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In previous columns, we discussed the way exchange depends on subjective determinations of value by each party, and how it requires each party to appeal to the rational assessment of the other party’s self-interest. We have discussed at length the philosophical premises of human rationality, self-ownership and their interpersonal ethical implications, which are rights and trade.
Voluntary trade has been a key element in the development of what anthropologists refer to as civilization, as distinguished from more primitive societal models. As humans moved away from hunter-gatherer societies, trade played a key role. The development of agriculture also prompted specialization in various crops. Trade is essentially a way of leveraging diversity on a societal scale. Its our diversity that allows exchange based on these divergent determinations of value.
Rather than independently growing or gathering everything for his own bare-subsistence existence, man was able to specialize and create great personal surplus of an individual staple and then trade his excess for the rest of his wants and needs. Specialization in a particular good or crop allowed humans to leverage the diversity of their abilities. Wealth, then, is either the increase in surplus resources or reductions of effort required to survive and is brought about by innovations in technology and the specialization enabled by trade.
The great surplus enabled by trade and specialization, as anthropologists tell us, was a necessary change for permanent cities; civilization to develop. It also permitted a phenomenon that could not exist prior to such surplus: the state. Among all of the competing theories about the process of early state formation, anthropologists generally agree that organized government as we know it was only possible after, and because of, this great surplus in wealth. This means (my own conclusion) that the state is essentially parasitic. Rather than being the cause of societal cooperation and its resulting prosperity, it is clear that the state could only have arisen after such advances in human development because of its need to feed on that resulting surplus. We can illustrate this by the use of an economist's favorite tool: the desert island analogy.
Suppose thirteen people crash-landed on a desert island. After all of the drama, emotional recovery, and after that one poor sap gets predictably sucked to his bloody doom into the still-turning jet engine, they settle in for a few weeks of scraping out survival. After experiencing the daily grind of individually gathering their own food, they start to find that there are great variations in their individual abilities. They decide to cooperate and hold a meeting to determine each others’ specialized roles (no, I’m not advocating central planning of careers here; just go with me on the analogy). After the skilled carpenters, doctors, hunters and such are identified, two people remain. They propose to the group that they, out of a need for order and regulation, are going to fill the role of creating and enforcing rules for the rest of the group. They offer no specialized service or product for which the others might voluntarily trade, and yet they propose that their role of controlling the rest is necessary for stability. They therefore propose that their personal survival should be supported by the excess wealth of the others, and even (if daring enough) might propose that the others also fund the enforcement of their rules for control (legislation). Let’s say that they then also propose that in order to enforce their rules, they require everyone’s agreement that they, and only they, be permitted to use aggressive force.
The State is these two individuals now. Our two benevolent, would-be parasites would undoubtedly be seen with great suspicion. Anthropologists are divided on whether the first states actually arose from a voluntary agreement to such a condition or whether the claims of such consensus based on supposed necessity are a retroactive justification for control that was obtained via conquest. Without reaching a conclusion on that ultimate question, we can still see that the state currently operates only on a fiction of “consent” and without specific and express contractual empowerment from the individuals experiencing its rulership.
This example illustrates the basic and defining nature of the state. It also helps illustrate how the state needs a preexisting surplus resulting from organized cooperation, a phenomenon for which it frequently takes credit. The state represents a very sophisticated, historically enduring, but increasingly apparent fraud by which a few humans have managed to evade the ethical rules of rights and trade, while simultaneously feeding on their resulting productivity.