Liberty Matters

Comments on David Friedman and Some Historical Examples


It is a great pity that Molinari never had a chance to read the work of James Buchanan, Murray Rothbard, or David Friedman. I for one would be most intrigued to see what he would have done with their ideas. Nevertheless, given the state of economic knowledge in the mid-19th century, it is amazing that he even had the glimmer of a premonition of an anarcho-capitalist society. Admittedly it was based on little more than his moral absolutism (that it is morally wrong to force people to pay for “services” provided by the state) and an economic hunch that the institutions which would provide protective services would be very similar to other enterprises that had already emerged to satisfy consumer demand in the free market. The actual mechanism of how this would operate he left opaque. David Friedman is quite correct to point out that Molinari lacked the historical knowledge we now have of how nonstate groups had solved these problems in the past and how the law might evolve to meet the more complex needs of a commercial, property-owning society where a centralized state was very weak or nonexistent. I wonder what he would make of Peter Leeson’s work on the social and legal institutions created by pirate bands.[1] Somehow I don’t think he would have been very surprised.
However, I would like to point out that Molinari did have access to some historical examples that gave him some confidence to make his assertions about what an anarcho-capitalist society would look like and how it might function. For example, in Soirée no. 3 he discusses the private supply of a number of public goods such as water and gas in London, the charging of tolls on privately owned turnpikes in England and the United States, local or community control of rivers and waterways, and so on. I see this as an essential chipping away of the notion that only the state can provide public goods, and if these can be privatized, why not (in theory) other public goods like police and national defense as well?
A second historical example can also be found in Soirée no. 3, where he discusses land ownership in California during the gold rush. At that time California had not yet been fully incorporated into the United State and Mexican legal habits still prevailed. It was during this period of legal limbo that Molinari observed that mining land law continued to operate and evolve without the state in order to satisfy the pressing needs of the ever-growing number of miners in that territory.
A third historical example he would have been aware of was the history, pioneered by Augustin Thierry, of the free medieval cities. Thierry had been active in liberal circles during the Restoration, when he worked for Charles Comte and Charles Dunoyer’s magazine Le Censeur européen and had absorbed their ideas about liberal class analysis. Thierry went on to become an historian and archivist during the July Monarchy and edited a large collection of documents published as the Recueil des monuments inédits de l’histoire du Tiers état (1850-1870). His writings such as Dix ans d’études historiques (1834), Lettres sur l’histoire de France (1827), and Essai sur l’histoire de la formation et des progrès du Tiers état (1850) would have been well known to the liberals of Molinari’s time. One of Thierry’s interests was the legal and constitutional foundations of the medieval free cities, especially the charters which formed the legal basis for their operation and which he discovered in the archives and republished. Although Molinari does not make any specific reference to Thierry’s work I’m sure he would have been aware of his writing on the new cities’ practice of “shopping around” for a suitable charter from the many that already existed (that of the city of Magdeburg was popular and adopted by many other cities) in a process that suggests a form of competition among legal systems. 
A final point I would like to make is that Molinari might have been the first political economist to have suggested how institutions like insurance companies operating in a competitive free market might provide security services, but he was not the first classical liberal to argue that much broader economic and social forces, broadly known as “industrialism,” were at work and would eventually so corrode and undermine the large political entities that had controlled the world for hundreds of years that they would collapse and fragment into much smaller units. While Thierry was busy exploring the legal history of the free medieval cities, his mentor Dunoyer wrote two books during the 1820s[2] in which he showed how America provided the model for how liberty and industrialism would “municipaliser le monde” (municipalize the world). By this he meant that as industrial societies advanced, they would reach a point where all large political structures would break down into smaller municipalities of self-governing cities and their hinterlands. As he put it:
There are absolutely no forces at work in the industrial system which require such vast associations of people. There are no enterprises which require the union of ten, twenty or thirty million people. It is the spirit of domination which has created these monstrous aggregations or which has made them necessary. It is the spirit of industry which will dissolve them -- one of its last, greatest and most salutary effects will be the “municipalisation of the world.” Under the influence of industry people will begin to govern themselves more naturally. One will no longer see twenty different groups, foreign to each other, sometimes scattered to the four corners of the globe, often separated more by language and customs than by distance, united under the same political domination. People will draw closer together, will form associations among themselves according to what they really have in common and according to their true interests. Thus these people, once formed out of more homogeneous elements, will be infinitely less antagonistic towards each other. No longer having to fear each other, no longer tending to isolate themselves, they will no longer be drawn so strongly towards their political centres and be so violently repelled from their borderlands. Their frontiers will cease to be dotted with fortresses. They will no longer be bordered by a double or triple line of customs officials and soldiers. Some interests will continue still to unite the members of the same association of people -- a community of an especially similar language or closely shared customs, or regions which are habituated to drawing their ideas, laws, fashion, and behaviour from the adjacent capital cities. But the shared interests of these groups will continue to distinguish them from other groups without being a source of enmity. One day, in each country, the time will arrive when the inhabitants closest to the frontiers will have more communication with their foreign neighbours than with their further removed compatriots. Thus there will occur a continual fusion of the inhabitants of one country with those of other countries. Each individual will employ their capital and labour wherever they might see the best means of increasing it. In this way, the same economic practices will be adopted with equal success among all people; the same ideas will circulate in all countries; differences in customs and language will tend in the long run to disappear. At the same time, a multitude of localities will acquire greater importance and will feel much less need to be closely tied to their capital cities. They will become in their turn administrative centres. Centres of activity will be multiplied. Finally, even the largest countries will reach a point where they will be able to present to the world a single people, composed of an infinite number of uniform associations, among which will be established without confusion and without violence the most complicated relations. At the same time, these relations will be the easiest, the most peaceful and the most profitable imaginable. [Dunoyer, L'Industrie et la morale (1825), p. 366-7, fn 1.]
What is interesting to note here is that this radically decentralist position of Dunoyer’s from 1825 is very similar to the “sell out” position Molinari retreated to in the late 1890s. Molinari may have sold out his anarcho-capitalist beliefs of the 1840s and 1850s, but his vision of “proprietary communities” and decentralized government entities of the 1890s remained faithful to the core radical anti-centralism and anti-statism of Say’s, Dunoyer’s, Bastiat’s, Thierry’s, and of course his own classical liberalism.
[1] Peter T. Leeson, The Invisible Hook: The Hidden Economics of Pirates (Princeton, N.J.: Princeton University Press, 2009).
[2] Charles Dunoyer, L'Industrie et la morale considérées dans leurs rapports avec la liberté (Paris: A. Sautelet et Cie, 1825); Charles Dunoyer, Nouveau traité d'économie sociale, ou simple exposition des causes sous l'influence desquelles les hommes parviennent à user de leurs forces avec le plus de LIBERTÉ, c'est-à-dire avec le plus FACILITÉ et de PUISSANCE (Paris: Sautelet et Mesnier, 1830), 2 vols.