The Rational Argumentator

A Journal for Western Man

Gustave de Molinari's 

Evolving Theory of Defense

Gustave de Molinari, born in Belgium in 1820, was perhaps France's most radically free-market economist. In his essay “The Production of Security” and his book The Society of To-Morrow, Molinari defends free markets as the only means for creating prosperity and civilization; he also denounces statism and government intervention as harmful and unnatural. Having spent much of his life in Paris working with Frederic Bastiat and his contemporaries, Molinari devoted his career to the promulgation of free-market ideas and the refutation of statism (Galles, 2005). Molinari was a methodological individualist; he believed that the individual at liberty, unshackled by government restraint, was the source of all prosperity and progress. But Molinari is unique as the first anarcho-capitalist, favoring free-market, rather than government, solutions to defense (Galles, 2005). While most of Molinari's free-market contemporaries believed that government was the necessary and sovereign provider of defense, Molinari declared that this service, just like any other, would become inefficient as a result of its legally-protected monopoly; optimally, he believed, it ought to be free, too.

            Molinari believed that civilization exists only as a result of individual men's sociability and self-interestedness. Following their “instinct of sociability,” men come together, and inevitably form “a certain division of labor ... necessarily followed by exchanges. In brief, we see an organization emerge, by means of which man can more completely satisfy his needs than he could living in isolation. This natural organization is called society.” Man forms this connection with society to satisfy “one particular type which plays an immense role in the history of humanity, namely the need for security.” Molinari recognized that, in the past, a country's defense had always taken on one of two forms; it would always be “based on monopoly or on communism.” The monopoly, he saw, was the end result of a competition between multiple providers of security; the communism resulted from an overreaction in tearing down a monopoly which goes too far in protecting individuals selectively. Dissatisfied with either alternative, Molinari attempted to find a path that took the benefits of both and the disadvantages of neither (Molinari, 1849).

            While Molinari realized that “everywhere ... one encounters a government, so universal and urgent is the need for security provided by government,” he believed that almost all people “misjudge their alternatives.” Rather than find an unorthodox solution to the problem of inefficient government defense, most people would rather “surrender a very considerable portion of [their] time and of [their] labor ... to guarantee the peaceful possession of [their persons] and [their] goods.” Yet, despite the urgency with which men need security, Molinari recognized that it is “obviously ... no less in [a man's] self-interest to procure his security at the lowest price possible” than it is to procure advantageously any other good (Molinari, 1849).

            Molinari's main economic contribution was his theory that defense was not a necessarily governmental function; nor, in his theory, did government need to be sovereign within a country. Instead, he believed, “the production of security should, in the interests of the consumers of this intangible commodity, remain subject to the law of free competition,” as it should with any other service (Molinari, 1849). The only solution to the inefficient government security monopoly was to allow competing governments – or, at the very least, competing defense agencies. This assertion was, according to Murray Rothbard, “the first presentation anywhere in human history of what is now called 'anarcho-capitalism' or 'free market anarchism'” (Rothbard, 1977). Though other thinkers had arrived at or near anarchism in the past, only “Molinari grounded his argument on free-market, laissez-faire economics, and proceeded logically to ask the question: If the free market can and should supply all other goods and services, why not also the services of protection?” (Rothbard, 1977).

            Molinari did recognize, however, that the private defense system which he proposed could be manipulated to take advantage of unwary consumers. “If the producers of security are originally stronger than the consumers,” he pointed out, “won’t it be easy for the former to impose a monopoly on the latter?” But, as in all other situations where an individual must take his welfare into his own hands, his caution grows exponentially with respect to his responsibility: before patronizing any private defense firm, Molinari contends, a consumer would check whether “in the first place ... [the agency] is really strong enough to protect [him]. In the second place, whether [the agency's] character is such that they will not have to worry about [its] instigating the very aggressions [it] is supposed to suppress. In the third place, whether any other producer of security, offering equal guarantees, is disposed to offer them this commodity on better terms.” He claims also that, in a free market setting, “war between the producers of security entirely loses its justification ... the consumers would not allow themselves to be conquered” (Molinari, 1849). However, Molinari may have underestimated the power of these free-market defense agencies: if they are strong enough to defend individuals from attack, then they are also strong enough to collude and eliminate any individual who opposes them; even should “the consumers ... call to their aid all the free consumers menaced by this aggression,” they would likely not have the skills nor the tools necessary to protect themselves – or they would not have hired their security out in the first place (Molinari, 1849). However, Molinari may have seen this natural result of the freedom of defense provisions later in his life; his later work, The Society of To-Morrow, did not entirely reject the free-market provision of security, but developed and refined the theory – and even accepted a conclusion that he rejected originally.

            Molinari's later work divided civilization into various chronological stages, during only some of which competition in the defense industry was desirable. After a society had come together, and, in forming, installed a government, then it was “the natural and essential duty of [that] government to ... [provide] internal security within its own State, and [continue] the further performance of those services which are naturally and essentially collective” (1849, II.3.10) (emphasis mine). Though this sounds like a direct contradiction of Molinari's initial position regarding defense – which he insisted ought not be either monopolistic or communistic – in fact, he has simply recognized a difference in the nature of the offered good. Unlike “bread, with all other victual, clothes, &c., [which] are articles of naturally individual consumption ... social security is an article of naturally collective consumption” (Molinari 1904, II.3.9). One man can go without bread and not cause the whole community danger and disorder; however, the “failure of one consumer to bear his quota of the costs of such production reacts on the entire community, who are compelled to bear a proportion of his defalcations over and above their own contribution” (Molinari 1904, II.3.8). The essential difference between the two goods is that one causes a negative externality, and the other doesn't.

            Molinari's theory of defense as a “naturally collective service” applies only to civilizations that have already chosen and installed a government, however. By limiting the time frame in which defense can be a market product, Molinari incorporated the “problem” of collusion among defense agencies into one necessary phase of development for all civilizations; initially, citizens still must “choose” which defense agency (or eventual government) they prefer.  The state of war which most undeveloped civilizations find themselves in is a “race” between governments – in fact, a “form of competition which stimulated men to perfect the institutions of politics and war, of the civil, fiscal, and economic State” (Molinari 1904, I.3.5). In fact, in this early stage, the “destructive” process of conquest and war is very much like the gradual convergence one sees on the market in industries that require large capital outlays. Each takeover – each war – is followed by a subsequent greater peace and prosperity for the consumer. However, after these conquests have secured a certain amount of liberty for the citizens of any given state – after a certain plateau of civilization has been reached – further war tended not to expand the economic sphere of any given society, but rather to “[bring] profit to a third class in the State, the officials, for it enlarges the scope of their activities,” and, more visibly, to cause great losses in the realms of “life and capital” (Molinari 1904, I.4.6, I.4.8). Should war continue long after it has ceased to be “the necessary guarantee of security,” then it imposes two very great and unnecessary burdens upon the citizenry. The first is an increase in taxes due to “the growing burdens of military expenditure” (Molinari 1904, I.6.6). The second, “equally injurious[,] is the necessity which it entails of continuing to endow governments with a sovereign power of disposition over the life and property of the subject” (Molinari 1904, I.6.6).  Government power grows as war continues; should a country not stop warring when its citizens' liberty waxes, then, over time, that liberty will gradually wane. At the waxing of liberty, peace, not war, is the natural state of affairs (Molinari, 1849).

            Molinari's initial theory, while somewhat problematic, improved with his expansion of it; in truth, every nation must go through a period of time where governments compete; only when emerging from the state of nature is it practicable for them to vie for supremacy, however. Molinari's ultimate conclusion – that the source of defense is initially uncertain, but is followed by a necessarily universal structure of production – is much less extreme and much more realistic than his initial position. However, only by the initial competition of various governments can any consumers ever truly “procure [their] security at the lowest price possible” (Molinari, 1849).

Wendy D. Bateman is an artist, writer, graphic designer, literary connoisseur, and contributor to The Rational Argumentator. She is a recipient of TRA's Henry Ford Award. Some of Miss Bateman's art can be found at http://rationalargumentator.com/Bateman.html.

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