The Austrian economist and political theorist Murray N. Rothbard praxeologically reconstructed Crusoe Island to deduce an ethical theory and case against the state. Today, we are going to analyze the Rothbardian state of nature to see if it can hold up to scrutiny and to see if this is true.
In Rothbard’s magnum opus, in part two of The Ethics of Liberty, Rothbard uses Crusoe economics and the praxeological framework to construct a theory of liberty. To summarize:
“Crusoe, then, has manifold wants which he tries to satisfy, ends that he strives to attain. Some of these ends may be attained with minimal effort on his part; if the island is so structured, he may be able to pick edible berries off nearby bushes. In such cases, his “consumption” of a good or service may be obtained quickly and almost instantaneously. But for almost all of his wants, Crusoe finds that the natural world about him does not satisfy them immediately and instantaneously; he is not, in short, in a Garden of Eden. To achieve his ends, he must, as quickly and productively as he can, take the nature-given resources and transform them into useful objects, shapes, and places most useful to him—so that he can satisfy his wants.”
In following paragraphs, Dr. Rothbard derived several axioms: self-ownership, man is innately rational, and man must transform his resources into capital for a better standard of living. Then later he will present the state as a parasitic entity. I believe Rothbard is ultimately correct that man will ultimately have transform his resources into capital but does this thought experiment is a good way to construct a theory of liberty? One fatal flaw in this thought experiment already the author already assumed that the man already has a libertarian mindset and later he added several more people to this thought experiment with a similar mindset. One crucial insight about the Hobbesian state of nature is that man is not put in a high-trust environment but face with external forces and constant threat of death. The natural tendency of man is to form a collective or group to defend themselves and when the threat of external forces is diminished then idea of individualism, liberty can emerge. To further note this is very unscientific, in Fukuyama’s The Origins of Political Order he documented that humans being are very kin based social creatures and their in-group morality is based reciprocity and altruism. This thought experiment started in the middle of the human condition; it is a half-truth. The state didn’t form to oppress the productive members of society but to protect them and rage war.
On the Labor theory of Property and the Rothbardian theory of Criminality
Dr. Rothbard is the advocate of the labor theory of property (or as Doolittle coined intersubjectively verifiable property) and constructed theory of criminality, as Rothbard defined in chapter nine:
“We also have a theory of criminality: a criminal is someone who aggresses against such property. Any criminal titles to property should be invalidated and turned over to the victim or his heirs; if no such victims can be found, and if the current possessor is not himself the criminal, then the property justly reverts to the current possessor on our basic “homesteading” principle.”
Rothbard only defined criminality as physical aggression to your acquired property which you mixed your labor in. To expand what constitutes aggression and criminality we must introduce relatively new concept, property en toto or property in total. Property in total is the acknowledgement of all kinds of property this includes; social norms, culture, and societal institutions. Under Rothbard’s theory of criminality it ignores social credit and an imposition cost. For example, the crack house usually stinks, you have drug addicts around the corner, devaluing the property value and forcing people to leave the neighborhood. This is called a negative externality. With the increase scope of aggression due to property en toto you are determined more crimes and conspiratorial behaviors that threaten to break down your social order.
Defending Hayek and the Rule of Law
In chapter twenty-eight of the Ethics of Liberty, Rothbard criticize Hayek for his definition of “coercion”, to summarize:
“Another fundamental fallacy of Hayek’s system is not only his defining coercion beyond the sphere of physical violence, but also in failing to distinguish between “aggressive” and “defensive” coercion or violence. There is all the world of distinction in kind between aggressive violence—assault or theft—against another, and the use of violence to defend oneself and one’s property against such aggression. Aggressive violence is criminal and unjust; defensive violence is perfectly just and proper; the former invades the rights of person and property; the latter defends against such invasion. Yet Hayek again fails to make this crucial qualitative distinction.”
To distinguish Hayek and Rothbard, they were operating in different epistemologies. Hayek was an operationist, British empiricist and while Rothbard was a Jewish rationalist.\ Hayek understood the necessity for the rule of law in a free society and understand that people can coerce each other in ordinary activities unfortunately Rothbard is only defining coercion as physical violence but Hayek understood that “coercion” includes fraud and deception. Hayek viewed coercion as a necessity maintaining a free society. The rule of law is very vital maintaining a free society because without the rule of the law we most likely going to see an anarcho-tyranny. We have seen societies with discretionary rule like China, Russia, and many Eastern European countries. They all failed to develop high-trust capital and the rule of law.
The Ethics Of Liberty by Murray Rothbard, Hans-Hermann Hoppe - New York University Press - 2014
The Origins Of Political Order by Francis Fukuyama - Farrar, Straus and Giroux - 2011
The Constitution Of Liberty by Friedrich Hayek - University Of Chicago Press - 1960