Replacing the Federal Government

A few days ago, I asked the question, "If the US federal government [were to] collapse, what consensual institutions [would] fill the vacuum? Is the fed's monopoly so tightly held that these institutions cannot begin to form today? Or are there some, like private schools, which can begin to operate in the current environment and be ready for growth once their government subsidized competitors fail?"

I gave a partial answer:

Protection against criminals - The majority of criminal law is handled by State governments, not the feds.

Pensions - If social security disappears in part or in full, there are near infinite investments and charities to support people in their retirement.  

Health Care - If federal legislation on employers becomes unenforceable, insurance companies will have to start serving [individual policy holders as] their customers. There will be some evolution of existing insurance companies, and competitors with new models will arise, but I doubt doctors will stop their practices overnight because they hear on CNN that Medicare is not paying its bills. They will look for other revenue streams.

Currency - I have trouble imagining that financial companies will simply give up if the currency is so effectively debased that their customers are reluctant to accept dollars. I expect that they will compete with each other to offer accounts denominated in foreign currencies or other inflation-proof instruments.

Transportation - The road, rail, and air network is worth incredible value to businesses and individuals. So much of this industry is already semi-private, that I don't imagine it being unable to deal with the loss of subsidies and controls from the government. And I am committing an error of collectivism calling it "an industry"--we are talking about a market of competing companies, some of which will be so dependent on old business models that they go bankrupt and some of which will survive and prosper with new models. "The transportation industry" already exhibits that inherent resiliency of anarcho-capitalism--there is no systempunkt.

FDA, USDA - As soon as these two regulatory bodies close their doors, we would be left with the reputation of the drug company (or even their specific product) or food supplier as an indication of quality. How long would it take before independent labs start offering certifications? Is there any way for them to get a slice of a similar market today and move into drug or food certification when the federal monopoly ends?

With the exception of blatantly coercive acts--waging offensive wars, intimidating other states or individuals, confiscating property--is there a single function of the federal government that couldn't be replaced? If not, why wait?

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Protection against invasion

If you had asked me about ten years ago what was the hard problem faced by anarchists, I would not have listed any of the above (currency, regulation, health care, etc.). The hard problem is invasion - or, more or less equivalently, takeover by internal warlords. Broadly, it's what people worry about when they talk about a "power vacuum", and the motto is, "if they don't do it, somebody else will". You are, of course, only talking about removing the Federal government, leaving the state governments in place. I don't see any problem there - we would become a collection of smaller countries, as Europe is. Europe is trying to unify into a European Union, moving in the opposite direction from what you suggest, and from what I can tell it is not something perceptive observers will be eager to emulate. However, the American Federal government is tenacious, murderously so, so don't expect it to disappear before it has murdered hundreds of thousands or millions of Americans. Something similar was attempted in 1861 and failed after half a million Americans had died, and the man in charge of the Federal government at the time is now considered our greatest President and an example for the Federal government to follow.


The hard problem is invasion

One aspect of a marketplace of competing solutions clearly makes a society less vulnerable to invasion. I mentioned it when speaking about the "transportation industry"--multiple systems are operating in parallel to solve a problem. This provides a passive form of defense because multiple targets would have to be hit simultaneously to, for example, stop the ability to transport relief supplies to an area.

It is easy to argue that a marketplace of actors also allows a more resilient response to an attack. Instead of a single command and control center that can be removed, multiple actors are using independent, redundant systems to provide infrastructure. For example, one terrorist attack scenario involves smuggling a bomb aboard a shipping container. The damage in the scenario results not from the single explosion, but from Department of Homeland Security mandating that all container shipments are frozen in place until DHS can guarantee there are no more bombs. The scenario doesn't work if DHS is not in the picture. Then the risk analysis is performed by multiple shippers and their insurance companies who can apply a cost/benefit analysis as finely grained as necessary.

Sometimes, the infrastructure being supplied is law enforcement. After Hurricane Katrina, Patri made an argument for the greater resiliency of polycentric law enforcement.

Finally, the argument could be made that distributed armies are more effective than conventional armies under central control. I'm out of my depth to make the argument, though--I don't have the background in military history or tactics. I do enjoy reading about distributed warfare at Global Guerillas, where such arguments are made. I will only observe that a military objective such as, "protect your family and property against invasion" is probably already well distributed to the US population.

the American Federal government is tenacious ...

I'm not arguing that it isn't. I have met a new meme and am trying to digest it--I have more questions than answers.

I think it's safe to say that most participants here hold the idea that centrally controlled, coercive institutions are unsustainable. The US federal government fits that definition, and is showing signs of failure--a currency crisis is unfolding during an election period when the incentive of the organization would appear to be the opposite. The first-order response of the organization seems to follow public choice theory--calls for even greater central control. The most obvious prediction is a positive feedback loop leading to catastrophic failure.

A more nuanced prediction would involve the organization giving up some power to sustain itself--say allowing competing currencies. But history wasn't on the side of the two reformers I saw who followed that strategy--Gorbachev and de Klerk; once they loosen their grip on power, everything slips from their hand.

The US federal government is not the totality of American society. First, other levels of government exist, coupled to varying degrees with the federal government. They are numerous and diverse enough that I don't think they would collapse simultaneously with the federal government.

Secondly, as much as its proponents would wish otherwise, government is not the economy and is not society. We have a rich collection of institutions through which we can cooperate to help each other to achieve our goals. By relative measures, they have been undermined by government over the last few centuries--government has, for example, worked to crowd charities out of health care and education. By absolute measure, though, our wealth has grown enormously since 1861 or 1930 or any other historic test of our society and economy. I am hoping the additional wealth is sufficient for society to survive the shock of the collapse of the world's largest military force around our ears. But I make no claims to understand fully how these events could unfold.

Do you think the opposite position is more likely? That the federal government can sustain itself indefinitely? Can it increase the enslavement of Americans to the level of Venezuelan or Cuban or North Korean or Zimbabwean citizens? Could it even increase controls to Norwegian levels fast enough to deal with unfolding financial crises?

takeover by internal warlords ...

I would imagine that State governments would be the centers of military power after the dust had settled from the collapse of the federal government. Maybe the wargamers can speculate on different sub-scenarios during the transition: "political reformer hands over the military to State governments to preserve stability", or "madman at the Pentagon takes control of the military when chain of command is disrupted", or whatever.

So long as a rational agent is in charge of the military, however, extortion (called "taxation" in polite circles) is the only economic model I can think of for them to stay in charge. A military is incredibly expensive to operate, and the commander would have to allow enough economic stability to maintain a tax base. American culture may not allow a high enough tax rate to fund the military without all the trappings of democracy and social welfare. It has taken several hundred years for the federal government to gradually raise the tax base to what it is now. If the authority to maintain that level of taxation is disrupted by a crisis of confidence, I think it would be difficult to reestablish.

Europe is trying to unify into a European Union, moving in the opposite direction from what you suggest ...

True. If coercive governments remain in charge of the States, the trend of history seems to be that they would eventually coalesce. And there is always the chance that, following a collapse, State politicians feel a "phantom-fed" pain that makes them try to immediately set up a new central government. I wouldn't expect a negotiation between fifty-four parties to be completed in short order, though.

In short, the government collapses of the past 25 years seem to show that wealthy countries are steadied by the invisible hand. The productive capacity of the country is simply too valuable to risk an open armed confrontation.

I agree with constant

Perhaps it's a reflection of my experiences Wargaming, but my first thought to your question was "What did they do with the Federal Government's arsenal? If Texas gets to keep all the tanks currently parked there, but the midwest keeps the ICBMS, California the planes and fleets..." It's a formula for civil war, because some states have a lot more Federal might than others.

Then there's the question of internal trade disruption. California has done a lot to annoy its neighbors to the north, east and south. Right now, there isn't a lot they are allowed to do within the federal framework to retaliate. As autonomous states, I would expect trade wars to break out.

internal trade disruption

Then there's the question of internal trade disruption

Our institutions take crossing State boundaries for granted.

  • How would Walmart react if California imposed a duty on goods from Arkansas?
  • Would California be able to collect enough duty to justify building Customs offices at the State border?

Many institutions currently

Many institutions currently in place could, properly adapted, replace functions of the federal government. However, this adaptation process is itself a form of institutional evolution which takes time. The U.S. is in a unique position because of the strength of state governments which could replace many of the federal government's functions, but like previous commenters, I am also afraid of warmongering and protectionism, both of which could undercut the adaptation of existing institutions as well as the development of new ones.

Btw, my comments are shorter than normal because my left arm is in a splint. If I don't fully explain myself or my replies seem so short that they convey dismissal, this is why. That I am replying at all is a sign that I thinkthe topic is important considering my current state.

Speed of adaptation

this adaptation process is itself a form of institutional evolution which takes time

Which could adapt faster?

  • An existing government?
  • A newly formed government?
  • A single voluntary institution?
  • A market of voluntary institutions competing to see which provides the best solution?

Sorry about the arm. Thanks for the comment.

Washington Sinks

Well, I've recently become of the opinion that states should have a more significant role in their own governing. Really, all the federal government should be doing is directing the army, maintaining the inter-state courts and providing a meeting place for the various members of the union. This is, of course, a gross oversimplification, but the fact of the matter is that the founding fathers had some pretty good ideas. There are a lot of things that the federal government does that are simply more efficient to do at an inter-state level, like maintaining corporate monopolies and settling inter-state disputes.

The federal government didn't even take such a major role until an economic crisis that devastated a pretty substantial portion of the population - the Great Depression. They had good reasons to, and a lot of the fixes they put in place were only meant to be temporary. But they held on for dear life and now we're all stuck with them.

So, I'm not exactly sure that Constant is right about the Civil War, but most of what he explains is a pretty good follow from the above information.

It all comes back to money, though. Free trade is good. The conservatives believe it as much as the liberals: free inter-state trade, namely. How unpatriotic is it to buy a shirt that says: "Made in America"? Its become so ingrained in our culture to not even consider another state not a domestic entity opposing Mexico and Canada for one reason or another.

Crisis => Control

The federal government didn't even take such a major role until an economic crisis that devastated a pretty substantial portion of the population - the Great Depression.

I had gotten used to the idea that every crisis would be met by greater government power. I was surprised to see this article suggesting the opposite. It encouraged me to consider when the federal government will run out of resources to defy reality.