National Defense Should Be Privatized

Editor's Note: This is part 1 of a two-part series on national defense. Read Part 2: "To End War, Privatize National Defense"

Before we can begin debating whether or not the state should provide "national defense," we must first ask what exactly the state is "defending." In part one of this article, I explain why privitizing the state eliminates the need for an organized national defense force in the first place.

I'm going to ask you to do something very difficult. I want you to envision a United States without any kind of coercively-funded government. Imagine that all that exists is a land mass with private businesses and residences populating it. Peace and property rights are protected by individual armed citizens or by companies like ADT and Brinks Home Security. Private security guards are the only "police" in this nation.

Since there is no state, there are no drug laws or any other laws that violate property rights. The only exception being that you can't use your property to violate someone else's property or rights.  So I couldn't dump the toxic waste from my factory in such a way as to damage my neighbors' property or I would be facing a lawsuit in a "loser pays" private court and possibly some not-so-friendly visits from a private security agency that was hired by my neighbor's insurance company to halt the damage I'm doing to his property.

Once you have this vision of an entirely privatized nation in your head, I now want you to come up with reasons explaining why another nation state would attack us. I also want you to think about what they would specifically attack.

Would China invade us and bomb Google's headquarters? Would Russia march an army down Main Street and blow up Intel's production facilities? Would the Cuban military assault Disney World? Why would another nation invade us and what would they gain?  

Might they attack us to take our natural resources? A quick economic analysis demonstrates why this argument falls flat on its face. Let's use China invading us to take our coal as an example.

Obviously coal does not magicly pull itself out of the ground. It takes men and machines to extract coal. If China invades to seize coal mines, it still costs them the same amount of money (resources) to extract the coal and ship it back to China as it would for them to simply buy it from the original mine owners in the first place. 

A private mine might take a small profit margin that China could by-pass if it seized the mine, but China would have to ship in its own workers and pay all of their expenses. Additionally, those workers would be working in a hostile environment where no one would want to do business with them. China would have to provide for all of those workers' needs by shipping in supplies from China. Also, the Chinese state would have to provide for their security while being surrounded by 60 million angry gun owners. This would be enormously expensive. I have full confidence that American insurgents would make Afghan insurgents look like a joke by comparison.  

Once these things are considered, it becomes apparent that the cost of an invasion far outweighs any possible gains that could come from seizing resources in a violent fashion. China would lose a tremendous amount of money on an invasion. The cost of building an invasion fleet alone is extraordinarily massive.  

Since there are no trade barriers in our scenario, China could buy coal from the private mine owners cheaply without having to pay taxes, tariffs, or deal with any other artificial trade barriers that states like to enact. There is no reason for China to invade if it can get all the resources it wants from us by simply buying them from the people who produce them in the first place.

Photo Credit: Flickr

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Michael Suede

Michael Suede is an Austrian economist and author who holds a business degree from the University of Wisconsin. Michael's articles have appeared in numerous economics publications. Michael is also one of the few economists who is well versed in the economics of voluntary crypto-currencies such as Bitcoin. Michael is a veteran of the US Navy and an advocate of voluntarism. Michael authorizes the use of all his content under Public Domain copyright. Any organization or individual may freely republish, edit, modify and distribute Michael's works without restrictions.

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