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Home Market Research Economy

Molinari on Secession, Monopoly, and “Freedom of Government”

by TheAdviserMagazine
19 hours ago
in Economy
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Molinari on Secession, Monopoly, and “Freedom of Government”
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[From Part IV, Chapter XV of The Natural Laws of Political Economy (Les lois naturelles de l’économie politique), first published in 1887.]

Can we, however, conceive of a state of affairs different from the one we have just described? Can we accept that a government is capable of providing the services for which it was established if it does not possess the exclusive right to impose them throughout the entire territory under its control? We have noted that this system was once common to most industries and that the possibility of another system was inconceivable at the time. It is quite natural that we cannot conceive today that people can be provided with security if they renounce political servitude, just as we could not conceive that they could be fed, clothed, and housed if they made the imprudent decision to free themselves from economic servitude. 

Let us therefore try to investigate what would happen if political servitude were to be abolished, if “freedom of government” were to be established as a logical and necessary complement to freedom of industry. What would governments be like and how would they function under this new regime?

The predictions that can be made about the future of freedom of government are, in some respects, hypothetical. At the time when economic servitude was abolished, it could certainly be stated with certainty that necessities or luxuries whose production was made free would continue to be produced, and that they would even be delivered to the consumer in greater abundance and at a lower price, but what the influence of freedom of industry would be on the structure of industrial establishments, and what the mode of operation of competition, now free, would be—that is what experience alone could reveal. Similarly, we can affirm that after the abolition of political servitude, the services currently monopolized by governments will continue to be provided to individuals and societies, and that they will be provided in greater abundance and at a lower cost, which, all things considered, is the essential point. However, we can no more predict what the political organization of the future will be than our predecessors could foresee, at the time of the establishment of industrial freedom, the future of industry. In this regard, we can only make simple conjectures. 

However, what can still be stated is that the abolition of political servitude would necessarily lead to the simplification of the enormous and costly apparatus of government that currently oppresses civilized peoples, and which, through its complexity, the gears and the slowness of its movements resemble a kind of colossal Marly machine that routine has preserved amidst the sophisticated apparatus of modern industry. 

Let us begin by recalling the general conditions of organization that apply to all industries and the specific conditions that characterize the industry of government. All industries that have reached a certain degree of development, and whatever the regime of freedom or monopoly to which they are subject, involve the establishment of a series of intermediaries between the producer and the consumer. The industry of government is no exception to this rule: between the consumer and the producer of public services, the State, there are at least two intermediaries, the municipality and the province. 

On the other hand, the services that constitute the natural attributes of governments, and for which they were instituted, are characterized by being not individual, but collective; They benefit, by their very nature, all the inhabitants of the territory where they are established; hence, the obligation imposed on the individual is either to leave the territory or to contribute their proportionate share to the costs of these services. This is a natural servitude. The individual lives in the commune. Under the current system, they are obligated to provide for the costs of all the services imposed on them by the communal government, whether these services are individual or collective. Suppose that political servitude were to be abolished, they could refuse those services that are individual in nature; he would refrain from using the municipal school, he would not go to church or the theater if there is one, etc., etc., but he could not avoid using the services of road maintenance, sewers, paving, street lighting, and finally, the police. The municipal society to which he belongs would have the right to compel him to pay his share under penalty of expulsion from the municipality. On the other hand, unless it reduces its powers to services of a community nature, the municipal government will no longer be able to establish taxes of this same nature, such as local taxes. Finally, since its powers will thus be limited to services that are naturally collective, it will be forced by competitive pressure to reduce everyone’s costs to a minimum and to establish a special contribution, proportional to each participant’s consumption, to cover these costs. Competition will intervene here in two ways: firstly, if the municipality is too small to be divided, residents who feel unfairly distributed in the allocation of collective expenses may move to neighboring municipalities, which they can already do under the current system; On the other hand, if the municipality is large, the inhabitants of a wealthy neighborhood, overtaxed for the benefit of others or vice versa, will be able to separate from the whole, which is forbidden to them under the current system, either to form an independent municipality, or to attach itself the neighboring municipality.

Now suppose that some “anarchists” refuse to contribute to the costs of public services that require a municipal government with regulations for roads and policing. They will be free to establish themselves in a separate locality where they will be able to do without government and public services, where there will be neither sewers, nor paving, nor street lighting, nor police. However, it seems likely that they will soon be convinced, to their own detriment, of the necessity of these services. Whatever their confidence in the innate goodness of human nature, they will soon realize that there are people who find it more advantageous to appropriate the values ​​created by others than to create them themselves, and that it is more economical and more efficient to pay for a special police force to protect themselves against these people than to police themselves. Furthermore, they would likely have a run-in with the province. Their anarchic commune would be part of it, and the State would demand its share of the costs of the naturally collective service of external defense, as long as the risk of invasion persists. 

If the individual receives services from the commune, the commune, in turn, receives them from the province, and the province from the State: services of land and water communication, internal and external security services. These provincial and state services reach the individual, just as the product of a factory reaches, passing through wholesale and retail outlets, the consumer who reimburses, in the price they pay the retailer, all the costs of production and intermediaries.

The natural organization of public services implies the distribution of state service costs among the provinces, the distribution of provincial service costs, plus state costs, among the municipalities, and finally, the distribution of municipal service costs, augmented by provincial and state costs, among individuals. But, under the current system, municipalities have no effective means of protecting themselves from the poor quality or excessive pricing of provincial services, nor from the undue proliferation of these services, and the province is likewise defenseless against the state, because the municipality is bound and subordinate to the province and the province to the state. It would be different under a system of free government. The municipality, freed from political servitude, would have the right to separate from the province and the province from the state. The consequences of this dual right of secession are easy to see. If the services that the municipality receives from the province, augmented by those that the province receives from the state and then passes on to the municipality, are excessive, if some of them lack the character of a collective service and individuals consequently have the right to refuse them, the municipality will refuse to pay its share of their production costs; if the collective services it is obliged to receive are of poor quality or too expensive, it will separate from the province to join another, and the provinces will do the same with respect to the state. Undoubtedly, local circumstances may hinder the exercise of this right of secession, but if one considers that territorial contiguity is not—experience attests to this—necessary for the constitution of a province and a state, and that a commune or province can subsist as an enclave, one will be convinced that the right of communal or provincial secession will generate sufficient competition between states and provinces to improve the quality of their services and lower their price. In any case, this right would result in the elimination of all services that do not have a collective character within the state or province, along with all taxes of this character, such as customs duties and monopolies, whether these are established for the benefit of the state or the province, or of private individuals. Specialization would be required for the remuneration of provincial and state services, as well as for municipal services, and the ancient and barbaric apparatus of taxation, with its multiplicity of taxes and the obstacles their collection necessitates, would be replaced by the annual collection of a simple contribution. This contribution would include, along with the costs of municipal services, those of the province and the municipality, divided and categorized.

Such would be the first consequences of the application of the right of secession, from the moment the abolition of political servitude authorized the exercise of this right, currently prohibited throughout the civilized world, and whose mere demand has not ceased to be considered a “crime against the security of the state.”

To these initial consequences—namely, the reduction of the responsibilities of the municipality, the province, and the state to services that are inherently collective, and the elimination of taxes that, by virtue of their particular nature, affect the general population of a territory, without any possibility of individual exemption, such as monopolies and customs duties—would be added others, no less advantageous to consumers of collective services. These services would not necessarily be produced by the communities of consumers themselves. Already, in countries where industry and entrepreneurship are sufficiently developed, municipal governments do not themselves undertake the provision of water services, gas lighting, or the construction of tramways. They find it more economical to entrust these services to specialized companies. What is advantageous for certain municipal services could, by the same principle, also be advantageous for provincial and state services, and in particular for the essential service of internal and external security. That being said, consumers of these services would benefit, on the one hand, from competition among the communities of which they would be a part as consumers, and on the other hand, from competition among the specialized companies responsible for providing public services; in short, they would benefit from all the progress generated by this dual competition applied to services whose monopoly continually increases the price without improving their quality.

Another subsequent consequence of the abolition of political servitude would be the impossibility of wars of conquest between civilized peoples. From the moment the right of secession was applied and became part of the customs of civilization, from the moment the commune was always free to separate from the province and the province from the state, it would no longer be possible for a government to seize a population like a herd and annex it to its political domain. This violation of the public law of civilized peoples would be considered a crime analogous to piracy and repressed, as piracy already is, by the general agreement of the states. If necessary, all would unite to punish the pirate government that attempted to re-establish political servitude under a regime of liberty.

[From Part IV, Chapter XV of The Natural Laws of Political Economy (1887). PDFs of the original (in French) available at davidmhart.com and archive.org. This selection was translated by Ryan McMaken.]



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