The latest "Liberty Matters" forum is online. The lead essay is by Roderick Long on “Gustave de Molinari’s Legacy for Liberty” [the centennial of his death was last year]. Long concludes that “for all his shortcomings, Molinari remains not only an interesting historical thinker, but also a vital lodestar for the liberty movement today.” There will be response essays shortly by Gary Chartier, “If Not Labor Exchanges, Then What?”; David D. Friedman, “Comment on Roderick T. Long on Gustave de Molinari”; David M. Hart, “Historical Reflections on Molinari’s Legacy”; Matt Zwolinski, “Two Cheers for Pessimism”.

See the Archive of "Liberty Matters".

This online discussion is part of the series “Liberty Matters: A Forum for the Discussion of Matters pertaining to Liberty.” EBook versions of these discussions in PDF, ePub, and Kindle formats can be found at <oll2.libertyfund.org/titles/2516>.

This discussion can be found in EBook formats at <oll2.libertyfund.org/titles/2519>.

"Liberty Matters" is the copyright of Liberty Fund, Inc. This material is put online to further the educational goals of Liberty Fund, Inc. These essays and responses may be quoted and otherwise used under "fair use" provisions for educational and academic purposes. To reprint these essays in course booklets requires the prior permission of Liberty Fund, Inc. Please contact the OLL Editor if you have any questions.

This discussion had its beginnings in a Liberty Fund conference on Molinari which was held in late 2012, the centennial year of his death. The discussants here were also at that conference and showed considerable interest in continuing that conversation online. Some of the topics which were raised at the conference were the following: Molinari between conservatism and socialism, eminent domain and the rights of labor, the competitive provision of security, religion and ethics, the evanescence of war, and the rise of autonomous communities. In his Lead Essay Roderick Long assesses Molinari's legacy, giving him a "hit" for his work on the competitive provision of security, his proposal for a system of labor exchanges, and his opposition to war and empire; and a "miss" for the weakness of the moral foundation of his philosophy, his hedonistic assumptions about human psychology, the historical inadequacy of his theory of political and economic evolution, and his theory of "tutelage" for those groups he believed were not yet ready for liberty. Long concludes that “for all his shortcomings, Molinari remains not only an interesting historical thinker, but also a vital lodestar for the liberty movement today.”

Lead Essay: Roderick T. Long, “Gustave de Molinari’s Legacy for Liberty” [Posted: May 1, 2013]

Responses and Critiques

The Conversation

Roderick T. Long is Professor of Philosophy at Auburn University, President of the Molinari Institute and Molinari Society, and a Senior Scholar of the Ludwig von Mises Institute. He received his philosophical training at Harvard (A.B. 1985) and Cornell (Ph.D. 1992) and has taught at the University of North Carolina at Chapel Hill and the University of Michigan. Among his books are, Reason and Value: Aristotle versus Rand (2000) and Wittgenstein, Austrian Economics, and the Logic of Action (forthcoming from Routledge); he is the editor of The Industrial Radical, co-editor of the Journal of Ayn Rand Studies, and Anarchism/Minarchism: Is a Government Part of a Free Country?. Roderick describes himself as an Aristotelean/Wittgensteinian in philosophy and a left-libertarian market anarchist in social theory. He blogs at Austro-Athenian Empire <http://aaeblog.com/> and Bleeding Heart Libertarians <http://bleedingheartlibertarians.com/> amongst others.

Gary Chartier is professor of law and business ethics and associate dean of the Tom and Vi Zapara School of Business at La Sierra University in Riverside, California. Among other works, he is the author of Economic Justice and Natural Law (Cambridge University Press, 2009), The Conscience of an Anarchist (Cobden Press, 2011) and Anarchy and Legal Order (Cambridge University Press, 2013), and coeditor of Markets Not Capitalism (Minor Compositions-Autonomedia, 2011).

David Friedman is an academic economist with a doctorate in physics whose current specialty is the application of economics to law. He has written books and articles dealing with economics, political philosophy, future technology, and law, as well as two novels. His academic interests include price theory, Public Choice theory, the history of economic thought, historical legal systems, stateless societies past and future, and the implications of radical technological change for law and society. His nonacademic interests include fantasy, science fiction, and medieval cooking.

David M. Hart received a B.A. in history from Macquarie University, Sydney, writing a thesis on the thought of Gustave de Molinari. He received a Ph.D. in history from King’s College, Cambridge on the work of two French classical liberals of the early 19th century, Charles Comte and Charles Dunoyer. He then taught for 15 years in the Department of History at the University of Adelaide in South Australia. Since 2001 he has been the Director of the Online Library of Liberty Project at Liberty Fund <>. His research interests include the history of classical liberal thought, war and culture, and film and history. He is currently the Academic Editor of Liberty Fund’s translation project of the Collected Works of Frédéric Bastiat (in 6 vols.) and is also editing for Liberty Fund a translation of Molinari’s Conversations on Saint Lazarus Street: Discussions on Economic Laws and the Defence of Property (1849). David is also the co-editor of two collections of 19th century French classical liberal thought (with Robert Leroux of the University of Ottawa), one in English published by Routledge (May 2012) and another in French called The Golden Age of French Liberalism (forthcoming 2013). On his personal website <http://davidmhart.com/liberty> David has his lectures and a considerable number of resources on 19th century classical liberal thought, including a large section on Molinari, Bastiat, and other French classical liberal political economists (mostly in French).

Matt Zwolinski an associate professor of philosophy at the University of San Diego, a co-director of USD’s Institute for Law and Philosophy, and the founder of and frequent contributor to the Bleeding Heart Libertarians blog <http://bleedingheartlibertarians.com/>. He has two book projects in progress: Exploitation, Capitalism, and the State, exploring the idea of exploitation and its relevance for the moral evaluation of both certain forms of market exchange (such as sweatshops and price-gouging) and political activities or structures (such as rent-seeking and the modern bureaucratic state), and with John Tomasi, A Brief History of Libertarianism, attempting to trace libertarian thought from its origins in figures like Grotius and the Spanish Scholastics to more contemporary figures like Rothbard, Hayek, Rand and Nozick. It is currently under contract with Princeton University Press.

"Liberty Matters" is the copyright of Liberty Fund, Inc. This material is put online to further the educational goals of Liberty Fund, Inc. These essays and responses may be quoted and otherwise used under "fair use" provisions for educational and academic purposes. To reprint these essays in course booklets requires the prior permission of Liberty Fund, Inc. Please contact the OLL Editor if you have any questions.

[16] An article – simultaneously sympathetic and condescending in tone – on the free-market anticapitalist position of Benjamin Tucker and his circle did appear in the Journal des Économistes under Molinari’s editorship; see Sophie Raffalovich, “Les Anarchistes de Boston,” Journal des Économistes 41, 4th series (15 March 1888), pp. 375–88. For Tucker’s reply, see Benjamin R. Tucker, “A French View of Boston Anarchists,” Liberty 6 (4), whole no. 134 (29 September 1888), p. 4. For more recent defenses of an anticapitalist version of free-market anarchism, see Gary Chartier and Charles W. Johnson, eds., Markets Not Capitalism: Individualist Anarchism Against Bosses, Inequality, Corporate Power, and Structural Poverty (Minor Compositions, 2011), also available at < http://radgeek.com/gt/2011/10/Markets-Not-Capitalism-2011-Chartier-and-Johnson.pdf > ; Kevin A. Carson, 2007, Studies in Mutualist Political Economy, (BookSurge, 2007), also available at < http://www.mutualist.org/sitebuildercontent/sitebuilderfiles/MPE.pdf >, and Organization Theory: A Libertarian Perspective (BookSurge, 2008), also available at < http://www.mutualist.org/sitebuildercontent/sitebuilderfiles/otkc11.pdf >; Gary Chartier, Anarchy and Legal Order: Law and Politics for a Stateless Society (Cambridge, 2013); and Samuel Edward Konkin III, New Libertarian Manifesto (Koman, 1983), also available at: < http://agorism.info/NewLibertarianManifesto.pdf >.

[12] De Puydt, “Panarchie,” Revue Trimestrielle (July 1860); also available at < http://www.panarchy.org/depuydt/1860.eng.html > . Curiously, de Puydt explicitly lists “the an-archy of M. Proudhon” as one of the options to be made available to the provider’s clients; how a monopolistic firm is to offer absence of monopoly as one of its possible services is unclear.

[11] Two Belgian economists independently defending competing-government schemes within a single eleven-year-old period would at any rate be a surprising coincidence, especially when the more prominent of the two is the one who wrote first.

[9] For contemporary discussion pro and con concerning such objections to market anarchism, see Edward P. Stringham, ed., Anarchy and the Law: The Political Economy of Choice (Transaction, 2007) and Anarchy, State and Public Choice (Edward Elgar, 2005); Roderick T. Long and Tibor R. Machan, eds., Anarchism/Minarchism: Is a Government Part of a Free Country? (Ashgate 2008); and on the broader question of public goods, Tyler Cowen, ed., Public Goods and Market Failures: A Critical Examination (Transaction, 1992).

[7] For French liberal reaction to Molinari’s proposals, see “Question des limites de l’action de l’État et de l’action individuelle débattue à la Société d’économie politique” (Journal des Économistes, t. 24, no. 103 [15 Oct. 1849], pp. 314-316), also available at < http://praxeology.net/JDE-LSA.htm >, and Charles Coquelin’s review of Les Soirées de la Rue Saint-Lazare (Journal des Économistes, t. 24, no. 104 [15 Nov. 1849], pp. 364-372, also available at < http://praxeology.net/CC-GM-RSL.htm > . De Puydt’s “Panarchy” (see above) may possibly have been motivated by just these criticisms, as a way of retaining as much Molinarian competition as possible within a monopoly framework.

[5] For criticism of the assumption that market provision of security must always take the form of competing for-profit firms, see Philip E. Jacobson, “Three Voluntary Economies,” Formulations 2, no. 4 (Summer 1995); also available at < http://www.freenation.org/a/f24j1.html >.

[2] The interpretation of Godwin and Proudhon as market-friendly thinkers may be more controversial than in the case of the other theorists mentioned, but is defensible. Godwin held that property should be shared rather than held privately – but also that this should be a free moral choice, and that all forcible interference with private property and trade should be rejected. Proudhon (to simplify a rather complex story) attacked a form of private ownership he called “property,” but defended another form of private ownership he called “possession”; hence he was by no means an enemy of private ownership as such.

[1] This position has also been described both as “voluntary socialism” and as “anarcho-capitalism,” largely according to which relations between labor and capital its various proponents have thought would or should emerge in a market entirely freed from state interference. More on this below.

All over the world, ordinary people long to be free of the tyranny of bosses and rulers; Molinari’s labor-exchange proposal, however flawed, plausibly identifies lack of competition as the linchpin of employer privilege and abuse, while his market anarchism, however incomplete, likewise plausibly identifies lack of competition as the linchpin of state privilege and abuse. Both proposals embody the same essential insight: the way to break the power of plutocrats and statocrats [20] alike is to subject both to the rule of competition – the adamantine chains of laissez-faire.

Yet for all his shortcomings, Molinari remains not only an interesting historical thinker, but also a vital lodestar for the liberty movement today. He understood that the solution to abuse of power is not to elect better people into power, or to persuade current holders of power to play nice, or to rein them in with paper constitutions whose interpretation the powerful themselves will ultimately control, but rather to dissolve that power by extending the range of competitive markets.

Perhaps the least appealing of Molinari’s positions (unfortunately not an unusual one in his era, but again in seeming tension with his aforementioned absolutism) is his view that the vast majority of the human race – including women, nonwhite races, and a large percentage of the working class – are not yet ready for the liberty he advocates, and need to submit to a condition of at least temporary “tutelage,” while waiting for scientists to improve the human race through (admittedly voluntary) programs of “viriculture” (i.e., eugenics).

Molinari’s opposition to warfare and militarism is also commendable (his very name is cosmopolitan, combining three languages in one); yet his proposed remedy – international arrangements for collective security – seems problematic. Would such arrangements indeed make war less likely, by deterring aggression, or might they instead pose a risk of extending warfare by drawing allies in, while simultaneously threatening the political decentralization that he favors? And his contention that warfare and the state were necessary and justified in early historical periods – a historicist thesis widely shared by radicals in his day [19] – also seems inconsistent with his emphasis on the absolute, timeless, and immutable character of economic and moral principles.

Molinari’s historical accounts of the evolution of social institutions are fascinating, and bear signs of Spencer’s influence; but unlike Spencer, Molinari offers virtually no evidence for them, and it is often unclear whether these are supposed to be literally accurate narratives or hypothetical constructs. The accounts also arguably suffer from excessive economic imperialism; have we really accounted for the spread of Christianity in Europe by noting that “Paganism was an expensive religion, Christianity a cheap one”? [18]

Molinari’s analyses are often marred, moreover, by narrowly egoistic and hedonistic assumptions about human psychology that a couple of simple thought-experiments should easily dispel. [17] And while remaining coy about his own religious commitments if any, he holds that for the masses, at least, a commitment to justice will be unstable without the motivations provided by religion. This seems hard to believe; the percentage of religious believers is high in Poland and low in the Czech Republic, for example, yet we do not see the kind of divergence between the two countries that Molinari would predict.

Molinari also describes private property as an extension of the self, a defensible neo-Lockean position, yet fails to explain how such a conception is compatible with his support for “intellectual property” laws. How can ideas, inventions, and artistic compositions still be an extension of their creators when the objects in which they are realized are the minds, bodies, and property of other people?

In his moral foundations Molinari combines consequentialist and deontological considerations. This seems like a good idea: purely consequentialist approaches to liberty tend to compromise moral principle and undervalue human dignity, while purely deontological approaches tend to make the normative force of moral principles mysterious, while leaving the beneficial consequences of liberty a fantastic coincidence. But Molinari never makes clear exactly how the consequentialist and deontological dimensions of ethics are supposed to be related.

But while labor-exchanges and market anarchism – both schemes for weakening the power of elites by extending the range of competition – may be Molinari’s two most distinctive contributions, he is a fascinating, wide-ranging thinker whose ideas on a variety of topics deserve study and consideration, both for their strengths and for their potential weaknesses.

Moreover, unlike many of his liberal and libertarian contemporaries such as John Stuart Mill , Herbert Spencer , Pierre-Joseph Proudhon, Lysander Spooner , Benjamin Tucker, and to a certain degree Wordsworth Donisthorpe , Molinari never questioned the necessity of the wage system itself, i.e., the separation of labor from ownership. Obviously one solution to unequal bargaining power between capital and labor would be worker control of industry – not in the collectivized version favored by state socialists, but in the form of individual workers’ cooperatives and independent contractorships competing on a free market. Eliminating legal barriers to worker control would force traditional hierarchical firms, unlovely in their work environments and blinded by the informational chaos that hierarchy brings, to compete on a level playing field with worker-controlled ones, to the likely advantage of the latter. Molinari never seriously addresses this pro-market but anti-capitalist alternative; his references to Proudhon, for example, are invariably dismissive, lumping him in with communists and state socialists, with little apparent recognition of his pro-market views. [16]

The idea is an ingenious one, but it is reasonable to worry that Molinari has exaggerated the extent to which labor’s mobility can be increased. The economist H. C. Emery plausibly attributes labor’s comparative immobility “not so much to the lack of adequate machinery of exchange or to ignorance of the foreign (non-local) demand” as to the fact that a “laborer is after all a man” who “has a wife and children, and desires a fixed habitat for them,” and consequently “refuses to have his household moved hither and thither at every fluctuation of demand.” [15] Admittedly, telephone and internet have since made instant mobility a reality for those tasks that can be done via telecommuting, but there are still many jobs that require a physical presence.

Concerns about unequal bargaining power between labor and capital are often regarded as a concern exclusive to the anti-market left; but Molinari, to his credit, recognizes the problem and seeks to address it. Molinari quotes favorably Adam Smith’s observation that there is “everywhere a tacit but perpetual conspiracy among the employers, to stop the present price of labor from rising,” and that with “employers being fewer in number, it is much easier for them to collude,” and “the employers can hold out very much longer.” But Molinari’s diagnosis of the problem is the partial insulation of employers from market discipline. Such insulation, Molinari holds, is partly the result of laws favoring employers over laborers, and thus can be addressed in part by repealing such laws; Molinari, like Bastiat, is a stern critic of anti-union legislation. [13] But apart from such laws, he tells us, labor is also hampered by its lack of mobility in comparison with capital. Happily, modern transportation technology makes it possible for workers to relocate swiftly from low-wage to high-wage areas; Molinari’s solution, then, is to create a private network of labor-exchanges whereby employers could bid on the services of workers near and far. Labor unions and mutual credit societies would “provide their collective guarantee to enterprises of transportation and job placement” and thus secure “to the mutualized laborers the funds necessary to pay the cost of transporting them to the most advantageous market.” [14]

It is unclear how much influence, if any, Molinari’s proposal for competing security firms had. Similar ideas would later be popular in Benjamin Tucker’s circle, but may have been developed independently – though Tucker did read widely in French, and Molinari was hailed (albeit at a fairly late date) as an anarchist in the pages of Tucker’s journal. [10] Some passages in Anselme Bellegarrigue’s 1850 Anarchy: A Journal of Order and Proudhon’s 1851 General Idea of the Revolution show possible traces of the influence of Molinari’s 1849 arguments as well. Another thinker likely [11] influenced by Molinari was a fellow Belgian, Paul Emile de Puydt, whose 1860 article “Panarchy” called for competing systems of government within the same geographical territory, though unlike Molinari he seems to have envisioned a single provider for the different systems. [12] But Molinari’s status as originator of market anarchism is more chronological than causal.

“One day,” Molinari predicted in 1849, “societies will be established to agitate for the freedom of government, as they have already been established on behalf of the freedom of commerce.” His words have proven prophetic. Molinari’s personal fame may have fallen over the course of the past century, but the popularity of his most distinctive idea has had the opposite trajectory, as today’s profusion of market anarchist websites attests. Molinari, by contrast, stood virtually alone; his classical liberal colleagues, even those like Dunoyer who had veered close to anarchism in their own writings, were largely unconvinced by his arguments, objecting that competition presupposes, and so cannot provide, a stable framework of property rights, and that competition in security was a recipe for civil war. [7] Molinari himself came, in later writings, to moderate his own position in the face of public-goods objections, arguing that pure competition was appropriate only for goods and services of “naturally individual consumption,” while for those of “naturally collective consumption” the only role for competition was in bidding for government contracts. [8] Replies to these sorts of objections are easy to come by nowadays, but were not so in Molinari’s own day and milieu. [9]

Inasmuch as Molinari was unfamiliar with the recent research on historical examples of stateless or quasi-stateless legal systems to which more recent proponents of market anarchism are able to appeal, his arguments are necessarily more theoretical than historical; but he does cite Adam Smith ’s argument that the “ present admirable constitution of the law courts in England ” is due to “that emulation which animated these various judges, each striving competitively....” And when military defense is needed, Molinari maintains, security firms would find it in their interest to pool resources to fend off the invader; as for military offense, firms would find it difficult to engage in this without a captive tax base.

"The present admirable constitution of the courts of justice in England was, perhaps, originally in a great measure, formed by this emulation, which antiently took place between their respective judges"

In place of the state provision of security, then, Molinari proposes a system of competing security firms on the model of insurance companies, with clients free to switch providers without switching locations; the need to retain clients, he argues, would keep prices low and services efficient. [5] In terms reminiscent of Proudhon’s call for “the dissolution of the state in the economic organism,” Molinari explains that he calls for neither “the absorption of society by the state, as the communists and collectivists suppose,” nor “the suppression of the state, as the [non-market] anarchists and nihilists dream,” but instead for “the diffusion of the state within society.” [6]

France’s own recent experience with democracy, in the wake of the 1848 revolution, played a role in weakening liberal enthusiasm for democracy generally; that Molinari’s proposal comes the immediately following year is probably no coincidence. But unlike some of his liberal colleagues (including Dunoyer), Molinari did not look to a restoration of monarchy, either Bourbon or Orleanist (let alone Bonapartist), as an attractive solution to democracy’s failings, instead upholding market anarchism as an alternative to autocratic and collective rule alike.

Now in the case of goods and services other than security, the incentival and informational perversities that beset both monopolistic and collective provision are well known, as is the superiority of free competition in respect of both efficiency and inherent justice; why, Molinari asks, should security be treated any differently? On the contrary, Molinari argues, the absence of market competition is even more dangerous in the field of security than elsewhere, since it not only serves as the enabling cause of monopolies in other fields, but also leads to warfare – both externally, as states strive to extend their territory, and internally, as interest groups struggle to direct the state’s energies to their own purposes. [4]

Molinari’s approach to the topic of security provision involves treating the state as a firm, whose managers are subject to the same economic incentives as those of other firms; in this respect he may be seen as a pioneer of public choice analysis. Molinari points out that there are three ways in which any good or service, security included, may be provided. First, the market for the good or service may be compulsorily restricted to a single provider or privileged group of providers; this is monopoly, which in the case of security corresponds to monarchy, wherein the royal family in effect owns the entire security industry. Second, the market may be managed by or on behalf of society as a whole; this is communism or collectivization, which in the case of security corresponds to democracy, wherein the security industry is in effect publicly owned. Third, the market may be thrown open to free competition, or laissez-faire, a situation which in the case of security Molinari calls freedom of government, and which his successors would call anarchy.

But while these thinkers tended to speak of turning governmental services over to the realm of economic enterprise rather than to that of political compulsion, they offered no real details as to how such functions as security might be provided in the absence of the state. And here we see the significance of Molinari’s contribution. Molinari’s account may not have been as sophisticated as those of some of his successors; he may not have addressed all the objections with which those successors have had to grapple; and he may have said disappointingly little about the market provision of legal norms, a topic that looms large in more recent market anarchist thought. But Molinari was the first thinker to identify and describe the economic mechanisms by which the nonstate provision of security might be effected; and this arguably entitles him – despite his not using the term “anarchist” himself [3] – to be considered the originator of market anarchism.

Paine did not himself draw from his analysis the moral that all state functions should be turned over to private enterprise; but he opened the door to such a conclusion, and other thinkers would soon be walking through it. William Godwin explicitly credited this passage from Paine with inspiring his own anarchist manifesto the following year, and other market-friendly advocates of a stateless society soon followed, including Thomas Hodgskin in England, Pierre-Joseph Proudhon in France, Johann Gottlieb Fichte in Germany, and Josiah Warren and Stephen Pearl Andrews in the United States. [2] Within Molinari’s own French liberal tradition, such pioneers as Jean-Baptiste Say , Charles Dunoyer, and Augustin Thierry had flirted, at least for a time, with the notion of a stateless society as a potentially viable ideal.

Moreover, unlike the primitivist, propertyless anarchist utopia that Jean-Jacques Rousseau had envisioned in his Discourse on the Origin of Inequality, the stateless society that Paine envisioned was clearly a commercial society where order was maintained by industry, trade, and economic self-interest.

Great part of that order which reigns among mankind is not the effect of government. It has its origin in the principles of society and the natural constitution of man. It existed prior to government, and would exist if the formality of government was abolished. The mutual dependence and reciprocal interest which man has upon man, and all the parts of civilized community upon each other, create that great chain of connection which holds it together. The landholder, the farmer, the manufacturer, the merchant, the tradesman, and every occupation, prospers by the aid which each receives from the other, and from the whole. Common interest regulates their concerns, and forms their law; and the laws which common usage ordains, have a greater influence than the laws of government. In fine, society performs for itself almost everything which is ascribed to government. ... It is to the great and fundamental principles of society and civilization – to the common usage universally consented to, and mutually and reciprocally maintained – to the unceasing circulation of interest, which, passing through its million channels, invigorates the whole mass of civilized man – it is to these things, infinitely more than to anything which even the best instituted government can perform, that the safety and prosperity of the individual and of the whole depends.

One of the first liberal thinkers to question this consensus was Thomas Paine . In his 1776 Common Sense , Paine had described government as a “necessary evil”; but sixteen years later – probably under the influence of the spontaneous-order analyses of thinkers like Adam Smith, whose work Paine praises – he seems to have become less certain of the “necessary” part. In The Rights of Man, Paine writes :

To understand the importance of Molinari’s contribution, some historical context is useful. The extent of the state’s proper sphere had long been a vexed question among classical liberals. That it should be small, most agreed; but how small? Even if liberals were generally more optimistic concerning the prospects for peaceful cooperation in a stateless social order than Thomas Hobbes had been in his 1651 Leviathan, they still tended, along the lines laid out in John Locke ’s Second Treatise of Government, to regard a governmental monopoly – albeit a sharply limited one – as an essential bulwark of liberty.

But Molinari’s chief claim to fame today, among those who have heard of him at all, is his status as the first thinker to describe (most notably in his article “The Production of Security” and book Les Soirées on the Rue Saint-Lazare, both published in 1849) how the traditional “governmental” functions of security could be provided by market mechanisms rather than by a monopoly state – the “free-market anarchist” position later developed and popularized by such thinkers as Lysander Spooner , Benjamin Tucker, John Henry Mackay, and Francis Dashwood Tandy in the nineteenth century, and Murray Rothbard, David Friedman, Bruce Benson, and Randy Barnett in the twentieth. [1]

Born in Liège, Molinari made his way to Paris at around age 21 and fell in with the classical liberal movement centered on the Société d’Économie Politique and working in the tradition of Jean-Baptiste Say ; Frédéric Bastiat in particular became an important colleague and mentor. Writing in a clear, engaging, and witty style modeled on Bastiat’s, Molinari penned dozens of works in economics, sociology, and political theory and advocacy, on topics ranging from the economic analysis of history to the future of warfare and the role of religion in society, as well as memoirs of his travels in Russia, North America, and elsewhere; his contemporaries described him as “the law of supply and demand made into man.” He eventually served as editor of the prestigious Journal des Économistes, chief organ of French liberalism, from 1881 to 1909. He is buried in Père Lachaise cemetery, in a grave adjoining that of fellow radical liberal Benjamin Constant .

Today the Belgian-born economist Gustave de Molinari (1819-1912) is little known outside of libertarian circles, and most of his work remains untranslated. Molinari’s fame was once much greater; in his own day his works were discussed by such internationally prominent intellectual figures as Lord Acton , Henry James, Karl Marx , Thorstein Veblen , and Frédéric Passy (first recipient, with Jean Henry Dunant, of the Nobel Peace Prize), and he was an important influence on Vilfredo Pareto.

[13] This fact should not be especially surprising, especially to libertarians attracted to an Oppenheimerian “conquest theory” of the state. If states originated in order to allow their rulers to more effectively extract rent from their subjects, then it follows that rulers will have a strong incentive to suppress violence within their population. Every dead subject is, after all, a subject who can no longer be exploited. See Franz Oppenheimer, The State: Its History and Development viewed Sociologically, authorized translation by John M. Gitterman (New York: B.W. Huebsch, 1922). < oll2.libertyfund.org/titles/1662 >.

[3] Herbert Spencer, chapter 19, “The Right to Ignore the State” in Social Statics: or, The Conditions essential to Happiness specified, and the First of them Developed, (London: John Chapman, 1851). < oll2.libertyfund.org/titles/273 >.

Perhaps, then, the later Molinari’s apostasy from the gospel of anarchism was not so much a product of pessimism as it was the product of a life full of experience – experience that undermined the tidy certainty of his earlier syllogistic reasoning. The Molinari of 1899 was not ignorant of the many virtues of market arrangements. Nor were the Hayek of 1945, the Sowell of 1987, or the Dunoyer, Coquelin, and Bastiat of 1849. But they were wise enough to doubt that one could demonstrate the moral or economic imperative of “smashing the state” from the armchair. They would be more impressed, I suspect, with what Peter Boettke [19] has described as the “ positive political economy of anarchism. ” But even here, the best case for anarchism that can likely be made will be an incremental one, not a revolutionary one. If Pinker is right and the modern state is responsible for much of the peace and security that we enjoy today, then we ought to be very, very cautious about dismantling it.

Anarchism of this sort thus demands from us an enormous confidence in the power of human reason to radically redesign and improve evolved social institutions. And it is precisely this sort of confidence that classical liberals have long warned us to be wary of. That kind of confidence is an example of the “unconstrained vision” that Thomas Sowell [15] found displayed so prominently in the work of the 18th-century anarchist William Godwin . [16] It is an example of the “false individualism” that Friedrich Hayek [17] saw manifesting itself in so much French social thought and that led him to dismiss anarchism as “but another product of the rationalistic pseudo-individualism to which [true individualism] is opposed.” And it is what Molinari’s classical-liberal contemporaries Charles Dunoyer, Charles Coquelin, and Frédéric Bastiat [18] described as the “illusions of logic” that had led their friend and colleague so astray.

Of course, the emergence of states isn’t the only reason for the decline of violence over time. The development of commerce no doubt played a major role as well, by transforming human interaction from a largely zero-sum game into a largely positive-sum one. And one can, if one looks hard enough, come up with a few examples [14] of anarchist societies that were not so violent after all. But I suspect that most thinkers attracted to anarchism as a normative political ideal are not actually driven by a careful examination of the relevant empirical data. For most, the argument is an almost entirely a priori one. The theory comes first, and the search for supporting factual data comes only afterwards, if at all. For some, like Rothbard, anarchism is a conclusion that one can logically derive from the “axiomatic” moral principle of nonaggression. For others, like Molinari, the fundamental premises are economic, rather than moral, but the derivation is once again purely logical, and the conclusion is held with the same apodictic resistance to potentially falsifying evidence.

It is natural for the state-produced horrors of the 20th century to dominate our thinking about such matters. But we should resist the temptation of historical myopia. Stephen Pinker has argued persuasively [12] that even taking the hemoclysms of the first half of the 20th century into account, the world today is a much safer, much more peaceful place than it has ever been before. And a substantial portion of the credit for that fact, on his analysis, goes to the development of the modern state. In absolute terms, to be sure, more people die violent deaths in state-based societies than in stateless ones. But that’s largely because there are more people around to be killed today than there were in our anarchistic past. In relative terms, one’s chances of dying a violent death in a state-based society are significantly lower than in a stateless one – somewhere between 6-25 percent as low, to be precise. [13] Anarchist societies may not have had nuclear bombs or concentration camps, but the constant raids, skirmishes, and low-level conflicts took a heavy cumulative toll.

These brief considerations do not, of course, settle the issue of whether some form of state is preferable to anarchy, all things considered. If the arguments I have presented are sound, then what they show is that an anarchist society will not be as peaceful, and hence will not be as desirable, as Molinari predicts. But it is possible, of course, that state-based societies might be even worse. If, after all, people are irrational and prone to violence, then this will be true of those who hold the reins of state power as well, and allowing such individuals access to the concentrated and monopolistic power of the state might very well magnify the damage they can do.

The third and final point has to do with the effects of people’s decision to use violence. By way of contrast, suppose that people make irrational decisions about what car to buy, and so end up purchasing vehicles that they later come to regret (because they break down, get poor gas mileage, or whatever). For the most part, the negative effects of their bad decision are internalized, and any external effects are relatively trivial. By contrast, the negative effects of decisions about the use of violence are largely externalized and can be devastating. Adam Lanza is only the most recent and tragic case in point. As a result, society has a much greater interest in preventing people from making bad decisions about violence than we do in preventing them from making bad decisions about cars.

Second, even when violence is regarded as a cost, it is not always one that we can count on individuals to rationally weigh against expected benefits in determining their best course of action. Whatever one might think about the rational-actor model of humanity in general, it is a model into which much real-world violence can be fit only by pushing very, very hard. Take, for example, any episode of the once popular reality show Cops. Is the husband who gets drunk and beats up his wife for the third time this year rationally weighing the costs and benefits of his behavior? Is the meth-head who – while in handcuffs – tries to pick a fight with his arresting officer? These examples are cheeky, I admit. But the lesson is real. We know from our study of the brain that aggressive impulses are correlated with a very different and much more primitive region than that responsible for rational calculation. So when we see on Cops that people often make strikingly irrational decisions about violence, or for that matter when we see on Teen Mom that people often make strikingly irrational decisions about sex, we should not be surprised.

The first point I offer in support of this claim has to do with the alleged costliness of violence. It is true enough that most people, most of the time, regard engaging in violence as a costly and undesirable activity. But there are at least some circumstances where people seem to regard violence as a positive benefit – a kind of consumption good, as it were. Consider, to take only two very recent historical examples, the kind of brutal ethnic conflict that took place in Central Africa between roughly 1960 and 1994, or between the Serbs and the Croats in Bosnia and Herzegovina in the 1990s. Did the Hutus who hacked their Tutsi neighbors to death with machetes really consider those violent acts a cost? A burden to be borne, grudgingly, for the sake of some offsetting hedonic benefit? On the contrary, it seems much more plausible to say that, for them, the violence was a constitutive part of the hedonic benefit -- not an obstacle standing between them and their goal but part of the goal itself. And I suspect that the same is true of much of the violence involved in primitive tribal conflict, the Christian Crusades, and contemporary street-level gang violence. It is no doubt true that some of this violence served an instrumental purpose. But there’s nothing incoherent about violence being both instrumentally and intrinsically gratifying, and I suspect that this is the best way of understanding the motivation of at least many of the perpetrators of these types of violence.

In what follows, I want to argue that there is something different about violence – actually that there are three important differences -- and that this fact significantly weakens the case for the young Molinari’s claim that an anarchist society will be a peaceful one. The young Molinari’s belief, I will argue, depends on an overly optimistic view of human nature that the later Molinari and the later Spencer were correct to reject. When it comes to violence, we have good reason to expect bad things from human beings. A certain amount of pessimism is thus a perfectly rational response to the limited potential of humanity’s crooked timber.

In general, I think there is a lot to be said for this form of argument. Rational customers will not buy cars that blow up when they are involved in minor fender-benders, and so rational, profit-maximizing firms will tend not to produce such cars. Usually. [11] But is there something special about the market for security? The argument that market anarchism will not produce excessive violence, like the argument that automobile markets will not produce exploding cars, depends on an assumption that consumers and producers will generally act rationally. When it comes to automobiles, that assumption is probably close enough to correct to generate the right outcome, most of the time. But is there something special about violence?

Contemporary market anarchists generally make the same point by noting that violence is expensive. [10] If your security firm is frequently getting into violent conflicts with other firms, then you’re going to have to pay for more guns, more funerals, and higher wages to compensate your employees for their increased risk. Because violence is expensive, rational firms will have a strong incentive to avoid these costs by resolving their disputes peacefully, probably through some form of prearranged binding arbitration. Firms that must bear the costs of violence themselves are less likely to resort to it than governments that can coercively impose those costs on their citizens, and so we have good reason to believe that an anarchist society will generally be a more peaceful one than a society governed by a state.

Under the rule of free competition , war between the producers of security entirely loses its justification.… Just as war is the natural consequence of monopoly, peace is the natural consequence of liberty. [9]

Once that stage had been reached and the state had been abolished, Molinari, like his contemporary market-anarchist followers, believed that violent conflict among producers of security would be rare.

I think an examination of Spencer’s pessimism sheds important light on Molinari’s own move away from anarchism, and puts into sharp relief hard questions with which any contemporary advocate of market anarchism must deal. Molinari embraced a theory of human social and moral evolution not unlike Spencer’s, including the important idea that human societies were evolving out of a stage in which militancy and hierarchy were appropriate, to one in which peaceful commercial relations would dominate. [8] And though he doesn’t say so explicitly, it seems reasonable to infer that Molinari shared Spencer’s belief that a stateless society was not a timeless ideal, but one appropriate only to a particularly advanced stage of human moral evolution.

What changed for Spencer was his belief that human character would be ready for anarchism any time in the foreseeably near future. By 1899, when he wrote his Autobiography , [5] Spencer had come to doubt that men would be ready any time soon for the kind of freedom he had advocated as a young man. Human beings, he now believed, were governed primarily by their emotions and desires and were rational only “ in a very limited sense .” [6] Social and political institutions were even more dependent on character than he had previously thought. And the character of human beings wasn’t progressively evolving, as he had once hoped and thought it would, in a way that would allow for peaceful and rational social cooperation among all human beings. Rather, he wrote in one of the 1896 concluding chapters of his Principles of Sociology, “The baser instincts, which dominated during the long ages of savage warfare, are being invigorated by revived militancy.” [7] The consequences of this development were hard to predict with any accuracy, but Spencer’s outlook at the dawn of the 20th century was decidedly (and prophetically) grim.

"I had come to see that institutions are dependent on character; and, however changed in their superficial aspects, cannot be changed in their essential natures faster than character changes. It had become manifest to me that men are rational beings in but a very limited sense"

Spencer never exactly repudiated this anarchistic ideal. He did pull the chapter on the right to ignore the state from the 1892 revised edition of Social Statics, along with some other material, including a defense of women’s suffrage and a provocative argument against the legitimacy of private property in land. But, as George Smith correctly argues, [4] this change is best explained by a shift in Spencer’s belief about the likely timing of a stateless society, not its desirability as an ultimate goal. Even in the original edition of Social Statics, Spencer was careful to note that the practicability of his moral principles “varies directly as social morality” and that attempting to apply it in a society of men whose moral character was not yet sufficiently developed would be productive of “anarchy” – a term he used, presumably, in a pejorative sense.

Interestingly, this same “pessimism” has also been suggested as the explanation for another well-known 19th-century libertarian’s retreat from anarchism. In 1851, Herbert Spencer ’s Social Statics put forth a vision of a stateless society as a moral ideal. In this ideal, “states,” or something like them, might continue to exist, but individuals would have the “ right to ignore ” them for any reason they chose, meaning that states would simply be one among many possible forms of voluntary organization. [3]

"we cannot choose but admit the right of the citizen to adopt a condition of voluntary outlawry. If every man has freedom to do all that he wills, provided he infringes not the equal freedom of any other man, then he is free to drop connection with the state—to relinquish its protection, and to refuse paying towards its support."

In 1849, Molinari saw no reason why it shouldn't. Fifty years later, however, he had changed his mind, reverting to the position that a single agency (the state) ought to have a monopoly on defensive services within a geographical area and that competition ought to be restricted to operating between states, not within them. [1] Long attributes Molinari’s apostasy to his falling sway (improperly, in Long’s view) to the influence of public-good type objections. David Hart, on the other hand, attributes it to a pessimistic spirit that Molinari seemed to develop in his later years. [2]

Roderick Long has, unsurprisingly, produced a terrific little essay on the life and thought of Gustave de Molinari. From it, readers can get a rich sense of the breadth, sophistication, and audacity of Molinari's thought. To be an anarchist of any stripe in the mid-19th century was a sign of tremendous intellectual independence and political courage. But what set Molinari apart from other anarchists, and secured for him a permanent position of honor in the history of libertarian thought, was his willingness and ability to go beyond a merely negative criticism of the state, and to provide real positive detail about the likely functioning of a stateless society. It was an ingenious insight, all the more so for being the kind of genius that appears obvious and inevitable in hindsight. If market competition is the most effective means for providing commodities like corn and linen, then why shouldn't the same commonly accepted economic logic be applied to the traditional security-providing functions of the state?

[7] Herbert Spencer, Social Statics: or, The Conditions essential to Happiness specified, and the First of them Developed, (London: John Chapman, 1851). Chapter: XIX. The Right to ignore the State. < /title/273/6325 >.

[6] Les Lois naturelles de l'économie politique (Paris: Guillaumin, 1887). A more detailed analysis of Molinari's gradual retreat from his early anarcho-capitalist position can be found in the discussion which accompanies this virtual anthology of Molinari's writings on the state between 1846 and 1912 < http://davidmhart.com/liberty/FrenchClassicalLiberals/Molinari/anarcho-capitalism.html >.

[4] The discussion of Les Soirées by the Société d'économie politique took place in October 1849. Present at the discussion were Horace Say (chairman), Gustave de Molinari, Charles Coquelin, Frédéric Bastiat, M. de Parieu, Louis Wolowski, Charles Dunoyer, M. Sainte-Beuve (MP for L'Oise), M. Lopès-Dubec (MP for La Gironde), M. Rodet, and M. Raudot (MP for Saône-et-Loire). See Journal des Economistes, Vol. XXIV, no. 103, 15 October, 1849, pp. 314-16. In the same month Charles Coquelin wrote a hostile review of Les Soirées which appeared in JDE, Vol. XXIV, no. 103, 15 October, 1849, pp. 364-372.

Interestingly, his contemporary Herbert Spencer was having similar reservations as the prospects for liberty receded in the late 19th century. In 1851 when Social Statics appeared with the chapter “ The Right to Ignore the State ,” Spencer believed that Britain was in a “transition state,” where the preconditions for people to live in a fully free and deregulated society were on the verge of being established. [7] If they wished to do so, they had or would soon have the moral framework to live as free and responsible individuals and could “ignore the state” without violating the rights of others. When he republished Social Statics in 1892, he no longer believed this to be the case. Instead he thought the people had become corrupted by the growth of government, militarism, and socialism, and so he withdrew the chapter on “The Right to Ignore the State.” The similarities with Molinari on this matter are striking.

But this was a strange kind of “sell out,” as he continued to quote passages from “The Production of Security,” such as the quote from Adam Smith on courts charging fees for their services. Whereas then he believed in fully competitive protection companies without any geographic monopoly, now he thought security is a “naturally collective” good that should be provided by the government with a geographic monopoly, but with a number of radical twists. He believed that these monopolies should be very small, such as municipalities or proprietary communities, and that they should outsource the provision of security to private firms in order to have some kind of market in security and thus keep costs down. If this is a sell-out then it is a strange kind of sell-out since it is still much more radically anti-state and pro-free market than anything his colleagues were advocating at that time.

As late as 1887 in Les Lois naturelles de l'économie politique [6] Molinari is still defending this idea of “la liberté de government,” but he now draws an important distinction between “la liberté du commerce” (free trade), which had a vigorous organization lobbying for its introduction, especially in England with Richard Cobden’s Anti-Corn Law League, and which could therefore prepare the English people for the idea of free trade, and “la liberté de gouvernement” (free government), which had no organization to prepare the people to accept it. That being the case, the idea would require “tutelage” as an intermediate measure before it could be fully implemented. By 1899 Molinari believed this intermediate measure had to be made permanent, thus fully abandoning an anarcho-capitalist meaning of “la liberté de gouvernement.” And so he stopped using this phrase entirely.

We can say definitely that by the time Esquisse de l'organisation politique et économique de la société future [ English version ] was published in 1899, [5] Molinari had definitely “retreated” to a non-anarcho-capitalist position, accepting that there were “natural monopolies” which only governments could supply and that protection services were such a natural monopoly. Exactly when this transition occurred between 1865 and 1899 needs to be determined by further study, but an analysis of some key phrases that he used can be instructive in pinning this down more precisely. One such phrase is “la liberté de gouvernement,” which he used in the sense of competitive “governments” (or suppliers of protective services), a parallel concept to that of “la liberté du commerce” (free trade). When he believed that competing privately owned insurance companies could supply security services, then “la liberté de gouvernement” had an anarcho-capitalist meaning in the Rothbardian sense.

I also think his transition from academia to journalism merits further study if we wish to understand how and why Molinari changed gears in his thinking about society. In October 1867 Molinari decided to make a career change, which took him out of academia and out of Brussels and back into journalism in Paris (one should also note that his wife died in 1868 which also deeply affected him personally). This meant that Molinari was no longer willing or able to work as an academic economist grappling with theoretical issues such as public goods. He dramatically shifted his attention to travel writing and political commentary about the new Third Republic. His new position was with the influential Journal des Débats, published by Edouard Bertin and after 1871 by Léon Say (the grandson of Jean-Baptiste Say), who served three times as minister of finance during the Third Republic. Molinari served as editor-in-chief from 1871 to 1876. His interest in foreign travel began with a lecture tour of the Russian Empire at the time of the abolition of serfdom (1861) and went on to include an impressive range of countries about which he wrote for the JDD, including the United States and Canada (1876), South Carolina (1878?), Ireland, Canada, Jersey (1881), the Rocky Mountains, Russia, Corsica (1886), Panama, Martinique, Haiti (1887). When not traveling he was occupied in writing political analysis about a very tumultuous time in French history, such as the defeat of France in the Franco-Prussian War, the collapse of Napoleon III’s Second Empire, the rise of socialism during the Paris Commune, and the formation of the Third Republic. When he did return to more economic concerns it was as editor of the Journal des Économistes to which he was appointed in 1881 on the death of Joseph Garnier who had been editor from 1866-81. The books which flowed from his pen during the early and mid-1880s were what I would call historical sociology rather than economic theory, a subject which he had not touched for nearly 15 years.

I think one could argue that Molinari did indeed retreat from the radical defense of anarcho-capitalism he had developed between 1845 and 1865 when he was relatively young (26-46 years old). This is not surprising for a couple of reasons. Firstly, he was abandoned by his free-market colleagues who thought, along the lines argued by Charles Dunoyer in a meeting of the Political Economy Society in Paris in 1849, that Molinari had been “swept away by illusions of logic”; none of them were prepared to follow him down this route. [4] Secondly, in 1867 Molinari made a career change that took him out of academia and into full-time journalism where he had less time to devote to such theoretical matters as anarcho-capitalism. In fact, you might say he became quite distracted with the directions his new career took him in. And thirdly, from the mid-1880s, with the return of protectionism and the rise of socialist groups across Europe, he became increasingly pessimistic about the prospects for liberty - and justifiably so I would add. As a consequence he no longer believed that people were ready for such a radical transition to a freer society as anarcho-capitalism would require. When all three factors are considered it is not surprising perhaps that his radicalism weakened as the years went by.

Molinari extended his analysis of the private and competitive provision of security services in his treatise on economics, the Cours d'économie politique, which came out of the lectures he gave at the Musée royal de l'industrie belge in Brussels in 1855 and which he revised and expanded in a second edition that appeared in 1863. [3] This was to be the last occasion Molinari dealt with these issues for some time because he left academia to pursue a career in journalism.

It should also be kept in mind that the chapter 11 in which these ideas were presented in Les Soirées was just one of several in which Molinari presented private alternatives to “public goods” such as water supply and roads. Thus he thought that security was part of a spectrum of similar industries to which competitive market solutions might be applied.

The actual details of how this would happen he left unexplored perhaps in his haste to get his thoughts on paper while the intellectual tornado of the revolution was still swirling about with its mix of socialist, conservative, Bonapartist, as well as liberal ideas. Perhaps he also thought that the specific way in which the market would supply these goods and services was not the job of the economist to answer, only that it could and would, since the “economic problem” was a universal one. For example, in a socialist society in which all groceries were supplied by government-run depots, one might well ask a free-market advocate of private provision of groceries how a free market would do this exactly? What grocery suppliers would emerge? On what streets would they be located? What would they charge for staples like bread (and wine). What would happen if the farmers refused to supply Paris with the food it needed? Wouldn’t rival grocery stores do battle on the streets to secure prime locations for their stores? Wouldn’t they offer low prices at first to win market share only later to jack up prices for the unfortunate customers? Perhaps, somewhat naively, Molinari thought that just as it would be foolish and impossible for an economist to give detailed answers to these questions to the defender of a government monopoly provision of groceries, so too would it be foolish to try to do the same for security services.

In 1849, Molinari’s annus mirabilis, Molinari published his revolutionary insights into how “the production of security” could be undertaken by private and competing insurance companies. He did this in an article on " The Production of Security " in the Journal des Économistes in February and in chapter 11 of his Soirées. [2] He lacked the theoretical insights and sophistication to take these ideas very far but he was the first to have them, which is certainly worthy of some kind of intellectual prize. His revolutionary insight lay in two things: that security could be viewed as being like any other service or “industry” provided in the free market, and that the institutions which the market was already evolving could supply this new “industry” as profit-seeking entrepreneurs sought to satisfy the needs of consumers using scarce resources.

Let me begin by summarizing a few aspects of his life and thought which are probably not well known and to discuss one or two of them in a bit more depth in order to begin assessing Molinari’s legacy:

Unfortunately, 101 years after his death at the ripe old age of 93, we still lack a good intellectual and political biography of Gustave de Molinari. Gérard Minart has made a good start with his French-language biography published in 2012 to coincide with the centennial of Molinari’s death, [1] but there are still enormous gaps in our knowledge of his very long life and his many and varied activities in the cause of individual liberty. This response to Roderick Long is designed to add a few paragraphs to what Roderick has usefully provided for us.

[1] “And if all the companies agreed to establish themselves as monopolies, what then?” Readings p. 145, Soirees p. 332, translation p. 298. [The draft translation used for the Conference Readings can be found at the OLL: < /index.php?option=com_content&task=view&id=1658&Itemid=371 >].

THE CONSERVATIVE … There are things for which no indemnity could compensate. Can you pay for the roof which has sheltered generations, the hearth around which they have lived, the great trees which witnessed their births and their deaths? Is there not something of the sacred in these centuries old abodes, in which the traditions of the ancestors live on, in which so to speak the very soul of the family breathes? Is not the expulsion of a family forever from its ancient patrimony, the commission of a deeply immoral assault?

THE CONSERVATIVE You go too far. If the law of expropriation were used in the cause of public utility to transform lawns and pleasure gardens into fields of wheat, what would happen to the security of property? Who would want to manicure a lawn, lay out a park, decorate a chateau?

THE ECONOMIST There are in the Sologne vast stretches of extremely poor land. The poverty stricken peasants who farm there receive only a meager return for the most laborious efforts. Yet close to their wretched hovels rise magnificent chateaux with immense lawns where wheat would grow in abundance. If the peasants of the Sologne demanded that these good lands be expropriated and transformed into fields of wheat, would not the public interest require that this be granted them?

THE SOCIALIST Ah, Mr. Conservative. These are words which reconcile me to you. You are a fine fellow. Let us shake on it.

THE CONSERVATIVE … The development of a railway is subject to certain natural exigencies; the slightest deviation in the route, for example, can entail a large increase in costs. Who will pay for this increase? The public. Well, I ask you, must the interest of the public, the interest of society be sacrificed to the stubbornness and greed of some landowner.

THE ECONOMIST Oh, and is not a farm which produces food for everybody not an undertaking also useful to all? Is not the need to eat at the very least as universal and necessary as the need to travel?…

THE CONSERVATIVE What? Do you wish to abolish that tutelary law without which no undertaking on the grounds of public utility would be possible?…

I end by offering some evidence for Roderick’s description of Molinari’s writing as “clear, engaging, and witty. Here is one of my favorite passages, from the Soirées, an imaginary exchange between a socialist, a conservative, and an economist—the latter obviously Molinari. The subject is eminent domain:

One explanation is risk aversion—in a worker-owned firm both the physical capital and the human capital of the owners are linked to a particular firm in a particular industry, making changes in the value of both highly correlated. Other explanations involve problems of organization and incentives; worker democracy within a firm has many of the same problems as political democracy. Arguably the ideal form of government is competitive dictatorship, the way in which restaurants are currently governed—I have no vote on what is on the menu, an absolute vote on what restaurant I choose to eat at. It is also the way in which traditional employment is organized, competing for workers rather than customers.

The part of Roderick’s piece that I found least convincing was his criticism of Molinari for failing to consider worker control of industry as a solution to the problem of unequal power between employer and employee. Roderick refers to legal barriers to worker control but does not, at least in this essay, actually mention any. As best I can tell, in modern capitalist societies, there is nothing to prevent workers from starting their own firms or buying out the stock of the firms they currently work for—as I pointed out some 40 years ago, income is sufficiently large relative to capital to make either, in many cases, a practical alternative. [6] Worker-owned firms exist but are uncommon, save in industries such as law where the ordinary corporate form is legally forbidden [7] — the opposite of the pattern one would expect if they were really a superior form of economic organization.

A feature of Molinari’s thinking that I found intriguing because of the parallel with modern libertarian thought is the idea that increased mobility could provide a solution to the faults of existing institutions. In his case that meant labor exchanges taking advantage of new technology—the railroad to move people and the telegraph to move information. For us it means the Internet, usually seen as a solution to problems not of employers, Molinari’s concern, but of governments. It is true, as Roderick points out, that even if information is mobile, individual workers often are not—while telecommuting has made one part of Molinari’s solution more practical than he imagined, geographical ties are still a constraint for those with real-space jobs. But even the real-space employee can use the Internet to reduce the geographical specificity of the rest of his life; if most of your social life occurs online, you can move to any job without abandoning your network of friends and acquaintances. That makes Molinari’s solution to his problem more viable for us than for him, as well as increasing the degree to which governments must compete for citizens.

In summary, most of what anarcho-capitalists have learned in the century and a half since Molinari wrote is what economists more generally have learned. We are better able to distinguish good arguments against our position—national defense really is a public good, and so presents problems for a pure market society—from bad ones, and better able to offer good arguments, largely from Public Choice theory, against the alternative.

Which sounds fine as rhetoric, but makes very little sense. One could as easily argue that either all metal is heavier than all wood or all wood is heavier than all metal—neither of which happens to be the case. Part of the problem is Molinari’s understandable ignorance of economic ideas not yet invented when he was writing, ideas that help explain why some activities are or are not better suited to market production than others. He is left making the best arguments he can, but they are not always very good ones.

Either communism is better than freedom, and in that case all industries should be organized in common, in the State or in the commune. Or freedom is preferable to communism, and in that case all industries still organized in common should be made free, including justice and police…. [5]

A more serious weakness in his defense of replacing monopoly government with competition is that much of it depends on arguments that appear logical only if you do not think very hard about them. Thus, for instance, he writes:

The response that some modern anarcho-capitalists would offer is that all agencies would agree on a common legal system, deducible by reason, and accept the verdicts of private courts judging according to that system. Molinari, however, writes that “The sense of justice seems to be the perquisite of only a few eminent and exceptional temperaments,” [2] and later, discussing the alternative of monopoly provision of justice in a democracy, appears skeptical of the view that “human reason has the power to discover the best laws … ,” [3] so it does not look as though that answer is available to him. An alternative, and in my view more plausible, response is that each pair of agencies, in order to avoid the costs and uncertainty of violent conflict, will agree on a private court to settle their disputes, bargaining on the basis of what legal rules they believe will make the product they produce most attractive to their customers. The agreement will then be enforced by the discipline of repeat dealing, each agency knowing that if it refuses to accept verdicts that go against its customers, the other will do the same. [4] That solution does not seem to have occurred to Molinari, possibly because the problem did not occur to him.

He does not, however, consider one problem routinely raised by critics of anarchy, from Rand on down—conflicts between agencies. If I think the customer of another agency has violated my rights and he denies it, how, other than by violent conflict between the agencies, is the dispute to be settled?

Molinari’s 19th century defense of anarcho-capitalism deals with some, but not all, of the objections familiar to its modern defenders. He considers the risk of a cartel of protection agencies and argues that the customers would respond by revolting against them, as the French revolted against the Ancien Regime. [1] It is not an entirely persuasive response—there have been lots of tyrannies that were not overthrown—but it is a response. He considers the problem of national defense and argues that the agencies would cooperate to provide it in their mutual interest—ignoring the free-rider problem due to the public-good nature of defense.

Molinari rightly sought to increase the competitiveness of the labor market in the interests of workers. Sharing information, as his labor exchanges would do, could be very useful. Eliminating state-secured privilege and remedying state-sanctioned and state-perpetrated injustice could be even more useful. [1]

A free society wouldn’t and couldn’t eliminate investor-owned or boss-dominated firms—nor should it, not only because violent interference with these patterns of ownership and control would be unjust but also because workers might often benefit from the ability to shift risk onto employers and investors. But structural changes could create significantly greater opportunities for self-employment and work in partnerships and cooperatives.

Moral suasion typically shouldn’t be seen as the primary driver of social change. But active advocacy on behalf of workplace dignity and fairness could obviously lead to changes in social norms and expectations that would further reduce the perceived legitimacy of bossism and encourage the flourishing of alternatives.

In addition, boss-dominated firms might experience greater pressure to democratize in virtue of unionization. To the extent that the state’s bargain with unions has been, all things considered, bad for collective action in the workplace, eliminating state labor regulation could open up opportunities for Wobbly-style direct action that could increase unionization and offer workers resultingly more extensive workplace protection. Again, even in nonunionized firms, there would be market pressure to mimic at least some features of unionized firms, both to avoid losing workers to those firms and to forestall union organizing efforts.

Thus, people who wanted to opt for boss-free workplaces would find it easy to do so in the absence of state-driven props for hierarchy and state-driven barriers to self-employment and employment in partnerships and cooperatives. And the fact that they did so, making boss-free options increasingly visible and numerous, would have consequences for boss-dominated workplaces, too. The availability of alternatives that offered people more dignity, more predictability, more security, and more opportunities for participation in decision-making would exert market pressure on conventional corporate firms, encouraging them to make theoretically boss-dominated workplaces more like those at other kinds of firms. The differences wouldn’t disappear, but they might be meaningfully reduced.

Furthermore, it’s not clear that it would be impossible to raise money in equity markets and from investment banks for partnerships, cooperatives, and solo ventures. There are ways to secure investments that don’t involve participation in governance—and of course significant quantities of stock for sale today doesn’t necessarily come with voting rights.

The price is partly affected by the relative frequency of hierarchical versus nonhierarchical workplaces. So eliminating props for hierarchy ought to put more alternatives on the table. At the same time, people often don’t choose such alternatives because of the risks associated with doing so. Saying goodbye to corporate employment means taking responsibility for one’s own medical care and retirement (if, of course, you’re a worker who even has these options in the first place, as many purportedly part-time workers don’t), requires one to front the capital required to make startup operations possible, and forces one to confront the spectre of unemployment if one’s startup business fails. But medical care and retirement are associated with corporate employment primarily because of the current tax system; and medical care, in particular, would be more affordable by far in the absence of state regulation and state-driven cartelization. So the challenge of caring for one’s health in connection with a mutual-aid network, say, would much less daunting than at present. Startup capital would be more available if state-confiscated resources were marketized and state-engrossed land available for homesteading, and less necessary, in any case, if state regulations didn’t drive up capitalization requirements. And unemployment would be more affordable if state regulations didn’t raise the minimum cost of living, and could be manageable by means of the support offered by mutual aid.

To the extent that such alternatives are more viable, they can be expected to be more common. Freedom from arbitrary authority is a consumer good. Given the disgust and frustration with which many people view the petty tyrannies of the contemporary workplace, I suspect it’s a consumer good many people would like to purchase. At present, the price is high; there are very few opportunities to work in partnerships or cooperatives or to choose self-employment. So the question is: what might reduce the price?

In addition, workers often lack access to the resources needed to start firms precisely because of state-sanctioned theft and state-secured privilege. Massive, ongoing robbery and asset engrossment by states and their cronies has played a crucial role in creating a class of economically vulnerable workers. Reversing this process can help to enrich workers and give them the economic leverage they need both to create new firms and to opt for self-employment as an alternative to work in hierarchical businesses.

Whether this is so will depend in significant part on empirical questions that can’t be sorted out a priori. But it does seem as if several factors in our economy might tend to help large firms ignore the diseconomies of scale that would otherwise render them unsustainably inefficient. Tax rules and regulations tend to encourage capital concentration and thus increased firm size. Subsidies reduce the costs inefficiently large firms might otherwise confront—and large firms can more readily mobilize the resources needed enable them to extract wealth from the political process than small firms. Eliminating these factors seems likely to make alternatives to the large corporate firm significantly more viable.

But we don’t see lots of smaller, flatter firms in the marketplace. Does this mean that, contrary to expectations, larger firms really are more efficient?

This means, then, that discernible economic pressures might be expected to lead existing firms to adopt flatter structures in which front-line workers were better able to use the knowledge available of them to make important decisions, and to make newly established firms more likely to feature flat organizational structures. Thus, firms that treat workers better by offering them more opportunities to make decisions and subjecting them less frequently to arbitrary managerial authority should do better in the marketplace than their hierarchical competitors. Market forces might be expected to lead to the emergence of firm structures in which workers could use their knowledge and skills effectively and in which they were treated with respect: Smaller, flatter firms could be expected to outcompete larger, more hierarchical ones.

Thus, it seems fairly clear that, all other things being equal, the smaller and flatter a firm is, the better the information available to participants will be. The more production decisions are based on actual market prices rather than on simulated intra-firm transfer prices, the more efficient and responsive to reality they’re likely to be. And the more a worker has skin in the economic game, the more likely she will be to make prudent, profit-maximizing decisions.

The larger an organization, the more likely it is that managers will lack crucial information. This is both because there will be multiple layers separating various actors with relevant information (with institutional pressures impeding accuracy) and because there will be no system of prices encoding the information and usable for calculation.

Large hierarchical firms seem likely to be beset by the incentive and knowledge problems that complicate the lives of state central planners. As economists have known for much of the 20th century, top-down control over an economy is certain to lead to poor performance. Hierarchical firms can be expected to encounter the same problems.

Attracting desired employees isn’t the only reason to treat workers well, obviously. A fair, morally decent employer will regard respecting workers’ freedom and dignity as worthwhile for its own sake. And even less morally sensitive employers may recognize that one way of respecting workers’ dignity—empowering them to make as many decisions as possible—can substantially enhance productivity.

People like being treated well. And they can thus be expected to gravitate toward jobs featuring attractive working conditions. They may, of course, opt for pay over dignity, as they should be free to do. But workers will likely choose greater freedom and dignity when they can. Thus, in a competitive labor market, firms that want to attract workers will be incentivized to offer greater freedom and dignity as means of securing the best employees. By contrast, of course, in a not-so-competitive labor market, like the one we in fact have now, firms will have little incentive to institute policies that safeguard workers’ freedom and dignity as a means of recruiting effectively.

Many workers in our society may conclude, not unreasonably, that while their material standards of living are higher than their peers’ were in previous generations, they still lack freedom and dignity in the workplace. Their capacity for independent judgment may be ignored; they may be dismissed capriciously; and they may be treated with disrespect.

The labor exchanges Molinari envisioned might well not have been practical. But his goal in proposing them—to help foster a seller’s market in labor—was important. Achieving it could help significantly to improve the well-being of workers within a genuinely freed market. While ensuring workers’ access to the kind of information about job opportunities that Molinari’s labor exchanges would have offered might make a difference, more radical free-market reforms could help to do so more effectively.

Gustave de Molinari’s proposals to expand the reach of markets deserve our unqualified praise, even if we might be inclined to proceed in ways different from those he suggested. In particular, Molinari’s entrepreneurial attempt to conceive of institutions that might help to better the competitive position of labor in the market reflects his concern with an issue of crucial importance.

THE CONVERSATION

1. David D. Friedman’s Comment: “A Problem for Radicals”

Many years ago I gave a talk on Robert Nozick’s Anarchy, State and Utopia with Nozick in the audience. In the conversation that followed, he offered a different, and I think better, argument against anarchy than the one in the book: If market anarchy is a workable and attractive system under modern conditions, one would expect to see examples, and one does not. That is a problem not only for market anarchists but for radicals more generally: If your system works, why do we see no examples of it?

One possible answer is the one that Matt Zwolinski attributes to Molinari and Spencer—that their system would work if only people were better than they are, and will work when they become better. It reminds of an exchange somewhat earlier between Malthus and his critics. He had argued that if, as Godwin and Condorcet had predicted, the standard of living of the mass of the population became much higher than in the past, that would sharply reduce the cost of having children and hence the cost of sex, that humans enjoyed sex and so would have more of it if its cost were much lower, and that the resulting population increase would eventually drive real wages back down. Their response was that although present day humans might greatly value sex, the taste for such base pleasures would decrease with future human progress, eliminating the problem.

Malthus’s response was first to point out that the world had already existed for over five thousand years and no such trend was yet observable, and second to ask what was base about the pleasure of sex, adding that connubial pleasure was inferior to intellectual pleasure only in its duration. I realize it doesn’t have much to do with Molinari, but it’s one of my favorite quotes and I can resist anything but temptation.

There are two other responses to Nozick’s challenge that do not depend on an optimistic view of the moral progress of mankind. One is what modern economists call “path dependency.” There might be multiple stable equilibria possible for human societies. Once stuck in one, getting to another is difficult, but if one somehow got to the alternative set of institutions they also would be stable. There is no obvious mechanism to guarantee that, among the possible equilibria, real societies have to end up in the most attractive.

The other is that how institutions work depends on the surrounding technology, broadly defined. If economies of scale in rights enforcement run up to a firm size representing a large fraction of the market, you end up with a small number of firms and a serious risk that they will decide robbery is more profitable than selling services and combine to recreate government. If everything important happens online and the technology of public key encryption gives the defense in cyberspace an overwhelming advantage over the offense, on the other hand, market anarchy might turn out to be the natural equilibrium without anyone planning it. Other assumptions about other relevant technologies might prevent anarchy, guarantee anarchy, or leave both anarchy and the alternative as viable options.

My response to Nozick and to others who have made the same argument since is to imagine myself back in 1800, with a different radical political system to propose—a mass franchise democracy with equal rights for men and women and a government controlling nearly half of all income. My critics could point out, correctly, that such a society had never existed in the history of the world.

If market anarchy requires some substantial improvement in human morality, we may have a very long wait before we see it. If it depends on changing technology, in a world in which technologies are changing with dizzying speed, we might get it next decade. Or next century. Or never.

2. David D. Friedman’s Response to Gary Chartier: “Wishful Thinking”

Gary writes:

“Thus, in a competitive labor market, firms that want to attract workers will be incentivized to offer greater freedom and dignity as means of securing the best employees. By contrast, of course, in a not-so-competitive labor market, like the one we in fact have now, firms will have little incentive to institute policies that safeguard workers’ freedom and dignity as a means of recruiting effectively.”

Consider the simplest example of a noncompetitive labor market—an industry with only a single employer. As long as he is paying wages above subsistence, as essentially all employers in a modern developed economy are, he faces a tradeoff between the working conditions he provides and wages he pays. If he changes the working conditions in a way that is valuable to potential employees, he can get them at a lower wage. If he changes them in a way they disvalue, he will have to pay a higher wage. It is the net advantage as evaluated by potential employees, the combined attraction of wage and working conditions, that determines whether or not they will accept his offer. Hence Gary’s claim is as true of a monopsony as of a perfectly competitive industry. His implication that this is one of the advantages of a competitive labor market is false.

He goes on to summarize the familiar diseconomies of scale that give organizational advantages to smaller firms—fewer layers of administration between the CEO and the factory floor. The obvious conclusion is that the size of firms reflects the balance between such diseconomies of scale and economies of scale. For readers interested in the subject, I recommend Oliver Williamson’s old book Market and Hierarchy (1975), which goes into some detail, with historical evidence, on the tradeoffs.

It is possible that, as Gary suggests, big government results in making firms bigger, but one can tell an equally convincing story in the other direction. The larger a firm is, the more it requires a flow of information up and down the hierarchy, information that can be used by a government to control it and its participants via taxation and regulation; that is probably one reason why criminal firms tend to be small. Hiding income from taxation by misrepresenting costs of consumption as costs of production—classifying your private vehicle as a company car, for instance, and its costs as a business expense—is easier in a small firm than a large one, so high levels of taxation may well push down the equilibrium size of firms.

The rest of Gary’s argument has the same ad hoc character. Getting rid of government might make all of us richer. But there is no good reason to believe that it would make firms smaller or employers more responsive to the desires of their employees.

3. Gary Chartier’s Reply to David Friedman

In The Machinery of Freedom, David Friedman offers some observations about the possible shape of productive activity in a stateless society.

Goods might be produced by giant, hierarchical corporations, like those that now exist. I hope not; it does not strike me as either an attractive way for people to live or an efficient way of producing goods. But other people might disagree; if so, in a free society they would be free to organize themselves into such corporations. Goods might be produced by communes, group families, inside which property was held in common. That also does not seem to me to be a very attractive form of life. I would not join one, but I would have no right to prevent others from doing so. My own preference is for the sort of economic institutions which have been named, I think by Robert LeFevre, agoric. Under agoric institutions almost everyone is self-employed. Instead of corporations there are large groups of entrepreneurs related by trade, not by authority. Each sells, not his time, but what his time produces. . . . The actual arrangements by which the market provides an economic good, be it food or police protection, are the product of the ingenuity of all the entrepreneurs producing that good. It would be foolish for me to predict with any confidence what will turn out to be the cheapest and most satisfactory ways of producing the services now produced by government. . . .[1]

Sharing Friedman’s view that a production model dominated by large corporations features neither “an attractive way for people to live [n]or an efficient way of producing goods,” I find Friedman’s analysis quite congenial. I also share his view that one cannot be dogmatic about what a society liberated from state-secured privilege might look like. But I am at least a little less inclined than he is, in his contribution to this Liberty Matters symposium on Molinari, to think I’m engaged simply in wishful thinking when I suggest that the concerns that prompt Molinari to propose labor exchanges could be addressed simply by eliminating state-secured privileges.

Perhaps the large hierarchical corporation will persist in the state’s absence. Friedman is right that I hope it won’t, and no doubt confirmation bias is a factor in my evaluation of the relevant evidence. But I still think there’s reason to be optimistic.

My case for a future in which a much greater percentage of people could be expected to work in sole proprietorships, partnerships, and cooperatives includes several elements:

Being treated well at work is a consumer good, one for which people might be expected to pay something. The more affordable it is, the more people will be inclined to buy it. Several things might make it more affordable:

If self-employment is less risky than at present, people might find it easier to choose to work for themselves. Reduced health-care costs, reduced costs associated with working at home (created by an end to zoning rules, licensing requirements, and building codes), and similar factors could be expected to make it safer to work for oneself.

The realistic availability of self-employment would increase competitive pressure on employers to recruiting workers, and providing greater opportunities for participation and greater dignity at work would be one way of attracting them. Obviously, some workers might prefer higher salaries, but the market could presumably meet both sets of needs.

Removing state-driven burdens on economic activity would presumably boost productivity generally and raise average incomes. Compare changes in working conditions—e.g., the emergence of the 40-hour week, increased workplace safety, etc. As prosperity increased, things people might have thought of as luxuries became increasingly affordable, and therefore more widely available.

Remedying past instances of state-perpetrated and state-tolerated injustice and making state-engrossed and similar assets available for homesteading might be expected to boost the wealth of some workers and thus, again, to increase their ability to secure more attractive working conditions.

Large hierarchical organizations face persistent informational and incentival problems similar to those confronted by state bureaucracies. Thus, other things being equal, smaller, more flexible alternatives might be expected to out-compete them in virtue of diseconomies of scale—a point Friedman seems to acknowledge when observing that corporate production doesn’t seem to be “an efficient way of producing goods.” If it’s not efficient, why does it persist? One possibility is that features of business culture dispose most people, including (perhaps especially) major investors, to see existing hierarchical business models as inevitable or desirable. Another is that the full force of the informational and incentival problems isn’t being felt in today’s economy. I sought to explore the latter possibility in my initial contribution to the symposium, suggesting that the state rigs the game in favor of hierarchy.

Friedman is unconvinced. He offers several reasons for his skepticism:

He notes that employers always face the choice between offering higher wages and offering various nonwage incentives to workers, so that if workers in today’s economy (say) really wanted more participatory workplaces badly enough to accept lower wages in exchange for them, the market would provide such workplaces. That they do not suggests, he seems to imply, that there is little market demand on the part of workers for greater participation.

He proposes that we might reasonably conclude that the economies of scale yielded by the contemporary hierarchical corporation outweigh the associated diseconomies of scale.

He notes that state action may in fact encourage reductions as well as increases in firm size.

If workers don’t care very much about participatory workplaces or opportunities for self-employment, I have no burden to force them to create such workplaces. Let a thousand flowers bloom! But it seems perfectly sensible to think, given that workers do report some interest in such workplaces,[2] that if the affordability of noncorporate employment increased, more workers would choose it. State action makes such alternatives less affordable both by increasing the costs of and the risks associated with self-employment and by decreasing workers’ incomes by decreasing overall wealth levels.

I don’t doubt that state action can be seen as pressuring firms to reduce as well as increase in size. And, ignoring cultural-cum-psychic factors, no doubt the balance between economies and diseconomies of scale achieved by corporations in today’s economy is efficient in that economy. But the question, of course, is why we ought to think that a similar balance would obtain were the state absent. I am prepared to wager that it wouldn’t, that the factors I note in my original contribution to the symposium, addressed in much greater detail in Kevin Carson’s Organization Theory,[3] would make for a significantly different pattern of worklife in a free society. But, like Friedman, I don’t propose to be dogmatic. I think it is also reasonable, though, for me to note, as he does, both that corporate hierarchies don’t seem to be efficient or appealing, and to hope and work for their replacement by more flat and flexible arrangements for organizing work.

Endnotes

[1] David D. Friedman, The Machinery of Freedom, 2d ed. (Chicago: Open Court 1989). The quoted passage is from the chapter, “In Which Prediction is Reduced to Speculation”; I draw here on the on-line version, available at <http://daviddfriedman.com/The_Machinery_of_Freedom_.pdf>.

[2] See, e.g., Richard B. Freeman and Joel Rogers, What Workers Want (Ithaca, ILR 2006).

[3] Kevin A. Carson, Organization Theory: A Libertarian Perspective (Charleston, S.C.: BookSurge, 2008), online at http://www.scribd.com/doc/53649743/Organization-Theory-A-Libertarian-Perspective-by-Kevin-a-Carson.

4. David M. Hart’s Comment on Gary Chartier

It is good that Gary Chartier focuses on Molinari’s concern for the problems of the average worker in France in the 1840s, because this is one very important component of his unusual form of liberalism. Unlike the “top down” concerns of liberal conservatives like Edmund Burke and Alexis de Tocqueville, who were most worried about the continuity of institutions of dubious legitimacy and “law and order” (or rather “ordered liberty” whatever that might mean), Molinari and his fellow liberals like Frédéric Bastiat were very much concerned with what you might call “bottom up” liberty -- the rights and liberties of, and the injustices faced by, ordinary working people. As a young journalist trying to make ends meet in Paris in the early 1840s, Molinari was attracted by three things: the agitation for free trade (in order to get cheaper and more reliable food supplies to the people), slavery and serfdom (the worst forms of exploitation of the weakest members of society), and the right of workers to form associations in order to better themselves. These issues were the first things he wrote on.

Regarding workers, he and Bastiat were very concerned about the legal restrictions the state placed on workers to prevent them forming all kinds of voluntary associations. The most obvious restriction was the ban on forming unions and collectively bargaining for wages and conditions with employers. Technically the law also applied to business owners, but it was selectively applied, thus shutting out workers from the benefits of forming associations. Bastiat, Molinari’s close friend and colleague, protested this in the Chamber in 1848 and vigorously defended the right of all individuals to associate and speak their minds, whether they were workers or employers. Molinari got a start in journalism by covering a notorious court case involving carpenters and writing articles about the perversity of the application of the anti-association law. This began his life-long interest in labor exchanges as one way of overcoming this form of legal discrimination.

A second worker-related matter was the nonwage aspect of worker associations, namely, the right to form self-help or friendly societies in order to provide mutual assistance for things like unemployment insurance and medical help, or even just recreational activities. Molinari and Bastiat were aware that such groups were then forming in England and that, as in so many things, France was late to the party because of excessive regulation and bureaucracy. In one of his witty chapters in Economic Sophisms (“The Lower Council of Labor,” ES2 IV [1847?])[1] Bastiat mocks the official government-supported Superior Councils of Industry, which allowed manufacturers and landowners to get together to discuss their mutual concerns and lobby the government for benefits, but which deliberately excluded what Bastiat calls the “proper workers, serious workers” like joiners, carpenters, masons, tailors, shoemakers, dyers, blacksmiths, innkeepers, and grocers. Since they were prevented from forming their 