True Separation of Powers

In arguing against market anarchism, blogger emeritus Jim Henley ends up making one argument in favor of it.

The idea behind checks and balances under separation of powers is the restraint of mutual jealousy - each of the three branches will be so zealous of its prerogatives, and so wary of overreaching by the other branches, as to want to keep the other two in line. This has proven spectacularly ineffective in practice and in retrospect it's not hard to see why.

Imagine a totalitarian society where "all that is not forbidden is required." Every aspect of life falls under the purview of government, with approximately a third of life each under the sway of the legislature, the executive and the judiciary. In such a circumstance, any gain in power by one branch entails a loss of power by at least one other. The other branch is highly motivated to defend its turf. One of those branches directly commands the armories and the other two don't but let's not sweat that detail. In that polity, you could indeed see each branch vigorously checking the power of the other two. Of course, in that polity, it does you and me no good, because we are not "free" in any aspect of life - the only question is which of three institutions exercises absolute control over it.

The problem is that the same incentives toward vigorous checking and balancing don't apply to (initially) limited government. Under limited government there is some territory of our lives (social, political, economic, esthetic) under the sway of one or more branches of government, and a theoretically larger region that is unclaimed territory. There we have liberty. The problem is, if one branch of government decides to make inroads into the unclaimed territory, it is not necessarily impinging on the prerogatives of another branch. Since the other branch is not directly threatened, it need not vigorously resist the assault. Indeed, where would be the profit in exerting itself to turn back the onslaught simply to restore the status quo ante - the end result is that sphere of life regains its ungoverned status and the branch that exerted itself accrues no gain in its own power and privilege at all. All it may have done is ticked off the other branch and motivated it to make an assault on some power the "checking" branch does hold. Now if the checking branch dislodges the original malefactor and sticks around, it has gained something, but the result for the citizen is the same - what was under the sphere of liberty has fallen under the sphere of (some branch of) government.

Far easier and more profitable, from a power, status and bureaucratic perpetuation standpoint, for each branch to nibble at separate regions of the unregulated sphere. If the government was truly limited initially, it can take quite some time until the branches come into unavoidable conflict. And when they do, they have options beyond simply checking and balancing each other. They can arrive at modi vivendi that beat zealously opposing the other branches at the margin.

The incoherence of the "checks and balances" approach to limited government is that the problem it identifies - governmental institutions are fundamentally self-interested - it can only solve if government agencies are also either paradoxically selfless or unreasoningly spiteful. Faced with a conflict between the people and the Executive, the Legislature must either identify with the people or hate the Executive with such instinct that it never stops to consider How can I make this deal work for me? In real life, the average legislator has his eye on a job in the executive, the average jurist needs the legislator's favor to get his next, cushier appointment, the average executive functionary plays golf and sleeps with members of the other two branches. A strong class consciousness binds the three "warring" branches into a commonality of interest.

And, in the end, so much for limited government. Just as democracy "can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury," a constitutional republic can only exist until its governmental components figure out the loopholes in its charter. A country where the legislature votes on a far-reaching piece of internal security legislation without insisting on time to even read it is pretty well along in that process. I'll miss the place.

I have nothing but the highest respect for most of the Founders. They were learned men who integrated the cumulative available knowledge of political philosophy of their times and created the greatest political experiment in history. Yet, like Jim states, they were spectacularly wrong about the whole "separation-of-powers" thing. If the three branches provided the same or similar function, competition between them could arise. But they do not, and their separate complementary powers act synergistically, not competitively.

The real separation of powers the Founders achieved was in making the Federal government relatively small so that power would be distributed to the states, whose laws would differ from one state to the next. Differing laws in different states could result in competition between them. In that sense, the anti-Federalists grokked the benefits of a market of competitive governments before just about anyone else. Yet, most of this benefit was lost in the War Between the States and thereafter as the Federal government grew into the behemoth it is today, vastly overriding any benefit of jurisdictional arbitrage between states.

Many libertarians are Constitutionalists who want a simple return to the original republican government that the events of the Constitutional Convention created. I sympathize with their general cause. I place myself firmly, with pride, within the classical liberal tradition that gave birth to the first practical implementation of Enlightenment ideals in America. Yet, the knowledge we have has grown considerably since that experiment first started. We have seen how the dynamics of our government have changed over the more than two hundred years since its founding. We have a greater understanding of what drives human beings to both competition and cooperation. We know about the strengths and weakness of various forms of government in addition to our own.

But more than anything, we have the knowledge of economics on our side - a fact that should not be underestimated. Something as fundamental to the development of modern economics as the marginalist revolution only happened a little more than a century ago, long after the blueprints for the United States government were firmly in place. Economic critiques of socialism and central planning were only developed in the middle of last century. Though I empathize with the desire to return to the smaller government the Founders intended, it is apparent that the economic incentives of such a government are skewed toward an inherent tendency for growth.

The argument Jim Henley makes above about constitutional republics is the public goods problem of keeping monopolistic governments in check, an argument that favors market anarchism. A law made by the Federal Government affects everyone in the United States. These laws are non-rivalrous in use and non-excludable in effect. Such a monopoly on law easily falls prey to niche interest groups, as its capture leads to narrow benefits and dispersed costs. It is much easier for a group of individuals to use a given amont of money to secure a large benefit to themselves (via pork, subsidies, tariffs, etc) at the behest of a small harm to everyone else (via small increases in prices, taxes, etc) than it is for them to get rid of such focal benefits to special interests with the result of marginally benefitting everyone. Aggression becomes cheap and protection from it, expensive. As such, good laws - those which merely secure property rights - will be public goods and be few and far between. Instead, bad laws - those by which one group imposes its will on everyone else - will be common.

That is the current state of the market for law - hundreds of special interest groups having large influence on legislation, pork running rampant, and legislation by fiat rather than law by mediation. Bad law has slowly pushed aside good law over the generations. Constitutionalists and minarchists agree with this; they often complain about how government is beholden to special interests. Yet, their remedy is a "return" to more of the same system in which good law is a rarely found public good. It is utopian to think that limited monopolistic government stays limited. Instead of going back to a system created before any of this knowledge was available to us, why not revise and reformat? Why waste the immense wisdom we now possess that the Founders were not privileged to?

In contrast to Federal legislation, a law made by the state of Virginia mostly only affects Virginians. Similarly, a law made by the city of Richmond, VA mostly only affects Richmonders. Without the power of a higher level government to countermand it, the narrower the geographic monopoly, the fewer people the law affects. If the costs of relocation are insignificant and individuals can costlessly move from one locality to another, then law becomes a private good. It only affects those people who choose to live in a particular legal jurisdiction. They capture the entire benefit of moving to that particular location and suffer nearly all the costs of choosing poorly. Similarly, states capture the total benefit of attracting people to live there and suffer the consequences of people moving to another state. Highly distributed monopolistic governments in a world of costless switching results in law as a private good. The effects of such law are not borne by everyone, only those who choose it and provide it.

If instead of moving geographically, the costs of switching were made nearly zero by making living under a different government as simple as picking up a telephone or clicking a mouse, then specific laws would only affect those people who chose a particular government. In such a situation, good law would be a private good and bad law would be an undersupplied public good. Aggression would become expensive as it would be much harder to capture a monopoly of the market for law. It would be much more difficult for governments to grow and tyrannize their citizens because the costs of that tyranny would have to be paid for by their subscribers who could easily "move" to another government rather than be an unwilling source of funding.

No longer would voters be able to vote themselves largesse from the public treasury. No longer would special interests be able to narrowly benefit themselves at costs borne by the rest of us. No longer would there be a tendency for governments to grow with each passing year. Currently, fighting the growth of monopolistic governments is an uphill battle. It is only the American culture of liberty that kept the US government from becoming truly despotic during the last century as governments in the rest of the world slaughtered their own citizens in record numbers. With polycentric law, libertarians have both culture and economics on their side.

Polycentric law is simply federalism taken to its logical conclusion. I don't envision such a society emerging anytime soon, let alone in my lifetime. As Hayek wrote, societies and ideas evolve slowly over time. There is no magic button to push. But if I could use a wayback machine to go back to the late 18th century and sit down and have a drink with with Patrick Henry and Thomas Paine, tell them how right their fears were, give them more ammunition for their battles with Jay and Hamilton in the form of knowledge of economics we have today, and beseech them to try even harder to assure a true separation of powers, without a doubt, I would. Market anarchism and polycentric law would surely be more in line with what spirit of 1776 was about than the document written a decade later.

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Here's what I don't get

Here's what I don't get about market anarchism - what prevents a monopoly from forming that's exactly like the one we have now? Consider this thought experiment:

10:00 AM: The United States government disbands, so that market anarchism can take its rightful place.
10:01 AM: Officials and employees formerly of the United States government form a private defense and law enforcement company, called USACo. Other companies will be free to compete with USACo, but USACo will be free to charge competitors (privately, of course) with treason against USACo. USACo declares itself the defense and law enforcement provider for all territories that were previously under the control of the United States government.
10:02 AM: USACo changes its name to "the United States government".

How would that be any better or worse than what we've got now?

I don't envision a

I don't envision a transition to market anarchism taking place like that. If the US govt disbands right now, a bigger and badder govt will immediately take its place. There have to be cultural institutions and traditions in place before it can happen, just like the transition from monarchy to liberal democracy. That's why, unlike many libertarians, I fully support intermediary measures that slowly chip away at state power (school vouchers, privatization of social security, etc) provided that there is a good chance that the plan will have the intended outcome.

The key to prevent something like what you describe from happening is for security and law to be a private good. Most people agree that it is very difficult for collusion to occur between suppliers of other private goods such as, say, gasoline or broadway musicals. Each supplier has an incentive to cheat in order to profit and capture market share. If law is similarly a private good, it becomes very difficult for monopolies to arise. That is not to say that they won't, just that the odds won't be in their favor. If enough people want monopolistic rule, that's what will result.

There are a number of variables affecting whether or not law is indeed a nearly private good - the number of firms in the market for law, the geographical location of clients, a positive-sum worldview among customers, etc - and these are likely a necessary prerequisite.

would everyone in a market

would everyone in a market anarchist "society" have to want market anarchism for it to work? what would happen if some people, even a tiny fraction, wanted statism? or even classical anarchism?

I have a question about the

I have a question about the assertion that market anarchism would end up in a situation that's pretty much the same as having a government. Where would the resources a defense company needed to establish a territorial monopoly come from? The government's monopoly on force requires an absolutely huge amount of resources, gained through taxation. Could it really sustain this voluntarily? Is it really a great possibility that enough people would come together and voluntarily pay enough of their own money to support a defense agency until it gains enough power to act as a government? USACo could declare itself a monopoly, but how would it sustain that monopoly if people did not want to pay it anymore? I have a hard time imagining that people would really want to devote so much of what they have simply to establishing the right to use force against other people for gain. I am new to these ideas, so maybe I am looking at it the wrong way. Thoughts?

A Few Questions for the

A Few Questions for the Candidates
Here is Roxanne's opening:Dear John Kerry and George "W standing for Women is a lot like Putin standing for Democracy" Bush: I no longer give a shit about your Vietnam-era exploits. It doesn't matter to me if you were once a drunk-driving, cocaine-...

USACo could declare itself a

USACo could declare itself a monopoly, but how would it sustain that monopoly if people did not want to pay it anymore?

People don't want to pay it now. But they do, because it's easier than having machine gun battles with federal agents.

True Separation of Powers:

True Separation of Powers:
Over on Catallarchy, Jonathon Wilde has a very thoughtful discussion of how a polycentric legal order provides genuine checks and balances to prevent abuses of power...

Digamma, True, people don't

True, people don't want to pay it now, but what if they had a choice to get someone else to defend them? The anarcho-capitalists I have met are just about the only ones who don't make every argument based on the assertion that the government is absolutely legitimate without question and has an absolute right to do whatever it wants to me (which I have implicitly consented to, of course, by living in the territory that belongs to it). If this perception no longer existed, would people exercise a choice not to pay the US government, or to hire someone to protect them from it?

Competitive Government Maybe

Competitive Government
Maybe Jonathan Wilde already had my idea in mind when he wrote about competitive government, but it's not exactly clear, so I'll write it myself. He explains why seperation of powers within the federal government hasn't worked that well and...

scott, would everyone in a


would everyone in a market anarchist â??societyâ?? have to want market anarchism for it to work? what would happen if some people, even a tiny fraction, wanted statism? or even classical anarchism?

Every political system has people who don't agree with it and fight against it. There are many people in the US who disagree with democracy and try to change it to something worse. Yet, enough people believe democracy is a Good Thing that those others have a tought time getting rid of democracy.

Similarly, in a polycentric legal order, there would be people who tried to consolidate power and reintroduce monopolistic law. Yet, if a polycentric legal order was ever established and functional, it would be difficult to override it because law would be private good. Creating monopolistic law when existing law is a private good would face the same problems businesses face when trying to collude. There would be much incentive to break the pact and try to secretly profit while your fellow colluders were looking the other way. (Most business who do successfully collude only do so with government privilege.) Collusion would be a public good. This is what David Friedman refers to as "being on the right side of the public goods trap."

How many people would need to desire monopolistic law before the system broke down? It's tough to say, but based on economic incentives I think it would be more than the number needed to convert a liberal democracy into a dictatorship. Though democracies have undergone this transformation (Germany), it has been rare.

People would be free to set up any type of voluntary relations they chose. If they wanted to live in a commune, they would be free to do so in a polycentric legal order. I wouldn't find such a lifestyle very attractive, but neither would I try to stop anyone from living it.

Lisa, I have a question


I have a question about the assertion that market anarchism would end up in a situation thatâ??s pretty much the same as having a government. Where would the resources a defense company needed to establish a territorial monopoly come from? The governmentâ??s monopoly on force requires an absolutely huge amount of resources, gained through taxation. Could it really sustain this voluntarily? Is it really a great possibility that enough people would come together and voluntarily pay enough of their own money to support a defense agency until it gains enough power to act as a government?

I think that without the proper meta-context and knowledge, they would indeed create a new monopolistic government. People would need to believe that multiple protection agencies without an overriding sovereign would be in their own long-term self-interests. Otherwise, they would flock to the territorial monopoly wannabe that promised them "law and order" by forced conformity of law and security.

This is where I part ways with libertarians who insist that simply getting rid of monopolistic governments (as in Somalia) will result in prosperity and freedom. Instead, I argue for something, not against - institutions, meta-contexts, traditions, rule of law, and a postivie-sum outlook that would make a market for law work. Like Randy Barnett wrote, liberty needs a structure, not merely absence of monopolistic government.

digamma, People donâ??t


People donâ??t want to pay it now. But they do, because itâ??s easier than having machine gun battles with federal agents.

Hopefully, there would be many other protection agencies to choose from, and hopefully they will realize that having machine gun battles is costly and peace is profitable.

Sounds idealistic, but democratic governments in the Western world operate from this basic pretext. Though wars were fought between France and England many times in history, such a war today would be nearly impossible for politicians to carry out, simply because there is too much to lose for both sides.

Shining a Light on CBS and

Shining a Light on CBS and Fox
Well, it is always better that congress spends time and resources on hearings rather than making sound bites about and voting on legislation though both hearings and legislation are wastes of citizens resources. Yet, I suppose, Hugh Hewitt's proposal ...

Superb analysis. I think

Superb analysis. I think Henley went into a funk about the time of the Beltway shooter incident, and he just keeps getting funkier. Pretty soon he'll be buying a shack in Idaho--especially if he keeps getting critiques like this.


:beatnik: Wilde: 1+

:end: Henley: -1

The incoherence of the

The incoherence of the â??checks and balancesâ?? approach to limited government is that the problem it identifies [...] it can only solve if government agencies are also either paradoxically selfless or unreasoningly spiteful.

On the other hand, "unreasoningly spiteful" is often a fair description of the players in two-party systems of government, and split houses has at least proven somewhat effective at limiting the growth of government. How's "Bring on the hate!" sound as a motto for small government advocates?

Federalism? Jonah Goldberg

Jonah Goldberg thinks federalism is a good thing and rues the apparent abandonment of the concept by bush and other conservatives:The virtue of a federalist, republican form of government is that the more you push these decisions down to the level wher...