The following was written by JoSH. It is the winning post
in our contest for the first post.

My essay, "National Defense in an Anarcho-capitalistic Society",
is hereby placed in the public domain.
--JoSH
________

	National Defense in an Anarcho-capitalistic Society

    "There is a common notion that during war costs do not count.  
    There is no greater fallacy.  Costs are more important in war 
    than at any other time, for the need for overall effectiveness 
    is then more imperative." 
	Vannnevar Bush, in "Modern Arms and Free Men"

    "Rear, (n): That part of the Army nearest to Congress"
        Ambrose Bierce, in "The Devil's Dictionary"

    "I'm a mercenary."
	David Friedman, in "The Machinery of Freedom"
	(somewhat out of context)

(David) Friedman's Law states that "it costs the government twice
as much as it should to do anything."  A common rule of thumb in 
military matters is that it takes an attacking force of three times
the strength of the defensive one to dislodge it.  If we follow these
dicta to their logical conclusion, we can reasonably suppose that 
a State wishing to attack an anarchistic society must invest six times
as much as the anarchy is investing in defense.

Jeffrey Hummel, in a widely distributed taped talk on the subject,
adds the belief that a truly free market will give the anarchy a
large advantage in overall wealth and technological progress vis-a-vis
a State sufficiently authoritarian to start an unprovoked war of 
conquest.  He therefore concludes that the anarchy would be
"invincible".

These ruminations must be set, of course, against the conventional
view that the anarchy must be decidedly inferior to the State on 
military terms.  Presumably this belief arises from some of the 
organizational advantages of the State:
 (1) The State obtains the men and materiel for its effort by
     coercion (of its own population), so it is not constrained 
     to allocating an economically efficient force. 
 (2) The State can conduct major operations in secrecy, and thus
     may make use of surprise and deception.
 (3) Perhaps most important, the State operates with a fixity of
     purpose that the anarchy cannot match.

On the opposite hand, the anarchy is supposed to labor under
corresponding disadvantages:  
 (1) Since defense is a public good, it will be in even shorter than
     economically efficient supply.
 (2) No major projects can be carried out secretly, and few openly,
     since there is no central direction.
 (3) The marketplace has neither the vision nor the perseverance to
     make a successful player in the game of statecraft.

I will concede at the outset that not only are the individual
statements largely true, but that there is a large extent to which the
conclusion is also true; to wit, the by now well known fact that the
more open and free a country is, the less likely it is to start a war;
and that past a certain point corresponding roughly to the average
western democracy, countries don't start wars at all.  The secrecy,
the ability to put through major projects without widespread social
approval, the ability of one or a few individuals to impose their ends
on the resources of a whole nation, are essential to the pursuit of
war--at least to the starting of one.

Whether they are essential to an effective defense is another
question.  I view the fact that an anarchy could not start a war as an
admirable feature, not a drawback.  A world of anarchic societies (or
indeed of liberal-enough democracies) would be a world without war.
This is highly desirable.  Between here and there, however, there is
the question of what one does in an anarchy attacked by its unfriendly
neighborhood State.

I think we can invoke the opening remarks to bet on the anarchy in the
case of any conventional invasion in which valid analogies can be
drawn to France in 1914.  The reason is that an actual invasion, if
not more or less immediately successful, will stimulate an
overwhelming response in the victim country giving it a concurrence of
purpose quite as strong as if it had the most totalitarian of
dictators.  I do not claim that it will necessarily succeed, but that
its chances are as good as those of a State to rally and hold the
invader, as France did on the plains outside Paris.

In essence, the "public good" arguments disappear since there are
other instincts operating besides individual self-interest, and 
even an enlightened self-interest will throw into a collective 
defensive effort when the danger is clear and present enough.

I further claim that in such a struggle, the advantages of wealth and
technology held by the anarchy will be real and substantial.  An
enormous part of modern warfare is simply production and
transportation, logistics and decision-making.  The market is *better*
at these tasks than a hierarchical bureaucracy.  In fact I believe
that an army whose higher echelons of command and control were
replaced by a market decision-making mechanism would be a more
effective fighting force.

An attacking state which realized this would want to make the most
of its advantages, and would therefore act in a more precipitate
manner.  Latter 20th-century technology allows for some very
precipitate actions indeed.  

"The Machinery of Freedom" lists defense as "The Hard Problem";
one reason is something I shall refer to as Friedman's Strategy.
It goes like this:  the ambitious State threatens a city, demanding
tribute, or annexation, or whatever.  If the city refuses, nuke it,
and go to the next city.  Organization of the control structure to
collect taxes for the tribute or to surrender is the city's problem; 
they'll probably do it.

Friedman's Strategy does not depend on the availability of nuclear
weapons;  it was used by Tamerlane, Nebuchadnezzar, and Genghis Khan.
Indeed, the new thing under the sun that technologically advanced
weapons of mass destruction have made possible is the *reverse* of 
Friedman's Strategy.  It works something like this:

I live in Lib City.  I'm apprehensive that it may be attacked or
threatened by neighboring People's Republic of State.  I sign a
contract with National Defense Incorporated:  I pay a monthly fee,
and they agree that if I'm attacked they will expend one of their 
exquisite collection of fine nuclear devices upon the Capital of 
State.

Now State cannot nuke Lib City; at least, it runs the same risks in
doing so as in nuking Chicago.  State can, however, attack Lib City in
any way that does not greatly threaten me.  If the rest of the city
has invested *nothing* in defense, this can be accomplished by a small
gang of men in snap-brim hats with Tommy guns.  In general, of course,
Friedman's Strategy has been reversed:  How to invade is now *State's*
problem.  

Note that N.D. Inc. has incentive to let State invade if they can do
it without harming me.  That, after all, is how their product loses
its externalities and can be sold to a relatively broad segment of 
the protected population.  For example, State could come to NDI ahead
of time and get a list of clients.  Then they could promise to avoid
those people, act to protect them if possible, and promise to pay
indemnity if they suffered accidental damage in the fighting.  NDI
would probably agree to reasonable terms, and the invasion could 
proceed.

Thus, I claim, defense *of* a nation may be a public good, but defense
*against* a nation is not.  Modern technology allows defense to be
done by threats of retaliation, which can be tailored with infinite
flexibility.  The interesting point is that it's State's previous
advantage, namely territorial hegemony, that makes this possible; one
could not defend against a widely distributed organization (such as
NDI) with such tactics.  Lucky for us anarchies are peaceful.

There are two objections left to deal with.  First, will it be 
possible for the people to afford to support nuclear weapons in this
fashion?   The answer is almost certainly yes.  Although the popular
press accounts of undergraduates almost building bombs are overblown,
realistic estimates are that a $50 million company could do so in the
absence of government controls on the wherewithal.  Such a company
could make money selling its contracts for $20 a month to 20,000
families or for $2,000 a month to 200 apartment buildings and
businesses.  Assuming the externalities are still big enough that
only 10% or so of families subscribe, a U.S.-like area can still
support 2,000 companies!  Quite a deterrent, I'd say.

The other objection is that massive indiscriminate retaliation
violates the rights of the subject people of State.  I can pose no
definitive answer to this objection that a natural-rights theorist
would accept.  I can, however, retreat to a rule-utilitarianism that I
believe is the proper formulation of libertarian moral ontology.  From
this standpoint, we can say the following:

(1) Few of the people of State will be completely blameless of its
actions; in the administrative, industrial, and military centers that
are the likely targets of retaliation, there will be a concentration
of people who give not only acquiescence but overt cooperation to its
machinations.

(2) Nuclear weapons are simply the example used here; as technology
advances, it may be possible to improve the match between those struck
and those carrying the blame.  Indeed, bombing the capital of a State
already improves this match over simply killing the probably
conscripted foot soldiers it sends against you.  

(3) Furthermore, improving the match drastically decreases the
probability that the attack will be made in the first place, so such
improvements would be avidly sought by NDI.  This phenomenon is
probably responsible for the remarkable absence of WWIII.  As a rule
of thumb, we can add to "Liberal democracies don't attack," "Nuclear
powers aren't attacked."  So when you start your national defense
company, it is with the expectation that in all probability you will
*not* have to use your weapons.

(4) When all is said and done, however, there still remains the
possibility of killing innocent people.  In this ultimate sense, the
scheme remains only the lesser of two evils.  It does carry the hope
that it is a stepping stone to a world without nations and without
war, and could then be dispensed with.

--JoSH