I just finished reading a very important book on the myth of national defense, which was edited by the present dean of Austrian school of economics, Prof. Hans Hermann Hoppe. In the next few paragraphs I will briefly present the case for a privatized system of defense. It is impossible to know in advance how a free market defense system will actually work, but we can surely look into the past and present, where many private firms provided and still provide defense services, to know how such system will likely function in future. As Prof. Walter Block said, and I paraphrase, the question of how the private market in a present public good sector will work is an entrepreneurial question, and not theoretical one. In any case, as I said, based on past and present experience we surely can imagine such a system.
Before we discuss private alternatives of defense, first it is important to bust the myth of national defense. The theoretical base on which the whole idea of only government can provide defense services via its national armies rests is totally hollow when we logically scrutinize it. Once we dismantle the theoretical case for a national defense, it is easy to see and appreciate its private alternatives.
Is national defense a public or a private good?
The major reasons which mainstream economists give to make the case for the state provided national defense are that of the problem of 'externality' and the 'public good argument'. National defense provision involves many positive externalities, and because of these externalities market will fail in providing adequate amount of defense to citizens. According to their thesis, only State can provide national defense because of this alleged market failure. The State must take the responsibility of providing national defense. They also argue, that national defense is a public good, which a system of free market can not provide. The Statist people say, that because of these two problems, the free market will not be able to produce defense good for the citizens, and so, to protect the citizens from aggression, government must take charge of national defense services. And above all, because citizens will not pay voluntarily for their own defense needs, government must force them, mainly the tax payers, to pay for this security of their life, liberty and property!
Before we go on and expose both the externality and public good arguments, first let us try and see the sheer lunacy of this argument of forcing citizens to pay for their own defense! As we all know, government tax us to make provision of defense (protection) of our life, liberty and property not only from the foreign enemies, but also from the domestic threats. Now, taxation is nothing but a day light robbery; it is a theft of our life, liberty and property. If that is the case, and it is THE case, then, how a government who first robs us of our life, liberty and property can protect that very same life, liberty and property later on? As Prof. Hans Hermann Hoppe says, an expropriating property protector is a contradiction in terms. When the Statist people tell us, that the government needs to rob us first to later protect us from robbery, they are logically contradicting themselves. They are fooling everyone. Those people who believe in such baloney are deceiving themselves.
Not only the government cannot protect us from foreign and domestic enemies via their tax theft funded national armies (and police force), but the whole notion of national defense itself is bogus to begin with. There is no such collective good called national defense. The collective thinking hides important facts about the security good. Defense, security etc., are just another type of commodities in the free market whose demand varies from customer to customer. The demand for defense is not same everywhere e.g., in India, those people who are living in the border areas like Kutch or Kashmir are in more need of defense from foreign nation states than those who are living in areas which are more interior like Madhya Pradesh! Moreover the defense resources are scarce, which means, if the government makes provision of defense equipments in, let's say, Kashmir than that many resources of defense services they can't provide in Gujarat simultaneously. If they try to defend Delhi first than they can't, at the same time, defend Bangalore. Even government will have to allocate defense resources. The problem with government allocation is, that it will be arbitrary, mostly based on political criteria, and not based on the intense defense needs of citizens of various part of the country. Government central planning resource allocation will be inefficient in the absence of the guidance of market price system. The way in which a private defense company can allocate resources based on the price and profit and loss system, governments can't even dream of doing that.
Apart from the above mentioned fundamental error in Statist thinking, both the externality and public goods arguments are also hollow as our analysis will show now. Let us first see what this alleged problem of externality is. I take help of my mentor Prof. Walter Block, from whose article now I cite a lengthy quote:
The first attempt to justify the levying of compulsory taxation in order to “protect” the citizen that we will consider is the argument from externalities. Many economists maintain that national defense is the sort of thing which, while it indubitably helps those who pay for it (they would scarcely consent to be billed were it otherwise), these benefits cannot be fully captured by them. Rather, a part of the good effect “spills over” onto those who have not paid for it. Each person thinks: “If others pay for protection from external enemies, then I, instead of undertaking the defrayment of these costs, can be a ‘free rider’ on their expenditures.” But if all go through this exercise of logic, then each will wait for the others to finance this operation; they will all operate under the hope that the other guy will pay the freight, and they will be passive beneficiaries. As a result, no one will recompense the private providers of this service, there will be no national defense, and relatively weak foreign armies will be able to overrun us. (The Myth of National Defense, p. 305)But this is a flawed argument. As Prof. Block has argued, private defense companies, in a purely free market capitalist societies, can easily internalize these so-called externalities by providing protection to only its subscribers. They can easily exclude the non-subscribers. We right now can't tell how the private defense companies will do that, but the flexibility of free market will definitely find some way of doing it. And in any case, the Statist solution of this externality argument of taxing the citizenry for their own defense is a contradiction in terms as we already noted above.
Seeing national defense as a public good is also a flawed thinking. Mainstream economists define public good by using two criteria of 'nonexcludability' and 'nonrivalrousness'. The meaning of nonexcludability is, that the producer of a certain economic good cannot exclude people other than its buyer from consuming that product. They say that the national defense has such characteristics e.g., once a border defense system is in place, even those people who did not pay for it - i.e., the non tax payers - can enjoy the benefit of its security. But such a notion is surely wrong because any private defense provider - e.g., a private insurance company - can easily exclude the non-payers from enjoying the benefits. Suppose people from Surat are paying subscribers of XYZ defense company, and of Ahmadabad are not. In case of an attack from the Pakistani government armies, XYZ company will only defend its subscribers from Surat city. People of Ahmadabad city will have to defend themselves by using other alternative defense tactics or, as will surely happen in a private free market, they will be subscribers of some other defense company, say ABC, which will defend them against any such foreign aggressions. The same thing can happen inside the city borders also where different areas can subscribe to the defense services of myriad of defense companies. There is no question of defense as a national or public good. Defense is very much a private good.
The meaning of nonrivalrousness is, that the cost of providing defense service to one additional customer is essentially zero once it is in place. But this notion is also mistaken because of the fact of scarcity of resources for the provision of (national) defense. Suppose if government armies are fighting on the Western front against Pakistani national army, and suddenly Chinese national army attacks Indian people from the East with full force. In such a case the Indian government will have to provide additional resources to the Chinese front for which it either has to move resource from other fronts making those fronts vulnerable or produce new defense equipments incurring additional cost. Prof. Block drives a final nail in the coffin of cost argument for public goods,
One basic difficulty with the entire public-goods schema is that whether or not there are costs at all, and whether or not they are positive or negative if they exist at all, is entirely a subjective matter. Costs, essentially, are opportunities forgone; specifically, the next best alternative not chosen. Who but the chooser himself can ever be acquainted with any such thing? Certainly not the outside observer-mainstream economist, the one responsible for the public-goods dogma in the first place. (p. 316)Some Private Alternatives of State's National Defense Armies
After proving the case against the national defense good, we are ready to discuss some private alternatives of defense production. I will discuss four alternative tactics very briefly: 1) Private mercenaries, 2) Citizen militia, 3) Guerrilla warfare, and 4) Private insurance companies providing defense services (those who are interested in further reading on this topic are advised to read Joseph Stromberg's article in above mentioned book, The Myth of National Defense).
Mercenary soldiers are hired soldiers to fight defensive wars of various geographic or political regions. For example, in ancient Italian city states wealthy merchants used hired soldiers for defense purposes. Stromberg reports:
Mercenaries played an important role in the politics of Renaissance Italy, where wealthy merchant oligarchies in city states provided for their defense by hiring soldiers. A number of benefits flowed from this system. The thrifty bourgeois who hired mercenaries could dismiss them when their work was done. The soldiers had no great incentive to kill or be killed, and their commanders would jockey for advantage and surrender when they lost it. As British jurist F.J.P. Veale wrote, “soldiering became a reasonable and comparatively harmless profession." (p. 218)Similarly British government also used Hessian mercenary force in their battle against the American revolutionaries (for other historical evidence of use of mercenary forces please see this). In recent times various democratic governments have banned the use of mercenary forces because they see them as a threat against their monopoly.
Militia force is a voluntary citizens' army which can gather in an event of aggression to defend its territories. They are different from the present day permanent standing State armies. All citizens of a country are trained in using war weapons, but they are called upon to gather and fight only when they face an aggression from outside. To understand how such militia forces can effectively work, just imagine a Pakistani national army facing 50 crore able bodied militia army of Indian citizens! The main issue here is of voluntary militia force. If government coerces its citizens for combat training, then, it is immoral and inefficient. The underlying point is, that in the absence of any government armed forces, all citizens of this country have an incentive of voluntarily training and arming themselves for their self-defense. Right now, except from the State armies, all citizens are unarmed, and thus totally defenseless against any foreign attack. Once the national armies are defeated, the whole country fells to the victors. Militia forces will not allow this to happen. An invading foreign army will have to face armed civilians in every little villages and towns before they can dream of capturing the whole country.
One of the most effective defensive war tactics is that of Guerrilla Warfare. As Joseph Stromberg says,
There is no absolute distinction between militias and guerrillas. “Guerrilla warfare” refers to tactics and style rather than to preexisting force-structure. It is the way of the weaker side, whether in “internal” war, wars of secession, or wars against foreign domination. Mao Tse-tung provided this summary: “When the enemy advances, we retreat! When the enemy halts, we harass! When the enemy seeks to avoid battle, we attack! When the enemy retreats, we pursue!”
Guerrilla strategists allow the enemy to advance into the interior, where his supply lines are longer, where he lacks popular support, and where partisans can harass his overextended armies. They force the enemy to exhaust his manpower and resources holding ground—until a decisive “battle of annihilation” against the weakened invader becomes possible (Yorktown, Dien Bien Phu). Militias, with their smaller size and greater mobility, are well suited for such warfare. (p. 223)As Stromberg's article shows, the Guerrilla tactic has defeated even mightiest invading armies e.g., the Soviet and mighty hi-tech US armies in Afghanistan are defeated by rag-tag Afghan guerrilla fighters. Guerrilla fighting is not only useful for defense against foreign invading states, but within the State boundary too where various groups of people, because of one or the other reason, no longer want to remain with the National State e.g., the secessionist movement in various parts of India where Maoist guerrilla fighters are giving lot of headaches to the mighty Indian State.
Private Insurance Companies Providing Defense Services
In a purely free market society we mostly will not need any mercenary or militia force for our defense needs. It is highly likely that private insurance companies will produce and provide these defense services to its subscribers, as we have noted above. Prof. Hans Hermann Hoppe's brilliant article, Government and Private Defense of Production, gives the details of how such private insurance companies will function and produce security good. I will here only very briefly discuss how this system will likely work. Today's private insurance companies are in a position to provide defense services because they have vast resources under their command. Big insurance companies, who are present all over the world, have also incentive of providing defense good to its customers to minimize the risk of vast insurance claims, which can quickly bankrupt them. Competing insurance companies will provide variety of security goods based on varied needs of its customers e.g., a region on an adjacent State border is in need of different defense good than a region far away from such a border. Such companies will be more flexible in fulfilling such needs than the government armies. Also, as Hoppe says, on the other hand, a system of insurers offering competing law codes would promote a tendency toward the unification of law. And, market competition for profit in the defense market will result into high quality defense services being provided at the lowest possible prices, which will enable everyone to subscribe to one or the other defense company services.
Above I have only scratched the surface of these alternatives, but still we can see that the whole idea of national defense is a myth perpetrated by the Statist people to continue our enslavement. Most people don't think about the above mentioned private alternatives of defense because they are either not allowed to or they are brainwashed in public schools and via mainstream media about the necessities of having national armies and impossibility of having any private alternatives. The government has molded public opinion in a such a way that it is difficult to even start the discussion of these alternatives. But, once people will open their brain even a bit to these private alternative possibilities, the public opinion will start to change. And once the public opinion starts to change, no one can stop the idea of private production of defense from taking hold and start changing our societies for better. The State mainly uses its armies for offensive wars; it uses it to subjugate its own population; it uses it to strengthen its own exploitation machine. Wars are the health of the State. Having a private purely defense system will eliminate State and its bloody Wars. If humanity wants to give Peace one chance, then, people will have to seriously start considering these private alternatives of defense.