced collectivization of the early 1930s reversed the wisdom of Lenin’s New Economic Policy, which Lenin’s favorite theoretician Bukharin would have extended onward towards a free market. (P. 45.)

What, then, does Rothbard have to say about Communism’s and the Soviet Union’s quest for world domination, about the fact that the whole of Eastern Europe were satellites to the Soviet Union from the end of World War II and until the late 1980’s, about its efforts to export Communism to Cuba and to Third World countries? Rothbard explains that those thing have never taken place. In his For a New Liberty: The Libertarian Manifesto there is a chapter on Libertarian foreign policy, in which he writes:

Any idea of “exporting” communism to other countries on the backs of the Soviet military is totally contradictory to Marxist-Leninist theory. […] When the Bolsheviks took power in Russia in1917, they had given little thought to a future Soviet foreign policy, for they were convinced that Communist revolution would soon follow in the advanced industrial countries of Western Europe. When such hopes were dashed after the end of World War I, Lenin and his fellow Bolsheviks adopted the theory of “peaceful coexistence” as the basic foreign policy for a Communist State. The idea was this: as the first successful Communist movement, Soviet Russia would serve as a beacon for and supporter of other Communist parties throughout the world. But the Soviet State qua State would devote itself to peaceful relations with all other countries, and would not attempt to export communism through inter-State warfare. The idea here was not just to follow Marxist-Leninist theory, but was the highly practical course of holding the survival of the existing Communist State as the foremost goal of foreign policy: that is, never to endanger the Soviet State by courting inter-State warfare. Other countries would be expected to become Communist by their own internal processes. Thus, fortuitously, from a mixture of theoretical and practical grounds of their own, the Soviets arrived early at what libertarians consider to be the only proper and principled foreign policy. As time went on, furthermore, this policy was reinforced by a “conservatism” that comes upon all movements after they have acquired and retained power for any length of time, in which the interests of keeping power over one’s nation-state begins to take more and more precedence over the initial ideal of world revolution. This increasing conservatism under Stalin and his successors strengthened and reinforced the nonaggressive, “peaceful coexistence” policy. (P. 290f.)

So Stalin was a man of peace, according to Rothbard. No explanation is given for the Molotov-Ribbentrop pact and the joint attack on Poland that inaugurated World War II; but he makes some fuss about the necessity for the Soviet Union to defend itself against the German attack later in the war. Another quote:

So unprepared was Stalin for the assault, so trusting was he in the rationality of the German-Russian accord for peace in Eastern Europe, that he had allowed the Russian army to fall into disrepair. So unwarlike was Stalin, in fact, that Germany was almost able to conquer Russia in the face of enormous odds. (P. 292.)

And to the question why Stalin, after the end of World War II, took the opportunity to take over the whole of Eastern Europe, Rothbard does have an answer: It was to protect the Soviet Union from the threat of invasion from the West!

Since their victory over German and associated military aggression [from, e.g. Finland] in World War II, the Soviets have continued to be conservative in their military policy. Their only use of troops has been to defend their territory in the Communist bloc, rather than to extend it further. Thus, when Hungary threatened to leave the Soviet bloc in 1956, or Czechoslovakia in 1968, the Soviets intervened with troops—reprehensibly, to be sure, but still acting in a conservative and defensive rather than expansionist manner. (P. 295.)


Russia, therefore, governed Eastern Europe as military occupier after winning a war launched against her. Russia’s initial goal was not to communize Eastern Europe on the backs of the Soviet army. Her goal was to gain assurances that Eastern Europe would not be the broad highway for an assault on Russia, as it had been three times in half a century—the last time in a war in which over twenty million Russians had been slaughtered. In short, Russia wanted countries on her border which would not be anti-Communist in a military sense, and which would not be used as a springboard for another invasion. Political conditions in Eastern Europe were such that only in more modernized Finland did non-Communist politicians exist whom Russia could trust to pursue a peaceful line in foreign affairs. And in Finland, this situation was the work of one far-seeing statesman, the agrarian leader Julio Paasikivi. It was because Finland, then and since, has firmly followed the “Paasikivi line” that Russia was willing to pull its troops out of Finland and not to insist on the communization of that country—even though it had fought two wars with Finland in the previous six years. (P. 294.)

Another word for the “Paasikivi line” is Finlandization. In short, Finland had to very carefully toe the line in its dealing with the Soviet Union.

If the Soviet Union and Communist states in general were so peaceful and never waged war except in self-defense, then what states are not that peaceful?

… empirically, taking the twentieth century as a whole, the single most warlike, most interventionist, most imperialist government has been the United States. (P. 277.)

If it is understood and expected, then, that the United States will try to impose its will on every crisis everywhere in the world, then this is clear indication that America is the great interventionary and imperial power. The one place where the United States does not now attempt to work its will is the Soviet Union and the Communist countries … (P. 278.)

One does not have to be an ardent admirer of US foreign policy to sense that there is something wrong here …[2]

Well, I think this is just about enough “cherry picking” for today.[3]

(For Scandinavian speaking readers: I said much the same in an article I wrote in 1993.)

$ $ $

Update August 5 2014: Rothbard also admired Che Guevara. Why? Well …

… we all knew that his enemy was our enemy – that great Colossus that oppresses and threatens all the people of the world, U.S. imperialism.

The obituary is not signed, but it was published as an editorial in Rothbard’s own newsletter, so if he did not write is himself, he at least must have approved of it.

(Hat tip to Justin Templer.)

Back in the late 50’s, on the other hand, he admired Ayn Rand. (Hat tip to Stephen Hicks.)


[1]) On Mises’ view, see my short piece Ludwig von Mises on Anarchism. – Rothbard did view Ayn Rand as an enemy, but that is beside the point in this context.

[2]) Murray Rothbard was not personally oppressed by the Soviet Union, since he did not live there. He was, no doubt, oppressed by the government of the United States. But I am oppressed by the Swedish government, and it does not make me an apologist for the Soviet Union.

[3]) Just one epistemological note: If one has reached an inductive generalization from observing a few instances, one would expect future observations to fall into line – just as one expects all future tables to be pretty much similar to the few tables from which one originally formed the concept. This is not “cherry picking”.

One may find exceptions – and then one will have to look into what explains those exceptions. A simple example: One has formed the inductive generalization that paper quickly starts burning, when it comes into contact with fire. Then one finds a counter-example: paper that does not catch fire or does so only slowly. Looking into the matter, one finds that this particular paper bundle is soaked with water. The exception is explained.

And it might just happen that one finds some instance of Rothbard making sense, even when he writes about politics; and then one has to look for an explanation …

Murray Rothbard on Organized Crime

Murray Rothbard was a great economist[1], and a disaster when it came to politics.

A while ago, I came across this article, about The Godfather I & II and other Mafia movies. A few quotes:

The key to The Godfathers and to success in the Mafia genre is the realization and dramatic portrayal of the fact that the Mafia, although leading a life outside the law, is, at its best, simply entrepreneurs and businessmen supplying the consumers with goods and services of which they have been unaccountably deprived by a Puritan WASP culture. […]

Hence the systemic violence of Mafia life. Violence, in The Godfather films, is never engaged in for the Hell of it, or for random kicks; the point is that since the government police and courts will not enforce contracts they deem to be illegal, debts incurred in the Mafia world have to be enforced by violence […]. But the violence simply enforces the Mafia equivalent of the law: the codes of honor and loyalty without which the whole enterprise would simply be random and pointless violence. […]

Organized crime is essentially anarcho-capitalist, a productive industry struggling to govern itself; apart from attempts to monopolize and injure competitors, it is productive and non-aggressive. Unorganized, or street, crime, in contrast, is random, punkish, viciously aggressive against the innocent, and has no redeeming social feature. [Italics mine.]

What is the logic (or praxeology) of this? Let me take it step by step:

  1. States are organizations. A particular state may be well organized or badly organized, but an “unorganized state” would be a contradiction in terms.

  2. According to Rothbard and his followers, states are criminal by their very nature. This is why they dismiss the idea of a rights-respecting and rights-protecting state (limited government or a “night watchman” state) as illusory. No matter how hard we try to establish such a state or government, it will always end up with our rights being violated.

  3. Thus, a state is an example of organized crime.

So, if Rothbard (and his followers) is in favor of organized crime, what justification does he (or they) have for opposing the state?

Well, the answer to this seems to be that the state or government is doing a bad job of enforcing law and order. Privately organized crime is simply more effective that governmental organized crime.

And isn’t there a kernel of truth in this? When the state or government does not do its job of enforcing rights – and, instead, violates our rights – other organizations will step in to fill the vacuum.

Organized crime thrives on “victimless crimes”. When drinking is outlawed (as during the Prohibition era) – or taking drugs or gambling – this is when the Mafia takes over and supplies the goods. And when there are heavy taxes on tobacco and alcohol, then organized smuggling takes over. With a truly rights-respecting and rights-protecting government or state, this would not happen. But this, of course, is precisely what the anarcho-capitalists dismiss as illusory.

Rothbard has this graphic illustration of how much better the Mafia is than the government:

One errant, former member of the Corleone famiglia abases himself before The Godfather (Marlon Brando). A certain punk had raped and brutalized his daughter. He went to the police and the courts, and the punk was, at last, let go (presumably by crafty ACLU-type lawyers and a soft judicial system). This distraught father now comes to Don Corleone for justice.

Brando gently upbraids the father: “Why didn’t you come to me? Why did you go to The State?” The inference is clear: the State isn’t engaged in equity and justice; to obtain justice, you must come to the famiglia. Finally, Brando relents: “What would you have me do?” The father whispers in the Godfather’s ear. “No, no, that is too much. We will take care of him properly.” So not only do we see anarcho-capitalist justice carried out, but it is clear that the Mafia code has a nicely fashioned theory of proportionate justice. In a world where the idea that the punishment should fit the crime has been abandoned and still struggled over by libertarian theorists it is heart-warming to see that the Mafia has worked it out in practice.

Now, states are sometimes at war with one another, and sometimes at peace; and this is true of different Mafia groups, as well. About this, Rothbard writes:

In many cases, especially where “syndicates” are allowed to form and are not broken-up by government terror, the various organized syndicates will mediate and arbitrate disputes, and thereby reduce violence to a minimum. Just as governments in the Lockean paradigm are supposed to be enforcers of commonly-agreed-on rules and property rights, so “organized crime,” when working properly, does the same. Except that in its state of illegality it operates in an atmosphere charged with difficulty and danger.

But governments, too, “mediate and arbitrate disputes”. This is what diplomatic services are for – trying to prevent disputes from developing into wars. And wars commonly end with a peace treaty.[2]

It is, of course, true that governments today (and in the past) do a very bad job of protecting our rights and a very good job at violating them. But this is also true of private robber bands. – And I assume that if Rothbard is opposed to unorganized street crime but in favor of organized crime, then he must be opposed to private muggers, who mug on their own with no organization behind them, but in favor of organized robber bands, just because they are organized – or should be, if he follows his own praxeology.

It is also true that the struggle for a proper, limited government (a “night watchman state” or a “constitutional republic” or whatever name for it you prefer) is an uphill struggle. Just think of how many politicians will lose their power, as well as their salaries and other advantages, if this would become true. They will fight back with all their might. But this is also true of Mafias and of all the other “private protection agencies” that the anarcho-capitalists envision. If politicians can be corrupted by power-lust, so can Mafia bosses.

But if this struggle is impossible and illusory, our only choice would be to throw in the towel.

Update July 30 2014: This post has also been published on the new website For The New Intellectual.


[1]) I haven’t read his magnum opus Man. Economy and State; but the introduction to his America’s Great Depression contains what may be the best explanation of the Austrian Business Cycle Theory and why it is the only possible explanation of the “boom-bust” phenomenon. And his shorter monographs What Has Government Done to Our Money? and The Case for a 100 Percent Gold Dollar are excellent presentations of the case for a 100% gold standard. I also recommend The Mystery of Banking, The Myth of Free Banking in Scotland and The Essential von Mises.

[2]) I once heard a story about Harry Binswanger discussing the idea of “dispute resolution organizations” (DROs) with Ayn Rand, and her reply was: “You mean, like the United Nations?”


Get every new post delivered to your Inbox.

Join 602 other followers