Arnold Kling  

A Theory of Government

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My latest essay is something that, if I were so inclined, I could try to dress up in academic jargon and send to a professional journal. But having to dress thoughts up that way is one of the things that keeps me from wanting to be an academic.

Suppose that you and I are meeting with an Arbiter to resolve a dispute, and you notice that I am carrying a gun. You might wonder about my commitment to fair arbitration. Indeed, you might reasonably worry that I am not going to comply with the Arbiter's decision if it goes against me. Rather than accept the decision, I might take out my gun and demand that you comply with my wishes in our dispute.

In order to demonstrate my commitment to resolving the dispute peacefully, I could give my gun to the Arbiter. Once the arbiter has my gun, then you can have confidence that I will go along with the Arbiter's decision. Giving the Arbiter my gun is a commitment strategy on my part. It shows that I am committed to accepting the decision of the Arbiter, which in turn gives you confidence that going to the Arbiter is worthwhile.

...We do not give guns to baseball umpires, and still we accept their decisions as final. However, I would argue that baseball games are peaceful in the context of a society in which we expect government to enforce the peace. Thus, although umpires are not employed by the state, their authority to resolve baseball disputes is indirectly backed by the state, in the sense that if you engage in violence to try to overturn an umpire's call, you can be punished by the state.

In contrast, if you are a heroin dealer involved in a dispute with another heroin dealer, it is much harder to commit to peaceful resolution of a dispute. Because you are involved in a business that is not sanctioned by the government, you cannot submit your dispute to an Arbiter who has ultimate backing from the state. Thus, it becomes difficult to develop peaceful mechanisms for resolving disputes among heroin dealers.

The state's credibility in resolving disputes depends on the state holding what I call the Golden Scepter. That is, if the state has enough force at its disposal, it can enforce its decisions in resolving disputes. Thus, the state can be defined as the Arbiter with the Golden Scepter.

I would be eager to see comments from other bloggers on this neo-Hobbesian view of how government is inevitable and how its powers are very difficult to limit.

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CATEGORIES: Political Economy

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The author at Modeled Behavior in a related article titled Answer to Arnold writes:
    Arnold asks for comments on his theory of government. . . . I generally agree although my story goes a little bit like this [Tracked on March 26, 2007 1:12 PM]
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John Goes writes:

Money quote:

"Thus, although umpires are not employed by the state, their authority to resolve baseball disputes is indirectly backed by the state, in the sense that if you engage in violence to try to overturn an umpire's call, you can be punished by the state."

Alex J. writes:

The umpire's authority doesn't come from the state. It comes from the fact that no fan will pay to see a crooked game. The league needs people to see their games as legit in order to stay in business. If a player threatens an umpire he won't get invited back.

The problem with mafia or gang arbitration is not that it lacks the backing of the government. Rather the problem is that their arbitration is forcibly suppressed by the government. Robbing a bank is just armed robbery, good for a few years. Resolving a dispute between to heroin dealers is a RICO offense worth decades in a federal prison.

Arnold Kling writes:

Aren't you being carried away by rhetorical points? If fear of RICO prevents heroin dealers from resolving disputes peacefully, why doesn't fear of being charged with attempted murder keep them from resolving disputes violently?

Josh writes:


I've been reading your columns quite regularly for some time now and I usually enjoy them, even when I don't agree. But every once in a while, you hit on something that seems so fundamental that I feel like it really changes the direction of my thinking (there are only a couple other authors about whom I can say that). This is one such column. I'll have to think for a while about the implications of this arbiter/scepter "model" before I have any intelligent observations. But regardless, I hope you can expand on this idea further, even if only informally.

Jon writes:

I agree with Alex that your example undermines your conclusion. Of course the umpire is protected against acts of violence by the state -- we all are, at least in theory. But that's not the source of his authority as a baseball umpire. His authority arises from a voluntary agreement between the competing teams.

As for the heroin dealers, it's the presence of goverment rather than the absence that causes the problem. Prohibition increases the likelihood of drug-related violence in at least two ways: firstly, by criminalising peaceful dealers, it effectively increases the incentive to resolve disputes by means of violence (one may as well be hanged for a sheep as for a lamb); secondly, as a consequence of the first effect, heroin dealing as a career(!) disproportionately attracts violent risk-takers.

Colin writes:

Alex and Jon-

Though you both make interesting points, I believe that you miss a fundamental point from Arnold's essay. He does not say that the source of an umpire's authority is the state, but rather that it is indirectly backed by the state. Yes, the authority is derived from and by the consent of the teams and the fans, but once that arrangement has been made, then the arrangement is backed by the state.

Think of Contract Law. The existence of a contract does not require the state, and the authority granted in such a contract is not supplied by the state. Once the contract is formed, however, subject so some constraints, it is backed by the state.

With respect to the settlement of disputes between two criminal entities, RICO is simply the state asserting it's monopoly over force against those who would circumvent it. Peaceful dispute resolution is a self-organizing system, which facilitates the expansion of activity (see Hayek - Fatal Conceit). Disrupting peaceful dispute resolution is one way to keep undesired activity contained (after a fashion).

Brad Hutchings writes:

Wow, I read your essay completely differently. Probably because I was exhausted and had just listened to an interview with a local city mayor whose council had just voted to require contractors to prove that all employees were legal workers after July 1. Coincidentally, watch all the pretty landscaping in Mission Viejo go to hell ;-). Also, discussion about the US Attorney from San Diego who was apparently (according to e-mails) fired for not being aggressive enough on illegal immigration cases. Her excuse was that she had to set priorities for her overworked staff.

So with those in mind, I read your essay, and I came away thinking that we're really beyond the limit of what government can practically enforce. It's powers are limited by reality. Americans have a healthy skepticism of government... It's usually only the state college educated goatee crowd that thinks government can do more/any good.

Let's take the mythical heroin dealers... Or maybe a home-based meth manufacturer makes more sense. We can clamp down on raw materials until none of us can get cold meds anymore, and it doesn't get rid of the problem. So we lose freedom on paper if not in practice and still don't make a dent in the problem. What if instead, we used indirect coercive means? For example, if a home-based meth lab goes up in flames, an insurance company could walk away without writing a check. A lein holder could take immediate possession of the property, etc. Let people do stupid things, but don't let them get away with the consequences.

joe writes:
this neo-Hobbesian view of how government is inevitable

But is it an inevitable evil? or is it just and good?
'coz what I'm getting from this is that good all gub'mint is the source of peace and order in society....
(no wonder you're all such a bunch of fascists, btw)

anon writes:

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MattC writes:

Reading the baseball umpire analogy I thought of soccer riots where the fans tried to kill the referees.

Constant writes:

To address the claim that the government backs up the umpire - it assumes its own conclusion. Sure, the government may step in to stop violence, but it will presumably step in to stop *all* violence. It biases matters to suppose that the players are disobeying the umpire violently. Maybe they are practicing nonviolent disobedience and the umpire is behaving violently. The the state might step in to stop him. You're stacking the deck by supposing that one side is violent and the other is not.

I'll tell you why the umpire will win the dispute and the player will not: because the voluntary agreements between all parties say so. Suppose that the umpire makes a ruling and nobody obeys him but they do so nonviolently. The state will not step in. Not unless there is some other pretext. But the umpire will be obeyed anyway because the agreements say so, and most of the players know that if you break the agreements then there is no game. A game depends on the rules being followed. Everybody knows that. So the rule-breakers will be in a distinct minority.

Think about a chess game. When you play a chess game, and you notice that somebody cheats, the government isn't going to arrest them! And yet, most of the time, people don't cheat. They follow the agreed-upon rules. Why? Because the rule breakers will be discovered and word will get around and soon everybody will refuse to play with them. Reputational enforcement by means of ostracism.

Back to the state. The state *will* step in in one case: to defend the owner's property right. The owner of the stadium gets final say over what happens in his stadium. He even overrules the umpire. If the umpire says something and the owner of the stadium overrules him, he holds the ultimate trump card which is that he can order the umpire and everybody else off his property.

And that, as things stand, happens to be enforced by the state. Which brings us to a separate topic, the enforcement of property rights by the state. How much does the state really protect my property, and how much does that protection really depend on me? I would argue that it depends primarily on me, but that's a separate discussion.

Curt writes:

I have some familiarity with the underground drug economies that operate inside prisons. Surprisingly, disputes that arise over these transactions are usually resolved with less violence than you might expect, even though there is no state authority to call upon to keep the peace. Fights are costly, so inmates look for non-violent means of conflict-resolution. Often, this involves submitting the dispute to an agreed-upon arbitrator. Each individual, concerned with maintaining his reputation as a reliable trading partner, is willing to be bound by the arbitrator's decision. Other times, the dispute is negotiated between rival gang-leaders, hoping to avoid the costs of an all-out battle. Although the threat of force is always present, it is rarely actually used.

Likewise, in the umpire example, it may be that most people abide by the umpire's calls simply because they known they must if they want to continue to enjoy the benefits of continued trade (i.e., continued play).

Bob Hawkins writes:

Oklahoma basketball coach Abe Lemons once said, "You can say something to popes, kings and presidents, but you can't talk to officials. In the next war they ought to give everyone a whistle."

Scott Scheule writes:

I admit to a bit of jealousy seeing Constant comment somewhere besides Catallarchy.

Constant writes:

Just thinking it through some more - the state will back up the stadium owner if the owner orders the umpire off the property. But if he kicks off the umpire for obviously bad reasons (e.g. the umpire is not sufficiently biased toward the home team) then he might get in trouble with the league, with the fans, and so on. So the stadium owner had better behave reasonably well *even though* the state is on his side. The authority of the umpire against the owner is therefore upheld *despite* state intervention on the side of the owner.

Sorry Scott. I didn't mean to do it. I was provoked.

Steve Sailer writes:

Good work. Libertarians need to think harder about how all property rights and other things they like ultimately rest on the threat of organized violence. To paraphrase Mao, property rights come out of the barrel of a gun.

Constant writes:

To boil my argument down: suppose one of the players owns the stadium and disagrees with the umpire. What happens?

What is pretty likely to happen is that the umpire will prevail - despite the state being on the side of the player (as property owner).

John Goes writes:

The umpire example was used to illustrate the need for some level of government at all levels of society, but ironically this is almost an ideal example used by anarchists in their analysis of spontaneous and non-coercive cooperation. Much better to either state outright that you just assume a certain level of government is necessary, or else the argument wants for academic clothing.

PrestoPundit writes:

The Lombards and other "Barbarian" tribes provide a good model for how "governments" get started, why they are necessary, and how they evolve into ordered legal systems. Overwhelming centralized force/power first evolves as a mechanism for plunder, is forced to expand as a mechanism for security and protection, then evolves as a force for domestic order and even justice -- something which in times becomes of interest to the powers that be.

Marcus writes:

"Libertarians need to think harder about how all property rights and other things they like ultimately rest on the threat of organized violence. To paraphrase Mao, property rights come out of the barrel of a gun."

From that it follows that no organization should have a territorial monopoly on violence.

Arnold Kling writes:

I agree that government typically does not start by people saying, "let's set up a peaceful way to resolve disputes." It starts as a tyranny, but as the tyrant gets weak he makes concessions to others, and these concessions evolve into weaker government.

But today it seems to be the people that seem to be conceding authority to government, rather than the other way around.

Alex J. writes:

A problem with illegal arbitration is that it can't be held up for public scrutiny. It has to be kept secret from the authorities, which means it has to be kept secret from almost everybody. Now, I'm not saying this is the only problem, just a big one.

Consider the Law Merchant. International merchants found that local governments refrained from acknowledging contracts from outside their jurisdictions. To get around this the merchants created their own courts that relied upon reputational enforcement. That way, they didn't interfere with local sovereignty. They had power because obeying their rulings was a self-interested boycott for third parties. Interested strangers could attend trials or find out about them if they doubted a judge's integrity.

Now imagine that instead of not merely recognizing the merchant's agreements, the governments tried to suppress the merchants' business entirely. The merchants and their courts would have to keep their proceedings secret. Therefore, resolving normal disputes between the merchants couldn't work (as well) via reputational enforcement.

So, you have a dispute resolution system that historically did work without state backing. But we can easily imagine how it wouldn't work if it was suppressed by the state.

JKB writes:

Arbitration of illegal activity is no kept secret. Those who function in that society learn all about it quickly. The fact that it can't be published in the local newspaper makes personal associations important but the word spreads. In many ways the organized crime concept was to provide a government to illegal activity. A feudal lord government but the boss is the arbitrator. He has soldiers who enforce his edicts. Anyone disobeying is dealt with harshly since his authority rests on his threat of violence.

As for umpires, it has been demonstrated that when threatened or arbitrarily overturned, they stop agreeing to officiate. This happened when parents started threatening umpires of little league games. Soon the umpire association had no one willing to umpire games. The teams themselves solved the problem by banning misbehaving parents and even their kids thus restoring order. The state indirectly backed this as they would have acted if anyone had attempted to force an umpire to officiate. But remember the umpire is not arbitrating warring parties. Any team dispute is handled by the league committee who is the arbitrator.

It is disturbing that individuals seem to be leaving behind these voluntary arbitration (governing) methods and running rapidly to government for the smallest dispute. Schools call the cops on 4-year olds these days. What's up with that.

Matt writes:

The state is ultimate if arbiters are hierarchically aligned.

It is not clear to me that the state always meets your second requirement, that it have the force to cause action. In areas where the state is weak, then the state is just a large arbiter, liked others in society.

You should check you assumptions about when and where the state acts, and then, I suspect, your theory will evolve into a theory of large organizations.

Gary writes:

I think the introduction of the gun in the example sends this whole discussion off in the wrong direction. The key to dispute resolution is the perception by both parties that there will be a fair and just hearing for both sides. If I bring a gun to an arbitration it does make it difficult for you to believe that the negotiation is fair, but that is not what drives most negotiations. Force of any type is rarely even considered in dealings between people.

There are, of course, those who try to take advantage of others through force, bribery or other unjust means. When this is allowed, civilization breaks down. Eventually societies can reach a point where they are ruled by gangs and warlords and the only way to survive is through force. However, an educated and moral society with a good sense of justice and the willingness to stand together has more power to stop this than the force of government. In fact, the greatest danger for any of us is for the parties that want to take advantage will hijack the power of government for their own unjust causes.

I too am convinced that government is necessary, but not because its power is what makes others play by the rules.

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