International Trade Refutes Hobbes' Theory about the State of Nature

Submitted by David A. Smither on Sun, 04/14/2019 - 12:00
Frontispiece of Thomas Hobbes’s Leviathan, 1651.

One of the most oft-quoted rationales for the existence of the state is that it ensures peaceful commerce. We are told that without the state acting as “referee” in our commercial lives, there would be an abundance of fraud, contractual defaults, and an atmosphere generally unconducive to a flourishing marketplace.

Thomas Hobbes, born 431 years ago last week, is perhaps most to blame for this myth and its continuing influence. One of the philosophical architects of modern government, Hobbes famously speculated on what human life would be like in a “state of nature” (i.e., in the absence of state power):

In such condition, there is no place for industry; because the fruit thereof is uncertain: and consequently no culture of the earth; no navigation, nor use of the commodities that may be imported by sea; no commodious building; no instruments of moving, and removing, such things as require much force; no knowledge of the face of the earth; no account of time; no arts; no letters; no society; and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short.

In other words, left to our own devices, we would surely devolve into a bunch of thugs and vandals, continuously pillaging one another and forever failing to build a stable civilization. We would live in “continual fear” of one another because we are all such terrible creatures.

 

Thank goodness Hobbes has a solution for this mess!

To remedy the violence of nature, we will establish a government by “social contract,” and by the “consent of the governed,” this government will protect us from ourselves and our wicked fellow men.

The state will enjoy “absolute sovereignty” and will thereby be able to adjudicate all of its subjects’ disputes.

In whatever social or commercial dealings we have with each other, the state will always be there as the champion and defender of human rights and the common good. Under this glorious regime, commerce can thrive, and we will all grow richer together, unified under the auspices of our benevolent overlords.

(We are not permitted to wonder how these overlords will themselves be so saintly given that we are all—so we are told—irredeemably wicked.)

 

Hobbes has serious philosophical chops and is a tough contender to debate against. Even with hindsight, it’s not so easy to refute his theoretical state of nature because the government he envisioned has largely come to pass.

Hence any objector to this theory may be met with the rejoinder that the proof of the government is in the governing. The generally peaceful state of our world and the absence of violence in the vast majority of commerce proves that Hobbes was right, right?

The renowned psychologist Steven Pinker recently published a bestselling book that compiles an enormous amount of statistical data lending credence to this claim. Indeed, Pinker claims (rightly or wrongly) that we are living in the golden age of history. And yet, post hoc non ergo propter hoc

Our world is certainly richer, more peaceful, and less violent today than ever before, but the question remains: Have we achieved our current levels of peace and prosperity through state intervention or in spite of it?

 

There is one domain where we still have access to real-time information from which we can glean insights for our fundamental philosophy of man and society: international trade.

As of this writing, there is no international government. While there are countless treaties, like NAFTA, that regulate trade between specific nations and international bodies like the UN that nominally support peace and development between nations, there is yet no state, properly speaking, that enjoys global sovereignty in the international market.

It follows, then—if we push the Hobbesian theory to its logical limit—that international trade takes place in a state of nature, i.e. in the absence of mediating state power. And yet anyone familiar with global commerce knows that it’s anything but “solitary, poor, nasty, brutish, and short.”

We have then a reductio ad absurdum. In the realm of international trade, we have demonstrable evidence that Hobbes was simply wrong about human nature, social reality, and government.

International trade thrives despite the aggressions of national governments at the import and export counters. (Imagine how much more robust our international trade networks could be if we lived in a world without tariff walls.)

 

Companies on either side of the Pacific can and do negotiate contracts and enter into complex trade agreements without paternalistic state oversight. In my own professional life—conducting international procurement in the energy sector—we do this all the time, buying equipment in China and reselling it in Turkey.

Never once in more than three decades has my company relied on the state—American, Chinese, Turkish, or any other—to settle our disputes (of which we have plenty). Rather, we rely on industry standards, well-written contracts, third-party inspectors, insurance companies, and arbitration agencies to protect ourselves from the encroachment of bad business. These are all voluntary agreements that serve our needs far more effectively than any coercive government.

 

This brings us to a very important point and returns us to Thomas Hobbes again. Hobbes wasn’t entirely wrong to claim that transacting parties are often in need of third-party arbitration. His critical error lay in assuming that only a state(i.e. a “territorial monopolist of force” in Hans Hoppe’s memorable phrase) could settle the inevitable disputes and conflicts that arise in human society.

It is true that we need arbitration and mediation readily available to peacefully settle our disputes. We also need established bodies of law and judicial systems in place to provide these services for us.

But it simply does not follow that these must be provided by the government. It’s actually rather absurd to imagine that a government, which by definition is not engaged in any commercial activity, could be capable of regulating the entire spectrum of commercial activity without the specialized knowledge that is necessarily distributed throughout each sector of the economy. In our age of rapid technological development, the idea becomes all the more preposterous. Governments simply can’t keep up.

The idea that government—an institution whose essence is to monopolize the use of violence—could serve as the instrument of choice for peacefully settling disputes is laughable at face value. It’s also intellectually bankrupt. Bruce Benson, in The Enterprise of Law, showed convincingly that law and order not only can but must emerge without a state. (It is a tribute to the success of Hobbes that most people today can hardly imagine how this would be possible.)

The economist Robert Murphy has also done us a great service in his book Chaos Theory: Two Essays on Market Anarchy, to stretch our imaginations to dream about a world of free men and women peacefully cooperating with one another for mutual benefit.

These and many other great thinkers in the classical liberal tradition have worked tirelessly to show us how we can live together peacefully in voluntary association and mutually beneficial economic relations. If only we would make the paradigm shift from Hobbes to a voluntary society in our time!

 

There is, of course, much more to say, and this is only the sketch of a much larger argument. The essential point to take away is that we have ongoing evidence, in real-world international trade, of peaceful and mutually beneficial human cooperation in the absence of a coercive state.

Whatever role national governments play in the commercial lives of actual buyers and sellers in global trade networks, they are not fulfilling the essential function that Hobbes and his ilk specified for them to play. Those roles—arbitration, mediation, and enforcement of contracts—are more often carried out by private actors such as third-party inspectors and transnational insurance companies.

In the end, the state is just too overwhelmingly incompetent to actually solve the problems of real-world commerce for the perfectly good reason that governments are not commercial businesses and therefore have no experience solving commercial problems. This is transparently obvious when we consider the differences between FedEx and USPS, but the principle is globally applicable.

This evidence should compel us to abandon once and for all the Hobbesian fallacy that we need a state—a territorial monopolist of force—to guarantee peace in our commercial lives. (Perhaps we can learn to do without the state in our personal lives while we’re at it.)

Happy birthday to Hobbes—but good riddance to Hobbesianism!

 

Note: Republished with permission from the Foundation for Economic Education.

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