“WAS MOLINARI A TRUE ANARCHO-CAPITALIST?:
AN INTELLECTUAL HISTORY OF THE PRIVATE AND COMPETITIVE PRODUCTION OF SECURITY”

By David M. Hart

[Created: 21 September, 2019] [Revised: 1 January, 2024 ]

 

This essay was first presented at the Libertarian Scholars Conference, New York City, 28 Sept. 2019. It has been revised and updated to include links to the many works by Molinari which I have on my website.

Word length: 92K

Abstract (561w)

The paper explores two topics relating to Gustave de Molinari's pathbreaking article "De la production de la sécurité" (On the Production of Security) ( JDE, Feb. 1849). The first is an exploration of the intellectual history leading up to this theoretical breakthrough, that private insurance companies in a competitive free market, or "les producteurs de la sécurité" (producers of security) or "entrepreneurs in the security industry," can and would be able to supply protection of life, liberty, and property, in other words police and national defense services, to private individuals, or "les consommateurs de la sécurité" (consumers of security), by voluntarily charging premiums for their services in a competitive market. The deeper roots of Molinari's idea lay in the work of Destutt de Tracy and J.B. Say in the 1810s on the question of whether or not government activity was "productive" and if so, in what way. Closer to his own time, the conservative politician Adolphe Theirs and the socialist publisher Émile de Girardin in the late 1840s both likened the state metaphorically speaking to an "insurance company" which provided services to taxpayers/shareholders who paid taxes/premiums to that company.

Molinari's contribution to the debate was to see how the metaphor could be turned into reality, where actual private property insurance companies ("les compagnies d'assurances sur la propriété" (property insurance companies) ) would contractually and voluntarily provide protection services to their policy holders. Molinari first developed his ideas in a series of articles and books written between 1846 and 1855 (the article "Le droit électorale" Courrier français (July, 1846); the article " in JDE, Feb. 1849; Soirée 11 in Les Soirées de la rue Saint-Lazare (1849); scattered references in several articles he wrote for the Dictionnaire de l'économie politique (1852-53); the chapter on "Public Consumption" (Douzième leçon, "Les consommations publiques," in his treatise Cours d'économie politique (1855)), and then returned to the topic again later in the 1880s and 1890s (the chapter Chap. X "Les Gouvernements de l'avenir," in* L'Évolution politique et la Révolution* (1884); his book on* Esquisse de l'organisation politique et économique de la société future* (Sketch of the political and economic organisation of the future society (society in the future)) (1899); and the late article "Où est l'utopie?" (Where is Utopia?) ( JDE, 1904).

The second topic to be explored is the question of how much of an "anarcho-capitalist" Molinari really was and whether or not he remained one over the course of his long life. The term itself is anachronistic to use about Molinari as it was coined by Rothbard to describe his own views which were emerging in the 1950s and 1960s under the influence of Molinari's original 1849 article, along with the writings of other members of the Paris School of economists, such as Charles Dunoyer, Charles Comte, and Frédéric Bastiat. Molinari himself referred to his views as "la liberté de gouvernement" (the liberty of government, or free government) or "la concurrence politique" (political competition, or competing governments). I will argue that Molinari was a "true" or "hard" anarcho-capitalist when it came to the question of the private production and provision of police and defense services ("la sécurité) - for which he used the very "capitalist" expressions such as "producers of security," "consumers of security," the "security industry," "entrepreneurs in the security industry," etc - until he reached his seventies when he "backtracked" slightly during the 1890s. He was also a "true" or "hard" anarcho-capitalist when it came to the question of the private production and provision of justice by means of competing law courts which charged "fees for service" and remained one for his entire life. He had several insights about how law might evolve privately but he did not develop it as far as he did with the private production of security. My conclusion is that he came came very close to being an early (perhaps the first) "Rothbardian anarcho-capitalist" but did not go all the way there. This fact in itself was quite extraordinary for his day and age and his achievements should be duly recognized by historians and economists.

Abbreviations

• AC = anarcho-capitalist
• ACT = anarcho-capitalist theory
• CW2 = The Collected Works of Bastiat, vol. 2
• DEP = Dictionnaire de l'économie politique
• JDE = Journal des Économistes
• PES = the Political Economy Society
• PoS = the article "The Production of Security" JDE (Feb. 1849)

Table of Contents

• An Intellectual Pre-History of the "Production of Security"↩
  • Introduction
  • A Note on the term "Anarcho-Capitalism"
  • The Prehistory of an Idea: The State as an Unproductive Parasite or Ulcer in the Body Politick: Destutt de Tracy (1754-1836) and Jean-Baptiste Say(1767-1832)
  • The Metaphor of Society as an "Insurance Company": Molinari and Adolphe Thiers
    • Molinari, "Le droit électorale" (July 1846)
    • Thiers and the Flat Tax as an Insurance Premium
  • When the Metaphor becomes Reality: Emile de Girardin (1806-1881) and Molinari
    • Girardin, "Le Socialisme et l'impôt," (Sept.-Oct. 1849)
• Molinari on the "Production of Security"↩
  • Introduction
    • Some Key Terms and Rhetorical Tropes
    • The Stages in his Intellectual Evolution
    • Three Different Ways Ways of Arguing his Point
  • The First Formulation of the Theory: "The Production of Security" ( JDE, Feb. 1849) and Soirée 11 (Sept. 1849)
    • Introduction
    • Some Rhetorical Tropes
    • Analysis of the PoS article
    • The Fees of Court Trope
    • The PoS article
  • The Production of Security in S11
    • Introduction
    • The Economist's Demurral
    • Analysis of S11
  • The Debate about the Production of Security in the SEP (Oct. 1849)
  • The Economics of Security and the Role of Government in his articles in the Dictionnaire de l'économie politique (1852-53)
    • Introduction
    • Nations
    • Peace - War
    • Towns
    • Conclusion
  • The Cours d'économie politique (1855, 1863), "Les consommations publiques" (Public Consumption)
    • Introduction
      • His Radical Terminology
      • What is New: An Overview of his Theory of Political and Economic Evolution
    • The Production of Security
      • Introduction
      • Actual Insurance Companies or "like" Insurance Companies?
      • The Production of Security in the era of monopoly
    • The Economic Analysis of Government
      • Introduction
      • All Governments must be subject to economic laws
      • The "Anti-Economic" Nature of Government
      • The Parasitical and Destructive effects of Governmental Monopoly
      • Governments as “ulcers”
      • Another kind of "industry": "l'industrie de la spoliation"
      • Monopoly Governments as polyps/growths
    • Governments in the Third Phase of Economic Development: the Era of Full Competition
      • Introduction
      • "Ad hoc" justice in the regime of competition
      • The Private Provision of Security and the Hypothesis of the Monopolist Grocer
      • The Solution to the Problem of Government
  • Questions d'économie politique et de droit public (1861) "The Crowning Achievement of political and economic progress"
    • Introduction
    • Some New Concepts
    • The Production of Security
  • L'Évolution politique (1884), "Les gouvernements de l'avenir" (Governments of the Future)
    • Introduction
    • Transitional Stages on the Path to "the liberty of government"
      • Farming out Security to a Private Company
      • Using a Constitution to Define the Terms of the Contract
      • Competition between the Communes and the Provinces
      • Another "simple hypothesis": Private "Property Development Companies"
    • The Liberty of Government
      • The Sovereignty of the Individual
      • The Simple Hypothesis of the Monopolist Baker
      • The Evolution of Law in the Era of Full Competition
      • Part of the Bundle of Liberties
    • Conclusion
  • Les Lois naturelles (1887) "La Liberté de gouvernement" (The Freedom of Government)
    • Introduction
    • The raison d'être of governments
    • The Hypothesis of Privately Built Towns
    • Not the Role of the Economist to Predict the Shape of the Future
    • The "Double Right" to Secede
  • Notions fondamentales (1891) "La Simplification De L'état" (Reducing the Size of the State)
    • Introduction
    • Still a Believer after 40 Years
  • Précis d'économie politique et de morale (1893) "Les Doits et la Lois positive" (Rights and the Positive Law)
    • Introduction
    • The Rule of Law and Positive Law
      • The "Fees of Court" and "ad hoc justice"
      • The Code of Law and the Positive Law
      • The Development of Contractural or "Conventional" Rights
    • Law and the Production of Security
  • Comment se résoudra la question sociale (1896) "La révolution silencieuse" (The Silent Revolution)
    • Introduction
    • On the Eve of the Regime of Competition
    • Associations of Consumers of Public Goods
    • Modern Governments have become "Monsters"
  • La Société future (1899) "La constitution libre des gouvernements" (The Free Constitution of Governments)
    • Introduction
    • The Production of Security in the "Society of the future"
      • The Functions of the State are now "Naturally Collective"
      • The Conditions necessary for the Production of Security
      • Problems with the current system and the need for improvements
    • What might the government of the future look like
      • Another Hypothesis
      • Two Improvements that need to be made
      • A Weakening of the Right of Communes to Secede
      • There will still be Competition between Nation States
      • The Rise of Individual Sovereignty and their Mandataires
      • Compulsory Taxes will be replaced by Fee for Service
      • Conclusion
    • Conclusion
  • Les Problèmes du XXe siècle (1901) "Le problème du gouvernement collectif" (The Problem of Collective Government)
    • Introduction
    • Security now only for the Owners of the Political State
    • Paying Taxes instead of Premiums
    • The Need for a New Group of Liberal Reformers
  • Where is the Classical Liberal Utopia? (1904): A Final "Fanciful" Hypothesis
    • Where is Utopia? (1904)
    • The hope for an "Association pour la liberté de gouvernement"
• Conclusion: Was Molinari a True 'Anarcho-Capitalist'?↩
  • Introduction
  • The Different Components of Molinari's ACT
    • Introduction
    • The (private) production of security
    • The (private) production of law
    • Competing governments
    • The voluntary vs. the compulsory payment for services rendered
    • Conclusion
  • Why Molinari is sometimes hard to pin down
  • How much did the "Founding Father of ACT" really "backtrack"?
• Endnotes

An Intellectual Pre-History of the "Production of Security" ↩

Gustave de Molinari (1819-1912)

Nous sommes convaincu que cette industrie, qui est la branche essentielle des attributions gouvernementales, est destinée à passer, tôt ou tard, du régime du monopole ou de la communauté forcée au régime de la liberté pure et simple, et que tel sera le « couronnement de l’édifice » du progrès politique et économique. En un mot, nous croyons que tout ce qui est organisation imposée, rapports forcés, doit faire place à l’organisation volontaire, aux rapports libres. (“Introduction,” Questions d’économie politique (1861), p. xxvii.)

We are convinced that this industry (the production of security) which is the essential branch of governmental functions, is destined to pass sooner or later from the régime of monopoly and coerced community to the régime of liberty pure and simple, and that it will be “the crowning achievement” of political and economic progress. In a word, we believe that that everything which is based upon imposed organisation and violent relations must make way to voluntary organisation and free relations.

Introduction↩

Today, if he is thought of at all, the Belgian-French economist Gustave de Molinari (1819-1912) [1] is best known for the essay on "The Production of Security" (henceforth "PoS") which was published in the JDE in February 1849. [2] It was rediscovered in the modern era by Murray Rothbard who circulated it among his circle in New York, called fittingly enough the "Cercle Bastiat" (Bastiat Circle), during the 1950s. Molinari's ideas, especially the argument that insurance companies would have an economic interest in reducing crime against property and the costs of settling disputes, became central to Rothbard's own theory of anarcho-capitalism which he was developing during the 1950s (when writing Man, Economy, and State (1962)) and the 1960s (when he was writing Power and Market (1970)). [3] A translation into English was done by J. Huston McCulloch for the Center for Libertarian Studies in 1977 which made Molinari's work available to a English audience for he first time. [4] This was followed shortly afterwards by my own translation of Soirée number 11 (henceforth "S11") in 1979 which was published in the Journal of Libertarian Studies in 1982. [5] What Molinari achieved in this short essay and the follow up chapter 11 in Les Soirées was a radical shift in thinking about the state and the provision of public goods. No one before him had argued using standard classical economic principles and property rights theory that private firms operating in a free market could satisfy the strong need of consumers for protection and security services at an affordable price, while at the same time avoiding the problems inherent in any monopolized industry.

In the past, the few political theorists who advocated a society without a state had no idea about how such a society would go about solving its problems, other than to piously assert that some kind of change would take place in the hearts of men which would cause violence against others to gradually disappear. Molinari's intellectual breakthrough was to argue that the institutions (such as insurance companies) and practices (profit seeking in an open and competitive market) which had already evolved in the free market could be extended to solve these other problems and that no change in the nature of men was required for this to work effectively. In fact, he turned the argument upside down by arguing that those who advocated any form of limited state were the real utopian dreamers. Whenever and wherever a state existed which had power over the property and lives of other people it would misuse taxpayers' money and allocate resources inefficiently and at high cost, and that the temptation to use political force would always be irresistible and that the power of this state would always grow. One might then say that the true utopians (or "les rêveurs" (dreamers)) were not the anarcho-capitalists but the classical liberals who believed they could permanently limit the power of the state.

Molinari did, however, think that men would have to make some ideological leap in order for the private provision of security to work, namely to give up their false ideas about the benefits of using force against others to advance their interests. As the century wore on he increasingly lost hope that this would happen in his lifetime, or even for several generations after, as tariff wars and then an arms race broke out among the European powers in the late 19th and early 20th centuries. However, in two remarkably prescient essays he wrote at the turn of the 19th century [6] he predicted that after a long war and period of economic depression, the people would rediscover classical liberalism and radical free market ideas and the possibility of creating a fully laissez-faire society would be reborn.

A Note on the term "Anarcho-Capitalism"↩

Before I proceed any further, something should be said about the matter of the proper terminology to use in this discussion. Of course, the term "anarcho-capitalist" (henceforth "AC") was a term invented by Rothbard to describe his views which were emerging in the 1950s and 1960s and thus it would be anachronistic to use the same term to describe the view of Molinari writing in the 1840s and 1850s.

I have not been able to track down Rothbard's first use of this term in his writings. It is a great pity the Mises Institute has not made Rothbard's writings searchable on their website, something which I thing is urgently required if scholars are to be able to analyse his work more effectively. I would like to see something like the way texts are coded and presented on Liberty Fund's Online Library of Liberty website. The term itself is a bit unusual as it seems intended to be used in opposition to "anarcho-socialism" (which has never existed). Surely, it wold be better to have switched the words around in order to distinguish it better from its socialist alternative: "socialist anarchism" vs. "free market anarchism." Or perhaps "social anarchism" vs. "individualist anarchism" (which is what I believe Tucker and his groups used to identify themselves.

By "anarcho-capitalism" I think Rothbard meant something like the following: [7]

1. that individuals have the right to self-defence, and the right to "contract or delegate" this right to others through the private, voluntarily, and competitive provision of police and defence services
2. that historically there has been the private provision of law, judge made law, the common law, which is a form of law which evolves over time to satisfy the needs of litigants; he combines this idea with the view that law should be based upon natural law principles concerning the non-initiation of violence, individual liberty, self-ownership, and private contracts

In Andrew Morriss's entry on "Anarcho-Capitalism" in The Encyclopedia of Libertarianism (2008) he defines it as: [8]

Anarchism is a theory of society without the state in which the market provides all public goods and services, such as law and order. … Because anarcho-capitalism is predicated on a capitalist economic system, it requires markets, property, and the rule of law. … Anarcho-capitalists believe that private entities will provide those goods and services necessary for society to function in peace and good order without the existence of a state that coerces individuals into paying for or obeying legal institutions.

Consider the anarcho-capitalist solution to the need for law and order. We can decompose law and order into a set of discrete services: rule production, protection (deterrence of rule violations), detection (capture of rule violators), adjudication (determination of guilt), and punishment. In most modern societies, these services are bundled together by the state, which requires all taxpayers to purchase the bundle. All of these services are economic goods. …

What I would like to explore in this essay is whether or not, or to what degree Molinari satisfies these definitions of what "anarcho-capitalism" is. I understand from the above that there are two or perhaps three components to "anarcho-capitalist theory" (henceforth "ACT"):

1. the private provision of police services for the protection of individual life, liberty, and property
2. the private provision of defence services for the protection of larger communities such as "the nation"
3. the private provision of courts and laws for the resolution of conflicts between individuals

The Prehistory of an Idea: The State as an Unproductive Parasite or Ulcer in the Body Politick: Destutt de Tracy (1754-1836) and Jean-Baptiste Say(1767-1832)↩

When Molinari began thinking about the private production of security in the 1840s he was building upon a tradition within classical liberal political economy that went back 40 years to the work of Destutt de Tracy (1754-1836) and Jean-Baptiste Say (1767-1832) in the early 19th century. [9] We can trace the roots back even further if we include work by Jean-Joseph-Louis Graslin (1727-1790) and Jakob Mauvillon (1743-1794), but these works were not known to Moinari. [10]

In their major works on political economy they debated the question of whether all the activities of the state were "productive" (for example, of "utility") or not; and for those that they thought were "productive," whether or not they should be provided as a state monopoly paid by taxpayers as a whole, or a state supplied service which would be paid for by levying a toll or charge on individual users, or whether the service should be competitively provided on the free market. They both agreed that an essential and productive function of the state was internal and external security but they differed markedly on other matters like education, money, public works, and the arts and sciences. On several of these issues Destutt de Tracy was more radical than Say, at least in their major public works: namely, Tracy's A Commentary and Review of Montesquieu's Spirit of theLaws (1811) and A Treatise on Political Economy (1817); [11] and Say's Traité d'économie politique (1803, 1814, 1817, 1819) and Cours complet d'économie politique pratique (1828-29). For example, Say was in favour of state provided elementary school education and extensive public works, and opposed to the charging of tolls on government roads; Tracy supported the idea of charging tolls for use of public goods. However, both agreed that consumption by the state was unproductive as it consumed assets and did not produce them.

A further complication came about because of Say's interest in "non-material" products (or "services" as we would call them today) and whether or not defence or police protection of one's property was a non-material good or service which might be considered to be "productive" to society in some way; or perhaps not, since there was no market for these government services and hence no "prices" were charged and thus calculating their social benefit was impossible. Destutt de Tracy came to the conclusion in A Commentary and Review of Montesquieu that all state expenditure was "sterile and unproductive" (but still necessary in many ways): [12]

… tout travail qui ne produit rien, est une cause d’appauvrissement, puisque tout ce que consomment ceux qui l’exécutent, était le résultat de travaux productifs antérieurs, et est perdu sans remplacement. D’après ces données, voyons quelle idée nous devons nous faire des dépenses des gouvernemens.	… all labor which is unproductive is a cause of impoverishment; for all consumption is the result of previous production, and it is lost when it produces no equivalent; upon this principle, let us examine what idea we should form of the expence of government.
D’abord, et c’est la presque totalité des dépenses publiques, tout ce qui est employé à payer les soldats, matelots, juges, administrateurs, prêtres et ministres, et surtout à alimenter le luxe des possesseurs et des favoris du pouvoir, est absolument perdu; car chacun de ces gens-là ne produit rien qui remplace ce qu’il consomme. …	In the first place, almost the whole of the expense, all that which is employed in paying soldiers, seamen, judges, the public administration, priests and ministers, but particularly what is expended in supporting the luxury of the possessors or favorites of power, is absolutely lost; for none of those people produce any thing, which replaces what they consume. …
De tout cela in résulte que la presque totalité des dépenses publiques, doit être rangée dans la classe des dépenses justement nommées stériles et improductives , et que, par conséquent, tout ce qu’on paie à l’état, soit à titre d’impôts, soit à titre d’emprunts, est un résultat de travaux productifs antérieurement faits, qui doit être regardé comme presque entièrement consumé et anéanti, le jour où in entre dans le trésor national.	From which it results, that almost all public expenditures, should be ranged in the class of expences denominated sterile and unproductive, and that consequently, all that is paid to the state, either as tax or loan, originates in productive labor, and should be considered as almost entirely consumed and expended, the day it enters the national treasury.

Say also came to similar critical but ultimately somewhat ambiguous conclusions about the productiveness of government expenditure in his major published works. However, in his unpublished lectures which he gave at the Athénée in Paris in 1819 and in an unpublished manuscript for a book he was writing on "La Politique pratique" (Practical Politics) [13] he is much more critical about government expenditure and the government provision of public goods, to the extent where he sounded very much like Molinari would in 1849, even to the point of arguing that "entrepreneurs" would have an interest in providing security services, as the following passages make clear. [14] In his Lectures at the Athénée he argued that although government services could be useful, they were not essential to the functioning of society, and that in times of war (such as during the recent Napoleonic Wars) or in places like the wilds of Kentucky, individuals created their own perfectly adequate police and defense services, at least in relatively small communities: [15]

Avons-nous jusqu’ici trouvé le gouvernement de la société dans tout cela ? Non. Et la raison en est que le gouvernement n’est point une partie essentielle de l’organisation sociale. Remarquez bien que je ne dis pas que le gouvernement est inutile ; je dis qu’il n’est point essentiel ; que la société peut exister sans lui ; et que si les associés voulaient bien faire leur affaire et me laisser faire la mienne, la société pourrait à la rigueur marcher sans gouvernement. L’autorité publique est done un accident ; un accident rendu nécessaire par notre imprudence, par notre injustice qui nous porte à empiéter sur les droits de notre semblable.	Have we encountered the government in any of this (normal economic activity)? No. And the reason for this is that the government is not an essential part of social organisation. Please note that I did not say that government is not usefull. I said that it is not essential ; that society can function without it; and that if the members of society (les associés) wish to go about their business and leave me to go about mine, society could at a pinch function without (any) government. Public authority is thus an accident, an accident made necessary by our recklessness, by our injustice which leads us to encroach upon the rights of our fellow human beings.
La société va si bien par elle-même, que dans trois ou quatre circonstances très graves survenues en France depuis une trentaine d’années, tous les ressorts de l’autorité se sont trouvés rompus tout-à-coup (et ce sont là de ces grandes expériences qui rendent l’époque où nous sommes, si remarquable, et si favorable aux progrès des sciences morales et politiques). Dans ces moments critiques, il n’y avait plus aucun gouvernement ; ceux qui tenaient auparavant les rênes, étaient cachés ou en fuite, loin de prétendre à donner aucun ordre, ils auraient voulu faire oublier qu’ils s’étaient jamais arrogé le droit d’en donner. Hé bien, dans aucun temps les fonctions essentielles du corps social ne se sont mieux faites. Tout a marché comme à l’ordinaire, mieux qu’à l’ordinaire. Les plus grands maux que nous ayons éprouvés sont arrivés pendant que nous étions gouvernés, trop gouvernés ; soit par des conseils de commune, soit par un comité de salut public, soit par des préfets, soit par une autorité centrale et militaire.	Society goes so well all by itself, that in three or four very serious situations which France experienced over the last 30 years, all the powers of the state (l’autorité) were suddenly broken (and these are some of the great moments which make our epoch so remarkable and so favourable for the progress of the moral and political sciences). During these critical moments, there was no longer any government; those who previously held the reins (of power) went into hiding or fled, and far from pretending to provide any order, they wanted to make people forget that they had ever claimed the right to provide any. Well then! At no time (during these periods) were the essential functions of the social body better provided. Everything ran as normal, even better than normal. The worst harm we suffered occurred when we were governed, governed too much; whether by the Communal Councils, or by a Committee of Public Safety, or by the Departmental Prefects, or by a central, military authority.
Il y a dans le Kentucky , dans cette nouvelle province qui s’est formée au-delà des monts Alleganys aux États-Unis, il y a des cantons ou une famille vient d’abord s’établir ; puis une autre dans le voisinage de la première ; puis une troisième ; finalement des villages se forment, on y fait des maisons et des enfants ; on les habille, on les nourrit, très bien, mieux que beaucoup de ménages ne peuvent se nourrir dans la rue Jean-pain-mollet (???), et pourtant, oh! malheur! il n’y a point de gouvernement.	In Kentucky, this new state (province) which has been formed beyond the Allegany Mountains in the United States, there are villages (cantons) where first one family comes to settle, then comes another as a neighbour of the first, then a third, and finally (whole) towns are formed where houses are built, children are raised, clothed, and fed very well, even better than many of the households which are fed in Jean-pain-mollet street. But, where, oh dear!, there is no government!
Quoi ! me dira un homme d’Europe, né, nourri, grandi sous (sans??) la paternelle administration des espions et des recors, point de gouvernement ! Il y a bien toujours une espèce de maire qui correspond avec le gouvernement. - Non, M., il n’y a point de maire, personne qui correspond , attendu que l’établissement est à peine ce que les Américains appellent un territoire , et n’est point encore un État propre à être admis dans la Confédération .	“ What do you say?” a European might say to me. “Born, fed, and raised under/without the paternal administration (of the father) of supervisors (spies) and aid workers (recours), and without a government! There has to always be a kind of mayor who is like the government. ” No Monsieur. There is no mayor, no one who is like a government, given the fact that the community is scarcely what the Americans would call a territory , and that it is still not a proper State ready to be admitted into the Confederation .
Je ne me suis done point trop hasardé en vous disant que l’on pouvait concevoir une société sans gouvernement ; on peut faire plus que la concevoir ; on peut la voir : il n’y a d’autre difficulté que celle du voyage.	So I would not be too bold in saying to you that one could conceive of a society without a government; one could even go further than being able to conceive it, one can (indeed) see it (in action), with no more difficulty than that of undertaking a journey (to America).

In the "Politique pratique" (possibly written between 1815 and 1820) Say argues that people will behave differently when they realise that they have it within themselves to direct their own lives and no longer have to be governed by others. They will take steps to protect their neighbours themselves when they see them being threatened, or they will employ "l'entrepreneur aux gages" (an entrepreneur for pay/hire) to protect them, even from foreign attacks. Say's idea of private businesses ("les entreprises") run by entrepreneurs providing police, "guards," and protection services for profit ("à gages") may well be the first instance of this. The similarities with Molinari are striking here and it is hard not to believe that he was unaware of them, although he did not quote Say directly on this: [16]

Il en va autrement lorsque les peuples savent qu’ils peuvent exister par une force qui est en eux-mêmes, et qu’il suffit de laisser agir; quand ils savent en un mot qu’ils n’ont pas besoin d’être gouvernés , que l’état subsiste sans pour cela qu’il doive recevoir une impulsion ; sans qu’il faille un système d’administration , une pensée du gouvernement . Tous mots avec lesquels on monte à cheval sur les peuples, avec lesquels les gouvernements monarchiques ou républicains exploitent leurs forces à leur profit.	Things work differently when people know that they can live (by using) a force which comes from within themselves, and that it is sufficient to (just) let this force operate; and when they come to realise that, in a word, they have no need to be governed (by others) , (no need) that a state should exist because without it they would not get (the proper) direction ; and without which there would be no system of administration , (nor even the very) thought of government . All these phrases (have been used before) when someone rides on the backs of the people, or when monarchical or republican governments exploit the (peoples’) forces for their own profit.
Ce qui est nécessaire à la société, c’est le respect des personnes et des propriétés, et il ne faut pour cela qu’abandonner la police à la société. Voyez ce qui se passe dans les rues d’une ville lorsqu’un homme bat une femme, lorsqu’un voleur enfonce un magasin: tout le public appréhende le délinquant. Voyez ce qui arrive quand deux négociants ont une dispute d’intérêts : l’un et l’autre nomment des arbitres. Les arbitres prononcent et le différend est termine.	What is necessary for (a) society is respect for person and property, and for this (to happen) it is only necessary to leave policing (la police) to society. Look what happens in the streets of a town when a man hits a woman, when a thief breaks into a shop: everybody (tries) to apprehend the offender. Look what happens when two merchants have a dispute: both of them nominate arbitrators and the arbitrators pronounce their judgement and the dispute is settled.
A la vérité, le corps social a d’autres attaques à redouter. On peut attaquer un voyageur isolé loin de tout secours. Mais faut-il à cause de cela avoir une gendarmerie composée de trente mille hommes. Donnez à l’entreprise les gardes que vous ne pouvez faire vous-mêmes et cassez l’entrepreneur aux gages, s’il ne vous garantit pas de quelques attentats ou tout au moins n’en livre pas les auteurs.	It is true (that) the social body has other attacks to fear. An isolated traveller can be attacked far away from any help. But is this any reason to have a police force of 30,000 men? Give businesses (les entreprises) the task of providing the guards which you cannot do yourselves and make the entrepreneur pay a fee/fine?? if he does not protect you (against) attacks or at least does not hand over the perpetrators.
Mais l’étranger peut faire une invasion. L’histoire ne fournit pas d’exemples d’invasion faites avec succès chez un peuple qui n’a point d’armée permanente et menaçante, où chaque citoyen est armé jusqu’aux dents et veut se défendre. Et l’on veut se défendre quand on a de bonnes institutions. Les romains furent envahis par les gaulois et par Hannibal. Ils ne l’auraient pas été si leurs provinces eussent été peuplées, non d’esclaves, mais de citoyens.	But foreigners can invade us. History does not provide us with examples of successful invasions of nations (peuple) who didn’t have a permanent and threatening army, where every citizen is armed to the teeth and wants to defend themselves (double neg??). And one wants to defend oneself when one has good institutions. The Romans were invaded by the Gauls and by Hannibal. They would not have been (invaded) if their provinces had been populated not by slaves but by citizens.

We learn from Bastiat's correspondence that soon after his arrival in Paris in May 1845 he was approached by Hippolyte Comte, the son of Charles Comte whose work was much admired by Bastiat, who showed him his father's papers (Comte had died in 1837). [17] Charles Comte was the son-in-law of J.B. Say and had helped J.B. Say's son Horace edit three volumes of his father's writings for Guillaumin in 1840 and 1841. Thus, the unpublished Say papers along with those of Comte may well have been circulating among the economists at this time and Molinari may have become aware of Say's lecture notes and other manuscripts.

Further evidence that Molinari may have been aware of Say's lectures is that he used the term "plague" or "ulcer" to describe the activities of the state and attributed it to Say. [18] However, Say never used the word in his published works, only in his unpublished "Cours à l'Athénée" (1819) as in the following passage where he talks about the dangers of "la gangrène administrative" (administrative gangrene): [19]

Quelques exemples que j’ai mis sous vos yeux ont dû vous convaincre qu’en général on gouverne trop, et qu’il serait à désirer que personne ne sentit l’action du gouvernement qu’au moment où elle entreprendrait une action attentatoire à la propriété de quelqu’un. La perfection de l’administration est d’administrer peu. Une machine compliquée, comme la machine de Marly, annonce l’enfance de l’art.

The several examples that I have brought to your attention ought to have convinced you that in general we are governed too much, and that it would be desirable that no one (should) feel the action of the government except at the (very) moment when they commit an act which is detrimental to the property (rights) of another person. The perfect administration is one which administers (very) little. A complicated machine, such as the machine (invented by) Marly (??), shows that the technology is still in its infancy.

Mais de quelle manière, comment s’y prendre pour simplifier une machine administrative compliquée où les intérêts privés ont gagné du terrain sur l’intérêt public, comme une gangrène qui s’avance dans un corps humain lorsqu’elle n’est pas repoussée par le principe de vie qui tend à le conserver ?. Pour gérir cette maladie il faut observer comment s’étend la gangrène administrative. Tout homme qui exerce un emploi tend à augmenter l’importance de ses fonctions, soit pour faire preuve d’un zèle qui lui procure de l’avancement, soit pour rendre son emploi plus nécessaire et mieux payé, soit pour exercer plus de pouvoir, augmenter le nombre des personnes obligées d’avoir recours à lui et de solliciter sa bienveillance. Le remède doit suivre une marche contraire et tendre à diminuer les attributions. …

But however you might do it, how do you go about simplifying a complicated administrative machine which private interests have used to gain a foothold on the public interest, like gangrene which advances in a peson’s body when it has not been repelled by the life-giving force which tries to protect it? To cure this sickness one has to study how the administrative gangrene spreads. Every person who has a (government) job tends to exaggerate the importance of his functions, whether it is to prove his zeal in order to get a promotion, or to increase the number of people who have to depend upon him or sollicite his favour. The cure ought to follow an opposite course and tend towards reducing (his) functions.

We might also mention here the work of the early Charles Dunoyer (1786-1862) from much the same time (1825) when he was more radical in his thinking than he would become in the 1840s when he was a senior official in the July Monarchy. He too, like Charles Comte, had influenced the thinking of Bastiat and Molinari as they readily admitted. In the first draft of what would later become De la Liberté du travail (1845), Dunoyer, L'industrie et la morale considérées dans leurs rapports avec la liberté (1825) [20] he was still very much under the influence of Say's radicalism, several of whose works he had reviewed in his journal Le Censeur européen . In this work he believed that large political "agglomerations" (or states) were artificial constructs and had become dangerous to the further development of industry and liberty and thus needed to be broken up into smaller units. [21] His model, like Say's, was the anarchist-like small communities which had sprung up in America before more formal political institutions like states or territories were established. For the more established states of Europe like France, Dunoyer advocated the radical break up of the centralised bureaucratic nation state into much smaller jurisdictions, or what he called "munipaliser le monde" (the municipalisation of the world), which would run their own affairs without central control. [22]

So on the eve of Molinari's own writing on this subject we can see a number of intellectual precedents upon which he could draw and with which he could well have been familiar.

The Metaphor of Society as an "Insurance Company": Molinari and Adolphe Thiers↩

Molinari, "Le droit électorale" (July 1846)↩

We can see glimmers of Molinari's new way of thinking about the security services provided by the state and how best to pay for them, in an article [23] which he published in the Courrier français [24] in 1846 and then again later in his January 1849 review of Adolphe Thiers' book De la propriété (On Property) (1848) in the JDE which suggests that he was already rethinking about these matters some years previously.

This is an early piece by Molinari which appeared as an article on electoral reform in a small circulation liberal magazine, le Courrier français, to which Bastiat also contributed. Here he toys with the metaphor of the state being nothing more than "une grande compagnie d'assurances mutuelles" (a large mutual insurance company) which charges people for services like security. Therefore taxes are like "charges de l'association" (membership dues) - he will use the more technical term "la prime" (premium) in later writings [25] - and citizens are like "un actionnaire de la société" (a shareholder in the company). [26] Like shareholders in privately owned companies, every taxpayer as a shareholder should have the right to vote in electing the management of the company, and this right to vote should be proportional to the amount of shares owned by the shareholder, or in this version of the metaphor, the amount of taxes paid to the state, and the amount of property they wish to have protected (or "insured" by the company).

The problem in France at the time Molinari was writing was that a very small minority of the largest taxpayers (some 240,000 who paid over 200 francs per annum in direct taxes, or "les censitaires" as they were called, [27] or about 0.7% of the population) had the right to vote or to stand for election and thus controlled the government, while the other 36 million citizens, the 99.3%, were excluded). He thought it was unjust that "les plus faibles actionnaires de la société" (the weakest shareholders in the company) were at the mercy of "les gros actionnaires" (the large shareholders) who were able to pass laws to further their own interests at the expense of the vast majority. He had in mind the protectionist large landowners and industrialists who of course qualified to vote, while the vast bulk of the French taxpayers were excluded from any say in how much taxation could be imposed upon them or how this money would be spent. One of the arguments he used in arguing for an expansion of the franchise in France was the idea that the main reason for having a government in the first place was to provide all citizens with an equal guarantee of security of their persons and property.

There were two ways in which a state acting like a large insurance company might be run: the largest shareholders have a monopoly in running the state, as in France, or the right to vote by shareholders is "universalised and made uniform" as in the United States ("Le second système consiste à universaliser et à uniformiser le droit électoral"), which runs the risk of seeing the democratic masses imposing a higher tax burden on the wealthiest groups in society: [28]

Sous l’empire d’un tel système (France), on sait ce qui arrive : les gros actionnaires, les censitaires pourvus du droit électoral, gouvernent la société uniquement à leur profit; les lois qui devraient protéger également tous les citoyens servent à grossir la propriété des forts actionnaires au détriment de la propriété des faibles; l’égalité politique est détruite.

Sous l’empire d’un tel système (France), on sait ce qui arrive : les gros actionnaires, les censitaires pourvus du droit électoral, gouvernent la société uniquement à leur profit; les lois qui devraient protéger également tous les citoyens servent à grossir la propriété des forts actionnaires au détriment de la propriété des faibles; l’égalité politique est détruite.

The problem was to find a system which would avoid the weakness of both systems, the aristocratic and the democratic. Molinari thought this could be achieved by having a universal right to vote as in America (where all shareholders could participate in choosing the management of the company) but making the payment of member's dues (taxes) limited to a fixed proportion of the value of the property which they wanted to protect (such as a flat rate of taxation on income or the value of property). This was to prevent a democratic majority of voters voting for confiscatory taxes on the property and income of the rich, which Molinari thought was a major weakness in the American system of government. [29]

Molinari's solution was to grant all taxpayers (shareholders) the right to vote but the weight of that vote would be determined by the amount of tax they paid (or income earned). Thus the 240,000 censitaires who earned a total of 25% of the income in France (the 0.7%) would have their electoral and thus political power reduced from 100% to 25%, and the excluded 99.3% would then have 75% of the electoral power. He thought his new scheme could avoid the problems faced by France, where a tiny minority of taxpayers controlled the state, and those faced by the United States, where the enfranchised masses could vote to tax or confiscate the property of the wealthy. His new proposal was for a lower house with manhood suffrage for all taxpayers which could propose legislation and an upper house of the largest taxpayers who could veto any legislation which violated their property rights. He would return to this topic in a book, b The Tempered Republic (1873) which he wrote during the debate about the constitution for the new Third Republic, and which is his only work of political theory.

What is interesting about this essay is Molinari's idea that the state is nothing more than "une grande compagnie d'assurances mutuelles" (a large mutual insurance company), that taxes are like "les charges de l'association" (membership dues), and that each taxpayer is like "un actionnaire de la société" (a shareholder in the insurance company). He is clearly still thinking this is a metaphorical description, but this would later change in the two pieces he wrote in 1849 where the metaphor would become reality, where the state would be replaced by private and competing insurance companies, compulsory taxes replaced by voluntary insurance premiums, and the taxpayer transformed into a "consumer of protection."

Thiers and the Flat Tax as an Insurance Premium↩

Two years later the conservative politician Adolphe Thiers gave a series of speeches in the Chamber attacking socialism and defending property rights. [30] The interest which these lectures aroused resulted in him turning them into a book De la propriété in September 1848 which sold many copies and went through several editions. [31] Molinari thought Theirs had provided a very poor defence of property rights which is one reason why Molinari would write Les Soirées the following year in order to rectify this problem. He also reviewed the book very critically in the JDE in January 1849. [32] However, what is of interest here is Thiers' use of the same metaphor, of society being like a large insurance company, which Molinari also noted and commented upon positively in his review. Surprisingly for a conservative, Thiers also likened society to an insurance company which had shareholders or citizens who should pay according to the risk they bore and the amount of property which they wished to insure. [33] Again, Molinari would take these metaphors of society as an insurance company, citizens as shareholders in that company, and taxes for services like security like premiums assessed on property according its value, and eventually turn them in his mind into an actual and possible way of organising society in a future "régime of pure liberty." [34]

Mais de même que l’on doit une part d’impôt pour la propriété qu’on possède et que la protection sociale vous garantit, de même on en doit une pour son travail, et on la doit proportionnée aux profits de ce travail. La prétention de ne pas imposer le travail serait tout aussi déraisonnable que celle de ne pas imposer la propriété. Tout ce qui est placé sous la protection sociale, tout ce qui n’existe comme la propriété, tout ce qui ne s’accomplit comme le travail, qu’à l’abri de cette protection, lui doit une rétribution proportionnée. Vous me sauvez par jour 10 francs de revenu, ou 10 francs de salaire provenant de mon travail, je vous dois une rétribution proportionnée à ces 10 francs. Le principe, comme dans une Compagnie d’assurance contre l’incendie, le principe naturel est de payer le risque en proportion de la valeur garantie, et quelle que soit la nature de cette valeur.	But in like manner, as you owe one part of the tax for the property you possess, and the social protection guaranteed to you, so you owe another for your labour, in proportion to the profits of that labour. Any plan for exempting labour would be as unreasonable as exempting property. All that is placed under the social protection owes a proportionate return. If you save me daily ten francs of my income, or ten francs of my wages, I owe you a remuneration in proportion to those ten francs. The principle, as in an insurance company, is, to pay the risk in proportion to the value guaranteed, whatever may be the nature of that value.
Je viens de faire voir, en remontant simplement à l’origine de l’impôt, que chacun doit contribuer aux dépenses publiques non pas également, mais proportionnellement, proportionnellement à ce qu’il gagne ou à ce qu’il possède, par la raison fort naturelle que l’on doit concourir aux frais de la protection sociale suivant la quantité de biens protégée. Ainsi, par exemple, si on suppose que la France donne 12 milliards de produit brut, et qu’il faille 1,200 millions pour faire face aux dépenses publiques (évaluations fort hypothétiques, je le déclare), il en résulterait que chacun devrait à l’État le dixième de ses revenus de tout genre. Celui qui a 1,000 fr. de revenu, soit de son travail, soit de son bien, devrait 100 francs de rétribution commune. Celui qui aurait 10,000 francs de revenus divers, propriété ou travail, devrait, sur le même pied du dixième, 1,000 francs. De même, celui qui aurait 100,000 francs de revenus divers, devrait 10,000 francs. Ils payeraient celui-ci cent fois, celui-là dix fois plus, parce que la protection sociale aurait garanti à l’un cent fois, à l’autre dix fois davantage. En reproduisant ici la comparaison que j’ai déjà faite de la société avec une Compagnie d’assurance mutuelle (comparaison la plus vraie, la plus complètement exacte qu’on puisse employer), je dis qu’on doit payer le risque en proportion de la somme de propriété assurée. Si on a fait assurer une maison valant 100,000 francs (la prime étant de 1 pour cent), on devra 4,000 francs à la Compagnie; si la maison assurée vaut un million, on devra 10,000 francs. Ces choses sont d’une telle évidence qu’elles ne semblent pas même devoir être discutées.	I have shown that every man ought to contribute to the public expenses, not equally, but proportionally— in proportion to what he earns or possesses, by a very natural reason, that we must contribute to the charges of social protection according to the quantity of goods protected. Thus, for instance, if we suppose France gives 12 milliards (billions) of gross produce, and that 1,200 millions are required for the public expenses, it would follow that every one would owe the state one-tenth of his revenues of every kind. The man with 1,000 francs of income, whether from labour, or from land, or from the funds, would owe 100 francs; the man with 10,000 francs, no matter from what source they arise, will owe one-tenth also, or 1,000 francs. So, the man with an income of 100,000 francs, will owe 10,000. One would pay a hundred times, and the other ten times more, because the social protection had guaranteed to the one, a hundred times, and to the other, ten times more. Reverting to the comparison between society and an insurance office (the truest and most complete that can be employed) I say, that we ought to pay the risk in proportion to the amount of property insured. If we insure a house with a 100,000 francs, at a premium of 1 per cent., we shall owe the company 1,000 francs; if the house is insured at a million, we shall owe 10,000 francs. These things are so plain, that they require no discussion.
… on doit sentir que la propriété est aussi sacrée que la liberté, et qu’il faut des règles certaines pour l’une autant que pour l’autre, qu’en un mot il faut des principes. La proportionnalité est un principe, mais la progression n’est qu’un odieux arbitraire. Les frais de la protection sociale représentent un dixième du revenu total, eh bien, soit, le dixième pour tous. Je comprends ce principe, car on payera en raison de ce qu’on aura coûté à la société, en raison du service qu’on en aura reçu , comme dans une Compagnie dont le capital est divisé par actions, s’il faut un prélèvement par action, on payera le même prélèvement par chaque action, qu’on en ait cent, qu’on en ait mille, ou cent mille. Exiger le dixième du revenu pour l’un, le cinquième pour l’autre, le tiers pour un troisième, c’est du pur arbitraire, c’est de la spoliation, je le répète. …	… they will feel that property is as sacred as liberty, and that certain rules or principles are as requisite for the one as for the other. Proportionality is a principle, but progression is a hateful despotism. The expenses of social protection may be represented by one-tenth of the total income; be it so—the tenth for all. I understand this principle, for then men will pay in proportion to what they have cost society, in the ratio of the services they have received, as in a company whose capital is divided into shares, whenever a call is made, the same amount is paid on each share, whether I have one or one hundred. To exact a tenth from one, a fifth from another, a third from another,—is pure despotism,—it is a robbery. …
Ainsi l’impôt proportionnel, c’est-à-dire l’impôt proportionné à la part des frais que la société est supposée avoir faits pour vous, au service que vous en avez reçu, comme en matière d’assurances la prime est proportionnée à la somme assurée, rien de mieux ; j’aperçois là un principe.	Thus, proportional taxation, that is, taxation proportioned to the share of the expenses which society is said to have incurred for you, and to the services you have received; just as in an insurance, the premium is proportionate to the sum insured—here is a principle. But to make one pay more towards these expenses than another, merely because he is thought too rich, is no principle, but a revolting act of despotism. I know what beneficence means; I can understand that society will exact nothing from an indigent man, whom we may find begging in the streets, or starving in bis garret. But beyond this, there must be a rule for all those whom society has not declared exempt from taxation on account of their misery. I ask for kindness towards the poor, and justice towards the rich. It is a virtue to love the poor; it is no virtue to hate the rich. After having seen society oppressed up to 1789, by the dominion of the upper classes, I have no wish to see it oppressed now, in 1848, by the government of the lower classes.

Thiers thought the current level of expenditure by the French government could be maintained if there was a flat rate of 10% imposed on all income and the value of all property owned. He estimated a ball park figure of 12 billion francs as the gross domestic product of France which would make a 10% flat income tax bring in 1,200 million francs to the government, which was not far off the actual amount for 1848-49 of about 1,400 million francs. [35]

In his review of Thiers' book Molinari rejects almost everything Thiers has to say except for this one section quoted above. On this matter he is quite effusive in his praise, both on the justice of a low flat tax on all income and thinking of society as an insurance company. [36]

La troisième partie de l’ouvrage est consacrée à l’impôt. Ici, je me plais à le dire, M. Thiers a été plus heureux. S’emparant avec un merveilleux savoir-faire d’une comparaison, déjà employée, entre l’Etat et une compagnie d’assurances, il démontre d’une manière mathématique la justice de l’impôt proportionnel, et l’iniquité de l’impôt progressif. … Nous ne voyons pas trop ce qu’on pourrait opposer à cette argumentation.

The third part of his work is devoted to tax (issues). Here, I am pleased to say, M. Thiers has been much more successful. In making with marvellous savoir-faire (skill) a comparison, already made by others (made elsewhere by him??), between the State and an insurance company, he shows mathematically the justice of a flat (proportional) tax and the injustice of a progressive tax. … We do not see how one could disagree very much with this argument.

Perhaps it was at this moment that Molinari came up with the idea of making literal what Thiers had only thought was a vague "similarity" or perhaps just a metaphor - that of turning the production of security over to a real "compagnie d'assurance mutuelle" (mutual insurance company) which charged its customers a premium for services provided by entering into a voluntary contract.

When the Metaphor becomes Reality: Emile de Girardin (1806-1881) and Molinari↩

Girardin, "Le Socialisme et l'impôt," (Sept.-Oct. 1849)↩

Also appearing in 1849 just as Molinari's book was hitting the bookshops, was a long essay on "Socialism and Taxation" written by the wealthy owner of La Presse magazine, Émile de Girardin, [37] which expressed very similar ideas but from a non-free market perspective. It began as a seven part article which appeared in late September and early October before being printed in book form which went through many editions during the Second Republic. [38] Like Thiers, Girardin wanted a flat rate of tax but in his case levied upon capital at a rate of 1%. But unlike Thiers, Girardin thought the government should be actually reorganised as a real insurance company, albeit with a monopoly and the police powers to enforce the payment of "premiums." In his view taxes were levied on income and were based upon coercion ("forcé"), whereas insurance premiums were levied on the value of one's insured capital and were therefore somehow "voluntary" (volontaire). As he succinctly put it in the first version of his plan, "Le propre de l'impôt, c'est d'être forcé. Le caractère de l'assurance, c'est d'être volontaire" (The real feature of taxation is that it is coerced. The character of insurance is that it is voluntary). [39] Girardin's fuller explanation of what he had in mind came in the revised edition of 1852, where he stated: [40]

L’impôt est et ne doit être qu’une prime d’assurance payée par tous les membres d’une société, appelée Nation, à l’effet de s’assurer la pleine jouissance de leurs droits, l’efficace protection de leurs intérêts, et le libre exercice de leurs facultés. Dans ce but, ils mettent en commun une portion déterminée de leur force, ce qui constitue la force collective.	A tax is and should only be an insurance premium paid by all the members of a society, called “The Nation,” for the purpose of guaranteeing them the full enjoyment of their rights, the effective protection of their interests, and the free exercise of their faculties. To this end, they place in common a predetermined part of their (own) power (force), which constitutes the collective power.
La force collective, c’est la puissance publique.	The collective power is the public power (puissance).
Pour subvenir à l’entretien de la puissance publique qui garantit l’indépendance nationale et la faiblesse individuelle, et assure l’exécution des contrats et des arrêts, les membres de la société payent une quotepart proportionnelle à la protection, sans laquelle aucun d’eux ne serait certain de conserver paisiblement ce qu’il aurait légitimement acquis.	To support the maintenance of the public power which guarantees national independence and individual weakness, and ensures the execution of contracts and legal decisions, the members of society pay a share (quotepart) which is proportional to the protection (they receive), without which none of them would be certain of peacefully preserving what they had legitimately acquired.
Cette quote part, qui doit être proportionnelle à la valeur des objets déclarés , est donc une prime d’assurance.	This share, which ought to be proportional to the value of the things (they have) declared, is thus an insurance premium.
Or, toute prime d’assurance doit être exactement proportionnée à l’étendue et à la probabilité du risque.	Now, all insurance premiums ought to be exactly proportional to the extent and the probability of the risk (they are exposed to).
Un Etat ne doit plus être qu’une société nationale d’assurances mutuelles contre tous les risques susceptibles d’être prévus. Alors disparaissent toutes les difficultés du régime actuel, toutes les fausses dépenses, toutes les gouttes d’eau qu’il s’épuise à jeter dans un fleuve. Il n’y a plus à rechercher dans quelle limite l’Etat peut donner ce qui n’est pas son bien, il n’y a plus à débattre quel sens et quelle portée doivent avoir ces grands mots « justice distributive, » qui, le plus souvent, ne sont que faveur distribuée. L’Etat ne prend ni ne donne plus : il assure. Assureur, il n’emprunte plus, il prête. Devant l’impôt transformé en assurance, il n’y a ni riche ni pauvre. Jamais l’un n’est l’obligé de l’autre. Tous les assurés sont égaux entre eux; il n’y a d’inégales que les valeurs entre elles.	A State ought to be nothing more than a national mutual insurance company (société) (which insures) against all the risks which can be foreseen. Then all the difficulties of the present régime will disappear, all the false/mistaken/wasted expences, (which are like) so many drops of water which are drained away by being thrown into a river. We will no longer have to go looking for the proper limit to what the State can and cannot appropriate; no longer have to debate what meaning and to what extent to give to the great words “distributive justice,” which far too frequently only means “distributed favours.” (Thus) the State will no longer take nor give. As an Insurer, it will no longer have to borrow, (instead) it will lend. Once taxes have been transformed into an insurance policy, there will no longer be rich or poor. Never again will one person be obliged to another. All of those insured will be equal to each other; the only unequal things are the value of the things (being insured).

However, there were serious anti-liberal aspects to Girardin's proposal which Molinari and the other liberals rejected. First of all was the idea of a nation-wide monopoly, which flew in the face of their deeply held criticisms of all state monopolies. Secondly was his idea that every citizen should carry about on their person "une Inscription de vie" (A Record of their Life) (1849, p. 158), much like the hated Worker's Passbooks or "livret d'ouvrier" which they would have to produce when asked and have their "insurance premiums" entered, stamped, and checked by "l'échiquier social" (social exchequer or treasurer) (1849, pp. 158, 213) who would enter all the relevant information about each citizen and their payments into "une Inscription de vie." Citizens, now known as "les Assurés" (the Insured), would be regulated or policed by "une Police d'assurance" described by Girardin in these chilling words: [41]

La police de chaque Assuré est à la fois son certificat de moralité et son certificat de solvabilité.	The “Insurance Book” (la Police d’assurance) of every Insured Person is both his certificate of morality and his certificate of financial solvency.
Toute police d’assurance acquiert presque la valeur du warrant: La société n’est plus, en quelque sorte, qu’un immense dock.	Every “Insurance Book” (la Police d’assurance) will acquire almost the same value as a police warrant : society will, in a way, become nothing more than an immense (court) dock . (uses English words)

So it was alongside this rather odd mixture of conservative thinking about the metaphor of government being "like" an insurance company and a flat rate of tax being "like" an insurance premium, and more radical thinking about literally turning society into a giant monopoly insurance company which would transform taxes imposed on all incomes earned into premiums levied on the value of all property owned, that Molinari developed his own classical liberal vision of competitive, private insurance companies run by entrepreneurs who would "produce" security services and sell them to willing customers for a fee, variations of which he would defend for the next 60 odd years.

Molinari on the "Production of Security" ↩

Introduction↩

To track the development of Molinari's thinking on the private and competitive production of security over the course of his long and productive life I have taken two approaches. The first is to take several key terms and phrases and rhetorical tropes which recur in his writings and to see how they may have changed in meaning over this period. The second approach is break up his writings into different phases when he returned to the topic at different stages over the course of his long life.

Some Key Terms and Rhetorical Tropes↩

In this section I will take several key terms and phrases and rhetorical tropes which recur in his writings and to see how they may have changed in meaning over this period. I believe that he had some pet phrases and stories which acted like "code words" which he could use in a way which did not provoke unnecessarily his colleagues who were uniformly hostile to his radical ideas. These phrases and tropes include the following:

Key phrases:

1. "la production de la sécurité" (the production of security) with its related terms relating to producers and consumers of security
2. "les compagnies d'assurances" (private insurance companies) charging "les primes" (premiums) for protection
3. "la liberté de gouvernement" (the liberty of government, or free government, the political analog to "la liberté des échanges" (free trade)) , i.e. the competitive provision of security in the free market
4. "des gouvernements libres" (free governments, i.e. freely chosen governments (not by free election but by free choice by individual consumers), governments subject to free competition; the opposite of monopoly or communist governments)
5. "la concurrence politique" (political competition, or competing governments); the next stage in the spread of competition to every sector of the economy; meant in a positive pro-liberty sense. He would later alter this term to mean "competition between governments for control over territory and taxpayers; meant here in a negative, anti-liberty sense.
6. "la libre concurrence" and "pleine concurrence" (free and complete competition): as in "la loi de la libre concurrence" (the law of free competition) - the idea that free and open competition should be applied to all industries and government activities; that it would be universally applied and result in "un régime de concurrence universalisée" (a system/regime of universalised competition) (in the Conclusion to L'évolution économique du XIXe siècle (1880)); also "un régime de pleine concurrence" (a regime of full competition) (in Cours (1855))

Rhetorical tropes:

1. Adam Smith and "the fees of court," as an historical example of how competing courts might provide consumers with choice (this long quote can also be found in the Appendix) [42]
2. Adam Smith on the difficult task which lay ahead (from 1776) of organising associations of people who would demand a policy of free trade and successfully lobby governments to do this, thus overcoming the powerful vested interests who defended protectionism (this would happen 70 years in 1846 with the success of the Anti-Corn Law League); [43] the implication he wanted to draw from this quotation is that the political analog of free trade (free governments) would require similar organisations and possibly a similar time frame in order to achieve their goals
3. the "simple hypothesis" of the monopolist grocer (sometimes a baker), that if competition was good for the grocery business it would also be good for the security business (these long quotes can be found in the Appendix)

Terms and phrases describing the final stage of evolution with complete liberty and competition:

1. "le régime de la libre concurrence" (the regime or system of free and open competition in all industries)
2. "un régime d'entière/pleine liberté" (a regime of full and complete liberty, a society of complete liberty)
3. "les gouvernements de l'avenir" (governments of the future) and "le régime de liberté de gouvernement de la société future" (the regime of the liberty of government in a future society)
4. "une système d'absolue propriété et de pleine liberté économique" (a system of absolute property rights and complete economic liberty)
5. "la société à lapropriété pure" (the society (based upon) pure property rights)
6. "un régime de la propriété illimitée" (a society of unlimited property rights)
7. "un régime de laisser-faire absolu" (a society of absolute laissez-faire)

The Stages in his Intellectual Evolution↩

In this section I want to break up his writings into different phases when he returned to the topic at different stages in his long life.

1. The first might be called the "metaphor stage" when he first began to think about society and government as being like an insurance company providing security services to its "shareholders" (or taxpayers). During this phase he wrote his article on electoral reform (1846).
2. The second phase was the most radical phase of his thinking when he developed what might be regarded as the purest and most radical version of his ACT concerning the production and consumption of security by private and competing insurance companies (1846-1868). I have called this set of ideas "hard" ACT. This phase lasted about 22 years when he was relatively young (27-49 years of age) and had aspirations to be an academic economist. His writings in this period included the PoS article (1849), S11 (1849), chap. 12 on "Les consommations publiques" inCours d'économie politique(1855, 1863), and his articles in his journalL'Économiste belge(1855-68).
3. After gap of 13 years when he left academia and worked as a journalist (1868-1881) he eventually returned to the subject and examined it from a more historical and sociological approach. This "mature" phase lasted about 7 years from 1884 to 1891. His writings in this period includedL'Évolution politique(1884) Chap. X. "Les gouvernements de l'avenir";Les Lois naturelles(1887) pt. 4, "La Liberté de gouvernement;" andNotions fondamentales(1891), "La Simplification De L'état" with the latter being a kind of turning point in his drift away from his radical ACT.
4. The fourth and final stage was the last two decades of his life (he lived to be 92) from 1893 to 1912 when he seems to have become more pessimistic about the immediate prospects for liberty and the possibility for AC to be implemented. He talked a lot more about "naturally collective" goods and services which had to be provided by some kind of government. Nevertheless, he still has quite radical aspects to his thought such as the right of secession, and the role proprietary communities might play in providing public goods privately. I call this set of ideas "soft" ACT. His writings in this period includePrécis(1893);Comment se résoudra la question sociale(1896), "La révolution silencieuse";La Société future(1899), "La constitution libre des gouvernements"; andLes Problèmes du XXe siècle(1901), "Le problème du gouvernement collectif."

Three Different Ways Ways of Arguing his Point↩

Molinari sometimes moved between three different ways of looking at the problem which makes it difficult for the reader to follow the exact train of his thought at times. Sometimes he would be discussing from an historical perspective, where he would discuss how actual European states had evolved over the centuries, how actual markets had evolved often separately or in opposition to the state, and how economic forces like competition changed markets and trade and government services over time. At other times he would discuss the matter from the perspective of current political events, describing how governments and markets functioned in the present, and what options existed realistically for improvement in the here and now. Then at other times, he would talk about the future, about his hopes and predictions about how societies would function in the future if certain conditions were met to allow competition and markets to operate at their best.

If a pattern merges, it might be that towards the end of his life he talked more about current political problems and how they might be alleviated by certain practical reforms in the here and now, and that he pushed further into the more distant future, as he became more pessimistic about the prospects for liberty in the medium term, his discussion of plans for a completely new "society of the future" which he thought would emerge when competition in all goods and services was giving full reign.

The First Formulation of the Theory: "The Production of Security" ( JDE , Feb. 1849) and Soirée 11 (Sept. 1849)↩

Introduction↩

So when he came to write the pathbreaking article on "De la Production de la sécurité" in February 1849 Molinari, as had others like Thiers and Girardin, had been reflecting for some time on the similarities between societies, governments, and insurance companies providing services to their citizens. The leap he made was to stop thinking of this similarity as purely a metaphor and to see it as an actual possibility that real insurance companies could sell premiums to willing customers for specific services which could be agreed upon contractually in advance and provided competitively on the free market. This article was his first attempt to explore the possibilities which this new way of thinking about government opened up; the second would be S11 in this book, and the third would be a lengthy section on "La Consommation publique" (Public Consumption) in the Cours d'économie politique which was based upon the lectures he had given at the Musée royale de l'industrie belge in Belgium and published as a book six years after Les Soirées . [44]

Molinari realised he was exposing himself to criticism by his colleagues of his views about how far "la loi de la libre concurrence" (the law of free competition) could in fact be pushed. We get a sense of their concern that Molinari had gone too far when one observes the quite extraordinary footnote inserted by the editor of the JDE , Joseph Garnier, at the beginning of Molinari's article where he distances himself (and presumably the other economists) from Molinari's radical views (which he describes as "utopian") but justifies printing it because Molinari addresses an important issue, namely the proper functions of government, which too many economists had ignored. [45]

Bien que cet article puisse paraître empreint d’utopie dans ses conclusions, nous croyons, néanmoins, devoir le publier pour attirer l’attention des économistes et des publicistes sur une question qui n’a encore été traitée que d’une manière accidentelle et qui doit, néanmoins, à l’époque où nous sommes, être abordée avec plus de précision. Tant de gens exagèrent la nature et les attributions du gouvernement, qu’il est devenu utile de formuler strictement la circonscription hors de laquelle l’intervention de l’autorité cesse d’être tutélaire et profitable pour devenir anarchique et tyrannique. (Note du rédacteur en chef.)

Although this article may bear the imprint of being utopian in its conclusions, we nevertheless believe that we ought to publish it in order to draw the attention of economists and journalists to a question which has hitherto been treated only in passing and which should, nevertheless, in our present time, be approached with greater precision. So many people exaggerate the nature and functions of government that it has become useful to define exactly the boundaries outside of which the intervention of authority ceases to be protective and profitable and becomes anarchical and tyrannical. .

Molinari knew of course that the reaction of his colleagues would be negative (criticism was expressed quite harshly at the October 1849 meeting of the Political Economy Society (a meeting which Molinari perhaps wisely did not attend) and in a review of his book Les Soirées with its chapter 11 in the JDE (Nov. 1849) [46] but he would have been disappointed that nobody among them came to his defence on this issue. In the PoS article he seems to be genuinely surprised that his colleagues were not willing to face up to the logical consequences of their own strongly held beliefs in the efficiency, innovatory nature, low cost, and morality of competitive free markets. All he wanted to do was to apply "le principe de la libre concurrence" (the principle of free competition) rigorously to the activities of the state as any "un économiste pur" (pure (consistent?) economist) or "un véritable économiste" (a real economist) would do, and he could not understand why his colleagues were reluctant to do this by making "an exception" of the government to this "natural economic law." He singles out in particular the doyen of the Economists, Charles Dunoyer, who was the permanent president of the PES and who had a formidable reputation as a theorist and activist for liberty going back to the 1810s. [47] It would be Dunoyer who would lead the charge against Molinari's views at the PES meeting when he accused Molinari of "allowing himself to be carried away by delusions of logic." In spite (or perhaps because of) the controversy his article aroused among his colleagues the Guillaumin firm published the article as a separate pamphlet in order to promote discussion of it among their circle. [48] The following passage from the PoS article makes clear his frustration with his colleagues and claims that he might be the only "pure or real economist" among them: [49]

Cependant, je dois dire qu’on a, jusqu’à présent, reculé devant cette conséquence rigoureuse du principe de la libre concurrence.	Nevertheless, I must admit that, up until the present, one recoiled before this rigorous implication of the principle of free competition.
Un des économistes qui ont étendu le plus loin l’application du principe de liberté, M. Charles Dunoyer, pense « que les fonctions des gouvernements ne sauraient jamais tomber dans le domaine de l’activité privée.»	One economist who has done as much as anyone to extend the application of the principle of liberty, M. Charles Dunoyer, thinks “that the functions of government will never be able to fall into the domain of private activity.”
Voilà donc une exception claire, évidente, apportée au principe de la libre concurrence.	Now here is a a clear and obvious exception to the principle of free competition.
Cette exception est d’autant plus remarquable, qu’elle est unique.	This exception is all the more remarkable for being unique.
Sans doute, on rencontre des économistes qui établissent des exceptions plus nombreuses à ce principe; mais nous pouvons hardiment affirmer que ce ne sont pas des économistes purs . Les véritables économistes s’accordent généralement à dire, d’une part, que le gouvernement doit se borner à garantir la sécurité des citoyens; d’une autre part, que la liberté du travail et de l’échange doit être, pour tout le reste, entière, absolue.	Undoubtedly, one can find economists who establish more numerous exceptions to this principle; but we may emphatically affirm that these are not pure economists. True economists are generally agreed, on the one had, that the government should restrict itself to guaranteeing the security of its citizens, and on the other hand, that the freedom of working and of trade should otherwise be complete and absolute.
Mais quelle est la raison d’être de l’exception relative à la sécurité? Pour quelle raison spéciale la production de la sécurité ne peut-elle être abandonnée à la libre concurrence? Pourquoi doit-elle être soumise à un autre principe et organisée en vertu d’un autre système?	But why should an exception be made for security? What special reason is there that the production of security cannot be left to free competition? Why should it be subjected to a different principle and organized according to a different system?
Sur ce point, les maîtres de la science se taisent, et M. Dunoyer, qui a clairement signalé l’exception, ne recherche point sur quel motif elle s’appuie.	On this point, the masters of economic science are silent, and M. Dunoyer, who has clearly noted this exception, does not investigate the grounds on which it is based.

Molinari makes the same argument in S11 a few months later where he calls himself "un économiste radical , un rêveur" (a radical economist, a dreamer) [50] who dares to point out the logical inconsistency in advocating the liberalization from state control of every branch of production which uses property, except for the one which guarantees the maintenance of property itself, even though it too was an "industry" which had to use scarce resources (property) wisely and economically in order to do this. [51]

Voyons! ne nous fâchons pas. Je suppose qu’après avoir bien reconnu que le communisme partiel de l’État et de la commune est décidément mauvais, on laisse libres toutes les branches de la production, à l’exception de la justice et de la défense publique. Jusque-là point d’objection. Mais un économiste radical , un rêveur vient et dit: Pourquoi donc, après avoir affranchi les différents emplois de la propriété, n’affranchissez-vous pas aussi ceux qui assurent le maintien de la propriété? Comme les autres, ces industries-là ne seront-elles pas exercées d’une manière plus équitable et plus utile si elles sont rendues libres? Vous affirmez que c’est impraticable. Pourquoi.

Oh, come on ! Let us not get angry. I suppose that after having recognised that the partial communism of the state and of the commune is decidedly bad, we could let all the branches of production operate freely, with the exception of the administration of justice and public defence. Thus far I have no objection. But a radical economist , a dreamer, comes along and says: Why then, after having freed the various uses of property, do you not also set free those who guarantee the upholding of property rights? Just like the others, will not these industries be carried out in a way more just and useful if they are made free? You maintain that it is impracticable. Why?

Some Rhetorical Tropes↩

One of the rhetorical tropes he uses in this article for the first time and then repeatedly over the course of the next 50 or more years is to attempt to persuade the believer in the efficiency and morality of free competition in one area of human activity to make the theoretical jump to applying it to everything including the private and competitive production of security. He does this by asking the reader to join him in making "une simple hypothèse" (a simple hypothesis) or "a supposition/conjecture" ("Supposez qu'un homme ou une association d'hommes …") which if the reader admits to being logical and morally justified, will lead logically to taking the next step towards full AC. In this article the "supposition" takes the form of imagining a society in which the salt industry was monopolized and to consider the economic consequences this would have on the price, quality, and availability of salt. One option for the consumers of salt suffering under a monopoly system is to rise up in rebellion and seize control of the state and take over the salt industry and run it communally, which also creates serious economic problems, or they can open up the salt industry to free competition between privately owned and run salt companies. Once the reader agrees with the conclusion that neither the monopolistic nor the communal (social) production of a good or service is satisfactory then the only possible solution is the competitive provision in a free market. As Molinari concluded: "Ce qui vient d'être dit du sel n'est-il pas visiblement applicable à la sécurité?" (Isn't what we have just said about salt obviously applicable to (the production of) security?) [52]

Nous citerons comme exemple le sel. …	Take salt for example …
Lorsque cette organisation ne s’applique qu’à une seule denrée, on dit que le communisme est partiel.	When this organization is applied to a single commodity, the communism is said to be partial.
Lorsqu’elle s’applique à toutes, les denrées, on dit que lé communisme est complet.	When it is applied to all commodities, the communism is said to be complete.
Mais que le communisme soit partiel ou complet, l’économie politique ne l’admet pas plus que le monopole, dont il n’est que l’extension.	But whether communism is partial or complete, political economy is no more tolerant of it than it is of monopoly, of which it is merely an extension.
VI. Ce qui vient d’être dit du sel n’est-il pas visiblement applicable à la sécurité ; n’est-ce pas l’histoire de toutes les monarchies et de toutes les républiques?	VI. Isn’t what has just been said about salt applicable to security? Isn’t this the history of all monarchies and all republics?

In many of the later versions of this "simple hypothesis" the argument takes the form of imagining a society which had only ever known the monopolistic provision of a key good such as groceries (S11 (1849), Cours (1853)), bread ( L'Évolution politique (1884), Question sociale (1896)), or clothing ( La Morale économique (1888)). He even uses the same way of arguing when he had exposed the abuses caused by the monopoly of baking in abc , just "Remplacez la fabrication du pain par la production de a sécurité" (Just replace the making of bread with the production of security). [53]

There is also a second example of this rhetorical trope in PoS which takes the form of an "hypothesis" (in section X), that is of imagining a newly established community where there is the spontaneous emergence of private providers of security who step forward to offer non-violently their expertise, due to the division of labour and the specialization of skills, to their neighbors to provide protection services for an agreed upon fee. Like any other need, like the need for food or shelter, the need for security gives rise to an "industry" to provide security, with producers of security willing to provide consumers of security with this service; and there will be a "price for security" which emerges from the market for security which will take the form of a "premium" paid to the producer. In this scenario, the security industry emerges "naturally" (i.e. spontaneously and non-violently) like any other industry, thus there is no need for a monopoly supplier. If one did try to establish a monopoly it would violate the liberty and property rights of those who had made their own arrangements for the provision of this service, and this would be unjust and economically inefficient, and would be resisted by the consumers.

Analysis of the PoS article↩

He begins the article on "The Production of Security" by restating the basic economic principles which lie behind his thinking, which are the following: the world is governed by natural laws which are universal and which cannot be violated or ignored with impunity; [54] conservatives, socialists, and even some economists must accept the fact of these natural laws and adapt their thinking accordingly; exceptions to these natural laws cannot be accepted by economists without overwhelming evidence and sound reasons, which he believes do not in fact exist; that human beings are naturally sociable and co-operate with others by means of the division of labour and free trade to satisfy their needs; that society is " naturellement organisée" (naturally organized, or naturally self-organising if left alone) and that it has evolved gradually under the influence of these laws through the activities of millions of individuals who produce and trade their goods and services on the free market with freely negotiated prices; that individuals in society have a need to protect their persons and property from attack and hence evolve institutions to do this in the form of governments; that people want goods and services to be provided as cheaply and as efficiently as possible ( à bon marché ) which is only possible through the law of free competition and the elimination of government protected monopolies; and that these natural laws of political economy do not allow any exceptions.

Having laid out this mini-treatise on political economy, Molinari then proceeds to make his case that the provision of security was just another government monopoly which should be liberalized. He turns the counter-argument on its head by challenging the economists who want to de-monopolize nearly everything the government does to justify why they have made this important exception to the general principle. Why should there be a government monopoly in this case when the theory of political economy shows conclusively that monopolies lead to higher prices, lack of innovation, and high profits for a privileged minority? Molinari distinguished between two different ways in which the production of security (or government broadly speaking) have been organized in throughout history - the "monopolistic" production of security and the "communistic" production of security. By "monopolistic" Molinari means an organisation dominated by a single person, such as a king, or a narrow class, such as the King in alliance with the aristocracy; by "communistic" he means an organisation dominated by society as a whole, or by its elected representatives, such as a parliamentary democracy. Here he is using the word communistic in a very limited way to mean "in common" or "communal" rather than with any reference to the political group known as "Communists," thus a better choice of word might be "socialist" or "statist" rather than "communist." He would later not use the term "communist" in this way but refer to all such governments as simply "monopolistic" as in "le monopole gouvernemental."

The historical example he uses to illustrate what he means by these two different methods of producing security, or any other government good or service, is taken from 17th century English history. Before the Revolution the King and allied aristocrats ran the country like a company for their personal and exclusive benefit, [55] or "le monopole de la sécurité" (the monopolistic production of security). During the Revolution when the Commons seized control of the state the company was run for the benefit of a broader group of individuals, nominally in the name of the people, which Molinari describes as "le communisme de la sécurité" (the communistic or communal production of security). An even clearer example of the communistic provision of security was the recent 1848 Revolution in France where: [56]

on a substitué à ce monopole exercé d’abord au profit d’une caste, ensuite au nom d’une certaine classe de la société, la production commune. L’universalité des consommateurs, considérés comme actionnaires, ont désigné un directeur chargé, pendant une certaine période, de l’exploitation, et une assemblée chargée de contrôler les actes du directeur et de son administration.

this monopoly exercised at first for the benefit of a caste and then in the name of a certain class in society, was replaced by communal production (of security), where a director was appointed and charged with its operation for a certain period of time, and an assembly was charged with supervising the actions of the director and his administration.

In order to avoid the problems of either the monopolistic or the communist (or socialist) provision of security the only alternative solution in his view was "communisme complet ou liberté complète" (complete communism or complete liberty). [57] How the latter might work he sketched out briefly in Section 10 of the article, to which he would add some interesting new twists to this in S11. Some inspiration came from a passage in Adam Smith's Wealth of Nations where he talks about competing courts in England where litigants could shop around for a court which best suited their needs and which would charge fees according to the type of case involved. [58] This was a clear historical example of how legal services could be provided on the free market between competing institutions for profit. Molinari prefaces this quote by saying:

De cette faculté laissée au consommateur d’acheter où bon lui semble la sécurité, naît une constante émulation entre tous les producteurs, chacun s’efforçant, par l’attrait du bon marché ou d’une justice plus prompte, plus complète, meilleure, d’augmenter sa clientèle ou de la maintenir.

This option the consumer retains of being able to buy security wherever he pleases brings about continual competition among all the producers, each producer striving to maintain or increase his clientele by attracting them with cheaper prices or of faster, more complete, and better justice.

The Fees of Court Trope↩

Quoting this passage from Smith was another trope Molinari returned to in his later writings and is another indication of the consistency of his radical thinking about the provision of security over several decades. He would quote a longer version of the passage in S11 where the Economist argues that:

Dans certains pays, où les justiciables avaient le droit de choisir leurs juges, les vices du monopole se trouvaient singulièrement atténués. La concurrence qui s’établissait alors entre les différentes cours, améliorait la justice et la rendait moins chère. Adam Smith attribue à cette cause les progrès de l’administration de la justice en Angleterre. Le passage est curieux et j’espère qu’il dissipera vos doutes.

In some countries, where those due to be tried had the right to choose their judges, the vices of monopoly were greatly alleviated. The competition established in this case by the different courts improves the justice process and makes it cheaper. Adam Smith attributed the progress of the administration of justice in England to this cause. His words are striking and I hope the passage will allay your doubts.

A third and final instance of Molinari quoting this passage would come some 50 years later in La Société future (1899) where he again invites the reader to make "a supposition," this time that the reduction in the threat of armed conflict between nations would allow countries an opportunity to outsource, farm out (affermer), or privatise security and police services and thus to drastically cut their expenditure on defence. He then quotes Smith again on the benefits of competition between judges and their courts ("the fees of court") and predicts that there will emerge "des compagnies judiciaires pleinement indépendantes et concurrentes" (judicial firms/companies which are completely independent and competitive) to satisfy this market demand. [59]

The PoS article↩

To return to the PoS article, here Molinari sets out three conditions for a market in security industry to emerge, and provides a sketch of what this market might look like. He will slightly rephrase these three conditions in S11 (see below for details).

Given the powerful need for protection of person and property felt by consumers ("les consommateurs de sécurité"), and the fact that there were individuals who had the knowledge and skill to provide protection services for a fee ("les producteurs de sécurité"), it was inevitable that an individual or association of individuals would emerge as a producer of security to do just that. This was in fact exactly how the market operated for everything else. Molinari spelled out some of the terms and conditions which a budding security entrepreneur in "l'industrie de la sécurité" (the security industry) would have to offer consumers in order to get their business and to provide an effective service: [60]

1° Que le producteur établisse certaines peines contre les offenseurs des personnes et les ravisseurs des propriétés, et que les consommateurs acceptent de se soumettre à ces peines, au cas où ils commettraient eux-mêmes des sévices contre les personnes et les propriétés;	1. that the producer (of security) would establish certain penalties for those who committed offences against individuals and those who violated property, and that the consumers (of security) (would) accept being subjected to these penalties in the case where they themselves committed these abuses against person or property;
2° Qu’il impose aux consommateurs certaines gênes, ayant pour objet de lui faciliter la découverte des auteurs de délits;	2. that (the producer of security) would impose on the consumers (of security) certain obligations for the purpose of assisting it (the producer) in discovering the perpetrators of the crimes/offences
3° Qu’il perçoive régulièrement, pour couvrir ses frais de production ainsi que le bénéfice naturel de son industrie, une certaine prime, variable selon la situation des consommateurs, les occupations particulières auxquelles ils se livrent, l’étendue, la valeur et la nature de leurs propriétés.	3. that (the producer of security) would regularly impose a certain premium to cover its costs of production as well as the normal profit (le bénéfice naturel) for its industry, which would vary according to the situation of the consumers, their particular occupations in which they were engaged, and the extent, value, and nature of their property.

Molinari thought that consumers would have the option of providing security themselves if they were not happy with these conditions, or they could seek out "un autre producteur" (another (competing) producer). The market for security services would then take on the following characteristics. Most producers of security would begin by limiting "leur clientèle" (their clientele) to a certain geographic area where it would pay to station their police (une police) and their clients would tend to group around the headquarters of the producer of the service. If the producer tried to "lay down the law" to their clients or raised their prices too much, the consumers would have the right to take their business to another entrepreneur in the same area or more likely go to a neighboring one ("En cas d'une augmentation abusive du prix de la sécurité, ceux-ci auront, en effet, toujours la faculté de donner leur clientèle à un nouvel entrepreneur, ou à l'entrepreneur voisin). He calls this "cette faculté laissée au consommateur d'acheter où bon lui semble la sécurité" (this ability left/allowed to the consumer to buy security wherever it seems good to do so) and it is here in the argument that he quotes Smith on "fees of court" for first time.

If consumers don't have this right to go elsewhere then we will see oppressive and arbitrary behavior by the producers and the bad management of security - it will become costly and slow, policing will be frustrating (vexatoire), individual liberty will stop being respected, the price will soar and be levied unequally, and "les assureurs" (this is the first time he uses this term "those who provide the insurance") will use force or their influence to seize consumers from each other in "des luttes acharnées" (bloody battles). We will have thus returned to the abuses the old system of monopoly and communism in the provision of security.

However, in "le régime de la libre concurrence" (a system where there is free competition) the natural organisation of the security industry will be just like that of other industries. In small cantons a single entrepreneur (un simple entrepreneur) would be enough to provide the service and he would be able to pass it on to his sons in the form of a family business. [61] Molinari likened this form of a single provider of security to "la monarchie sans le monopole" (a monarchy without a monopoly). In larger cantons there would be a company or firm which would be able to organise the resources necessary to provide "cette importante et difficile industrie" (this important and difficult industry). This firm would most likely become a permanent one and would continue over time, like other firms in other branches of production. He likens this form of the provision of security to "la république sans le communisme" (a republic without communism). Molinari believed that firms/companies providing security would most likely replace the family business over time. Both forms of providing security would only have clients if their authority was accepted and respected on the grounds of its utility, and not imposed by force and Terror.

Although he admitted at the end of the article that his daring "hypothesis" could be described as utopian, he concludes that "le problème du gouvernement" (the problem of government) could only be solved, like all other economic problems, by the rigorous and consistent application of economic principles, such as exposing its services to the forces of competition. To achieve this end organisations would have to be set up to lobby for it, much like organisations like the English Anti-Corn Law League had been set up in in 1838, and the French "l'Association pour la liberté des échanges" in 1846, to lobby for the repeal of the protectionist corn laws and the introduction of "la liberté des échanges" freedom of exchange , or free trade). Only, these new organisations would be lobbying for " la liberté de gouvernement " (the freedom of government).

The Production of Security in S11↩

Introduction↩

Six months after the publication of the PoS article Molinari returned to the topic in his famous chapter or "Soirée" number 11 in a book called rather matter of factly, Les Soirées de la rue Saint-Lazare; entretiens sur les lois économiques et défense de la propriété (Evenings of Saint Lazarus Street: Discussion about Economic Laws and the Defence of Property). [62] These "soirées" brought together representatives of the three main schools of political and economic thought in France at that time, "a Conservative," "a Socialist," and "an Economist" (who was obviously the mouthpiece for Molinari), [63] who argued among themselves over the course of 12 evenings about a large number of economic issues raised by the Revolution of 1848 and the new government of the Second Republic. The title gave no clue about the real content of the book, which was the presentation of Molinari's proposals to privatise or abolish every government function currently undertaken by the recently installed régime.

The chapter on the private provision of security takes place in a much broader context developed throughout the book concerning the private and competitive provision of many other public goods as well, such as mineral resources, state owned forests, canals, rivers, city water supplies, the post office, public theatres, libraries; and the ending of private monopolies protected by government licences and heavily regulated professions such as bakeries, butchers, printers, lawyers, brokers, funeral directors, cemetery owners, doctors, teachers, and even brothel owners. It was an amazing tour de force in the application of rigorous free market principles to nearly every aspect of French society. It is also in my view, one of the first, perhaps even the first, one volume survey of the radical classical liberal worldview, along the lines of Rothbard's For a New Liberty (1973/4). [64]

As one would expect, there are many similarities between the PoS article of February and the S11 of Sept. 1849. There are references to the same key terms, such as "la liberté de gouvernement" (the freedom of government, which was one of his code words for AC), and the language describing security as an economic industry like any other with terms such as "la production de la sécurité" (the production of security), "le prix de la sécurité" (the price of security), "les producteurs de sécurité" (producers of security), and "les consommateurs de sécurité" (consumers of security). He also uses the same rhetorical tropes of quoting Adam Smith on "the fees of court" [65] and competition between judges, and using a "conjecture" or "hypothesis" to make the case for competition in the provision of security services (here he talks about the "monopolist grocer"). [66]

There are also several things which are new to S11, such as his contrast between, on the one hand "gouvernements de monopole et gouvernements communistes" (monopolist governments and communist/socialist governments) and, on the other hand "des gouvernements libres" (free governments, that is to say free in the sense that one is free to say no to their services and go elsewhere if one wishes) which will become another of his code words along with "la liberté de gouvernement" for his ACT. He defines "free governments" as "des gouvernements dont je puisse, au gré de ma volonté individuelle, accepter ou refuser les services" (governments whose services I may accept or refuse according to my own free will). Secondly, his "demurral" or his reluctance/refusal to specify in advance what a market for security services would look like exactly in the future; he says that this is not the function of an economist to do this for the security industry or any other industry for that matter. And thirdly, he is now much more specific about what general shape the "producers of security" would assume; he introduces the radically new idea that an actual insurance company might be the type of private company best suited to providing security services for person and property; they are now much larger companies ("vastes compagnies"), perhaps national in scope, more specifically still they are "ces compagnies d'assurances sur la propriété" (property insurance companies) run by entrepreneurs who charge a premium to "les assurés" (those they insure).

The Economist's Demurral↩

I think something should be said here about what I am calling "the Economist's Demurral" to be be specific. Molinari did not believe it was the economist's job here or in any other area of economic activity to specify in advance exactly how goods and services would be provided at some time in the future, how many companies might be set up to supply these services, at what prices these goods and services would be traded, and so on. An argument he sometimes used in the Soirées and the Cours was the story of the village which had only ever known a single monopoly supplier of groceries. [67] Here uses stories like these in two ways, firstly as a rhetorical trope of "a simple hypothesis" to make the case for competition in all areas of economic activity, and secondly to support his refusal to outline in exact detail what future markets in a good or service might look like. To return to the story of the grocer, if a free market economist suddenly appeared in the town and pointed out the high prices and poor quality of the food which was on sale, and urged the deregulation of the grocery business and opening it up to competition, he would be met with disbelief and opposition from the townspeople. They would ask him what the grocery business would look like in 10 years if it were deregulated, how much food would cost, and how many grocers would have set up shop and how could they trust their services? Naturally he would not be able to give them any specific answers to their questions other than to say it was very likely they would have a number of grocers who would compete with each other for the town's business and that they would be supplied with cheap and abundant food. The only things an economist needed to know is whether or not there is a demand for a good or service, whether or not there are people willing to supply this good or service at a given price, and if there are no legal impediments to these two parties coming together to trade with each other; then the economist can say with some certainty that markets will evolve to satisfy this demand: [68]

Cela ne regarde pas les économistes. L’économie politique peut dire: si tel besoin existe , il sera satisfait, et il le sera mieux sous un régime d’entière liberté que sous tout autre. A cette règle, aucune exception! mais comment s’organisera cette industrie, quels seront ses procédés techniques, voilà ce que l’économie politique ne saurait dire.

That does not concern the Economists. Political economy can say: if such a need exists , it will be satisfied and done better in a regime of full freedom than under any other. There is no exception to this rule. As to how this industry will be organized, what its technical procedures will be, that is something which political economy cannot tell us.

This is of course a true statement about many if not most economic activities. As he was writing these very lines Molinari was witnessing the dramatic transformation of shopping in Paris with the emergence of the department store. No economist could have imagined how this new invention of the competitive market for the sale of consumer goods would transform big cities like Paris. An entrepreneur named Aristide Boucicaut founded the first department store named appropriately enough, "Le Bon Marché" (the cheap or low cost market), [69] in Paris in 1838 which was rapidly evolving into its modern form in the late 1840s and early 1850s with its individual "departments" (or shops within a shop) selling a vast range of goods under one roof, at fixed prices, and offering the customer exchanges or refunds for unwanted purchases.

Just as this new phenomenon had emerged unplanned and unanticipated out of the competitive market place for consumer goods, so Molinari imagined a similar new market would emerge for the buying and selling of security services in ways unimagined by economists. Whether such a market could arise was, of course untested, but Molinari was confident it would and, if fact was so confident, that he made a very bold prediction in S11 about how long a transition period was needed for this to occur, which only confirmed in his critics minds that he was a bold and daring utopian thinker: [70]

Je prétends donc que si une communauté déclarait renoncer, au bout d’un certain délai, un an par exemple, à salarier des juges, des soldats et des gendarmes, au bout de l’année cette communauté n’en posséderait pas moins des tribunaux et des gouvernements prêts à fonctionner; et j’ajoute que si, sous ce nouveau régime, chacun conservait le droit d’exercer librement ces deux industries et d’en acheter librement les services, la sécurité serait produite le plus économiquement et le mieux possible.

Therefore, I maintain that if a community were to announce that after a given delay, say perhaps a year (sic!), it would give up financing the pay of judges, soldiers and policemen, at the end of the year that community would not possess any fewer courts and governments ready to function; and I would add that if, under this new regime, each person kept the right to engage freely in these two industries and to buy their services freely from them, security would be generated as economically and as well as possible.

As the 19th century wore on and Molinari witnessed the reversal of economic liberalism with the return of protectionism, the rise of socialism, militarism, and the political class or what he called "le fontionnairisme" (rule by bureaucrats) and "le politicianisme" (rule by professional politicians), this very optimistic view about the shortness of the transition period to a "régime of full competition" changed to one of increasing pessimism. I think he still was convinced that one day complete and full competition would exist for all government services, including the production and consumption of security, but it would might take several decades for the right political and ideological circumstances to appear before this was possible.

Analysis of S11↩

In S11 Molinari repeats the three conditions he thinks would be needed to create a market for security services as he did in the PoS article, with a couple of significant changes to the wording. He replaces the word "le producteur" (the producer of security) in the singular, with "les compagnies d'assurances" (insurance companies) in the plural (thus suggesting more clearly that they would be competing against each other for business), and "les consommateurs" (consumers) with "les assurés" (the insured). The word "prime" (premium) remained the same in both cases.

1° Que les compagnies d’assurances établissent certaines peines contre les offenseurs des personnes et des propriétés, et que les assurés consentissent à se soumettre à ces peines, dans le cas où ils commettraient eux-mêmes des sévices contre les personnes et les propriétés.	1. For the insurance companies to establish certain penalties for offenders against persons and property, and for those insured to accept these penalties, in the event of their committing offences against persons and property.
2° Qu’elles imposassent aux assurés certaines gênes ayant pour objet de faciliter la découverte des auteurs de délits.	2. For the companies to impose on the insured certain restrictions intended to facilitate the detection of those responsible for offences.
3° Qu’elles perçussent régulièrement pour couvrir leurs frais une certaine prime, variable selon la situation des assurés, leurs occupations particulières, l’étendue, la nature et la valeur des propriétés à protéger.	3. For the companies, on a regular basis, in order to cover their costs, to levy a certain premium, varying with the situation of the insured and their individual occupations, and the size, nature and value of the properties to be protected.

In spite of his demurral to be too specific, Molinari does offer some "conjectures" about how "des entreprises de gouvernement" (enterprises which offer the services of government, or governmental services) might emerge and asks the reader to "Poursuivez cette hypothèse dans tous ses détails" (pursue this hypothesis in all its details). Like any other company which produces expensive goods on a large scale, such as the building of roads or docks, there will be established "des vastes compagnies" (huge firms/companies) to produce security, which will raise capital and hire trained workers to carry out the tasks. These "ces compagnies d'assurances sur la propriété" (property insurance companies) will then go looking for clients. Since this industry will be free (i.e. have free entry) the number of firms in the security industry will be determined by the price of the services they provide (whether it is competitive or not), the number of clients they can attract, how efficiently they are run, and ultimately whether or not they are profitable.

Cette industrie étant libre on verrait se constituer autant de compagnies qu’il pourrait s’en former utilement . S’il y en avait trop peu, si, par conséquent, le prix de la sécurité était surélevé, on trouverait profit à en former de nouvelles; s’il y en avait trop, les compagnies surabondantes ne tarderaient pas à se dissoudre. Le prix de la sécurité serait, de la sorte, toujours ramené au niveau des frais de production.

This industry being free, we would see as many companies set up as could usefully be formed. If there were too few, if, consequently the price of security rose too high, people would find it profitable to set up new ones. If there were too many, the surplus ones would not take long to be dissolved. The price of security would in this way always be led back to the level of its costs of production.

Molinari also thought there would be economic incentives for firms to cooperate with each other in order to keep their costs down. The firms will cooperate with each by sharing facilities to seize criminals, they will concentrate in certain areas/districts (circonscriptions) in order to have their police force as near as possible to their own clients and offer reciprocal services to firms which are located elsewhere. Ultimately, their behaviour will be controlled by the threat of competition springing up if they do not offer a good service at a good price to their customers.

Elles s’entendraient comme s’entendent aujourd’hui les gouvernements monopoleurs et communistes, parce qu’elles auraient intérêt à s’entendre. Plus, en effet, elles se donneraient de facilités mutuelles pour saisir les voleurs et les assassins, et plus elles diminueraient leurs frais.	They would reach agreement as do monopoly or communist governments today, because they would have an interest in so doing. The more, in fact, they agreed to share facilities for the apprehension of thieves and murderers, the more they would reduce their costs.
Par la nature même de leur industrie, les compagnies d’assurances sur la propriété ne pourraient dépasser certaines circonscriptions: elles perdraient à entretenir une police dans les endroits où elles n’auraient qu’une faible clientèle. Dans leurs circonscriptions elles ne pourraient néanmoins opprimer ni exploiter leurs clients, sous peine de voir surgir instantanément des concurrences.	By the very nature of their industry, these property-insurance companies would not be able to venture outside certain prescribed limits: they would lose by maintaining police in places where they had very few clients. Within their district they would nevertheless not be able to oppress or exploit their clients, on pain of seeing competition spring up immediately.

There is also an interesting discussion of how they would handle the threat of a foreign invasion. Molinari's suggestion is that they would charge an additional premium (un supplément de prime) on their insured customers for the added risk which has appeared. Their customers would have the right to refuse payment if they thought the risk was low; or if they thought they could defend themselves better than the insurance company, or if they wished to move to some place safer and thus escape or avoid (échapper) their would be conquerors.

A final point which shows how deeply Molinari had thought about this issue was the discussion of war breaking out between competing security companies (a topic Robert Nozick seized upon in his critique of Rothbard's defence of AC in Anarchy, State, and Utopia (1974). [71] He thought it would only be possible, given the growing costs of waging a war in the industrial era, if the shareholders of the insurance company advanced more funds to the company to undertake the war. He was convinced they would not do this because of the high cost and the risks of retaliation and damages. The Economist (i.e. Molinari) concludes rather optimistically that "la guerre serait matériellement impossible sous ce régime, car aucune guerre ne se peut faire sans une avance de fonds." (war would be physically impossible under this system, for no war can be waged without an advance of funds.). Molinari at this time obviously had no idea how the public debt would make this kind of war funding possible later in the century by the centralized nation states such as the "Great Powers" of Europe. He didn't make this error again in his later writings in the 1890s and 1900s when this kind of open-ended funding of state activities worried him greatly. [72]

The Debate about the Production of Security in the SEP (Oct. 1849)↩

Molinari caused a furore in the Political Economy Society when he published "The Production of Security" and Les Soirées . In the February article the editor of the JDE Joseph Garnier took the very unusual step of publishing a warning to readers about Molinari's radicalism in a footnote. This was a harbinger of what was to come when the Political Economy Society discussed Les Soirées at its October meeting. [73]

Bien que cet article puisse paraître empreint d’utopie dans ses conclusions, nous croyons, néanmoins, devoir le publier pour attirer l’attention des économistes et des publicistes sur une question qui n’a encore été traitée que d’une manière accidentelle et qui doit, néanmoins, à l’époque où nous sommes, être abordée avec plus de précision. Tant de gens exagèrent la nature et les attributions du gouvernement, qu’il est devenu utile de formuler strictement la circonscription hors de laquelle l’intervention de l’autorité cesse d’être tutélaire et profitable pour devenir anarchique et tyrannique. (Note du rédacteur en chef.)

Although this article may bear the imprint of being utopian in its conclusions, we nevertheless believe that we ought to publish it in order to draw the attention of economists and journalists to a question which has hitherto been treated only in passing and which should, nevertheless, in our present time, be approached with greater precision. So many people exaggerate the nature and functions of government that it has become useful to define exactly the boundaries outside of which the intervention of authority ceases to be protective and profitable and becomes anarchical and tyrannical. .

In spite of, or perhaps because of, the opposition it provoked, Guillaumin republished it as a standalone 16 page pamphlet which would have given it wider circulation, so he must have some supporters within the group of economists. [74] At their regular monthly meeting on October 10 the members of the Political Economy Society debated Molinari's ideas about competitive governments which he had set forth in these publications. [75] Present at the discussion were Horace Say (chairman), 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). Molinari was notable for his absence, which is probably understandable. The reaction to Molinari's ideas was universally hostile with Dunoyer arguing that Molinari "s'est laissé égarer par des illusions de logique" (has allowed himself to be carried away by delusions of logic).

Coquelin, who was to write a very critical review of Les Soirées in the JDE the following month, led off the discussion with the observation that in the absence of a "supreme authority" such as the state, justice would have no sanction and thus the beneficial effects of competition could not be felt throughout the economy. In other words "Au-dessous de l'Etat, la concurrence est possible et féconde; au-dessus, elle est impossible à appliquer et même à concevoir" (beneath/below the state competition is possible and productive; above the state it is impossible to be put into practice and even to conceive). Bastiat followed Coquelin with a statement about his own views for a state which was strictly limited to guaranteeing justice and security. Since this required force to accomplish and since force could only be the attribute of a supreme power, he could not understand how a society could function if supreme power was split among numerous groups which were all equal to each other. Furthermore, given the current dangerous political climate where socialist ideas were rampant Bastiat was concerned that to argue that the state should only have one function, namely to guarantee security, might provide the socialists with "a useful and effective" piece of propaganda in the current circumstances. Dunoyer wrapped up the discussion on the function of the state by observing that to allow competition between private companies providing government services would lead to "des luttes violentes" (violent battles). He concluded that therefore it would be better to leave the exercise of force where history had placed it, namely in the hands of the state. There was, he argued, already "véritable concurrence" (genuine competition) in politics in the form of the jostling for power by groups or parties who sought control of the government by offering their services to voters who exercised "real choice" (qui choisit bien réellement) every time they voted.

The consensus view was summed up by Coquelin in his review of Les Soirées the following month in the JDE whereCoquelin objected to the fact that Molinari put into the mouth of "the Economist" views about the private provision of security which no other economist held. [76] This is certainly true and it probably embarrassed the other political economists. The result was that none of his friends or colleagues took up any of his ideas, leaving Molinari as the sole advocate of these ideas for the rest of the century.

The economists though were forced by Molinari's challenge to the orthodox view of the functions of the state to think about this question in a more formal way, which they did in a series of articles which appeared shortly afterwards: the 3rd version of Bastiat's essay on "L'État" which appeared as a pamphlet in 1849 and which Coquelin slightly edited for the entry in the DEP on the state; [77] a lengthy essay by Ambroise Clément in the February 1850 issue of the JDE ; [78] and most importantly a series of article by the President of the PES Charles Dunoyer over the course of the following few years. [79]

The Economics of Security and the Role of Government in his articles in the Dictionnaire de l'économie politique (1852-53)↩

Introduction↩

As part of the Guillaumin firm's anti-socialist campaign during 1848-49 it published a series of both popular and more academic works pointing out the theoretical and moral problems of the policies being advocated by various groups who were contending for power in the Second Republic. Bastiat wrote a series of 12 important anti-socialist pamphlets which were heavily promoted by Guillaumin; [80] Molinari wrote his "conversations" between a Socialist, a Conservative, and an Economist in the book Les Soirées (1849); and the firm under Charles Coquelin's editorial control undertook a massive publishing project in the form of a dictionary or encyclopedia of political economy. [81] This was being planned in 1849 when Molinari wrote Les Soirées and he was asked to write a total of 29 articles for it as well as act as a kind of junior assistant editor to the project. [82] Not surprisingly there was some overlap between what he said in his book and the articles which wrote for the DEP .

However, it is a little surprising that he made no reference to the PoS in any of his articles in the DEP so soon after 1849 when these radical ideas would still be fresh and important to him. Perhaps he felt unable to express his true thoughts because he was part of a team writing a reference work for a broader audience under someone else's editorial control. He had been criticised by Coquelin (the first editor of the DEP ) in his review of S in JDE for speaking on behalf of "all economists" even though he alone opposed eminent domain laws and supported the private PoS.

The closest he came to referring to PoS was in three articles on "Nations" (Nations), "Paix -Guerre" (War - Peace), and "Villes" (Towns) where he talked about the proper size of governments, the benefits of having more and smaller nation states which competed against each other for inhabitants, the need to remove governments which had become "ulcerous," the need to overcome "the spirit of monopoly" which infected all governments, the need to have within the nation as well, small and smaller jurisdictions like municipalities which also competed against each other for inhabitants by offering lower taxes and better services than their neighbors, and the ultimate threat to government monopoly which was the "right to exit" and leave a highly taxed town in order to build a new lower cost one somewhere else. Only if the reader knew of his real views and the specific vocabulary he used to describe them might one be able to read into his articles a more radical interpretation.

Taken as a whole, the 25 major articles he wrote for the DEP are a fascinating collection of examples where the young economist applied economic reasoning and analysis to a large range of topics which did not normally receive this kind of attention. In addition to his regular fare of writing on the grain trade, free trade, protection, and customs duties he also wrote original and insightful articles on such unusual and diverse topics such as the economics of fashion, fine art, public monuments, the growth of cities and towns, the class analysis of slavery, serfdom, and the nobility, the economics of theatres, and travel. [83]

Nations↩

The first article to note is that on "Nations." [84] Molinari had briefly discussed nationalism at the end of S11 where he had criticized the common practice of states to acquire or dispose of new territory with little regard to the nationality of the populations involved. He called this practice "ce morcellement barbare et cet antagonisme factice imposés à un même peuple" (this barbarous fragmentation and artificial antagonism imposed on a single people) and predicted that with the privatisation of security and the radical reduction in the size and power of states there would be much greater opportunities for people with a common language or national identity to get into contact with each other. He returned to this topic in the article "Nations" were he reiterated his argument that "le morcellement" (the fragmentation) or the "le fractionnement" (the breaking up) of societies into much smaller autonomous units based upon nationality, language, or shared economic interests would aid in reducing the size and power of states and would introduce a very useful element of competition between these small states to attract more people with offers of lower taxes and better public services. He concluded that:

En résumé, l’économie politique reconnaît que le fractionnement de l’humanité en nations a son utilité, sa raison d’être; elle reconnaît qu’aucune nation, à moins de la supposer composée d’anges, ne saurait se passer de gouvernement; mais, en même temps, elle démontre que les nations ont intérêt à baser leur politique extérieure sur la paix et leur politique intérieure sur l’économie ; elle démontre que les nations ont intérêt à entretenir les unes avec les autres des relations libres et amicales, comme à se laisser gouverner aussi peu que possible.

To sum up, political economy recognizes that the fragmentation of humanity into nations has its utility and its raison d’être ; it recognizes that no nation, unless it be composed of angels, would be able to do without government; but, at the same time, it demonstrates that nations have an interest in establishing their foreign policy upon peace, and their domestic policy upon economy; it demonstrates that nations have an interest in maintaining free and friendly relations with one another, and to be governed as little as possible.

When it came to the question of the proper functions of government in any given nation Molinari seems to toe a rather precarious line in the way he presented his argument. On the one hand, he asserts that even though it criticizes government intervention in the economy "Political economy is not therefore an-archic " and admits that "governments play a necessary part in society, and it is precisely because they appreciate all the importance of this part, that they consider that governments should be occupied with nothing else." Yet on the other hand, he quotes Jean-Baptiste Say, who was perhaps the next most "anarchistic" political economist after Molinari, [85] who thought governments were "a veritable ulcer" which should be cut out by economists using "the coolness of a surgeon who removes a cancer." [86] He also inserts the sly comment that "the same practices of scrupulous economy, which are the rule in private industry, should be the rule also in the government of nations" (les mêmes pratiques de scrupuleuse économie dont l'application est de règle dans l'industrie privée doivent être appliquées aussi au gouvernement des nations), which attentive readers would have recalled also included one of his unbreakable natural laws of economics, that of the need for free and open competition even for government services.

Peace - War↩

We can find another two-edged sword in his article on "Peace - War" where he blames much of the conflict between nations on "l'esprit de monopole" (the spirit of monopoly) whether in political, religious, or economic matters. [87] When one recalls his criticism of "monopoly governments" for exercising a monopoly amongst many other things in the provision of security, and his desire to see the introduction of "la liberté de gouvernement" (which was one of his code words for AC), then the following passage might also be seen to have a double meaning:

Le même esprit de monopole se retrouve au fond de toutes les guerres politiques et civiles. Comme dans les cas précédents, il a encore pour infaillible antidote l’esprit de liberté. S’agit-il, par exemple, de contestations relatives à la possession d’un territoire ou d’une couronne? Laissez les hommes adopter librement le gouvernement qu’ils préfèrent, au lieu de disposer d’eux sans les consulter, comme s’il s’agissait de vils troupeaux, et la principale cause des guerres politiques cessera d’exister. De même, qu’au sein des États la liberté devienne de plus en plus la base des institutions politiques, religieuses et économiques, et les occasions de conflits intérieurs disparaîtront peu à peu. La liberté amènera la paix entre les partis comme entre les nations.

The same spirit of monopoly is found at the bottom of all the political and civil wars. As in the preceding cases, the infallible cure/antidote is the spirit of liberty. If it is a matter, for example, of disputes over the possession of territory or a crown, (then) leave people free to adopt the government which they prefer instead of disposing of them without any consultation as if they were a worthless flock (of sheep). Thus, the principle cause of political wars would cease to exist. Furthermore, as liberty becomes more and more the foundation within states of their political, religious, and economic institutions the occasion for internal conflicts will gradually disappear. Liberty will lead to peace between the parties as it will between states.

Towns↩

A third example can be found in his article on "Towns" where he discusses the important part the provision of security for their inhabitants played in their growth and development during the middle ages. [88] Following the collapse of the Roman Empire and the external threat posed by barbarian invaders towns grew and prospered (or not) depending on the level of security the local lord could provide, firstly within the town itself, and then gradually spreading to the outer suburbs. Towns which provided good protection at a reasonable cost flourished and grew in size, while those who did not stagnated. Towns also competed with each other to attract productive citizens to their territory and made deals with local lords to regularize or even decrease the cost of security for their people. As he would later argue in more detail [89] he thought that these competing municipalities were much better able to provide these services at lower cost and at higher standards than remote and usually profligate central states ruled by rapacious aristocrats and monarchs, and as time progressed these services would be more and more provided by private groups, which meant that the central and municipal governments could be eventually "dispensed with."

Quant aux errements à suivre pour bien gouverner une ville, ils ne diffèrent pas de ceux qui doivent être suivis dans le gouvernement d’une nation. L’administration de la cité comme celle de la nation doit s’attribuer uniquement les fonctions qui, par leur nature, ne peuvent être abandonnées à la concurrence des particuliers. Or ces fonctions sont peu nombreuses, et elles le deviennent de moins en moins, à mesure que le progrès fait disparaître les obstacles qui empêchent ou qui entravent l’action de la concurrence. En effet, quel que soit le zèle et le dévouement d’une administration municipale, il n’est pas dans la nature des choses que les services qui se trouvent organisés en commun dans la cité valent ceux qui sont abandonnés aux particuliers. Sans doute le désir de mériter la considération publique doit pousser les administrateurs à bien faire; mais ce mobile égale-t-il jamais en puissance celui de l’intérêt qui sert de stimulant à l’industrie privée? On peut préférer l’intervention des municipalités à celle du gouvernement pour l’organisation de certains services, l’établissement et l’observation de certains règlements d’utilité publique, mais il est bon de se passer autant que possible de l’une et de l’autre.

As to the course to pursue in order to govern a city well, it does not differ from that which should be pursued in the government of a nation. A city administration, like a national one, should exercise only such functions which, by their nature, cannot be left to competition between private individuals. Now these functions are not numerous, and they become less and less so, as progress causes the obstacles to disappear which either prevent or obstruct the action of competition. In fact, whatever the zeal or the devotion of a municipal administration, it is not in the nature of things that the services which are organized in common in the city should be of as much importance as those which are left to private individuals. Doubtless the desire to merit public esteem should press the administrators to do well: but does this motive ever prove as powerful as the interest which stimulates private industry? We may prefer the intervention of municipalities to that of the government for the organization of certain services, and the establishment and maintenance of certain regulations of public utility; but it is well, as far as possible, to dispense with both.

One way they could be "dispensed with" was by people "voting with their feet" and relocating to other lower cost places or by building entirely new towns outside of expensive jurisdictions. This would become a topic of considerable interest to Molinari in his later works [90] when he discussed the right to secede and "property development companies" providing these services in late 19th century France. In this article he predicted that towns which exercised a kind of "natural monopoly" would gradually lose this as people became wealthy enough to build new towns and suburbs where the taxes were lower:

Ces circonstances réunies attribuaient aux villes existantes, considérées comme lieux d’habitation, un véritable monopole naturel . Mais, sous l’influence des progrès que nous avons déjà signalés, ce monopole s’efface de plus en plus, et il en résulte que les populations peuvent chaque jour plus aisément se soustraire au fardeau que leur impose une mauvaise administration. Elles ne manquent point de le faire, et on les voit abandonner les villes où la vie est trop chère, en commençant par les quartiers les moins favorablement situés, pour aller grossir les faubourgs ou créer plus loin de nouveaux centres d’activité et de richesse C’est ainsi qu’en puisant magnifiquement dans la bourse des contribuables et en tirant sans scrupule force lettres de change sur les générations à venir, les administrateurs prodigues, loin d’ajouter à la prospérité de leurs cités, finissent par les précipiter dans une inévitable décadence. L’économie dans les dépenses, voilà donc quelle doit être la règle suprême du gouvernement des villes, aussi bien que du gouvernement des nations.

Circumstances combined to give existing towns, considered as places of residence, a veritable natural monopoly . But, influenced by the progress already mentioned, this monopoly is disappearing more and more, and as a result, it daily becomes easier for the people to rid themselves of the burden which a bad administration imposes upon them. Nor do they neglect to do so; for we see them abandoning towns where the expenses of living is too great, (commencing in the quarters less favorably situated), and enlarging the faubourgs (suburbs)or creating, farther away, new centres of activity and wealth. Thus, by drawing largely on the wallets of tax payers and unscrupulously issuing any number of bills of credit on future generations, high spending city administrators, far from adding to the prosperity of their cities, end by precipitating them into inevitable ruin. Economy in expenditure should be the supreme rule in the government of cities, as well as in the government of nations.

Conclusion↩

At the end of 1852 Molinari moved from Paris to take up a teaching position in Brussels. Part of his motivation was also to get away from what he thought was the increasingly authoritarian and interventionist rule of the soon to be proclaimed "Emperor" Napoleon III. In the final chapter of the economic treatise Cours d'économie politique (1855) which would emerge from his lectures he would return to the issue of "the production of security" in a lengthy chapter on the general problem of "public consumption."

The Cours d'économie politique (1855, 1863), "Les consommations publiques" (Public Consumption) (to expand??)↩

Introduction↩

This two volume work on economic theory was published six years after his article on PoS and S11 were published so it is is part of the early, most radical phase in Molinari's ACT. He had begun giving lectures at the private Athénée royal in Paris in 1847 (as Bastiat had also done which resulted in his treatise Economic Harmonies (1850, 1851)) [91] but these were interrupted by the outbreak of revolution in February 1848 and he turned to other more pressing matters - he worked almost full-time on writing articles for the JDE covering the events of the revolution and then between 1849 and 1852 he worked on the massive DEP project under Charles Coquelin, for which he became virtually the assistant editor. With the rise to power of President Louis Napoléon after the elections of December 1848 and his gradual shift to more authoritarian government, Molinari decided to leave Paris and move back to his native Belgium at the end of 1852 where he thought the political climate was more liberal and where he was able to get a teaching position at the Musée belge de l'industrie . [92] It was here that he was able to continue working on his lectures and eventually turn them into the book Cours d'économie politique (1st ed. 1855, 2nd. revised ed. 1863).

The 40 page chapter in volume 2 of the Cours (1855, 1863), the Twelfth Lesson on "Les consommations publiques" (Public Consumption) and the final 63 page chapter of his later book L'Évolution politique (1884), Chap. X on "Les gouvernements de l'avenir" (The Governments of the Future) provide the most extensive discussion of the production of security and the proper role of the state in Molinari's writings.

His Radical Terminology

The most detailed discussion of his ideas about the proper functions of government can be found in the final chapter of the second volume, "Les consommations publiques" (public consumption), [93] but throughout the book we can find the telltale vocabulary and rhetorical tropes of his ACT, such as "la production de la sécurité" (the production of security (p. 503).), producers and consumers of security, insurance companies and premiums, political competition (in the favorable ACT sense), "un régime de pleine concurrence" (a regime of full/complete competition (p. 503)), and the most important one "la liberté de gouvernement" (the freedom of government, or free government, or competing government). [94]

We also have the rhetorical tropes of the "simple hypothesis" of the monopolist grocer (p. 512-13), direct references to his earlier radical work (the PoS article and S11 (p. 532)), and a quotation from Adam Smith on his optimism about ending economic monopolies and protectionism in a hundred years, but not, interestingly, his quote about "the fees of court" (p. 533). [95]

We should note one important change in the terminology he uses. Here he dropped the phrase "communist government" which he used in the the PoS article and S11 and now refers to "un gouvernement de monopole" (monopoly government). In fact, he dropped all reference to "communist" (except for one reference to Proudhon) and made very few to "communism" (which he now defined cleverly as "le monopole retourné" (a back to front monopoly, which impoverishes people instead of enriching them) (p. 444)). And he now contrasts this monopoly form of government with "la concurrence politique" (political competition (p. 532)) or "la liberté de la gouvernement" (competing gouvernement).

We should also note the range of derogatory names he calls the government which indicates his great hostility to it as an institution, the immorality of its conduct in violating individuals's rights to life, liberty, and property, and its economic inefficiency. He calls government "un monstrueux polype" (a monstrous polyp or growth (p. 443)), "un véritable monstre" (a veritable monster (p. 523)), "les ulcères des sociétés" (ulcers on society (p. 530)), a parasite (vol. 1, p. 187), "la pompe aspirante des impôts et des emprunts" (a suction pump to suck out taxes and loans from society (p. 531)), and perhaps most damning coming from an economist, that it was "anti-économique" (anti-economic (p. 513)) in its very nature.

What is New: An Overview of his Theory of Political and Economic Evolution

What is new in this work is a more extensive analysis of the "economics of government" as an institution. Some of the issues he addresses are the following:

1. that the very nature of "le monopole gouvernemental" (the monopoly of governing, or the governmental monopoly (p. 441)) spawns all the other kinds of monopoly (industrial, trading, educational, money, etc.) and if you want to get rid of these other monopolies you have to get rid of the orignal monopoly upon which all the others came from, as well.
2. that all government activities can and should be analyzed from an economic perspective (p. 515); he thought there was nothing special (or "sublime" as he put it) about government which exempted it from this kind of analysis
3. that governments and societies have evolved over time through three historical phases or periods of economic development, that of the era of community or the commune, the era of monopoly, and the era of competition, which dictated how a society's political and economic institutions were structured
4. in the communal phase there was a union or association of families for mutual protection and assistance
5. in the monopoly phase a powerful family or aristocracy seizes control of the state; increasing specialization and division of labour leads to the creation of privileged corporations or monopolies which control different industries; the government becomes a coalition or hierarchy of privileged corporations which rules by regulations and price controls
6. that both the "natural" and "artificial" monopolies which were either inevitable or useful in the early stages of economic development (given the small size of the market and limited external trading opportunities) were costly and inefficient (anti-économique) in the final stage and could and should be replaced by private and competitive organisations/businesses which became possible as the market grew in size and international trade expanded
7. that the end result of this economic and political evolution would be "un régime de pleine concurrence" (a regime where there would be full/complete competition) in which both economic and political sectors would be free, open, competitive, cheap, peaceful, productive
8. the conditions for the realization of this third and final stage of full competition were that the market and trade had increased dramatically (both domestically and internationally), that there was growing competition in the production of more and more goods and services, and that the threat of war (and the need for expensive standing armies) had been diminished by international treaties and arbitration
9. that there is a close relationship between the government and the broader economic and social framework in which it operated; that when the economic activities and relationships in the broader society changed this immediately puts pressure on the government to change likewise, if not, there develops "la discordance" or (discordance or disharmony (p. 484)) and tension between the two sectors which needs to be resolved
10. that European societies in the mid-19th century were going through the transition from the era of monopoly (for both governments and the economy (or "industry")) to the era of competition, with industry having made considerable progress in this direction (with the abolition of the English Corn Laws in 1846 and the Anglo-French Free Trade Treaty of 1860) but not so with government which still remained firmly in the era of monopoly (where the provision of many goods and services remained highly regulated or a government monopoly); this disparity caused a certain tension or "la discordance" (disharmony) [96] between the two sectors as the "anti-economic nature" of the more backward institution (government) became a drain on the further growth of the economy and the broader society;
11. this disharmony could only be resolved when "l'Unité économique" (economic unity or parity) had been reached when both political and economic sectors were either both monopolistic or both competitive
12. this could be achieved if both sectors either went back to the previous method of organisation (such as monopoly in both economics and politics) or moved forward to the next stage of competition in both economics and politics
13. Molinari's ideal was a political sector which had reached "parity" with the more advanced economic sector which surrounded it, when "un gouvernement de monopole" (monopoly government) was transformed into "la concurrence politique" (political competition) or "la liberté de la gouvernement" (competing gouvernement)
14. that in violating several fundamental "natural laws of economics" (especially the law of competition) governments become increasingly "anti-economic" in their behavior and operation; this leads to them becoming a drain on society's resources which means that governments increasingly become parasitical, "ulcerous," and "monstrous."
15. that the solution to "the problem of government" [97] and its economic cost and inefficiency was to force it to become "economic" by exposing it to the force of competition for the production of all its services (including security); if this proved to be too difficult consumers had other options which they could pursue in the meantime, such as secession (elsewhere he talks about competition between local government jurisdictions (communes) and the building of private fully autonomous communities (towns and cities)). [98]

The Production of Security↩

Introduction

His discussion of the production of security begins with the observation that the need to protect oneself from harm (les nuisances) gives rise to a special form of insurance known as the "production of security," the purpose of which is to eliminate or control these sources of harm (la destruction ou la police des nuisances). [99] Government's most basic function is to act as an insurance company to protect individuals against the harms and risks they face which they should do by charging a premium to cover these risks. Unfortunately, governments historically have "bundled" the payment of the premium with other, usually unnecessary, taxes, thus hiding it from the plain view of consumers, and they have attempted more to reduce risk (at least for some but not all "consumers") and have not provided the other essential function of an insurance company, which is to spread the risk among the policy holders and to reimburse the policy holder for their losses. [100]

Les assurances considérées par rapport au crédit ont pour effet de diviser les risques et, par conséquent, de diminuer la prime nécessaire pour les couvrir. Elles peuvent s’appliquer à toutes les causes de destruction ou de perte qui menacent les capitaux engagés dans les entreprises; que ces causes de destruction ou de perte, manifestées par des risques, soient générales ou spéciales . Ainsi toutes les entreprises sont soumises à des risques de destruction, de pillage, de vol ou de dépossession, provenant de la violence ou de la fraude, et les gouvernements ne sont autre chose que des mutualités établies pour combattre ces risques généraux. L’impôt, sous quelque forme qu’il soit perçu, n’est donc, au moins pour une bonne part, qu’une prime d’assurance. Seulement, cette espèce d’assurance diminue les risques, plutôt qu’elle ne les divise. En établissant, par exemple, une bonne police, un gouvernement abaisse le niveau des risques d’assassinat, de pillage et de vol, mais sans diviser ceux qui subsistent, en ce sens qu’il ne rembourse pas les dommages causés par l’échéance de ces risques. Les assurances proprement dites ont, au contraire, pour objet de diviser les risques, sans les diminuer au moins d’une manière directe. Telles sont les assurances contre les risques de mer, naufrages, avaries, etc., les assurances contre l’incendie, contre la grèle et les autres intempéries, contre les épizooties, contre les causes de mortalité ou d’accidents qui menacent l’espèce humaine.

Insurance considered in relationship to credit has the effect of sharing (diviser) the risks and, as a result, reducing the premium necessary to cover them. They can be applied to all the causes of destruction or loss which threaten capital used in (business) enterprises, whether these causes of destruction or loss caused by exposure to these risks are general or specific . Thus all enterprises are subject to the risk of destruction, pillage, theft or dispossession as a result of violence or fraud, and governments are nothing other than insurance associations (des mutualités) established to combat these general risks. Taxes, in whatever form they may be levied, are only, at least in a good part, an insurance premium (une prime d’assurance). Only this kind of insurance reduces the risks rather than sharing them. For example, by creating a good police (force) a government lowers the level of risk of being murdered, pillaged, or robbed, but without sharing/splitting/spreading (the risks) which remain, in the sense that it does not reimburse the damages caused by the action (échéance) of these risks. Insurance properly understood has, on the contrary, the goal of sharing/spreading the risk without reducing them at least in a direct way. This (sharing the risk) happens with insurance against shipping accidents, shipwreck, spoilage; insurance against fire, hail, and other bad weather; against disease, the causes of death or accidents which threaten the human race.

The production of security is the essential function of governments by providing laws courts and police for internal security, and an army for eternal security. However, in contrast to this purely protective function, the army can also be used to benefit "la classe gouvernement" by conquering other countries and bringing more land and taxpayers under their control. Thus, in addition to there being an "l'industrie de la sécurité" (industry producing security) there also grows up in parallel "l'industrie de la spoliation" (industry for plundering). (See below for a discussion of this other kind of industry.) [101]

Produire de la sécurité, telle est en résumé la fonction essentielle des gouvernements. Dans ce but, ils établissent et ils entretiennent, d’une part, des tribunaux et une police, d’une autre part, une armée. Les tribunaux et la police ont pour mission de faire régner la sécurité à l’intérieur, en préservant les différents membres de la communauté, de l’assassinat, du vol et, en général, de toute atteinte contre leurs personnes et leurs propriétés. L’armée a pour mission de défendre la communauté contre les agressions ou les prétentions abusives des autres communautés comme aussi d’étendre au besoin la clientèle de la classe gouvernante par voie de conquête.

To produce security, this is in sum, the essential function of governments. Towards this end, they establish and the they undertake, on the one hand courts and police, and on the other hand an army. Courts and the police have as their mission to establish internal security, by protecting the different members of society from murder, theft, and in general any attack against the person and their property. The army has as its mission to defend the community against the aggression or improper claims of other communities as well as to extend if needed the clientele of the ruling class by means of conquest.

Molinari notes that the economic costs and benefits of security can be provided badly or well. When the security of person and property is well provided the cost of capital is kept low and the profits of economic activity can be enjoyed without the considerable threat of being destroyed or stolen. He gives the examples of the relatively successful and prosperous countries of Holland, England, Switzerland where this is the case. He contrasts this with the increased risk to capital when governments do not provide security adequately. [102]

He also restates an observation which he first made in his entry on "Nations" in the DEP [103] where he discusses how increased security in and around towns attracted citizens from neighboring districts and increased the value of the surrounding land which benefited more and more people. [104]

Actual Insurance Companies or "like" Insurance Companies?

A significant difference in the Cours is that he no longer talks explicitly about private insurance companies run by entrepreneurs providing security services to their premium paying customers as an immediate possibility. He now couches the argument in more general terms, in much the same way as he did in his 1846 article on "Electoral Reform," that governments are "like" an insurance company which insures against risk, that this is how they have evolved "naturally" over time, but with the proviso that soon, in the coming "un régime de pleine concurrence" (regime of full competition), all governments will be exposed to competition in the provision of these services and be reduced to acting like, and possibly actually being, private insurance companies, which he will explain in more detail in later works such as L'Évolution politique (1884) and Les Lois naturelles (1887).

He also begins to take more heed of the notion that there are some goods and services which are "naturally collective" which need to be supplied on a different basis to those goods and services which are "naturally individualistic." This becomes more noticeable in some of his later writings (such as La Société future (1899)), although it is not always clear to what extent these "naturally collective" goods have to supplied by a government monopoly, by the government outsourcing this to private suppliers by means of competitive bids, or through voluntary but still "communal"means such as private "property development companies."

The Production of Security in the era of monopoly

During the "era of monopoly" although the government provided some essential security functions it increasingly fails to do this for a number of reasons. Part of the reason, is that it cannot keep up with the changes which are taking place in the more progressive parts of the economy as trade and the division of labour continue to increase output, prosperity, and the complexities of the trading relationships which spring up. Another problem arises when powerful groups seize control of the state and use it for their own benefit. In the era of monopoly it its common for a powerful family or aristocracy to seize control of the state and for the increasing specialization and the division of labour to lead to the creation of privileged corporations or monopolies which control different industries. The government then becomes a coalition or hierarchy of privileged corporations which rules by regulations and price controls: [105]

Le gouvernement apparaît comme une corporation ou une réunion de corporations superposées à celles qui ont monopolisé les autres branches de travail. Ces corporations gouvernantes non seulement repoussent la concurrence des intrus qui essayent d’entrer en partage avec elles, mais encore elles repoussent, autant qu’elles le peuvent toute tentative de limitation de leur monopole par voie de réglementation et de maximum .

Government looks like a corporation or a union of corporations superimposed upon those which have monopolized the other branches of labour. These governing/ruling corporations not only repel the competition of the intruders/interlopers who try to enter (the market) and share it with them, but in addition they repel as much as they can any/all attempts to limit the monopoly by means of regulations and price controls (maximum).

Like every other industry, "l'industrie du gouvernement" (the industry of government or governing) will undergo increasing specialization and division of labour as economies develop and expand. It is unable to do this properly if it remains stuck with the practices it acquired in the era of monopoly: [106]

Enfin, dans l’industrie qui pourvoit à la sécurité publique, dans l’industrie du gouvernement, les forces productives se trouvent ordinairement rassemblées par masses considérables et les travaux divisés à l’infini. Il y a des administrateurs, des juges, des agents de police, des soldats, qui contribuent, chacun dans la mesure de ses aptitudes et de ses forces, à la production de la sécurité.

Finally, in the industry which provides public security, in the industry of government/governing, the productive forces are usually found gathered together in considerable quantity and labour is divided to an (almost) infinite extent. There are administrators, judges, policemen, and soldiers who contribute, each according to their aptitude and their strength, to the production of security.

In the communal and monopolistic phase of economic development some industries will be expanded beyond the needs of consumers in order to suit the needs of the monopolist producers and will thus become "parasitic" on other productive activities in that society. Such is the case with the production of security which has many "anti-economic" aspects to it. Yet he believes those who work in the security industry can be as productive as other members of the "liberal professions" who also provide services to their customers , as Destutt de Tracy and J.B. Say argued as well (see above): [107]

Le même résultat se produit chaque fois que l’on augmente une industrie au delà de la proportion requise par les besoins de la consommation. La production de la sécurité est l’une de celles où l’on peut observer, le plus fréquemment, ce développement parasite, où il présente, en même temps, le caractère le plus anti-économique. C’est là probablement ce qui a porté un grand nombre d’économistes à considérer les travailleurs employés dans cette branche d’industrie comme des improductifs . Sans doute, ils ne le sont que trop souvent, car partout aujourd’hui l’effectif militaire dépasse la proportion utile; mais quand cette proportion est observée, le soldat, qui sert à garantir aux autres producteurs la sécurité dont ils ont besoin, contribue, autant qu’eux-mêmes, quoique peut-être d’une manière moins immédiate et moins visible, au développement de la richesse.

The same result is produced each time one increases (the size) of an industry beyond the amount required by the needs of consumption. The production of security is one of those where one can observe most frequently this parasitical development, and where it is shown at the same time the most anti-economic character (of the government). It is this which has probably led a large number of economists to regard workers employed in this branch of industry as “unproductive.” Doubtless, they are unproductive all too often, because everywhere today the size of the military surpasses the amount the is useful; but when this amount is met, the soldier who serves to guarantee the security of the producers who need it, he contributes as much as the others to the development/creation of wealth, although perhaps in a manner which is less immediate and less visible.

Unfortunately, the governments in his day were in no position to satisfy these new, expanded, and more sophisticated needs for personal security and the protection of contracts and property rights for a number of reasons. [108]

1. they continue to be controlled by powerful vested interests who used them to further their own personal and class interests at the expense of other consumers of security
2. they ignored the effect of powerful "natural laws of political economy" and so were in essence "anti-economical" in they they were organized and functioned (see below for further details)
3. they violated "les lois de l'unité des opérations et de la division du travail" by undertaking too much to do any one thing efficiently:

Au point de vue des lois de l’unité des opérations et de la division du travail, un gouvernement qui entreprend la production de la sécurité et de l’enseignement, le transport des lettres et des dépêches télégraphiques, la construction et l’exploitation des chemins de fer, la fabrication des monnaies, etc., n’est-il pas un véritable monstre ?”

From the point of view of the laws of the unity of operations and the law of the division of labour, a government which undertook the production of security and education, the delivery of letters and telegraph messages, the construction and administration of railways, the coing of money, etc. wasn’t it a veritable monster ?

1. they didn't know how to measure the true demand for protection since they did not operate in a market for security; elsewhere he talked abut the inadequate amount of policing; [109] here he talks about "too much" being produced, especially of "military services," which then became "parasitical" on other more productive economic activities.

As societies gradually moved from the era of monopoly into the era of competition these defects in the government's production of security should lessen as it becomes exposed to economic forces such as competition and the need for greater specialization as the economic system becomes more sophisticated. When society finally enters "un régime de pleine concurrence" (a regime of full or complete competition) and "la monopole gouvernementale" (the monopoly of governing) comes to an end these defects, he believed, should completely disappear.

The Economic Analysis of Government↩

Introduction

One of the most interesting aspects of Molinari's economic and political theory is the way in which he applied economic analysis to institutions and behavior which most other economists had not. We see the beginning of this in his book Les Soirées where he applied economic analysis to show how every so-called "public good" could be better provided on the free market by private "entrepreneurs" seeking profit opportunities by satisfying the needs of customers. He did something very similar in the articles he wrote for the DEP where he provided economic analysis of things like fine arts, theaters, emigration, fashion, public monuments, the growth of towns and cities, and travel. [110] In the long chapter on "Public Consumption" in the Cours Molinari applies and extends his economic analysis of government which he began in these earlier works in new and very interesting ways.

The important insight Molinari had, with interesting similarities to the Pubic Choice approach to understanding politics, was to treat the state in the same way he would treat a firm or a company, that the people who owned or ran the firm had goals which they wanted to achieve with limited resources, that they responded to changing relative costs and benefits, and that they had to adjust to technological and other systemic changes. The terminology Molinari used to describe the state is quite instructive. The following is a sample: "les entreprises gouvernementales" (government enterprises), "les entreprises politiques" (political enterprises), "l'industrie du gouvernement" (the industry of government), "une vaste entreprise, exerçant des industries et des fonctions multiples et disparates" (a vast enterprise which carried out multiple and various enterprises), and "ateliers de production de la sécurité" (workshops which produced security). He was even working on a public choice-like notion of "le marché politique" (the political marketplace) in which politicians bought and sold favours in order to get or to stay in power.

The difference between the state treated in this economic fashion and a true firm was that the state had access to coercive powers which were denied most firms, except for those "rent-seeking" firms which could get government privileges or monopolies of some kind. Nevertheless, Molinari thought it was very important to use economics to analyse the operation of the state, especially the "anti-économique" aspects of state activity which led to waste, corruption, and the poor provision of services like security. It was a mistake he thought to exempt the state from the economists' scrutiny: [111]

L’échec désastreux de toutes les tentatives qui ont été faites pour améliorer les services publics, tant sous le rapport de leur production que sous celui de leur distribution, sans avoir égard aux lois économiques qui président à la production et à la distribution des autres services, démontre suffisamment, croyons-nous, que l’on se trompait en plaçant ainsi les gouvernements dans une région inaccessible à l’économie politique. Science de l’utile, l’économie politique est seule compétente, au contraire, pour déterminer les conditions dans lesquelles doivent être établies toutes les entreprises, aussi bien celles que les gouvernements accaparent que celles qui sont abandońnées à l’activité privée.

The disastrous failure of all the attempts which have been made to improve public services, just as much with regard to their production as with their distribution, without having any consideration for the economic laws which govern the production and distribution of other services, clearly demonstrates in our view that one deceives oneself by putting governments beyond the reach of political economy. Political economy, as the science of what is useful, is alone competent to determine the conditions in which all enterprises ought to be established, just as much for those enterprises monopolized by the government, as those which are left to private activity.

Du moment où l’on restitue à l’économie politique cette partie essentielle de son domaine, sans se laisser arrêter davantage par un préjugé trop respéctueux pour des puissances que la crainte des uns, l’orgueil des autres, avaient divinisées, la solution du problème d’un gouvernement utile devient non seulement possible mais encore facile. Il suffit de rechercher, en premier lieu, si les entreprises gouvernementales sont constituées conformément aux lois économiques qui président à la constitution de toutes les autres entreprises, quelle que soit la nature particulière de chacune, en second lieu, comment, dans la négative, on peut les y conformer.

From the moment when this essential part of its domain has been restored to political economy, without allowing it (this process) to be halted by any prejudice which is too respectful towards the powers (of the state) which the fear of some and the pride of others have deified, the solution to the problem of a useful government becomes not only possible but even easy. In the first place, it is sufficient to discover if the government enterprises are constituted in conformity with the economic laws which govern all other enterprises, whatever the particular nature of each one may be, and in the second place, if this is not the case, how one could make them conform to them (economic laws).

What Molinari is doing here is similar to what James Buchanan and Gordon Tullock, and Douglas C. North did in the 1960s and 1970s with their theory of the economics of political decision-making and the history of the emergence of political institutions from an economic perspective, respectively. [112] Political and religious leaders as well as other producers and consumers make decisions based upon the economic and political options which are available to them, and these options are limited by things such as the extent of the division of labour, the depth and breath of the market, the productivity of economic activity at that time, and the amount of surplus they can extract from the workers and taxpayers. As these things change over time, especially as technological change introduces new possibilities for economic activity, institutions change in order to take advantage of them.

We can see an interesting precursor to this way of thinking in his 1852 DEP article on "Villes" (Towns) [113] in which Molinari discusses the evolution of towns as the security needs of the people living in them and the near vicinity change over time. When the threat of barbarian invasion was high, towns built expensive walls around their town, which was often located on a more defensible hill or other higher ground. People accepted the high cost of moving in and out of the protective town walls everyday since the threat of attack was high. Overtime the townspeople paid off the "roving bandits" to leave them alone and this turned into regular payments of feudal dues to the more powerful "bandits" who settled down among the people and became "stationary bandits" or feudal lords. Once greater security was established, people could move beyond the town walls to create the "faubourgs" (suburbs) where land was cheaper and where they could spread out.

All Governments must be subject to economic laws

His key insight was that he believes that the behavior and constitution of all governments can be explained and understood through economic analysis and, in another provocative step, argued that they should be subject to the same economic laws as every other industry.

He argues that the traditional view that government activity is somehow "above" economic analysis must be abandoned. There is nothing "sublime" (p. 515) about government which puts it outside or above other institutions. It too is subject to economic laws and we need an economic analysis of the way governments are formed, the way they function, and how they share features and problems with other "enterprises." He notes that the people who make the argument that governments are "above" the laws of economics are themselves usually part of the government (and its protected monopolies) and want it to remain outside of economic scrutiny for their benefit; these areas include the government provision of security, money, transport, religion, and education: [114]

En revanche, ces mêmes esprits qui appartenaient presque sans exception, notons-le bien, au personnel des anciennes corporations gouvernantes, étaient convaincus que les fonctions qui avaient jusqu’alors formé le domaine de ces corporations supérieures, la sécurité, le monnayage, les transports, le culte, l’enseignement, etc., devaient être nécessairement réservées, en vertu de leur nature propre, au gouvernement; à quoi ils ajoutaient que l’économie politique n’avait point à s’en occuper. Cela étant, il s’agissait de constituer le gouvernement, sans avoir égard aux données de la science économique, mais de manière cependant à ce qu’il pût remplir, aussi avantageusement que possible pour la société, les fonctions nombreuses et importantes qu’on lui attribuait.

On the other hand, these same people (esprits) who belong, let us note well, almost without exception to the personnel (employees) of these old government corporations, were convinced that the functions which had up until then formed the domain of these higher corporations, such as security, money, transport, religion, education, etc., ought to be necessarily reserved, by virtue of their very nature, to the government; to which they added that political economy had nothing to do with it. That being the case, it was a matter of establishing the government, without any regard to the facts of political economy, but in a way however in which it would be able to carry out, as advantageously as possible for society, the numerous important functions that were given to it.

In the era of monopoly all these protected "corporations" are fused into one giant "régie" (public company, body, organisation) of publicly run services, which he calls this "une lourde et monstrueuse machine" (a heavy and monstrous machine) and which is run by a staff of experts who make up "une classe gouvernante" (a governing/ruling class): [115]

La compétence de l’économie politique en matière de gouvernement étant ainsi récusée, on ne doit pas s’étonner, si, pour résoudre le problème de la constitution utile de la production des services publics, on prit d’abord la voie qui en éloignait le plus. Que fit-on en effet? On commença par fusionner tous les services qui formaient, sous l’ancien régime, le domaine de corporations séparées, service de la sécurité, service de l’enseignement et des cultes, service du monnayage, service des transports, etc., et l’on constitua ainsi une énorme “régie” des services publics; ensuite, on essaya de remettre cette régie aux mains d’une démocratie communautaire, dont les institutions étaient empruntées à celles de la phase embryonnaire de l’existence des sociétés. Mais s’il était possible, à la rigueur, — quoique ce fût visiblement une œuvre rétrograde, — de fusionner des services de nature diverse dans une régie unique, il était impossible de faire manœuvrer cette lourde et monstrueuse machine autrement que par un personnel spécial. En conséquence, on vit se reconstituer une classe gouvernante dans laquelle l’ancien personnel gouvernemental se fondit avec l’élément nouveau que la révolution avait fait surgir.

Since the competence of political economy (to judge) in the matter of government has been ejected one shouldn’t be surprised if, in order to resolve the problem of the (most) useful structure for the production of public services, if first up the path which has been put off the longest is the one taken. Indeed, what would one do? They begin by “fusing together” (fusionner) all the services which comprised under the ancien regime the domain of the separate corporations, such as the security service, the education and religion service, the money service, the transport service, etc. and so one builds an enormous “administration” (régie) of public services; then one would try to return this administration into the hands of a communitarian democracy (une démocratie communautaire), whose institutions had been borrowed from those of the first embryonic phase of the existence of societies. But if it were possible, at a push - although this would be quite clearly/obviously a retrograde step, - to fuse all these services, which by their nature are divers/different, into a single administration, it would be impossible get this heavy and monstrous machine managed/run other than by specialized personnel. As a result one would see the reconstruction of a governing/ruling class in which the ancient/old government personnel gets fused with the new element which the revolution has pushed forward.

Individually these old corporations of the old regime would have been gradually forced by growing competition to open up to the market, but by forming this "une corporation colossale" (colossal corporation) they have bene able to fend this off for the time being. In reaction to this, historically consumers have sought to regulate and mitigate this giant monopoly by means of a constitution and government regulation and price controls. This has been what has happened since the French revolution.

Since this new system does not work well there is a demand to incorporate all of society into the government in order to regulate it "englober la société dans le gouvernement" (to incorporate (all of) society into the government), as the socialists wanted to do. But this is the exact opposite of what must be done to fix the problem. The people must recognize the power of economic laws and expose all government activities to these laws. Public services cannot be reformed/improved either in their production or distribution, but must be opened up to private activity: [116]

Ces utopies et bien d’autres ont leur source dans l’erreur que nous avons signalée plus haut, savoir que la constitution des gouvernements n’est point, comme celle des autres entreprises, du ressort de l’économie politique, d’où il résulte que la solution du problème d’un bon gouvernement doit être cherchée ailleurs. L’échec désastreux de toutes les tentatives qui ont été faites pour améliorer les services publics, tant sous le rapport de leur production que sous celui de leur distribution, sans avoir égard aux lois économiques qui président à la production et à la distribution des autres services, démontre suffisamment, croyons-nous, que l’on se trompait en plaçant ainsi les gouvernements dans une région inaccessible à l’économie politique. Science de l’utile, l’économie politique est seule compétente, au contraire, pour déterminer les conditions dans lesquelles doivent être établies toutes les entreprises, aussi bien celles que les gouvernements accaparent que celles qui sont abandonnées à l’activité privée.

These and even other utopias have the origin in the error which we have mentioned above, namely that the nature of governments is not at all, like other enterprises, the responsibility of political economy, from which it results that the solution to the problem of good government has to be found elsewhere. The disastrous failure of the attempts which have been made to improve public services, as much in regard to their production as with their distribution, without any regard to the economic laws which govern production and distribution of other services, sufficiently shows we believe, that one deceives oneself by sop placing governments in a place/region which is inaccessible to political economy. On the contrary, as/being a useful science, political economy alone is competent to determine the conditions under which all enterprises ought to be established, as well as those that governments have monopolized and those which have been left for private enterprise (l’activité privée).

The "Anti-Economic" Nature of Government

One of the most interesting sections of this chapter is his long discussion of what he called the "anti-économique" nature of all government activity, which he believed violated (or "sinned against," in rather Catholic terminology) economic principles/laws. He listed four such economic laws which governed both the production and distribution of goods and services, the violation of which would inevitably make government provided services inefficient, more expensive, and unresponsive to consumer needs. They were "contre les lois de l'unité des opérations et de la division du travail, des limites naturelles, de la concurrence, de la spécialité et de la liberté des échanges" (against the laws of the unity of operations and the division of labour, of the natural limits (to their size), of competition, and of principles of specialization and free trade). Given all these reasons for the "uneconomic" (or anti-economic) nature of governments they were, to borrow an expression from Jean-Baptiste Say, "les ulcères des sociétés" (ulcers on society).

For example, government monopolies tended to overproduce goods or services beyond the needs of the consumers (what he called "ce développement parasite" (this parasitical development)) because, in the absence of prices and freely negotiated contracts, the government monopoly did not know how much production is optimal. Molinari thought that defence was an excellent example of this tendency to overproduce a good or service: [117]

La production de la sécurité est l’une de celles où l’on peut observer, le plus fréquemment, ce développement parasite, où il présente, en même temps, le caractère le plus anti-économique.

The production of security is the example of this parasitical development which is most frequently observed, and where at the same time it demonstrates the most anti-economic character.

Another reason was that government had become too big and complex and had become "un véritable monstre" (a veritable monster) which was active in too many fields to be expert in all of them. This also suggests he had an inkling of Hayek's problem of knowledge [118] which was faced by monopolists and central planners in the absence of adequate information provided to planners by the wishes of consumers and suppliers by means of price signals. Molinari thought that running a very large government supplier of any good or service was like chasing too many hares at once ("chasser plusieurs lièvres à la fois"): [119]

Comment d’ailleurs des gouvernements qui exercent plusieurs industries ou plusieurs fonctions se conformeraient-ils à la loi des limites naturelles? Chaque industrie a les siennes, et telle limite qui est utile pour la production de la sécurité cesse de l’être pour celle de l’enseignement. Cela étant, un gouvernement ne peut évidemment observer une loi qui lui imposerait autant de limites différentes qu’il exerce d’industries ou de fonctions.

By the way, how could governments which carry out many industries or many functions conform to the law of natural limits (to the size of enterprises)? Each industry has its limits, and such a limit which is useful for the production of security ceases to be (the limit) for that of education. That being so, a government evidently cannot observe a law which imposes upon it as many different limits as the number of industries or functions which it carries out.

A third reason he gave was that firms had a natural size limit (la loi des limites naturelles) beyond which they could not operate effectively. In an insight that suggests thinking along the lines of Ronald Coase's theory of the firm, [120] Molinari gave as an example the dream of some rulers to build "la monarchie universelle" (the universal monarchy) [121] which would govern huge territories, with millions of people, and supply them with myriads of services. Molinari thought that the market should determine the optimal size of firms which would best be able to satisfy the needs of its consumers as well as make a profit for its owners: [122]

Comment d’ailleurs des gouvernements qui exercent plusieurs industries ou plusieurs fonctions se conformeraient-ils à la loi des limites naturelles? Chaque industrie a les siennes, et telle limite qui est utile pour la production de la sécurité cesse de l’être pour celle de l’enseignement. Cela étant, un gouvernement ne peut évidemment observer une loi qui lui imposerait autant de limites différentes qu’il exerce d’industries ou de fonctions.

By the way, how could governments which carry out many industries or many functions conform to the law of natural limits (to the size of enterprises)? Each industry has its limits, and such a limit which is useful for the production of security ceases to be (the limit) for that of education. That being so, a government evidently cannot observe a law which imposes upon it as many different limits as the number of industries or functions which it carries out.

In many areas of government activity, especially the production of security, competition was banned outright. This meant that these activities are not required to cover their costs of operation (or go out of business if they did not), or get the standard rate of return for most industries, or to improve their service or products. As he noted: [123]

Pour certains services publics, la sécurité, le transport des lettres et le monnayage par exemple, ils prohibent absolument la concurrence dans les limites de leur domaine.

For certain public services, like security, the delivery of lettres, and money for example, the absolutely prohibit competition within the borders of their domain.

By ignoring the division of labour, the proper size of the firm, and avoiding competition, government services like security are higher priced and of lower quality, unlike those sectors of the economy which are exposed to competition and have to constantly improve and diversify their goods and services as the economy advances: [124]

S’agit-il de la sécurité? Elle doit être nécessairement plus complète et plus diversifiée dans une société riche et civilisée, où les propriétés à protéger se sont multipliées et ramifiées à l’infini, que dans une société pauvre et barbare.

Is it a matter of security? Unavoidable it has to be more complete and more diversified in a rich and civilised society, where the property which needs to be protected has multiplied and branched out into infinity, that a poor and backward/barbarous society.

Molinari summed up his objections to the "anti-economic" nature of government activity with a list of four acts of government "sinning" against (pécher) or violating the natural laws of political economy concerning the production and distribution of services. The only way he thought this problem could be reversed was to apply these laws to "les entreprises gouvernementales" (government enterprises/businesses), especially that of security: [125]

I. Les gouvernements pèchent visiblement contre les lois de l’unité des opérations et de la division du travail.	I. Governments visibly sin against (violate) the laws of the unity of operations and the division of labour.
II. Les gouvernements ne pèchent pas moins contre la loi des limites naturelles.	II. Governments sin no less against the law of natural limits (to their size).
III. Les gouvernements pèchent contre la loi de la concurrence.	III. Governments sin against the law of competition.
IV. Les gouvernements pèchent, enfin, dans la distribution de leurs services, contre les principes de la spécialité et de la liberté des échanges.	IV. Finally, governments sin in the distribution of their services against the principles of specialization and free trade.

Molinari was still railing against the economic inefficiency of government monopoly police services in the 1890s which he described as "le plus arrière de tous" (the most backward of them all) and modern governments in general as "monsters": [126]

En revanche, le service non moins nécessaire de la sécurité intérieure, qui se trouve entièrement à l’abri de la concurrence, est le plus arriéré de tous. La justice n’a pas cessé d’être coûteuse, lente et incertaine, la police insuffisante et vexatoire, la pénalité tantôt excessive et tantôt trop faible, le système pénitentiaire plus propre à développer la criminalité qu’à la restreindre. Comment en serait-il autrement? Comment les fonctions naturelles des gouvernements ne souffriraient-elles pas de l’accroissement incessant de leurs fonctions parasites ? Quelle entreprise particulière pourrait subsister si elle était constituée et gérée comme un gouvernement, et accaparait, à son exemple, des industries multiples et disparates ? Au point de vue économique, les gouvernements modernes sont-ils autre chose que des « monstres » ?

On the other hand, the no less necessary service of internal security, which is completely protected from any competition, is the most backward of them all (government services). Justice is still costly, slow, and uncertain; the police are inadequate and persecutory; penalties are sometimes excessive and at other times too weak; and the prison system is more suited to developing criminality than controlling it. How could it be otherwise? Why wouldn’t the natural functions of government suffer from the incessant expansion of their parasitic functions? What individual enterprise could survive if it were structured and run like a government and, following its example, monopolized multiple and disparate industries? From the economic point of view, aren’t modern governments nothing more than “monsters”?

The Parasitical and Destructive effects of Governmental Monopoly

Because these economic laws (especially that of competition) were ignored out of ignorance or deliberately violated by vested interests who benefited from the old ways, government remained stuck in the practices of an earlier and less developed economic state, that of monopoly. Thus governments were quite backward concerning their own economical organisation and in satisfying the needs of the consumers. When surrounded by other sectors of the economy which were being reformed, improved, and made more efficient, this contrast between an inefficient state and an increasingly efficient economy produced "la discordance" or disharmony - "cette discordance qui se manifeste de nos jours entre l'état des gouvernements et celui des autres branches de l'activité sociale" (this disharmony which is visible in our day between the state of government and the state of the other branches of social activity) [127] - which had to be resolved in some way.

As other sectors advanced economically the "disharmony" between the two became worse with the result that in Molinari's view governments had become disruptive and dangerous "monsters," "ulcers," "cancerous growths," "tumors," "parasites," "sucking pumps," and "plunderers" which had to removed if societies were to progress further in their development.

Governments as “ulcers”

One of Molinari's most colorful expressions was "government as an ulcer" which he borrowed from Jean-Baptiste Say and used several times in his writing. [128] In this angry passage he combines Say's medical metaphor of an ulcer eating away the healthy tissue of society with a mechanical one of a suction pump sucking out taxes and loans from the economy: [129]

C’est ainsi, par le fait de leur constitution antiéconomique, que les gouvernements sont devenus, suivant une expression énergique de J. B. Say, les ulcères des société s. A mesure que la population et la richesse augmentent, grâce au développement progressif des industries de concurrence, une masse croissante de forces vives est soutirée à la société, au moyen de la pompe aspirante des impôts et des emprunts, pour subvenir aux frais de production des services publics ou, pour mieux dire, à l’entretien et à l’enrichissement facile de la classe particulière qui possède le monopole de la production de ces services. Non seulement, les gouvernements se font payer chaque jour plus cher les fonctions nécessaires qu’ils accaparent, mais encore ils se livrent, sur une échelle de plus en plus colossale, à des entreprises nuisibles, telles que les guerres, à une époque où la guerre, ayant cessé d’avoir sa raison d’être, est devenue le plus barbare et le plus odieux des anachronismes.

This is how, because of their anti-economic nature, that governments have become, in the colorful expression of J.B. Say, “the ulcers of society.” As population and wealth increase, thanks to the progressive development of industries which compete with each other (des industries de concurrence), a growing mass of life-giving/sustaining forces are extracted from society by the suction pump of taxes and debts, in order to support/subsidise the costs of production of the public services or, to better put it, maintain and enrich more easily the particular class which possesses the monopoly in providing these services. Not only this, governments get paid every day very handsomely for the essential functions which they have monopolized, such as wars in a period when war, having ceased to have any raison d’être, has become the most barbarous and the most odious of anachronisms.

A cet ulcère qui dévore les forces vives des sociétés, à mesure que le progrès les fait naître, quel est le remède?

What is the remedy/cure for this ulcer which eats aways at the living forces of society, as progress gives birth to them.

Another kind of "industry": "l'industrie de la spoliation"

Molinari thought that the opposite of "l'industrie de la sécurité" (the security industry) was what he called "l'industrie de la spoliation" (the industry of plundering) which could be undertaken by individuals (such as thieves and highway robbers) or organized by bands of pirates or by governments - "les industries du vol, du brigandage, de la piraterie, de la conquête, exercées soit individuellement, soit par voie d'association" (the industries of theft, brigandage, piracy, and conquest, whether exercised by individuals or by means of (some) association). The latter form of this "industry," plunder organised and protected by governments, was the main cause of the impoverishment of societies and the inequality in incomes. It increased in scope as the wealth of society increased and there was more goods and services upon which it could prey. The methods used by the state have become less brutal over time (there is less outright plunder by force and less slavery) but it has become more widespread and indirect in the form of taxes and tariffs. [130] Like his older friend and colleague Frédéric Bastiat, Molinari wanted to see economists produce a deeper study of the phenomenon of plunder and called for "une histoire analytique et raisonnée de la spoliation" (an analytical and well thought out history of plunder). [131] He summarized his views as follows: [132]

Mais on peut affirmer que la violence et la ruse ont, de tout temps, exercé une influence considérable sur la formation des revenus et il ne paraît pas malheureusement que cette influence perturbatrice ait sensiblement diminué de nos jours. Les moyens dont on se sert pour s’emparer du bien d’autrui sont peut-être moins brutaux qu’ils ne l’étaient jadis, mais sont-ils moins nombreux et moins productifs? Comme toutes les autres industries, la spoliation a perfectionné ses procédés et ses méthodes: à mesure que les moyens de créer de la richesse se développent, ceux de la détourner de ses destinations légitimes et utiles semblent se développer d’une manière parallèle; en sorte qu’en considérant l’industrie de la spoliation dans la multitude de ses branches, on ne saurait affirmer qu’elle occupe dans les sociétés modernes une place moindre que celle qu’elle s’était faite dans les sociétés anciennes. La seule différence à l’avantage de notre époque, c’est qu’on commence à mieux étudier les procédés que la spoliation met en œuvre, comme aussi la nature, l’étendue et l’incidence des dommages qu’elle cause. Un jour viendra peut-être où, en analysant ses opérations et en faisant ses comptes, en montrant clairement ce qu’elle coûte et à qui elle coûte, on parviendra à soulever contre elle la masse des intérêts aux dépens desquels elle s’exerce.

However, one can state that violence and fraud have in all times exercised a considerable influence on the way revenue is collected and unfortunately it does not appear that this disturbing influence has visibly diminished in our day.. The means used to seize the goods of another person are perhaps less brutal that they once were but are they less numerous and less productive? Like all other industries plunder has perfected/improved its processes and its methods: as the means of creating wealth have developed those for diverting it from its legitimizes and useful purposes have developed in a parallel manner; so (to the point) that when one thinks about the industry of plunder in all its multitude of branches, one would have to agree that it only occupies a smaller place in modern societies than that which it had in ancient societies. The only difference in favor of our own time is that we have begun to better understand the processes that plunder uses, as well the nature, extent, and impact of the damage the it causes. One day perhaps will come when, in analyzing its operation and in drawing up the total costs (faire see comptes), in clearly showing what it costs and to whom costs, one will manage to arouse the mass of interests at whose expence it is exercised.

It was upon this "industry of plundering" that "le monopole gouvernemental" was both based and which in turn made all the other forms of plunder possible in the modern world.

Monopoly Governments as polyps/growths

Molinari explored the problem of plunder and its relationship to monopoly government in the Eleventh Lesson on "Revenue and Useful and Harmful Consumption." [133] When government is a monopoly and has a monopoly of the use of force it becomes what he called "un monstrueux polype" (a monstrous polyp or growth/tumor) which is dangerous in its own right but also because it gives rise to all the other forms of monopolies because of the legal privileges it can confer on some at the expense of others. [134] This monopoly of government not only spawns other monopolies such as trading and industrial companies, banks, the issuing of money, etc., which provide many lucrative sources of income to the upper and middle classes at the expense of ordinary working people. Like a polyp or growth which spreads, the main governmental monopoly creates "branches" which in turn create other monopolies which behave like subordinates or dependents on the main source of monopoly. [135]

Mais la spoliation conserve encore bien d’autres forteresses. A mesure qu’on la chasse de ses vieux repaires, on la voit même s’en creuser de nouveaux, plus vastes et plus redoutables. A peine les corporations privilégiées ont-elles été démolies et au moment où l’édifice de la protection commence à s’écrouler, nous voyons, par exemple, le monopole gouvernemental se développer partout, comme un monstrueux polype, aux dépens des industries de concurrence. Or, ce monopole qui se trouve, partout aussi, en droit ou en fait, entre les mains des classes supérieures ou moyennes, embrasse une multitude de fonctions et fournit, par conséquent, une multitude de revenus. Au premier aspect, ces revenus ne paraissent pas dépasser le niveau général; mais si l’on considère l’insuffisance du travail fourni en échange, sous le double rapport de la quantité et de la qualité, la nullité même de ce travail quand il s’agit de sinécures, on s’aperçoit qu’ils contiennent, en comparaison des revenus fournis par les industries de concurrence, une rente considérable. Au monopole gouvernemental proprement dit viennent se rattacher, à titre de dépendances ou d’annexes, une multitude croissante d’autres monopoles, en matière de crédit, d’industrie, de commerce, etc., qui ont uniformément pour objet, — quels que soient du reste les prétextes invoqués en faveur de leur établissement, — une augmentation artificielle des revenus de ceux qui ont eu le pouvoir de les faire établir. Ces monopoles, institués au moyen d’une limitation quelconque de la concurrence, contiennent nécessairement une spoliation, d’abord en ce qu’ils obligent les consommateurs des produits ou des services monopolisés à les payer à un prix supérieur à celui de la concurrence, en fournissant aux monopoleurs une rente proportionnée à la différence des deux prix; ensuite, en ce qu’en ralentissant les progrès naturels des branches de travail monopolisées, ils retardent l’abaissement de leurs frais de production, toujours au détriment de la masse des consommateurs.

But plunder still keeps many other fortresses. Just as one chases it out of one of its old lairs wee see it dig itself a new one, even bigger and more formidable. Scarcely had the privileged corporations been demolished and at the very moment when the edifice of protection began to collapse, we see for example the monopoly of government growing everywhere, like a monstrous polyp (cancerous growth), at the expense of the competing industries. Now this monopoly is found everywhere as well both in law and in fact in the hands of the upper or middle classes, and embraces a multitude of functions and supplies as a result a multitude of revenue. At first glance, these revenues do not appear to exceed the general level; but if one thinks about the inadequate amount of labour provided in exchange, in the double amount of the quantity and the quality, even the uselessness of this labour when it is a matter of sinecures, one realizes that they contain, in comparison with competitive industries, a considerable rent . Attached/connected to the actual governmental monopoly there arise a growing multitude of other monopolies which are dependent or attached to it, in areas such as credit, industry, commerce, etc., which all have the same goal - whatever might be the other pretexts invoked for their establishment - and artificial increase in the revenue of those who had the power to get them established. These monopolies, created by means of whatever limit placed on competition necessarily contains some plunder, in the first place in that they oblige the consumers of the monopolized goods or services to pay a higher price for them than they would if there were competition, thereby supplying the monopolists with a rent proportional to the difference in the two prices; then, by slowing down the natural progress in the branches of labour which have been monopolized, they delay the lowering of their cost of production, always to the detriment of the mass of the consumers.

As Molinari says elsewhere [136] he thought the function of the economist was to act like a surgeon saving his patient from cancerous or ulcerous growths, by cutting it out from the social body in order to save its economic health. Fortunately, Molinari could save himself this trouble because he thought the forces of history would do the job for him when societies entered the third and final phase of economic development, namely "the era of full competition."

Governments in the Third Phase of Economic Development: the Era of Full Competition↩

Introduction

The steady growth and expansion of markets leads to greater competitive production; leading on to "l'ère de la concurrence" (the era of competition) in spite of the interests of those with monopolies to protect; [137]

C’est l’agrandissement successif du marché de la consommation qui détermine le passage de la société de la production embryonnaire et communautaire, à la production spécialisée et monopolisée d’abord, à la production de concurrence ensuite.

It is the steady enlargement of the market for consumption which determines the passage/transition from the society of/with embryonic and communitarian production, to first of all one with specialized and monopolized production, and then to one competitively supplied production (la production de concurrence).

In this new stage of competition the government will be exposed to the full array of the natural laws of economics. It will have to grow and improve in order to satisfy the rapidly changing needs and demands of a more advanced economic system; it will no longer be able to run efficiently and economically all the functions which it now undertakes because of the needs of specialization in certain tasks and the division of labour (if it tries to do everything it will become "un véritable monstre" (a veritable monster)); it will also run into the problem of the optimal size of an organisation if it tries to do too much. One example is: [138]

Au point de vue des lois de l’unité des opérations et de la division du travail, un gouvernement qui entreprend la production de la sécurité et de l’enseignement, le transport des lettres et des dépêches télégraphiques, la construction et l’exploitation des chemins de fer, la fabrication des monnaies, etc., n’est-il pas un véritable monstre ?

From the point of view of the “law of the unity of operations” and the division of labour, isn’t a government which undertakes the production of security and education, the delivery of the mail and telegraph, the construction and management of the railways, the printing of money, etc. a veritable monster ?

Governments now come under strong pressure to follow the progress of economic development as they enter the era of full competition; there has to be "unité" (unity or parity) between the production of public goods and private goods otherwise there is "dissonance" (disharmony) between the two ways of organizing society. [139]

Si, grâce à l’agrandissement progressif des marchés de consommation, les entreprises qui fournissent les produits ou les services nécessaires à la consommation privée passent d’un régime de monopole plus ou moins limité à un régime de concurrence, il y a apparence que la constitution des gouvernements producteurs des services publics devra inévitablement subir une transformation analogue; qu’ils passeront de même du régime du monopole à celui de la concurrence, et que l’unité économique finira ainsi par s’établir dans la troisième phase du développement des sociétés comme elle s’est établie dans les deux précédentes.

If, thanks to the steady growth of markets for consumption, the enterprises which supply these goods or services which are necessary for private consumption pass from a regime of more or less limited monopoly to one (regime) of competition, then it seems to follow (il y a apparence que) that the constitution/nature of the governments which produce public services ought to inevitably follow a similar transformation; that they will pass/move in the same way from the regime of monopoly to that of competition, and that economic parity (l’unité économique) will thus result in being established in the third phase of the development of societies as it has been established in the two preceding ones.

He argues that this "economic parity" has not been achieved at the present time; and this results in a situation where things become increasingly "anti-économique": [140]

Au moment où nous sommes toutefois, cette unité économique ne semble pas près encore d’être reconstituée. Tandis que les entreprises qui pourvoient à la consommation privée sont déjà, pour le plus grand nombre, placées sous le régime de la concurrence, les gouvernements producteurs des services publics se trouvent encore attardés dans le vieux régime du monopole. De là, une situation anormale et périlleuse, car, de même que des gouvernements communautaires ne pouvaient plus suffire à des sociétés qui étaient entrées dans la phase du monopole, des gouvernements de monopole ne peuvent plus suffire à des sociétés qui sont entrées dans la phase de la concurrence. En termes plus brefs, si les gouvernements de la première phase étaient antiéconomiques dans la seconde, ceux de la seconde doivent être antiéconomiques dans la troisième.

However, where we are now this economic parity doesn’t seem to anywhere near close to being created/constituted . While the enterprises which provide (for) private consumption are already, for the greatest number, placed/located in the regime of competition, government producers of public services still find themselves caught behind in the old regime of monopoly. As a result, (there is) an abnormal and dangerous situation , because just as the communal governments could no longer provide enough for the societies who had entered the phase of monopoly, monopoly governments (des gouvernements de monopole) can no longer provide enough for the societies which have entered the phase of competition. In brief, if the governments in the first phase were “anti-economic” in the second, those in the second would have to be anti-economic in the third.

"Ad hoc" justice in the regime of competition

A growing and more sophisticated market economy also required more sophisticated ways of "producing security," including new kinds of law and justice. He recognized that in "l'ère de la concurrence" (the era of free competition) as he called the future fully deregulated laissez-faire society where security was provided by the market, the law would adapt in order to meet the needs of a rapidly growing economy which was undergoing technological change and globalization of markets. As new kinds of property emerged new means would be required to protect it from force, fraud, or loss. He talks about the multiplication and diversification of new legal "appareils" (devices, apparatuses, structures) [141] which would spring up to solve "les contestations continuelles" (perpetual disputes) involving property rights. He describes this legal process of dispute resolution "une justice ad hoc " (ad hoc justice, or law created as needed) which he does not describe in any detail but which suggests a kind of common or customary law developed by the parties involved in disputes. These expanded markets require better and more sophisticated security for the new types of contracts and extended trading relationships which have emerged. [142]

La “production de la sécurité” doit donc se développer et se perfectionner dans cette nouvelle phase de l’existence des sociétés, en raison même de l’extension et du raffinement du besoin auquel elle doit pourvoir.

The production of security thus has to be developed and improved in this new phase in the existence of societies because of the growth and sophistication of the needs which it has to satisfy.

Governments could now withdraw from many economic interventions needed in the previous stage and allow competition and private economic activity to take over in what he now calls "un régime de pleine concurrence" (a regime of full or complete competition) (p. 503). In fact, governments would be exposed to full competition and will thus see its monopoly of security finally removed as the demands of consumers of security strengthen and grow in sophistication.

There is a passage here which is one of the few places in his writings where Molinari talks about "the production of law" as part of "the production of security," thus attempting to complete the missing part of his ACT. [143] He refers to the idea of market created laws, or what he calls "une justice ad hoc , " (p. 502) appearing to satisfy this new and more demanding "clientele for security." The specific passage is:

Il faut pour résoudre ces questions litigieuses une justice ad hoc . En d’autres termes, la justice devra s’étendre et se diversifier en raison de l’extension et de la diversification du débouché que l’accroissement et la multiplication de toutes les branches de la richesse ouvrent à la fraude et à l’injustice.

It is necessary in order to resolve these litigious matters to have a justice (system) which is ad hoc (une justice ad hoc = flexible and created for special purposes??). In other words, justice ought to be extended and diversified because of the extension and diversification of the market which the growth and multiplication of all the sources of wealth opens up to fraud and injustice.

The whole section where he discusses his ideas of what this future fully competitive legal and security system might look like is important and needs to be quoted at length: [144]

Quelles sont, dans cet état nouveau, les attributions et la constitution naturelles du gouvernement?

In this new stage, what will be the natural functions and structure of government?

Nous connaissons les attributions naturelles du gouvernement dans les deux phases précédentes du développement économique des sociétés. Dans la phase de la concurrence, où nous commençons à nous engager, elles subissent de nouvelles modifications en plus et en moins. Dans cette phase, les sociétés, croissant rapidement en nombre et en richesse, ont besoin par là même d’une sécurité plus parfaite, mieux assise et plus étendue. Pour faire naître et maintenir l’ordre au sein d’une multitude d’intérêts incessamment en contact, il faut à la fois une justice plus exacte et une puissance plus grande pour la faire observer. En outre, les propriétés se multipliant et se diversifiant à l’infini, il faut multiplier et diversifier les appareils qui servent à les défendre. La production des inventions et la production littéraire, par exemple, donnent naissance, en se développant, à un nombre considérable de propriétés d’une espèce particulière, dont les limites soit dans l’espace soit dans le temps, engendrent des contestations continuelles. Il faut pour résoudre ces questions litigieuses une justice ad hoc . En d’autres termes, la justice devra s’étendre et se diversifier en raison de l’extension et de la diversification du débouché que l’accroissement et la multiplication de toutes les branches de la richesse ouvrent à la fraude et à l’injustice. Enfin, la sécurité doit s’allonger, pour ainsi dire, dans l’espace et dans le temps . Si le développement des voies de communication et les progrès de l’industrie permettent aux hommes et aux produits de se transporter aux extrémités du globe, ils devront y trouver des garanties de sécurité suffisantes, sinon ils ne se déplaceront point. Si des contrats ou des engagements sont effectués à longue échéance ou même sans limites de temps, comme dans le cas des rentes perpétuelles, l’exécution de ces contrats ou l’accomplissement de ces engagements devra encore être assuré, sinon on ne les conclura point. La “production de la sécurité” doit donc se développer et se perfectionner dans cette nouvelle phase de l’existence des sociétés, en raison même de l’extension et du raffinement du besoin auquel elle doit pourvoir.

We know what the natural functions of government were in the two preceding phases of the economic development of societies. In the phase of competition, in which we have begun to enter, they will be subject to some new modifications here and there. In this phase societies which are rapidly growing in number and wealth will need as a result a more perfect form of security, which is better founded and more extensive. In order to give rise to and maintain order in the midst of a multitude of interests which are constantly coming into contact with each other, there has to be at the same time a form of justice which is more exact/precise and a power which is greater in order to have it enforced. Furthermore, as private property is being multiplied and diversified to infinity, it is necessary to multiply and diversify the apparatuses which are used to protect them. The creation of inventions and literary works for example give rise by being developed to a considerable number of property rights of a particular kind, whose limits whether across time or space produce constant challenges/disputes. It is necessary in order to resolve these litigious matters to have a justice (system) which is ad hoc (une justice ad hoc = flexible and created for special purposes??). In other words, justice ought to be extended and diversified because of the extension and diversification of the market which the growth and multiplication of all the sources of wealth opens cup to fraud and injustice. Finally, justice has to be extended so to speak in both space and time . If the development of the means of communication and the progress of industry allow men and goods to be transported to the four corners of the globe, they ought the be able to find there sufficient guarantees of their security, otherwise they will not go there. If contracts and business agreements are undertaken for the long term or even for unlimited periods of time, as in the case of perpetual rent, the execution of these contracts or the completion of these agreements also ought to be assured, otherwise they will not be undertaken. The “production of security” thus ought to be developed and improved in this new phase of the existence of societies, on account of the extension and sophistication of the demand (besoin) for it which it has to satisfy.

The Private Provision of Security and the Hypothesis of the Monopolist Grocer

We know from the other times when Molinari broaches the radical topic of competing legal and police services that a rhetorical trope he liked to use to defuse his readers' opposition to the concept is his "simple hypothesis" of the monopolistic grocer (or baker). [145] The idea was to give the standard economic arguments for why a monopoly suppler of groceries (or bread) is bad for individual customers as well as for society as a whole, and then to turn the argument on its head and say, "if this is true for the grocery (or bakery) industry, why isn't it also true for the security industry?" [146]

In the Cours he introduces one of his hypotheses, ("notre hypothèse") about the monopolist grocer (l'épicier monopoleur), [147] in an industry which "everybody" believes has to be provided by a private monopoly for the sake of the community's well being, even though the economy as a whole was moving towards open and free competition in all other areas of business activity. Most of the villagers, and the grocer too of course, believed in "quelque antique superstition" (some ancient superstition) that groceries could only be supplied by a monopoly and that their supply of groceries would break down if the business were to be opened up to competition. Molinari then proceeds to show how the villagers are mistaken, how free and open competition by grocers would lead to greater variety in the choice of food, lower prices, and even more work for people in the grocery business. [148] He then asks the reader to "poursuivons jusqu'au bout notre hypothèse" (follow us to the (very) end of our hypothesis."

He turns the saga of the people's struggle to control this monopolist grocer into a story about the rise of the state monopoly of the provision of security and its inevitable fall as all industries begin to enter "le domaine de la concurrence" (the domain of competition). According to this story, the people quickly realize that the private monopolist grocer provides poor service at a high price and so the people demand that the government impose price controls to prevent the grocer exploiting the people. A battle then breaks out between the people's representatives and the representatives and lobbyists of the grocer on how the grocery industry should be regulated. Sometimes a "revolution" breaks out (as in 1789) and the people seize the grocery business for themselves and run it as a government supplied monopoly. A constitution is drawn up to determine who pays what and how much, how the grocery business is to be run, and a bureaucracy is set up to supervise it. Given the chronic economic inefficiencies of a government run grocery monopoly there is pressure to either increase taxes to pay for it, or to increase the number of taxpayers by "annexing" new territory to acquire new consumers. Then national rivalries emerge among the consumers of groceries and there is pressure to break up the state so that each nationality can run its own grocery monopoly within their own territory. Eventually the different peoples learn that their own national monopolies are also inefficient and, as they see how the break-up of other industrial monopolies leads to more choice and lower prices for goods and services, there is pressure to break up the state monopoly of security as well and to expose everything to the "domain of competition." Molinari concludes this sad story by stating that: [149]

l’on découvrira, non sans surprise, qu’il n’est pas vrai, ainsi que les monopoleurs s’étaient appliqués à le faire croire, le croyant du reste eux-mêmes, que le monopole soit la forme nécessaire et providentielle du commerce de l’épicerie. En conséquence, au lieu de poursuivre l’œuvre impossible d’une meilleure “organisation” de ce monopole, on travaillera à le démolir, en faisant passer successivement les différentes branches de commerce qui s’y trouvent agglomérées, dans le domaine de la concurrence. Cette agglomération contre nature étant dissoute, chaque branche devenue libre pourra se développer dans ses conditions normales, en proportion des besoins du marché, et la société débarrassée d’un monopole qui la retardait et l’épuisait croîtra plus rapidement en nombre et en richesse.

One will discover, not without some surprise, that it is not true, as the monopolists have attempted to make us believe and as they themselves moreover believe, that monopoly is the necessary and god-given form for the grocery business. As a result, instead of attempting the impossible task of creating a better “organisation” of this monopoly, they will work to demolish/destroy it, by making each of the different branches of government which are part of this agglomeration, to move one by one into the domain of competition. Once this unnatural agglomeration (“cette agglomération contre nature”) has been dissolved, each branch will become free to develop under its normal conditions, in proportion to the needs of the market, and once society has got rid of a monopoly which has held it back and exhausted it, will grow more rapidly in number and in wealth.

C’est là l’histoire des gouvernements depuis que la société a commencé à passer de la phase du monopole dans celle de la concurrence.

This is the history of governments since society began to move out of the phase of monopoly into that of competition.

Including of course "la production des services publics" (the production of public services) like security and other public goods.

As he elsewhere says about the "simple hypothesis" of the monopolist baker, [150] replace the bakery business with the security business to understand what his solution to the problem of government would be. Molinari seems to be a bit coy here as he does not make this statement at the conclusion of his story. [151] Perhaps he thought it was not necessary in this more theoretical work in which he was trying to lay the foundations of his economic theory rather than make too many specific policy statements. Perhaps by quoting his earlier works (the PoS article and S11) he thought this was sufficient to make his point.

We should mention here some of the solutions he would put forward in later works which were of a transitional nature before the final regime of complete completion could be implemented. He does this in his next major work on the evolution of the state and the production of state, L'Évolution politique (1884), where he mentions the following very interesting suggestions to begin exposing the monopoly state to various forms of competition: a government "farming out" (contracting out) security to a private company, using a constitution to define the terms of the contract with a private security firm, competition between the communes and the provinces for consumer/taxpayers, and most radically private "property development companies" which would create new towns and suburbs supplied with all "public goods" including security. Three years later he would also advocate what he called the "double right of secession" (that of the commune from the province, as well as the province from the central state) in Les lois naturelles (1887).

The Solution to the Problem of Government

Molinari believed that the solution to the problem of "la constitution antiéconomique des gouvernements" (the anti-economic nature of governments) was to make them function according to the standard economic rules which governed other business entities, i.e. to make them function in a truly economic manner, or "economically" (à la rendre économique ). This could be done by firstly, removing all functions not related to their natural function of being "producers of security," and then gradually subjecting all governments, in all their activities, to the law of competition. [152]

Si, comme nous avons essayé de le démontrer, le mal provient de la constitution antiéconomique des gouvernements, le remède consiste évidemment à conformer cette constitution aux principes essentiels qu’elle méconnait, c’est à dire à la rendre économique . Il faut pour cela, en premier lieu, débarrasser les gouvernements de toutes les attributions qui ont été annexées à leur fonction naturelle de producteurs de la sécurité, en faisant rentrer l’enseignement, le culte, le monnayage, les transports, etc., dans le domaine de l’activité privée; en second lieu, soumettre les gouvernements, comme toutes les autres entreprises, à la loi de la concurrence.

If, as we have endeavored to show, the harm coming from the anti-economic nature of governments, the remedy consists obviously in (making) this nature conform to the essential principles of which it is ignorant/does not understand, the is to say to make it “economic/economical.” To achieve that it is necessary/requires in the first place to remove from governments all the functions which have been added to their natural function as producers of security, by making them return education, religion, money, transport, etc. the the private sector (to the domain of private activity); in the second place to submit government, as all other enterprises, to the law of competition.

We can get a better appreciation of his continued support for his earlier radical position by carefully reading his footnotes which accompany this discussion. He has an explicit reference to his most radical writings, Les Soirées and his collection of articles in Questions d'économie politique et de droit public (1861) (which included his "production of Security" article) and the magazine he edited and wrote while he was living in Brussels, L'Économiste belge , which suggests he is still as radical in his thinking as he was then.

One of these footnotes reads: [153]

Nos deux précédents ouvrages, les Soirées de la rue Saint-Lazare et les Questions d’économie politique et de droit public , auxquels nous prenons la liberté de renvoyer nos lecteurs, sont presque entièrement consacrés à la démonstration des nuisances de l’intervention gouvernementale. Nous avons fondé, dans le même but, le journal l’ Economiste belge .

Our two previous works, the Soirées de la rue Saint-Lazare and the Questions d’économie politique et de droit public , to which we take the liberty of referring our readers to, are almost entirely devoted to demonstrating the “harm” (nuisances) (caused by) government intervention. We have (also) founded the journal l’ Économiste belge for the same end.

Further proof if this is another footnote which comes slightly later, which contains an explicit reference to the supposedly "chimérique" (fanciful, idealistic) idea of subjecting governments to the regime of competition which he defends in his earlier writings - "cette prétendue chimère" (this so-called pipe dream): [154]

Nous n’en croyons pas moins devoir revendiquer, hardiment, la priorité de cette prétendue chimère. Voir les Questions d’économie politique et de droit public. La liberté du gouvernement . T. II, p. 245, et les Soirées de la rue Saint-Lazare . 11e soirée. P. 303. Consulter encore, pour les développements, L’Économiste Belge , le Sentiment et l’intérét en matière de nationalité , no du 24 mai 1862, polémique avec M. Hyac. Deheselle sur le même sujet, nos des 4 et 21 juin, 5 et 19 juillet, le Principe du sécessionisme , 30 août; Lettres à un Russe sur l’établissement d’une constitution en Russie , 2 et 30 août; 19 septembre 1862; la Crise américaine , 17 janvier 1863; un nouveau Crédit Mobilier , 14 février; une Solution pacifique de la question polonaise , 9 mai, etc., etc.

We think we should claim responsibility, (perhaps) courageously, for first putting forward this so-called “fantasy” (pipe-dream). See Questions d’économie politique et de droit public. La liberté du gouvernement . T. II, p. 245, and Soirées de la rue Saint-Lazare . 11e soirée. p. 303. See also for further developments, L’Économiste Belge , le Sentiment et l’intérét en matière de nationalité , no du 24 mai 1862, the polemic with M. Hyac. Deheselle on the same subject, issues 4 et 21 juin, 5 et 19 juillet, le Principe du sécessionisme , 30 août; Lettres à un Russe sur l’établissement d’une constitution en Russie , 2 et 30 août; 19 septembre 1862; la Crise américaine , 17 janvier 1863; un nouveau Crédit Mobilier , 14 février; une Solution pacifique de la question polonaise , 9 mai, etc., etc.

Interestingly (since the second edition of the Cours was published in 1863, so while the American Civil war was underway), he makes a passing reference to a topic he would return to in later works such as L'Évolution politique (1884) and Les lois naturelles (1887), [155] namely the right of secession. He regards this as another possible solution to the problem of monopoly government, which he believes will lead eventually to "la liberté de gouvernement," which you will remember is one of his code words for AC): [156]

Déjà, la cause de la simplification des attributions gouvernementales est gagnée dans la théorie, si elle ne l’est pas encore dans la pratique. En revanche, l’idée de soumettre les gouvernements au régime de la concurrence est généralement encore regardé comme chimérique. Mais sur ce point les faits devancent peut-être la théorie. Le “droit de sécission” qui se fraye aujourd’hui son chemin dans le monde aura pour conséquence nécessaire l’établissement de la liberté de gouvernement . Le jour où ce droit sera reconnu et appliqué, dans toute son étendue naturelle, la concurrence politique servira de complément à la concurrence agricole, industrielle et commerciale.

Already, the cause of reducing the functions of government has been won in theory, if not yet in practice. On the other hand, the idea of subjecting governments to the regime of competition is generally still regarded as fanciful/idealistic (chimérique). But on this point the facts are perhaps running ahead of theory. The “right of secession” which is making its way (clearing a path) through the world will have as a necessary consequence the establishment of “la liberté de gouvernement” (the freedom of government). The day when this right will be recognized and put into practice, through its entire natural extent, political competition will serve (act) as the complement to agricultural, industrial, and commercial competition.

Another rhetorical trope he uses here is to quote a passage from Adam Smith. Not the "fees of court" passage which one might have expected, but another one on Smith's optimistic hope in the dark mercantilist days of 1776 that the vested interests who benefited from trade policy (des monopoleurs furieux) and the widespread ignorance about free trade might eventually be overcome: [157]

To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia should ever be established in it. Not only the prejudices of the public, but what is much more unconquerable, the private interests of many individuals, irresistibly oppose it. Were the officers of the army to oppose with the same zeal and unanimity any reduction in the number of forces, with which master manufacturers set themselves against every law that is likely to increase the number of their rivals in the home market; were the former to animate their soldiers, in the same manner as the latter enflame their workmen, to attack with violence and outrage the proposers of any such regulation; to attempt to reduce the army would be as dangerous as it has now become to attempt to diminish in any respect the monopoly which our manufacturers have obtained against us. This monopoly has so much increased the number of some particular tribes of them, that, like an overgrown standing army, they have become formidable to the government, and upon many occasions intimidate the legislature. The member of parliament who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services, can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists.

Molinari confidently concludes from this passage that if the "furious monopolists" of the 1770s could be defeated in 70 years (the Corn Laws were repealed in 1846) and protectionism comes to seem like a bad memory, then why shouldn't there be an end of "les monopoles politiques" (political monopolies) within a similar time frame? It should be noted that the time frame he was thinking about in S11 (when he was a youthful and optimistic 30 years old) for the transition to a regime of full competition and privately provided security was only one year! [158]

Je prétends donc que si une communauté déclarait renoncer, au bout d’un certain délai, un an par exemple, à salarier des juges, des soldats et des gendarmes, au bout de l’année cette communauté n’en posséderait pas moins des tribunaux et des gouvernements prêts à fonctionner; et j’ajoute que si, sous ce nouveau régime, chacun conservait le droit d’exercer librement ces deux industries et d’en acheter librement les services, la sécurité serait produite le plus économiquement et le mieux possible.

Therefore, I maintain that if a community were to announce that after a given delay, say perhaps a year, it would give up financing the pay of judges, soldiers, and policemen, at the end of the year that community would not possess any fewer courts and governments ready to function; and I would add that if, under this new regime, each person kept the right to engage freely in these two industries and to buy their services freely from them, security would be generated as economically and as well as possible.

In the 1860s he had given up the hope of a one year transition to the new era but he was still optimist that it was coming as "economic parity" between the political and economic spheres continued to draw closer. He concluded the book with this optimist paragraph: [159]

Cependant, la liberté commerciale a fini par avoir raison des “monopoleurs furieux” dont parle le père de l’économie politique, et l’on peut aujourd’hui, sans s’abandonner à des rêves utopiques, espérer qu’avant un siècle le système protecteur n’existera plus qu’à l’état de mauvais souvenir dans la mémoire des hommes. Pourquoi les monopoles politiques ne disparaîtraient-ils pas à leur tour comme sont en train de disparaître les monopoles industriels et commerciaux? S’ils disposent d’une puissance formidable, les intérêts auxquels ils portent dommage grandissent aussi, chaque jour, en nombre et en force. Leur heure suprême finira donc par sonner, et l’ Unité économique se trouvera ainsi établie dans la phase de la concurrence comme elle l’a été dans les phases précédentes de la communauté et du monopole. Alors, la production et la distribution des services, enfin pleinement soumises, dans toutes les branches de l’activité humaine, au gouvernement des lois économiques, pourront s’opérer de la manière la plus utile.

However, commercial freedom came about because it got the better (of the argument?) with the “furious monopolists” of which the father of political economy spoke, and today one can hope, without giving into/surrender to utopian dreams that before a century is out/over (avant un siècle) the protectionist system will exist as nothing more than a bad reminder in the memory of mankind. Why wouldn’t political monopolies (les monopoles politiques) disappear in their turn as industrial and commercial monopolies are in the process of disappearing (now)? Even if they have enormous power, the interests which they are harming are also growing in power and in number every day. Their final hour will come and “economic unity/parity” with thus come to be established in the phase of competition , as it has been the the preceding phases of community and monopoly. Then the production and distribution of services, finally fully subjected t in all branches of human activity to the government of economic laws, will be able to operate/function in the most useful manner.

Molinari would not return to the problem of the production of security and the end of government monopoly in all its forms for another 20 years, when he published the second volume of his history of the economic and political evolution of society, L'Évolution politique (1884) which will be discussed below.

Questions d'économie politique et de droit public (1861) "The Crowning Achievement of political and economic progress"↩

Introduction↩

This two volume collection of some of his articles from the previous 15 years (1846-1861) shows that Molinari is still very much in his radical AC phase. [160] He compiled the collection in between editions of his Cours (the revised second edition was announced in the list of new books at the back of the volume) and after his trip to Russia where he had been advising the government on their policy of freeing the serfs, on which Molinari had become something of an expert).

There are eight sections in which he covers two theoretical topics (on economic equilibrium and intellectual property) and six on various aspects of "liberty" such as labour, credit, money, education, charity, religion, theatre, commerce, and most importantly "the liberty of government." In this latter section he reprints his 1849 PoS article along with the minutes of the meeting of the PES which discussed his ideas, and his early essay on "Electoral Reform" from 1846. What should be noted here are his comments in the introduction to the collection.

He states quite clearly that these essays comprise his political "credo" which he summaries in the words "la Liberté et la Paix" (Liberty and Peace) which he says is the cause to which he has dedicated his life and to which he has been able to recrute "a few converts" (prosélytes). [161]

La liberté embrasse, en effet, toute la vaste sphère où se déploie l’activité humaine. C’est le droit de croire, de penser et d’agir, sans aucune entrave préventive, sous la simple condition de ne point porter atteinte au droit d’autrui. Reconnaître les limites naturelles du droit de chacun, et réprimer les atteintes qui y sont portées, en proportionnant la pénalité au dommage causé par cet empiétement sur le droit d’autrui, telle est la tâche qui appartient à la législation et à la justice, et la seule qui leur appartienne.

Liberty embraces in effect the entire vast sphere in which human activity takes place. It is the right to believe, to think, and to act without any preventive shackle/hindrance, on the simple condition of not infringing upon the rights others. To recognize the natural limits of the rights of others, and to repress attacks which are made against them, and by making penalties proportional to the damage caused by this infringement on the rights of others, such is the task which belongs to legislation and justice, and (these are) the only one which belongs to them.

Some New Concepts↩

As one has come to expect with Molinari's fertile imagination, there are a number of new concepts he raises in this introduction. He introduces the idea of "l'interventionisme" (interventionism) which he distinguishes from socialism, in that socialism provided a body of doctrine about what a future society might look like, while the policies or practices of interventionism provided the specific means of putting socialist ideas into practice. Thus interventionism provided the road or the pathway to full-blown socialism: [162]

des doctrines du socialisme et des pratiques de l’interventionisme, qui n’est qu’un acheminement au socialisme

The theory of socialism and the practice/policies of interventionism, which is only road to socialism.

According to this way of looking at the problem, liberal reformers like himself now faced three groups who were opposed to the free market and deregulation of the economy, "les privilégiés, les socialistes et les interventionistes, tels sont donc les adversaires que nous avons à combattre" (privileged elites, the socialists, and the interventionists, these are the adversaries we have to fight). [163] What he could see taking place in Paris at the time he was writing was the replacement of the radical socialist threat "from below" (for the time being at least) by the perhaps more insidious threat of "socialism from above" in the form of Bonapartist economic planning and interventionism.

Another very interesting distinction he raises for the first time in his writing is the choice reformers faced between using force or persuasion to covert people to their cause, the choice of being part of "l'école de la force" (the school of force) or "l'école de la persuasion" (the school of persuasion). Molinari states he is firmly in the latter camp which is partly a result of his moral objections to the use of force and partly a result of his belief that economists needed to be "the bookkeepers of society" who could produce a cost-benefit analysis of the use of force such as wars, revolutions, and interventionist economic policies, which he concluded cost much more in the long run than than any benefits they may have provided. He had first made this argument in his work on the class analysis of Bonapartist despotism in Les Révolutions et le despotisme envisagés au point de vue des intérêts matériel (1852) shortly after his relocation to the safety of Brussels. His preferred method of changing the minds of people was the one adopted by the early Christian church before it became the official religion of the Roman Empire and switched to using coercion to establish itself. Molinari instead believed in what he called "cette libre conquête des âmes" (the free conquest of minds): [164]

Nous appartenons pour notre part, exclusivement, à l’école de la persuasion. Nous répudions, de la manière la plus absolue, le concours de la force pour la réalisation de nos idées. Nous condamnons, en conséquence, à priori, toute révolution, toute guerre entreprise en vue d’accomplir un progrès, si légitime et si nécessaire que ce progrès puisse paraître

On our part, we belong exclusively to the school of persuasion. We repudiate/renounce in the most absolute manner the use of force to realize our ideas. As a result, a priori we condemn all revolution, all war undertaken with the purpose of achieving (any) progress/improvement, as legitimate and as necessary as this progress might appear/seem.

The Production of Security↩

However, since he was republishing two of his three breakthrough pieces on the production of security, his comments about this aspect of his thought are especially interesting for us here. He admits that some of his thoughts about the freedom of religion and "la liberté de gouvernement" (the liberty of government) are not as well thought out as other aspects of his thought. He would expand considerably his theory of the latter in the chapter on "Les consommations publiques" in the second edition of his Cours (1863) and then the chapter "Les gouvernements de l'avenir" in his work on political sociology some twenty years later L'Évolution politique (1884).

Here he makes an indirect reference to security in a warning he gives about people who end up violating the rights to property and liberty of others under the pretext of defending and protecting those very rights; a charge he leveled against any government monopoly in the production of security: [165]

Cela étant, en quoi doit consister l’œuvre des amis du progrès? Elle doit consister uniquement à détruire les entraves que des intérêts étroits et égoïstes, des passions aveugles ou des préjugés à courte vue ont opposés depuis des siècles à la liberté et à la propriété. Restituer aux hommes la liberté de travailler, de s’associer, d’échanger, de prêter, de donner, la libre jouissance et la libre disposition de leurs propriétés, en empêchant simplement les uns d’empiéter sur la liberté et sur la propriété des autres, et pour éviter d’attenter à la liberté et à la propriété sous prétexte de les garantir, en se bornant à réprimer les atteintes qui y sont portées, voilà ce qu’il y a à faire aujourd’hui, rien de moins, mais aussi rien de plus!

That being the case, what should the task of the friends of progress be? It should consist simply in destroying the shackles which the narrow and egotistical interests, the blind passions or the short sighted prejudices have placed on liberty and on property over the centuries. To restore to mankind the liberty of working, of associating, of exchanging, of lending, of giving; and the enjoyment and free disposal of their property, by simply preventing some from violating the liberty and property of others, and to avoid infringing upon liberty and property under the pretext of defending them, and in limiting themselves to repressing attacks which are made upon them; here are the things it must do today, nothing less, but also nothing more! (emphasis added).

He describes any and all restrictions on liberty, including restrictions on the production of security, as essentially plunderous in nature which hamper its production and distribution. It was costly to do this to key industries like agriculture and manufacturing, but it was even more dangerous to do this to "cette industrie spéciale" (this special industry) which was what he called "le « couronnement de l'édifice » du progrès politique et économique" (the crowning achievement of political and economic progress) which made all other economic activity possible. He was convinced that sooner or later this industry of security, like all other industries, would move out of the régime of monopoly and into the "régime de la liberté pure et simple" (the regime of pure and simple liberty) where it will become "l'organisation volontaire" (a voluntary organisation) like every other: [166]

Comme résultats de cet examen, nous avons constaté que partout les restrictions ou les interventions artificielles dans le domaine de la production et de la distribution des richesses, ont ralenti l’une et faussé l’autre, soit qu’il s’agisse de l’industrie agricole ou manufacturière, soit qu’il s’agisse encore de l’enseignement, des cultes et des arts, soit enfin même qu’il s’agisse de cette industrie spéciale qui a pour objet de procurer à toutes les autres branches de la production la sécurité qui leur est indispensable. Nous sommes convaincu que cette industrie, qui est la branche essentielle des attributions gouvernementales, est destinée à passer, tôt ou tard, du régime du monopole ou de la communauté forcée au régime de la liberté pure et simple, et que tel sera le « couronnement de l’édifice » du progrès politique et économique. En un mot, nous croyons que tout ce qui est organisation imposée, rapports forcés, doit faire place à l’organisation volontaire, aux rapports libres. (pp. xxvi-xxvii)

As a result of our investigations (in this book) we have stated that everywhere restrictions or artificial interventions in the domain of the production and distribution of wealth have slowed down the former and distorted the latter, (this is true) whether it is a matter of the agricultural or manufacturing industry, or furthermore education, religion, and the arts, or even finally a matter of this special industry which has as its purpose to provide for all the other branches of industry of production (that/the) security which is indispensable for them. We are convinced that this industry (the production of security) which is the essential branch of governmental functions, is destined to pass sooner or later from the régime of monopoly and coerced community to the régime of liberty pure and simple, and that it will be “the crowning achievement” of political and economic progress. In a word, we believe that that everything which is based upon imposed organisation and violent relations must make way to voluntary organisation and free relations.

L'Évolution politique (1884), "Les gouvernements de l'avenir" (Governments of the Future)↩

Introduction↩

A quarter of a century after publishing the first edition of the treatise Cours d'économie politique , after he had left academia and returned full-time to journalism (becoming editor of the prestigious Journal des débats in the early 1870s) and writing a series of books about his travels in the Americas, [167] Molinari returned to defending the private production of security in a long series of articles first published in the JDE between 1877 and 1883. Theses articles were published as a pair of books in which he developed an historical and sociological analysis of the evolution of the state and the market. The first volume, L'évolution économique du XIXe siècle. Théorie du progrès (1880), [168] is more concerned with economic evolution, and the second, L'évolution politique et la Révolution (1884), [169] with political evolution, culminating in a long chapter on his vision of "les gouvernements de l'avenir" (governments in the future). With this pair of volumes Molinari was doing something very similar to what his contemporary counterpart in England, Herbert Spencer, was doing with his volumes on The Principles of Sociology (beginning in 1876).

I describe this roughly 10 year period in his career between 1880 and 1891 as the second part of his "radical phase" in which he still strongly defends the AC ideas he first presented in 1849 (the PoS article and S11). Whereas the first part of his radical phase, between 1846 and 1863, looked at the state and the production of security primarily from the perspective of economic analysis, in the second part of his radical phase he now adds a sociological dimension to his economic analysis. The main works in which he argues for ACT during this period are L'évolution politique (1884), Les Lois naturelles (1887), and Notions fondamentales (1891).

In L'Évolution politique we can see the continued use of his key terms, such as producers and consumers of security, the price of security, insurance companies and insurance premiums, and most importantly "la liberté de gouvernement" (freedom of government). In fact, he becomes quite specific in a short section which he entitles "La liberté de gouvernement," [170] where he states unequivocally that security will be provided by "des sociétés d'assurances libres sur la vie et la propriété, constituées et organisées comme toutes les sociétés d'assurances" ( free life and property insurance companies, established and organized like all other insurance companies) and other services by "l'entreprise par actions avec marché libre" (the joint stock enterprise/company in a free market).

There is also discussion of the greater economic efficiency and lower costs of free market alternatives to government, and the need for governments to obey the economic laws which govern all enterprises, especially living within its means and paying its debts. Only when governments adhered to these economic laws, Molinari thought, could governments avoid becoming what J.B. Say described as "les ulcères des nations" (the ulcers of nations) or "l'administrative gangrène' (administrative gangrene). [171]

We also find in the book another example of the "simple hypothesis," this time of a monopoly bread maker (not a grocer); and a direct reference to the PoS article, the section in Questions d'économie politique (1861 on "la liberté de gouvernement"; and the important 12th lesson in Cours on "Public Consumption."

However, he also introduces a few new terms which can cloud the issue somewhat, such as the distinction between "des gouvernements d'entreprise" (governments run as a business enterprise) vs. "les gouvernements communautaires" (governments run by the community or the commune), where the former seem to be an alternative to replacing governments with competing private firms, and the latter are a way of introducing competition between the smaller jurisdictions within France; there is a new historical distinction between periods when politics and the economic system are dominated by "la petite industrie" (small-scale industry) which is followed by more competitive "la grande industrie" (large-scale industry); a new kind of political competition which is used in an historical and very negative sense, "la concurrence politique et guerrière" (political and martial/military competition) where states compete against and fight each other for control of territory and resources; the introduction of the English word "self-government"; and the quite troublesome word "la tutelle" or tutelage by which he means that some less well developed or mature individuals need be looked after by a "tutor" or "guardian" until such time as they are capable of exercising full "self-government."

There is also a new discussion on how the law might evolve and change to meet the needs of a growing economy. This is significant because this important aspect of ACT had been largely ignored by Molinari up until now and was a major gap in his theory in my view. This will be discussed in more detail in the final section of this paper.

We also see a new interest in the right of secession which Molinari believed was a right both individuals and communities had, as well as being a useful mechanism to introduce competition between jurisdictions both within and between states.

Transitional Stages on the Path to "the liberty of government"↩

Farming out Security to a Private Company

In this more complex evolutionary theory of the development of the state, Molinari argues that the state is controlled in the pre-Revolutionary period by a "maison" or family run business (like a royal family or aristocratic ruling class) which uses the state and its ability to produce security to get and keep benefits for themselves at ordinary taxpayers' expense, and who regard the state as their personal property which is held in perpetuity. (Later in Les Problèmes du XXe siècle (1901) he would use the phrase "les sociétés propriétaires et exploitantes des États politiques" (societies which own and exploit the political state) to describe this phenomenon. (pp. 188-89)) As society gradually enters the era or stage of large-scale industry competitive and other economic forces begin to be felt more strongly, the domination of the state by a "maison" is replaced by "une société" or "une compagnie" (a privately owned company or a firm). Here the state may "farm out" (affermer) or contract out security and other services to a private monopoly which will be run like a profit making firm. Although this is not ideal (that will come later) this new arrangement is better than the previous one, Molinari argues, because economic pressures force the company to keep costs down, satisfy their consumers, and make profits. In a very curious and very long footnote Molinari cites the example of the East India Company's rule of India (1757-1858) as a model of how this transitional political arrangement might work. [172] He called the East India Company "un modèle de bonne gestion politique et d'administration économique" (a model of good political and economic administration), "une « compagnie de gouvernement »" (a 'government company' or perhaps "private government"?), and "cette compagnie concessionnaire du service gouvernemental" (this company with a concession to provide government services).

Using a Constitution to Define the Terms of the Contract

A second transitional stage on the path to full "la liberté de gouvernement" (free government) is for those who are living under "la servitude politique" (political servitude or slavery) to attempt to mitigate their burdens by using constitutions to negotiate the conditions under which they are ruled, in other words to create a kind of "political contract" which more clearly defines their rights and duties vis-à-vis the state. [173] This is what happened in Europe and America in the late 18th and 19th centuries when constitutional governments first emerged, but admittedly with mixed and imperfect results as far as Molinari was concerned: [174]

En attendant, les « consommateurs politiques » devront se résigner à supporter les défectuosités naturelles du vieux régime de l’appropriation des marchés, sauf à recourir aux moyens, malheureusement toujours imparfaits et insuffisants, de limiter la puissance du monopole auquel ils se trouvent assujettis. Le système adapté actuellement à cet état de choses est celui du gouvernement constitutionnel ou pour mieux dire contractuel, monarchique ou républicain, se résolvant dans un contrat débattu et conclu librement entre la « maison » ou la « société » productrice des services politiques et la nation qui les consomme.

While waiting (for the arrival of “la liberté de gouvernement”), “political consumers” will have to resign themselves to supporting the natural defects of the old regime (resulting) from the appropriation of these markets (monopolies of all kinds), unless they resort to some means, unfortunately always imperfect and insufficient, of limiting the power of the monopoly to which they find themselves subject. The system which has been modified to the present state of affairs is that of constitutional government, or rather contractural government, whether monarchical or republican (in nature), which solves (the problem) with a a contract which is freely negotiated and concluded between the “maison” or the “company” which provides the political services, and the nation which consumes them.

Unfortunately this "solution" is far from perfect for many reasons, such as the inevitable corruption of the people's representatives who draw up the contract. Molinari asks rhetorically, wouldn't it be better to let individuals do this for themselves instead of doing it through intermediaries? An argument which suggests on AC perspective on the issue. Or if this proved to be too difficult, then perhaps "des associations librement formées entre eux" (associations freely formed among them (the people)) could do it for them. He expressed his skepticism about the "constitutional or contractural' form of government in the following passage: [175]

Toutefois, en présence de la corruption à peu près inévitable du régime représentatif, on peut se demander si les garanties qu’on croit y trouver ne sont pas, le plus souvent, illusoires, s’il ne serait pas préférable d’abandonner aux consommateurs eux-mêmes le soin de débattre les conditions du contrat, de le modifier et d’en surveiller l’exécution, sans leur imposer aucune formule de représentation. Sans doute, les consommateurs politiques sont individuellement incapables de se charger de cette tâche, mais des associations librement formées entre eux ne pourraient-elles pas s’en acquitter avec l’auxiliaire de la presse? Dans les pays où la masse de la population ne possède ni la capacité ni les loisirs nécessaires pour s’occuper des choses de la politique, cette représentation libre des consommateurs, recrutée parmi ceux qui possèdent cette capacité et ces loisirs, ne serait-elle pas un instrument de contrôle et de perfectionnement de la gestion de l’État plus efficace et moins sujet à se rouiller ou à se vicier que la représentation officielle d’une multitude ignorante ou d’une classe privilégiée?

However, given the more or less inevitable corruption of the representative regime, one could ask oneself if the guarantees that one believes to be there are not, most often illusory; if it wouldn’t be preferable to leave to the consumers themselves the task of negotiating the conditions of the contract, to modify it, and to supervise its execution, without imposing on them any formula for representation. Without doubt, political consumers are individually incapable of carrying out this task, but couldn’t associations freely formed among them accomplish this with the assistance of the press? In countries where the mass of the population possesses neither the capacity nor the leisure necessary to busy themselves with political matters, this free representation of consumers, recruited from those who do possess this capacity and leisure, wouldn’t it be an instrument/tool to control and improve the administration of the state which is more efficient and less subject to being corroded or tainted than the official representation of an ignorant multitude or a privileged class?

Competition between the Communes and the Provinces

In a separate section of this long chapter Molinari discusses the role that local governments (la commune, and the provinces) or what he calls "le petit État" (the little state) might play in the evolution towards a fully free and competitive society. [176] This is the third transitional stage he envisages on the path to complete "liberty of government." One possibility is for "competition" to emerge between existing communes and provinces to attract people by lowering their costs by leaving local services to private firms to provide or to outsource them to private firms, which would enable them to drastically lower local taxes and charges and thereby compete with neighboring communes or provinces in attracting new inhabitants. Thus there would emerge a new industry for providing such services, "les industries immobilières" (a land or property services industry) which would replace local town governments and provide services such as roads, sewers, sidewalks (footpaths), lighting, and water for which they would charge a fee. Molinari thought that "il n'y a pas un seul service municipal qui ne puisse être abandonné à l'industrie privée" (there not a single municipal service which could not be left to private industry (to supply/provide). [177]

Les localités où les frais de production de l’industrie et le prix de la vie seront surélevés à l’excès par les taxes locales courront le risque d’être abandonnées pour celles où cette cause de renchérissement sévira avec une moindre intensité; elles seront obligées alors, sous peine de ruine, de restreindre leurs attributions et leurs dépenses. En dehors de l’édilité (town councillor??) et de la voirie (highways), comprenant les services des égouts (sewers), des moyens de communication, du pavage, de l’éclairage et de la salubrité, il n’y a pas un seul service municipal qui ne puisse être abandonné à l’industrie privée. Enfin, si nous considérons ces services mêmes, nous nous apercevrons que la tendance déjà manifeste du progrès consiste à les annexer aux industries immobilières qui pourvoient à l’exploitation des immeubles et du sol, et par conséquent à en incorporer directement les frais dans les prix de revient de ces industries.

The places where the costs of production and the cost of living have been raised to an excessive level by local taxes will run the risk of being abandoned for those places where the cause of this increase (in cost) is felt with less intensity. These (high cost) localities will then be obliged, under pain of being (financially) ruined, to restrict their functions and their expenses. Apart from the management of the town (l’édilité) and the highways department (la voirie), including the services of sewers, roads, sidewalks, lighting and water (las salubrité = publics health?), there not a single municipal service which could not be left to private industry (to supply/provide). Finally, if we consider even these services, we will realize that the already obvious tendency of progress consists in including them in the land or property services industry which run/operate buildings and land, and thus to incorporate the costs (of these services) directly in the price these industries (charges for their services).

Later he would expand this idea to include the right of secession of groups who were dissatisfied with the services they were getting from their government. According to Molinari, there was what he called a "double right of secession," that of the commune from the province, as well as the the province from the central state. [178]

Another "simple hypothesis": Private "Property Development Companies"

His fourth transitional arrangement was even more radical than the others which is probably why he introduced it as another "simple hypothesis" to hide this initially from his readers. [179] It is also probably a hint to the reader that he considered it to be part of his ACT. In this hypothesis Molinari argued that private firms could build entirely new towns (like modern American "gated communities" perhaps) in which all the so-called "public goods" would be "built in," as it were, and charged for with an annual fee or rent by those who bought residences in the new community. The terms he used to describe were "des industries immobilières" (real estate development companies), "la compagnie propriétaire" (company owning the land), l'industrie du logement" (the housing or accommodation industry), and "les compagnies immobilières" (companies in the land business).

In these "new towns" even highways and public buildings like schools, churches, theaters, and public halls, trams and railways, and even security, would be designed and built by "la compagnie propriétaire" (company owning the land) also called "l'industrie du logement" (the housing or accommodation industry) or sub-contracted out to companies which specialized in offering these services.

As more privately run and operated communities came into existence there would be competition between them for residents which would force the communities to keep their prices competitive. In addition, these private communities would form associations (syndicat) in order to settle any disputes which might arise as their cities expanded or if gas, streets, and lighting had to be connected between them. Failing that, there would also emerge private arbitrators or tribunals to settle any differences that the associations could not resolve themselves. [180]

Poursuivons maintenant notre hypothèse. Supposons que la situation favorable de la nouvelle cité, la bonne gestion des services urbains et la modicité du taux des loyers agissent pour attirer la population et qu’il devienne avantageux de construire un supplément d’habitations. N’oublions pas que les entreprises de tous genres ont leurs limites nécessaires, déterminées par la nature et le degré d’avancement de leur industrie, et qu’en deçà comme au delà de ces limites, leurs frais de production vont croissant et leurs bénéfices diminuant. Si la compagnie qui a construit et qui exploite la cité estime que ces limites se trouvent atteintes, elle laissera à d’autres le soin de l’agrandir. On verra donc se former d’autres compagnies immobilières qui construiront et exploiteront des quartiers nouveaux, lesquels feront concurrence aux anciens, mais augmenteront cependant la valeur de l’ensemble, en accroissant le pouvoir d’attraction de la cité agrandie. Entre ces compagnies exploitantes celle-là du noyau de la cité, celles-ci de nouvelles rues ou quartiers, il y aura des rapports nécessaires d’intérêt mutuel pour le raccordement des voies, des égouts, des tuyaux du gaz, l’établissement des tramways etc. ; elles seront, en conséquence, obligées de constituer une union ou un syndicat permanent pour régler ces différentes questions et les autres affaires résultant de la juxtaposition de leurs propriétés, et la même union devra s’étendre, sous l’influence des mêmes nécessités, aux communes rurales du voisinage. Enfin, si des différends surgissent entre elles, elles devront recourir à des arbitres ou aux tribunaux pour les vider.

Now let us pursue our “hypothesis” (further). Let us imagine that there is a location suitable for (building) a new city, a good administration of city/urban services, and a modest level of rent which attract (a number of) people. It would then become attractive to build additional housing. Let’s not forget that (business) entreprises of all kinds have their necessary limits which are determined by the nature and level of development of their industry, and that below or above these limits their cost of production are going to increase and their profits decline. If the company which has build and runs the city calculates that these limits have been reached, it will leave the task of increasing the size of the city to other companies. Therefore one will see other property development companies (d’autres compagnies immobilières) be established which will build and run these new sections of the city (quartiers) which will compete with the older ones, but will however increase the value of the city as a whole (la valeur de l’ensemble) by increasing the attractive power of the enlarged city. Between the companies running the old sector of the city (noyau de la cité) and those running the new streets and sectors/quartiers) there will be essential relationships of mutual interest to link up the streets, sewers, gas pipes, the creation of tram lines, etc. As a result, they will be obliged to create a permanent union/association or syndicat to regulate these various matters and other business arising from the proximity of their properties; and this same association will have to be extended, under the influence of the same requirements, to the rural communes in the neighborhood. Finally, if disagreements arise among them they will have to resort to arbitration or to tribunals in order to resolve them.

The question of the production of security naturally came up as a problem these private communities would have to solve. His discussion of this was brief but still in keeping with his ACT. He argued that these associations of property owners - "cette union, composée des propriétaires, individus ou sociétés, ou de leurs mandataires" (this union/association of property owners, whether individual owners or corporate (sociétés) or their representatives (mandataires)) - would settle (régler) all their common interests in advance, and make similar settlements or arrangements with neighboring property associations for things like roads, lighting, public health (water?) as well as the important matter of security. The latter he now believes could be paid for "par abonnement ou autrement" (by subscription or otherwise), so not insurance premiums, which is a very interesting new twist to his theory. This is slightly different from his earlier notion of playing an annual premium to a property insurance company but still close enough to qualify as in keeping with what we would consider to be ACT in my view. There is also the extra added notion that these proprietary communities would be rather fluid in that they would have the right to leave the association they belonged to initially in order to run their affairs independently (a form of secession) or to join another neighboring association that could provide them with better terms. [181]

Cette union, composée des propriétaires, individus ou sociétés, ou de leurs mandataires, réglerait toutes les affaires de voirie, de pavage, d’éclairage, de salubrité, de sécurité par abonnement ou autrement, et elle se mettrait en rapport avec les unions voisines pour le règlement commun de ces mêmes affaires, en tant toutefois que la nécessité de cette entente se ferait sentir. Ces unions seraient toujours libres de se dissoudre ou de s’annexer à d’autres, et elles seraient naturellement intéressées à former les groupements les plus économiques pour pourvoir aux nécessités inhérentes à leur industrie.

This association, made up of property owners, whether individual owners or corporate owners (sociétés) or their representatives (mandataires) would regulate all the business/matters concerning highways, footpaths, lighting, and public health (water?), and security by (charging) subscriptions or by other means, and it would (also) establish relations with neighboring associations for the common regulation/administration of these same matters, always to the extant that the necessity of this understanding/agreement is felt by both parties. These associations would always be free to dissolve themselves or to join with others, and they would be naturally interested in forming groupings/associations which were the most economical in providing the requirements essential to their industry (pourvoir aux nécessités inhérentes à leur industrie).

The Liberty of Government↩

The Sovereignty of the Individual

In a section on "La souveraineté individuelle et la souveraineté politique" (Individual and Political Sovereignty) [182] he discusses the history of the development of the production of security through three historical stages, but this time he adds a further consideration, that of "sovereignty," in particular the sovereignty of the individual vis-à-vis the state. An important part of his evolutionary theory is the transition from a condition of "individual servitude" (slavery) and its institutional counterpart "political servitude" to one of "individual sovereignty" and its institutional counterpart "political sovereignty."

He defines individual sovereignty in much the same way as Spencer did with his "law of equal liberty" in Social Statics (1851), [183] that each individual has a right to their own property and liberty but this right is limited by the equal rights others have to their property and liberty. It is the purpose of the "industry" which he calls "the production of security" to protect these rights. As he stated in the opening to this section in very clear terms of Lockean-style self-ownership and first acquisition of property via labour, [184] which I think is worth quoting at length: [185]

L’homme s’approprie l’ensemble des éléments et des forces physiques et morales qui constituent son être. Cette appropriation est le résultat d’un travail de découverte ou de reconnaissance de ces éléments et de ces forces, et de leur application à la satisfaction de ses besoins, autrement dit de leur utilisation. C’est la propriété personnelle. L’homme s’approprie et se possède lui-même. Il s’approprie encore,— par un autre travail de découverte, d’occupation, de transformation et d’adaptation, — le sol, les matériaux et les forces du milieu où il vit, en tant qu’ils sont appropriables. C’est la propriété immobilière et mobilière. Ces éléments et ces agents qu’il s’est appropriés dans sa personne et dans le milieu ambiant, et qui constituent des valeurs , il agit continuellement, sous l’impulsion de son intérêt, pour les conserver et les accroître. Il les façonne, les transforme, les modifie ou les échange à son gré, suivant qu’il le juge utile. C’est la liberté. La propriété et la liberté sont les deux facteurs ou les deux composantes de la souveraineté.	Man appropriates for himself the collection of elements and physical and moral forces which constitute his being. This appropriation is the result of the labour (undertaken) to discover or recognise these elements and these forces, and to apply them to satisfying his needs., in other words their utilization. This is personal property. Man appropriates and possesses himself. He appropriates in addition, by other labour (undertaken) to discover, occupy, transform and adapt the soil, the materials and the forces of the surroundings where he lives, to the degree that they are ownable (“appropriable”). This is property in land and things (la propriété immobilière et mobilière). These elements and resources (agents) that are appropriated in his person and his immediate surroundings (le milieu ambiant), and which constitutes “valuable things” (les valeurs), man constantly takes action under the driving force of his self-interest to preserve and to increase them. He works on them, transforms them, modifies or exchanges them as he wills, as he judges it useful to him. This is liberty. Property and liberty are the two factors or the two components of sovereignty.
Quel est l’intérêt de l’individu? C’est d’être absolument propriétaire de sa personne et des choses qu’il s’est appropriées en dehors d’elle, et d’en pouvoir disposer à son gré; c’est de pouvoir travailler soit isolément, soit en associant librement ses forces et ses autres propriétés, en tout ou en partie, à celles d’autrui; c’est de pouvoir échanger les produits qu’il tire de l’exploitation de sa propriété personnelle, immobilière ou mobilière, ou bien encore de les consommer ou de les conserver : c’est, en un mot, de posséder dans toute sa plénitude la « souveraineté individuelle ».	What is the interest of an individual? It is to be the absolute owner of his person and of the things which he has appropriated outside of himself, and to be able to dispose of them as he wills; it is to be able to work either in isolation or by freely associating his forces and his other property, in whole or in part, with those of other people; it is to be able to exchange the products which he draws/gets from using (exploitation) his personal property, whether in land or things, or furthermore to consume them or keep them: it is in a word, to possess “individual sovereignty” to its fullest extent (dans toute sa plénitude).
Cependant l’individu n’est pas isolé. Il est perpétuellement en contact et en rapport avec d’autres individus. Sa propriété et sa liberté sont limitées par la propriété et la liberté d’autrui. Chaque souveraineté individuelle a ses frontières naturelles dans lesquelles elle s’exerce et qu’elle ne peut franchir sans empiéter sur d’autres souverainetés. Ces limites naturelles, il faut qu’elles soient reconnues et garanties, sinon les faibles se trouvent à la merci des forts et aucune société n’est possible. Tel est l’objet de l’industrie que nous avons nommée « la production de la sécurité » ou, pour nous servir de l’appellation habituelle, tel est l’objet du « gouvernement».	However, the individual does not live in isolation (n’est pas isolé). He is constantly in contact and in touch with other individuals. His property and his liberty are limited by the property and liberty of others. The sovereignty of each individual ( Chaque souveraineté individuelle) has natural boundaries within which it can be exercised and which it cannot breach (franchir) without impinging upon the sovereignty of others. These natural limits have to be recognised and protected otherwise the weak will find themselves at the mercy of the strong and no society will be (is) possible. This is the function/purpose of the industry which we have called “the production of security” or, to use the customary term, this is the purpose of “the government.”

In the first stage of historical development the individual is sovereign within the tribe or small community and security is provided by the group in the form of "une mutualité d'assurance" (a mutual insurance association). The individual "consommateurs de sécurité" in such a community are sovereign because they can withdraw at any time from the insurance association and go elsewhere or provide it for themselves.

In the second stage, specialization and the division of labour have taken place and have been applied to the production of security along with every other industry. There is now a defined group of specialists who become the "producers of security" for another group who are now purely "consumers of security." The former group, an "oligarchy," form a government which they now control and impose their "services" on the latter who no longer have the opportunity to withdrew and go elsewhere. This state of affairs Molinari calls "la servitude politique" (political servitude or slavery) which lasted until the French Revolution broke out in 1789 and gave sovereignty back to the people instead of the previous group who controlled the state for their own benefit. However, the French citizens who seized control of the state were faced with the difficult choice when it came to deciding how security was to be provided: they could either return to the system under the old regime of heavily regulated corporations and monopolies; or they could return to the original primitive system of a communal "mutualité" or insurance association which they, the citizens, would run for themselves as a community; or the most radical solution preferred by Molinari, they could break entirely with political servitude and allow competition between protection providers to be able to protect "individual sovereignty." He suggested they should have "supprimer purement et simplement la servitude politique, et laisser à la concurrence le soin de pourvoir à la garantie de la souveraineté individuelle. (purely and simply abolish (their) political servitude and leave to competition the task of providing the protection of individual sovereignty). [186]

Unfortunately, Molinari thought, the French chose the second alternative where "the nation" or its political representatives would decide how security was to be provided, and thus foolishly exchanged one form of political servitude for another. [187]

The Simple Hypothesis of the Monopolist Baker

It was in the course of defending the right of individuals to seek protection of their personal sovereignty outside of the state's or nation's monopoly that he returned to his favored trope of the "simple hypothesis," this time about the monopolist baker of bread. [188] Just as each individual has the "primordial right" to bake their own bread or choose another baker to do it for them if they don't like the local monopolist bakery, [189] so the French people had the right to seek alternate "producers of security" if they wished, and competition between security providers would ensure its high quality and low price. As Molinari rather sweepingly put it, "Remplacez la fabrication du pain par la production de a sécurité" (Just replace the making of bread with the production of security). [190]

In the end, Molinari is not confident that this "agreement" between monopolist producers of security and the consumers of security as regulated and controlled by the political representatives of the consumers is stable or even able to be achieved in practice. The benefits of "cheating," especially by the holder of the monopoly and the politicians who are supposed to be policing it on behalf of the consumers, are too great to resist. And the simulacrum of competition which this agreement is supposed to provide is not "real" competition. That will only appear in the coming era of "un régime de pleine concurrence (liberty)" (full and complete competition), or "the government of the future." [191]

L’expérience atteste malheureusement que cette conciliation n’est pas facile à accomplir dans la pratique. Il en sera ainsi, selon toute apparence, aussi longtemps que la production de la sécurité s’opérera sous le régime du monopole et que subsistera la « servitude politique ». Seule, la concurrence peut établir une exacte délimitation de la souveraineté politique.

Unfortunately, experience attests to the fact that this agreement is not easy to achieve in practice. It will remain this way, according to all appearances, as long as the production of security operates under the regime of monopoly and as long as “political servitude” survives. Only competition can establish a precise limit to political sovereignty.

The Evolution of Law in the Era of Full Competition

In a chapter on "Évolution et révolution" Molinari argued that no matter what state of economic and political development a society might be in, whether the communitarian, monopoly, or competitive phase or régime, legal and political institutions evolve in order to achieve "concordance" or equilibrium between them and the level of complexity of the economy in that stage of development (such as the extent of the division of labour and the size and scope of trading relationships). In a very Spencerian way of arguing he hinted that the evolution of institutions, such as government, or what he called in English "the machinery" of government and the law itself would have to be modified in order "to bring them into concordance with the new state of mankind and of (material) things." This was another of the few times Molinari spoke about law in this fashion: [192]

Les institutions qui régissent les sociétés sont le produit d’une série d’inventions et de découvertes, c’est-à-dire d’une industrie particulière, laquelle apparaît et se développe, comme toute autre industrie, lorsque le besoin et, par conséquent, la demande de ses produits ou de ses services viennent à naître et à grandir. On trouve profit alors, — soit que l’on ait en vue une rétribution matérielle ou simplement morale, — à découvrir ou à inventer les institutions et les lois qui répondent à ce besoin. Ce travail se poursuit jusqu’à ce que la société, — troupeau, tribu ou nation, — soit pourvue de l’ensemble d’institutions et de lois qui sont ou qui lui paraissent le mieux adaptées à sa nature et à ses conditions d’existence. Lorsque ce résultat est atteint, lorsque la machinery du gouvernement approprié à la société est achevée, la production des inventions et découvertes politiques et économiques, après s’être ralentie, finit par s’arrêter. Cependant ce ralentissement et cet arrêt ne sont que temporaires, car chaque fois que les éléments et les conditions d’existence de la société viennent à se modifier, il devient nécessaire de modifier aussi ses institutions et ses lois, de manière à les mettre en concordance avec le nouvel état des hommes et des choses.

The institutions which govern societies are the product of a series of inventions and discoveries, that is to say, of a particular industry which appears and develops like any other industry, when the need for, and thus the demand for its products or services arise and grow. Profits can be then found, whether one has in mind material or simply moral rewards, in discovering or in inventing institutions and laws which respond to this need. This work is pursued until society - whether a band, a tribe, or a nation - is provided with the ensemble of institutions and laws which are or appear to be the best adapted to its nature and to its conditions of existence. When this result has been achieved, when the machinery of government (GdM uses the English word “machinery” here) appropriate to (that) society has been achieved, the production of political and economic inventions and discoveries comes to an end. However, this slowing and stopping are only temporary, because each time that the elements and conditions of existence of society are modified it becomes necessary to also modify its institutions and laws in such a way as to bring them into concordance with the new state of mankind and of (material) things.

Part of the Bundle of Liberties

However, in spite of his proposed transitional stages listed above, it appears that his ideal solution was still "la liberté de gouvernement" (his code word for AC), which was also the title he gave to a short section in the chapter. He predicted that in a not too distant future, monopoly government would be replaced by "free" life and property insurance companies and joint stock companies which would provide services such as protection. "La liberté de gouvernement" would then become part of the "faisceau" (bundle) of other liberties all people would be able to enjoy. As further proof of his continued radicalism he also directly cited in a footnote here his three previous defenses of ACT in PoS, S11, and the Cours . [193]

Un jour viendra toutefois, et ce jour n’est peut-être pas aussi éloigné qu’on serait tenté de le supposer en considérant la marche rétrograde que la révolution a imprimée aux sociétés civilisées; un jour viendra, disons-nous, où la servitude politique perdra toute raison d’être et où la liberté de gouvernement, autrement dit la liberté politique, s’ajoutera au faisceau des autres libertés. Alors, les gouvernements ne seront plus que des sociétés d’assurances libres sur la vie et la propriété, constituées et organisées comme toutes les sociétés d’assurances. De même que la communauté a été la forme de gouvernement adaptée aux troupeaux et aux tribus des temps primitifs, que l’entreprise patrimoniale ou corporative, avec monopole absolu ou limité par des coutumes, des chartes, des constitutions ou des contrats, a été celle des nations de l’ère de la petite industrie; l’entreprise par actions avec marché libre sera, selon toute apparence, celle qui s’adaptera aux sociétés de l’ère de la grande industrie et de la concurrence.

However, a day will come, and this day is perhaps not as far away as one might be tempted to think when considering the retrograde steps/march which the Revolution has imprinted on civilized societies. We say that a day will come when political servitude will lose all its reason for being (raison d’être) and when the liberty of government, otherwise known as “la liberté politique” (political liberty) will be added to the bundle of the other freedoms. Then, governments will be nothing more than free life and property insurance companies, established and organized like all other insurance companies. Just as “la communauté” (the community) has been the form of government suited to the bands and tribes in primitive times, just as the patrimonial (family??) or corporative enterprise, with an absolute monopoly or one limited by custom, carters, constitutions, or contacts has been the form of government suited to nations in the era of small-scale industry; “l’entreprise par actions” the joint stock enterprise/company in a free market will be, according to all appearances, suited to the societies in the era of large-scale industry and competition. [It is here where Molinari quotes S11, the PoS article, and the Cours .

Conclusion↩

Molinari concluded from this analysis that traditional monopoly political organisations like the commune or the central state would eventually be melted or dissolved (fonder) into the broader society and would for all practical purposes disappear and there would be at last "l'État libre dans la Société libre" (a free state in a free society). This is a very similar notion to that of Charles Dunoyer in 1825 who argued for what he termed "munipaliser le monde" (the municipalisation of the world) [194] which seems to be thread which runs through French radical liberal thought. [195]

C’est ainsi qu’au lieu d’absorber l’organisme de la société, suivant la conception révolutionnaire et communiste, la commune et l’Etat se fondent dans cet organisme. Leurs fonctions se divisent et la société est composée d’une multitude d’entreprises formant, sous l’empire de nécessités communes qui dérivent de leur nature particulière, des unions ou des États libres exerçant chacun une fonction spéciale. L’avenir n’appartient donc ni à l’absorption de la société par l’État, comme le prétendent les communistes et les collectivistes, ni à la suppression de l’État, comme le rêvent les anarchistes et les nihilistes, mais à la diffusion de l’État dans la société. C’est, pour rappeler une formule célèbre, l’État libre dans la Société libre.

Thus, instead of absorbing the organisation of society, according to the revolutionary and communist notion, the Commune and the State will be dissolved into this organism. Their functions will be divided up and society will be made up of a multitude of (business) enterprises , under the control/sway of the common/shared necessities which come from their particular nature, associations or free states (des unions ou des États libres) each of which will exercise/carry out a special function. Thus the future will belong not to the absorption of society by the state, as the communists and the collectivists claim, and not to the abolition of the state as the anarchists and nihilists dream of, but to the diffusion of the state within society. This, to recall/remember the famous saying, is “l’État libre dans la Société libre” (a free state in a free society).

Les Lois naturelles (1887) "La Liberté de gouvernement" (The Freedom of Government)↩

Introduction↩

This work is a book length treatment of ideas he first expressed in his book Les Soirées (1849) which had as its subtitle"entretiens sur les lois économiques et défense de la propriété" (conversations about economic laws and the defense of property). [196] In summary, he thought there were six "natural laws" which operated regardless of any individual's hopes or desires to act counter to them:

1. "la loi naturelle de l'économie des forces ou du moindre effort" (the natural law of the economising of forces, or (the exertion) of the least effort)
2. "la loi naturelle de la concurrence" (the natural law of competition) or "la loi de libre concurrence" (the law of free competition)
3. "la loi naturelle de la valeur," sometimes also expressed as "la loi de progression des valeurs" (the natural law of value, or the progression of value)
4. "la loi de l'offre et de la demande" (the law of supply and demand)
5. "la loi de l'équilibre" (the law of economic equilibrium)
6. "Thomas Malthus' law of population growth"

In the course of this work he also discussed the production of security in similar terms to those in Les Soirées which suggests his radical ACT has not waned much at this stage. In fact, one might describe it as the last of the books of his radical AC phase before he began to compromise and "backslide" in the early 1890s. He was 68 years old when he published it. We see here references to "liberté de gouvernement," [197] "les compagnies d'assurances" (insurance companies), and another "simple hypothesis" concerning private "property development companies." We also have references to his speculations about "l'organisation politique de l'avenir" (the political organisation in the future) and some of the intermediary steps that will have to be taken in order to break out of "political servitude" in order to reach that future society, namely radical decentralisaton of politics to the communal level, competition between communes for "political consumers" (i.e. inhabitants and taxpayers), and the right of individuals to secede. The latter he now decides is a "double right" in that communes have the right to secede from a province they do not like living under, and the province has the same right to secede from the central state if it is not happy the quality and price of the services it receives.

If there are any indications of his wavering a little from his most radical formulation of ACT it is in the acknowledgement that there are things which are "naturally collective" (like certain public goods like streets, gas, water, and security which cannot be provided "individually," but the uncertainty comes about from the fact that he still does not think that these services should be provided coercively by the central nation state in the form of a government monopoly; and the notion that in the progress to a regime of full and complete liberty and competition in which there would be "la liberté de gouvernement" he admits that "Mais nous n'en sommes pas là" (but we are not there yet), thus leaving the possibility open that one day "we" will be there.

The raison d'être of governments↩

In a chapter on obstacles to achieving peace and liberty he talks about the the tendency of individuals to engage in theft which gives rise to what he terms "la nécessité et raison d'être des gouvernements" (the necessity and raison d'être of governments). He explicitly rejects "anarchism" by name for the first time (probably in reaction to the emergence of explicitly anarchist left wing groups in Europe at the time, especially in Russia). Left wing anarchists, he argues, do not understand the nature of the division of labour and the specialization of functions which takes place in a market society and so cannot conceive of a cheap and efficient economic way to insure against theft and damage to life and property. The function of "government" is to act as an "insurance company" to protect the three different forms of property - personal property, landed property, and moveable property. Unfortunately, Molinari argues, all governments do this in the most crude and clumsy manner (d'une manière plus grossière) by mixing the "premium" component for providing this essential service with other impositions on the citizens in the form of taxes which are unjust and unnecessary. He describes these taxes as "barbares et compliquées" (barbaric and complicated). [198]

D’abord, quand on veut garantir une propriété contre un risque quelconque, risque de vol ou risque d’incendie, on doit avant tout la reconnaître, la délimiter et l’évaluer. C’est ce que font les compagnies d’assurances en vue de savoir ce qu’elles assurent, de connaître l’importance des risques qu’elles se chargent de couvrir, et de fixer le montant de la prime qu’elles doivent exiger pour compenser leurs frais et réaliser un bénéfice. C’est ce que font aussi les gouvernements, quoique d’une manière plus grossière. Ils « reconnaissent » la propriété, et c’est là ce qui a porté les juriconsultes, étrangers à l’économie politique, à déclarer qu’ils la créent. Est-il nécessaire de remarquer que les gouvernements ne créent pas plus les valeurs dont ils garantissent la propriété et l’usage contre le vol et la destruction que les compagnies d’assurances ne créent les valeurs qu’elles assurent contre l’incendie? De même encore que les compagnies d’assurances, les gouvernements imposent des règles et des restrictions ou des servitudes à l’usage de la propriété, afin de faciliter leur tâche et de diminuer leurs risques; seulement ces règles et ces servitudes sont plus compliquées et plus étendues, en raison de la plus grande complexité des risques et de la difficulté de les couvrir. Enfin, comme les compagnies d’assurances, les gouvernements exigent une prime destinée à pourvoir aux frais de la production de la sécurité des personnes et des propriétés. Cette prime a été perçue jusqu’à présent sous les formes barbares et compliquées de l’impôt et elle est trop souvent sans aucun rapport avec le service rendu, mais, telle quelle, elle n’en constitue pas moins une prime d’assurance.

First of all, when one wishes to insure one’s property against some kind of risk of theft or fire, above all one has to acknowledge (what it is), to define it (precisely), and to have it evaluated. This is what insurance companies do in order to know what it is they are insuring and to understand the importance/nature of the risks that they are responsible for covering, and to set the amount of the premium they will have to charge to cover their costs and to make a profit. This is what governments do, although they do it in the crudest way. They “recognize” property (rights), and this had led jurists, who are strangers to political economy, to declare that the government creates property (rights). Do we have to note that governments do not create the value (les valeurs) of the property and the use of that property which they protect against theft and destruction, any more than the insurance companies create the value of the things they insure against the risk of fire? And in addition, just like insurance companies, governments impose rules and restrictions or (a form of servitude on the use of (one’s) property in order to facilitate their task and to reduce their risks; only these rules and “servitude” are more complicated and moire extensive because of the greater complexity of the risks (involved) and the difficulty of covering them. Finally, like insurance companies, government demand/impose a premium which is designed to cover the cost of the production of security of both persons and property. This premium has been imposed up until now in the barbaric and complicated form of taxes and it (the premium) too often has no relationship to the service which it renders/provides, but which, such as it is, constitutes none the less an insurance premium.

The Hypothesis of Privately Built Towns↩

In Part 4, chap. 14 "La Constitution naturelle des gouvernements. La Commune. La Province. L'Etat" he explores in more detail the kinds of services local governments like communes have traditionally provided, what he calls "les services collectifs" (collective services), and how they might lower their costs and improve the quality of their services by privatizing or outsourcing them. He tentatively even goes so far to say that "under a regime of political liberty" the communes might even do this for police services. It is here where he introduces another one of his speculative "hypotheses," this time returning to his idea of private companies building new cities and towns for which they provide all "collective services" in exchange for a fee or annual dues (cotisation) or which is part of the "rent" they charge to live there. He imagines a situation where there would be two sources of competition for the provision of these services (la double concurrence), private companies which specialize in providing these individual services, as well as the property development companies which would build "gated" or private communities from the ground up. But he draws back a little from this vision by saying that, "mais nous n'en sommes pas là" (we are not there yet). [199]

Cependant, parce qu’il y a des services ayant un caractère naturel de collectivité ou de communauté, il ne s’ensuit pas que la commune soit obligée de les établir et de les gérer elle-même; elle peut trouver et elle trouve, dans les pays où l’industrie est suffisamment avancée et spécialisée, des entreprises qui se chargent de construire et d’entretenir les égouts, de paver, de balayer et d’éclairer les rues; elle pourrait en trouver de même, sous un régime de liberté politique, qui se chargeraient de faire la police. En admettant que ces entreprises spéciales pussent se multiplier de manière à se faire une pleine concurrence, le gouvernement de la commune trouverait avantage à leur confier les services dont la réunion constitue ses attributions naturelles. Ces services, il les rétribuerait en gros, et s’en rembourserait en détail, au moyen d’une cotisation spéciale pour chaque service, prélevée sur tous les habitants de la commune, et c’est ainsi en effet que les choses se passent dans les communes bien constituées et gouvernées.	However, because there are services which have a natural characteristic of being collective or communal (un caractère naturel de collectivité ou de communauté), it doesn’t follow that the commune is obliged to establish them and administer them itself. It can find and does find, in countries where industry is sufficiently advanced and specialised, business enterprises which are responsible for building and maintaining sewers, sidewalks, sweeping and lighting the streets. It could even find, under a regime of political liberty, (business enterprises) which would be responsible to provide police (services). In admitting that these “specialized” business enterprises (enterprises which specialise in this - ces entreprises spéciale) could multiply in such as way to provide/create complete/full competition (for these services) (se faire une pleine concurrence), the government of the commune would find it beneficial to entrust to them all the services which combined constitute its natural functions. It (the government) would pay the firms for these services in a lump sum (en gros) and would be reimbursed (from the citizens) individually (en détail), by means of a special fee (cotisation) for each service, leveed/imposed upon all the inhabitants of the commune, and thus this is in effect how things happen in the communes which are well established and governed.
En supposant, — et cette hypothèse deviendra une realité à mesure que l’industrie progressera et se développera sur un plan plus vaste, — en supposant, disons-nous, que des sociétés particulières se constituent pour fonder et exploiter des villes ou de grands domaines agricoles, pourvus des habitations nécessaires au personnel, la rétribution des services ayant un caractère collectif cessera d’être perçue sous la forme d’une cotisation spéciale; elle s’ajoutera simplement au prix du loyer, librement débattu entre la société propriétaire et le locataire . Le poids de la servitude naturelle qu’impliquent les services collectifs se trouvera alors réduit à son minimum , grâce à la double concurrence des entreprises ayant pour spécialité la production de ces services et de celles qui fonderont et exploiteront les villes et les domaines agricoles.	But let us imagine (en supposant), and this hypothesis would become a reality to the degree that industry will (have) progressed and developed on a much larger scale, let us imagine, we say again, that individual firms (des sociétés particulières) are established to found and run towns or large rural areas (grands domaines agricoles), to provide the required housing to its staff/personnel, the payment for the services which have a collective nature will cease to be levied in the form of a special/separate fee (cotisation). It will simply be added to the price of the rent which will be freely negotiated between the propriety owning company (la société propriétaire) and the tenant. The burden of the natural “servitude” which these collective services entail will thus be reduced to its minimum (amount) thanks to the double competition between business enterprises which specialise in the production of these services and those (enterprises) which found and run towns and rural estates/territories.
Mais nous n’en sommes pas là, …	But we are not yet there …

Not the Role of the Economist to Predict the Shape of the Future↩

There is also another defence of the idea that it is not up to the economist to predict in advance how exactly all these services will be provided once a free market and competitive system has been established. All that can be predicted is that if there is a demand for a good or a service, and if there are people willing to satisfy this demand for a profit, the goods and services will be provided. [200]

Peut-on concevoir cependant un état de choses différent de celui que nous venons de décrire? Peut-on admettre qu’un gouvernement soit capable de rendre les services en vue desquels il est institué s’il ne possède point le droit exclusif de les imposer dans toute l’étendue du territoire soumis à sa domination ? Nous avons remarqué que ce régime était autrefois commun à la généralité des industries et qu’on ne concevait pas alors la possibilité d’un autre régime. Il est assez naturel qu’on ne conçoive pas aujourd’hui que les hommes puissent être pourvus de sécurité s’ils renoncent à s’assujettir à la servitude politique, de-même qu’on ne concevait pas qu’ils pussent être nourris, vêtus et logés s’ils commettaient l’imprudence de s’affranchir de la servitude économique.	However, could one conceive of a state of things different from those which we have just described? Could one admit that a government could be capable of providing the services for which it was created, if it did not possess the exclusive right to impose them throughout the full extent of the territory under its domination/control? We have remarked (previously) that at one time this regime (of monopoly) was common to most industries and that then one could not conceive of the possibility of any other regime. It is quite natural that today one can’t conceive how men could be provided with security if they give up being subjected to political servitude, just as one could not conceive (then) they they might be fed, clothed, and housed if they committed the folly (imprudence) of freeing themselves from economic servitude.
Essayons donc de rechercher ce qui arriverait si la servitude politique venait à être abolie, si la «liberté de gouvernement » venait à être établie comme un complément logique et nécessaire de la liberté de l’industrie. Que seraient les gouvernements et comment fonctionneraient-ils sous ce nouveau régime?	So let us explore what would happen if political servitude came to be abolished, if “la liberté de gouvernement” came to be established as the logical and necessary complement to the liberty of industry. What would governments (be like) and how would they function under this new regime?
Les prévisions que l’on peut formuler sur l’avenir de la liberté de gouvernement ont, à certains égards, un caractère hypothétique. A l’époque où la servitude économique a été abolie, on pouvait bien affirmer avec certitude que les articles de nécessité ou de luxe dont la production était rendue libre continueraient à être produits, et qu’ils seraient même livrés au consommateur en plus grande abondance et à meilleur marché, mais quelle serait l’influence de la liberté de l’industrie sur la constitution des établissements industriels et quel serait le mode d’action de la concurrence devenue libre, voilà ce que l’expérience seule pourrait révéler. De même, nous pouvons affirmer qu’après l’abolition de la servitude politique, les services dont les gouvernements ont aujourd’hui le monopole continueront à être rendus aux individus et aux sociétés et qu’ils le seront en plus grande abondance et à meilleur marché, ce qui, à tout prendre, est l’essentiel, mais nous ne pouvons pas plus prédire ce que sera l’organisation politique de l’avenir que nos devanciers ne pouvaient prévoir, à l’époque de l’établissement de la liberté industrielle, l’avenir de l’industrie. Nous ne pouvons faire à cet égard que de simples conjectures.	The predictions (prévisions) that one can make about the future of “la liberté de gouvernement” have to a certain degree a hypothetical character. In the period when economic servitude was abolished one could indeed state with certainty that essential or luxury items whose production had been made free, would continue to be produced and that they would even be delivered to the consumer in greater abundance and at a better price. But what the impact of the liberty of industry on the nature/kinds (constitution) of the industrial establishments and the mode of operation (mode d’action) of the competition which had (now) become free would be, is a matter only experience could demonstrate. Furthermore, we can state that after the abolition of political servitude the services which today governments have a monopoly will continue to be provided to both individuals and societies and that they will be provided in greater abundance and at a better price, which, when all is said and done, is the essential thing, but we cannot predict what will be the political organisation of the future (l’organisation politique de l’avenir) any more than our ancestors could predict, in the period when industrial liberty was established, what the future of industry would be like. We can make in this matter only simple conjectures (simples conjectures).

The "Double Right" to Secede↩

There is an interesting discussion of the problem of exit faced by most "political consumers." Those who are not happy with the Communal services they receive find it very difficult to leave. The usual practice is that the wealthy seize control of the government for their own benefit, "la minorité gouvernante ," and impose the costs on the less well off. The same situation applies to the provinces. The examples he cites are the Poles who are subject to the Russian Empire, and the southern agricultural states under the control of the protectionist northern states in America. Molinari hints at the right of secession but concludes that in the short term emigration is the most likely solution for most people who are subject to these kinds of "political servitude."

He then goes on to discuss how overtaxed and under-serviced inhabitants of a commune might go about freeing themselves from their political servitude, which brings him to the question of the right to secede. He discusses the plight of a wealthier region in a commune resenting the fact that they are being overtaxed to subsidize the services provided to a poor part of the commune. If the region is relatively small, they can emigrate to another lower taxed commune (which is a right they currently have). If the region is larger he thinks they should have the right to secede and form their own independent commune or to merge with a neighboring adjacent and lower taxed commune (this is a right they do not have under the current regime). Molinari argues that they should have this right and that this right is a double edged sword, that it is "un double droit de sécession" (double right of secession) where the commune can secede from the province, and the province can secede from the central state. This double threat of secession he believes would be a powerful force to keep the costs of government down to a minimum as each level of government would be most reluctant to lose too many of its taxpayers, and it would force each one to provide better services by contracting out to private companies (as described above) to attract more people to its locality. The costs of government overall - communal, provincial, and national - would be reduced by these multiple competitive forces to a single user fee or subscription (cotisation) which would be the bare minimum necessary to proved these "naturally collective" or public goods and services. This "double right of secession" would create "a double form of competition" (cette double concurrence) which would be brought to bare on the provision of services. These competitive forces would come from two directions, "la concurrence des collectivités" (competition between collective government bodies) which results from communes and provinces competing to attract more inhabitants to their respective territory, and "des entreprises spéciales" (business enterprises which specialized in the provision of public goods).

On the existence of “un double droit de sécession" (a double right of secession) of the commune from the province, and the province from the state: [201]

Si l’individu reçoit des services de la commune, celle-ci, à son tour, en reçoit de la province, et la province de l’État, services de moyens de communication par terre et par eau, services de sécurité intérieure et extérieure. Ces services de la province et de l’État aboutissent à l’individu, comme le produit d’une manufacture aboutit, en passant par les magasins de gros et de détail, au consommateur qui rembourse dans le prix qu’il paye au détaillant tous les frais de production et d’intermédiaires. L’organisation naturelle des services collectifs implique la répartition des frais des services de l’État entre les provinces, celle des frais des services des provinces en y ajoutant ceux de l’État entre les communes, enfin, celle des frais des services des communes, augmentés de ceux de la province et de l’État entre les individus. Mais, sous le régime actuel, les communes n’ont aucun moyen efficace de se préserver de la mauvaise qualité ni de l’exagération du prix des services de la province non plus que de la multiplication indue de ces services et la province est désarmée de même vis-à-vis de l’État, car la commune est liée et subordonnée à la province et la province à l’État. Il en serait autrement sous un régime de liberté de gouvernement. La commune, affranchie de la servitude politique, aurait le droit de se séparer de la province et la province de l’État.

If the individual receives services from the commune, the latter in its turn receives them from the province, and the province from the central state, services (such as) the means of communication by land and water, and internal and external/foreign security. These services from the province and the state end with the individual, just as the product of a factory ends with consumer, by passing through (the hands of) wholesale and retail stores, who reimburses them in the price he pays to the retailer all the costs of production and the intermediaries. The natural organisation of collective services implies the sharing of the costs of state services among the provinces, that of the costs of provincial services (after adding those of the state) among the communes, and finally the costs of communal services (adding them to those of the province and the state) among the individual (citizens). But, under the present regime, the communes have no effective means of protecting themselves against the poor quality or the excessive price of the services provided by the provinces, any more than (they have) against the unwarranted multiplication of these services, and the province is disarmed/exposed in the same way vis-à-vis the central state. It would be otherwise under a regime of the liberty of gouvernement (un régime de liberté de gouvernement). The commune, having freed itself from political servitude would have the right to separate from the province and the province (would have the right to separate) from the central state.

Les conséquences de ce double droit de sécession sont faciles à apercevoir. Si les services que la commune reçoit de la province, augmentés de ceux que la province reçoit de l’État et qu’elle reporte sur la commune sont surabondants, s’il en est qui n’aient point le caractère de collectivité et que les individus aient par conséquent le droit de refuser, la commune refusera de payer sa quote-part de leurs frais de production; si les services collectifs qu’elle est obligée de recevoir sont de mauvaise qualité ou à trop haut prix, elle se séparera de la province pour se joindre à une autre et les provinces en useront de même vis-à-vis de l’État. Sans doute, des circonstances locales pourront faire obstacle à l’exercice de ce droit de sécession, mais si l’on songe que la contiguïté des territoires n’est point—l’expérience l’atteste — nécessaire à la constitution d’une province et d’un État, qu’une commune on une province peut subsister comme une enclave, on se convaincra que le droit de sécession communal ou provincial suscitera une concurrence suffisante entre les Etats et les provinces pour améliorer la qualité de leurs services et en abaisser le prix. En tous cas, ce droit aurait pour résultat de déterminer la suppression de tous les services qui n’ont point, dans l’État ou la province, un caractère de collectivité, en même temps que tous les impôts ayant ce caractère, les douanes et les monopoles par exemple, soit que ceux-ci se trouvent établis au profit de l’État ou de la province, ou des particuliers. La spécialité s’imposerait pour la rétribution des services des provinces et de l’État comme pour celle des services des communes, et l’antique et barbare appareil de la fiscalité, avec la multiplicité des impôts et des entraves que leur perception nécessite serait remplacé par la perception annuelle d’une simple cotisation dans laquelle seraient compris, avec les frais des services communaux, ceux de la province et de la commune, divisés et spécialisés.

The consequences of this double right of secession (ce double droit de sécession) are easy to see. If the services which the commune receives from the province, augmented by those which the province receives from the state and which it passes on to the commune are excessive, and if they are not of a collective nature (le caractère de collectivité) which individuals as a result have the right to refuse, the commune will refuse to pay its share of the costs of production; if the collective services which it is obliged to pay are of poor quality or too high in price, it will separate from the province in order to join another one, and the provinces will do the same vis-a-vis the central state. No doubt, local circumstances can create obstacles to the exercise of this right of secession (ce droit de sécession), but if one thinks that the contiguity of territory is not necessary for the creation of a province or a state - and experience attests to this fact - that a commune or a province can exist as an exclave, one will be convinced that the right of communal or provincial secession will stimulate sufficient competition between the states and the provinces to improve the quality of their services and lower their price. In any case, this right would have the result of causing the abolition/ending of all services in a state or province which do not have a collective nature, at the same time (bringing to an end) all taxes which also have this character, such as customs and monopolies for example, whether they were established for the profit of the state or the province or particular individuals. Fee for service (la spécialité = individual/separate payment??) would be imposed to pay for the services of the provinces and of the state, as they would be for those of the communes, and the ancient and barbaric apparatus of the tax department (la fiscalité), with its multiplication of taxes and the burdens which their imposition requires would be replaced by an annual payment (perception) of a simple fee (cotisation) which would be made up of , along with the costs of communal services, those of the province and the state, divided up and itemised (divisés et spécialisés).

And just as there is a "double" right to secede, there is also a "double" source of competition which comes into play to reduce the costs of governing. The costs of running a Commune fall as as communes contract out to private companies for services such as water, light, gas, tramways), and revenue for these more efficient and cost effective communes increases as a result of "la concurrence des collectivités" (competition between these collective organisations) which allows taxpayers/consumers from high tax jurisdiction to migrate to low tax jurisdiction: [202]

A ces premières conséquences, savoir la réduction des attributions de la commune, de la province et de l’Etat aux services naturellement collectifs, et la suppression des impôts qui frappent, également en vertu de leur nature particulière, la généralité de la population d’un territoire, sans qu’il soit possible de s’y soustraire individuellement, tels que les monopoles et les douanes, s’en joindraient d’autres, non moins avantageuses aux consommateurs de services collectifs. Ces services, les collectivités de consommateurs ne se chargeraient point nécessairement de les produire elles-mêmes. Déjà, dans les pays où l’industrie et l’esprit d’entreprise sont suffisamment développés, les gouvernements municipaux ne se chargent pas eux-mêmes du service des eaux, de l’éclairage au gaz, de l’établissement des tramways. Ils trouvent plus d’économie à les confier à des entreprises spéciales. Ce qui est avantageux pour certains services communaux pourrait l’être en vertu du même principe pour les services de la province et de l’Etat, et notamment pour le service essentiel de la sécurité intérieure et extérieure. Cela étant, les consommateurs de ces services profiteraient, d’une part, de la concurrence des collectivités dont ils feraient partie à titre de consommateurs, d’une autre part de celle des entreprises spéciales qui se chargeraient de la production des services collectifs; ils bénéficieraient en un mot de tous les progrès que susciterait cette double concurrence appliquée à des services, dont le monopole augmente continuellement le prix sans en améliorer la qualité.

To these initial consequences, namely the reduction in the functions of the commune, the province, and the state to (only) those services which are naturally collective, and the abolition of taxes which hit the entire population of the territory equally because of their special nature since it is impossible to avoid paying them, such as monopolies and customs duties; can be added others no less beneficial to the consumers of collective services. These “collectives” of consumers (les collectivités de consommateurs) would not necessarily have to be responsible for producing these services themselves. Already, in countries where industry and the spirit of enterprise are sufficiently developed, municipal governments are not themselves responsible for (providing) the services of water supply, gas lighting, and the building of tramway. They find greater economy (it more economical to ) in entrusting them to business enterprises which specialize in this (des entreprises spéciales). What is beneficial for certain communal services could also be beneficial for the same reason for services of the province or the central state, notably for the essential service of internal and external security. That being the case, the consumers of these services would profit, on the one hand from “la concurrence des collectivités” (competition between the collectives, groups) of which they form a part as consumers, and on the other hand from that (competition) by “des entreprises spéciales” (business enterprises which specialize in this) which would be responsible for the production of collective services; they would benefit in a word from all the progress which “cette double concurrence appliquée à des services” (this double competition which is applied to services) would stimulate, the monopoly of which constantly increases the price without improving the quality.

He then repeats his claim first expressed in S11 about the impossibility of wars and conquests in this new radically decentralized society which would view any attempt by a group to seize territory and incorporate it into their "state" as an act of "piracy" [203] which would be vigorously opposed by a coalition of free political states: [204]

Une autre conséquence ultérieure de l’abolition de la servitude politique serait l’impossibilité des guerres de conquêtes entre les peuples civilisés. Du moment où le droit de sécession serait appliqué et entré dans les moeurs de la civilisation, du moment où la commune serait toujours libre de se séparer de la province et la province de l’Etat, il ne serait plus possible à un gouvernement de s’emparer d’une population comme d’un troupeau pour l’annexer à son domaine politique. Cette infraction au droit public des peuples civilisés serait considérée comme un crime analogue à la piraterie, et réprimée, comme l’est déjà la piraterie, par l’accord général des Etats. Au besoin, tous se réuniraient pour châtier le gouvernement pirate qui entreprendrait de rétablir, sous un régime de liberté, la servitude politique.

Another later consequence of the abolition of political servitude wold be the impossibility of wars of conquest between civilized people/nations. From the moment when the right of secession was applied and became part of the culture/values (moeurs) of civilisation, from the moment when the Commune was always free to separate from the Province and the Province from the (central) state, it would no longer be possible for a government to seize a group of people (population) like a flock (of sheep) in order to annex them to its political domain. This violation of the public right of civilized nations would be regarded as a crime analogous to piracy and would be repressed as piracy now is by the general agreement of states. If needed, all of them would join together to punish the pirate government which was attempting to reestablish political servitude in a regime of liberty.

Notions fondamentales (1891) "La Simplification De L'état" (Reducing the Size of the State)↩

Introduction↩

This late work (Molinari was 72 when he published it) is interesting because it is the last work in which he cites in a footnote a reference to his book Les Soirées but this time makes no specific mention of S11 or the PoS article, which suggests that he was gradually drifting away from the very radical views he expressed in those works some 42 years previously. Nevertheless, he does explicitly say he has not changed his views in those 40 years, although he might be just referring to the general idea of privatizing the provision of public goods and not that of security in particular. The book is also an example of his growing pessimism about the future of liberty as he thinks "le politicianisme, le militarisme, et le protectionnisme" (rule by politicians, militarism, and protectionism) are on the rise and if left unchecked will undermine the liberal gains of the 19th century (see his two essays on this from 1901). [205] It also contains one of the few examples of the kind of political and economic program he wanted to see implemented in order to avoid this calamity. He summarized his program as "free trade, a guarantee against war, and a reduction in the size of the state." [206] The third part of the book contains a lengthy critique of socialist plans for the future and his own ideas about how to limit the size of the state, expanding the extent of markets, and the nature of self-government.

He is also very concerned about the new arms race which was beginning to get underway and which he predicted would impose an intolerable burden on taxpayers and provoke a new war between the great powers of Europe. He concedes that building powerful militaries might have been necessary at one time to protect nations from barbarian invasions but this danger was well passed and "l'énorme et coûteux appareil" (the enormous and costly (military) apparatus) which had been built now had to be abolished. [207]

Cette œuvre accomplie, l’objectif du progrès politique et économique des nations se trouve changé. L’énorme portion de forces et de ressources qu’elles appliquaient à la conservation et au développement de leur puissance destructive peut être pour la plus grande part, économisée, car le monde barbare n’envahit plus, il est envahi, et la sécurité intérieure n’exige qu’une faible dépense; les servitudes que nécessitait la défense des populations, la sécurité de leurs approvisionnements et de leur travail peuvent être supprimées, bref, la propriété et la liberté de chacun peuvent être assurées au prix d’un minimum de charges et de servitudes.

Now that this task has been accomplished, the goal of the political and economic progress of nations has been changed. The enormous share of energy and resources that (nations) devoted to the preservation and development of their destructive power can for the greatest part be saved (économisée), because the barbarian world no longer is invading (us), it has been invaded, and internal security now only demands/requires low/meagre (faible) expenditure; the (political and economic) servitude which the defence of the population, the security of their for supplies and their labour, required, can be abolished, in short, the property and liberty of each person can be assured at a minimum price in terms of cost and servitude.

Dans ce nouvel état de choses, la tâche des hommes de progrès consiste à démolir ce que leurs devanciers avaient construit, c’est-à-dire à démanteler des forteresses devenues inutiles, à supprimer les charges et les servitudes nécessaires à leur défense, enfin à abattre l’informe et lourd édifice d’exploitation que les intérêts engagés dans l’ancien régime se sont efforcés d’élever dans ces vieux abris de la civilisation.

In this new state of affairs, the task for men of progress consists in demolishing what their ancestors have built, that is to say in dismantling the armed fortresses which have become useless, in abolishing the (financial) charges and servitude required for their defence, and finally in knocking down the misshapen and heavy edifice of exploitation which the (vested) interests who were active in the old regime were forced to erect in these old bunkers (abris) of civilisation.

Still a Believer after 40 Years↩

In the section dealing with his program for the future [208] he has a section on reducing the size of the state in which he states that it is no longer necessary for "the consumers of security" to have to submit to political and military servitude in order to be provide with the "indispensable" item which is the "production of security." He still argues that the functions of the state can be reduced to the bare minimum of providing "insurance" against risks to life and property, both internal and external, by charging "insurance premiums," and that this premium can be kept to a modest amount through competition between insurance providers, once the condition of political servitude had ben abolished for good. In the meantime, he despairs that police and justice services remain everywhere in "un état d'imperfection grossière" (a state of gross imperfection) because of the inherently "anti-economic" nature of the state and everything it does. [209] Nevertheless, he still quotes for the last time in his writings his book Les Soirées with its explicitly AC chapter 11 on the private production of security. My reading of this is that even though things look bleak for AC at the end of the 19th century he still believes in it as his ultimate goal. As he states in the footnote "Nous avons esquissé cette démonstration dans les Soirées de la rue Saint-Lazare , et nous n'avons cessé de la poursuivre, depuis plus de quarante ans dans la série de nos publications." (we have sketched this demonstration (on the inferiority of publicly provided services compared to privately provided ones) in Les Soirées and we have not stopped pursuing this for more than 40 years in the collection of our publications.) [210]

Mais du moment où la sécurité du monde civilisé s’est trouvée assurée, cet appareil de protection pouvait être successivement réduit. Il n’était plus nécessaire de soumettre les « consommateurs de sécurité » aux servitudes politiques et militaires qu’exigeait la production de cet article indispensable, puisqu’ils n’étaient plus exposés au risque de destruction ou d’asservissement que leur faisaient courir les invasions du monde barbare. On pouvait encore renoncer à les soumettre aux servitudes économiques, qui assuraient leurs approvisionnements et leurs moyens d’existence, aux règlements et aux coutumes qui refrénaient des monopoles que l’extension de la sécurité et le développement des communications faisaient disparaître. Tout cet appareil lourd et compliqué devenait nuisible en cessant d’être nécessaire. Les fonctions de l’État pouvaient être simplifiées et réduites à l’assurance de la vie et des biens des individus contre les risques intérieurs et extérieurs, ceux-ci diminués sinon annulés; en même temps la multitude des impôts et charges qu’exigeait la vieille machinery du gouvernement, pouvaient être remplacés par une prime d’assurance que la concurrence entre les assureurs, la servitude politique ayant disparu, aurait fini par abaisser au niveau minimum des frais de production de la sécurité. Nous avons analysé les causes qui ont empêché la réalisation de cette réforme d’un régime qui avait perdu sa raison d’être. Nous avons vu comment les intérêts engagés dans ce régime ont réussi à en conserver les parties essentielles, comment ils ont prolongé artificiellement l’existence de l’état de guerre, maintenu et développé l’appareil de la paix armée, accru au lieu de les réduire les attributions et les fonctions des gouvernements. Mais, nous avons constaté aussi que l’accroissement du nombre des fonctions et des attributions des gouvernements est en opposition avec la loi naturelle de l’économie des forces, que les services publics, l’enseignement, la poste, le télégraphe, etc., etc., sont incapables de soutenir la concurrence des services privées. Non seulement les gouvernements produisent à plus grands frais et en moindre qualité les articles qu’ils ont annexés à celui qui est l’objet naturel de leur industrie, mais la dispersion anti-économique de leurs forces a pour résultat d’enrayer les progrès de cette industrie, les services de la justice et de la police demeurant partout dans un état d’imperfection grossière; enfin, les impôts croissants que nécessite cette prolongation et cette aggravation d’un régime qui a cessé d’avoir sa raison d’être, infligent aux nations civilisées une double charge: celle du tribut qu’ils prélèvent et celle des servitudes fiscales auxquelles ils les assujettissent et qui dépassent fréquemment le poids même du tribut.

But from the moment when the security of the civilized world was assured, this apparatus of protection could be gradually reduced. it was no longer necessary to subject the “consumers of security” to political and military servitude which the production of this indispensable item demanded/required., since they were no longer exposed to the risk of destruction or enslavement which the invasions by the barbarian world would have exposed them to. Furthermore, one was able to give up being subjected to the economic servitude which assured them of their supplies and their means of existence, to give up the regulations and customs which restrained the monopolies which the extension of security and the development of the means of communication caused to disappear. This entire heavy and complicated apparatus had become harmful when it ceased to be be necessary. The functions of the state could be simplified and reduced to insuring the life and possessions of individuals against internal and external risks, the latter having been reduced if not annulled. At the same time the multitude of taxes and charges which the old “machinery” of government demanded could be replaced by an insurance premium which competition between insurance providers (les assureurs), once political servitude had disappeared, would have resulted in lowering to the minimum level of the cost of production of security. We have analyzed the causes which have prevented the realisation of this reform of the regime which has lost its raison d’être. We have seen how the (vested) interests committed to this regime have succeeded in preserving its essential parts, how they have artificially prolonged the existence of the state of war, maintained and developed the apparatus of the armed peace, increased instead of decreased the activities and functions of governments. But we have also stated that the increase in the number of functions and activities of governments is in opposition to “the natural law of economizing one’s energies/forces” (la loi naturelle de l’économie des forces), that public services, education, the post office, the telegraph, etc. etc. are incapable of holding up under the competition of private services. Not only do governments produce at greater cost and lower quality the items which they have added to that which is the natural purpose of their activity (industrie), but the anti-economic dispersion of their energies/forces has the result of blocking the progress of that industry, (so that) the services of justice and police remain everywhere in a state of gross imperfection. Finally, the increasing taxation which the prolongation and worsening of this regime which has ceased to have (any) its raison d’être requires, imposes on civilized nations a double charge, that of the tribute which they levy and that of the fiscal servitude to which they subject them, a charge which frequently even surpasses the weight of the tribute.

Simplifier l’État, réduire les gouvernements au rôle de producteurs de sécurité, en leur enlevant toutes les attributions et fonctions qu’ils ont usurpées et usurpent chaque jour sur le domaine de l’activité privée, en un mot, substituer à l’État socialiste, en voie de devenir le producteur universel, l’ Etat-Gendarme des pères de l’Économie politique, tel est le troisième article, et non le moins important, d’un programme économique.

To simplify the state, to reduce governments to the role of the producers of security, by taking away from them all functions and activities which they have usurped and (continue) to usurp every day from the domain of private activity, in a word, to replace the socialist state ( l’État socialiste), which is on the way to becoming the universal producer, with the “gendarme state” (l’ Etat-Gendarme ) of the fathers of political economy. This is the third, but not the least important , article of (our) economic program.

What he is offering here is an explanation of why his ideal way of providing security is still not possible in the short term. The private production of security should have become possible once a number of factors came into play:

1. the threat of war from barbarian nations came to an end which allowed a drastic cut in the size of the military and expenditure on it
2. the old system of industrial and trading monopolies had come to an with the opening up of both internal and foreign markets to free trade; this would also allow the dismantling of the entire system of bureaucratic regulation of economic activity and result in further drastic cuts to government spending
3. once the size of the state had been cut to the bone "taxes" could be transformed into a "contribution" in the form of an insurance premium to cover the cost on insuring each person's life, liberty, and property; and this insurance policy could be provided by insurance providers who competed on the free market for this business

He seems to have thought that these conditions were well on the way to being realized by the middle of the 19th century with the growth of the free trade movement in Britain and France, and partially put into practice in 1846 and 1860 respectively. However, the old elites were able to regather their forces in the 1870s and later and prevent further liberalization from taking place. As Molinari notes: [211]

Nous avons vu comment les intérêts engagés dans ce régime ont réussi à en conserver les parties essentielles, comment ils ont prolongé artificiellement l’existence de l’état de guerre, maintenu et développé l’appareil de la paix armée, accru au lieu de les réduire les attributions et les fonctions des gouvernements.

We have seen how the (vested) interests committed to this regime have succeeded in preserving its essential parts, how they have artificially prolonged the existence of the state of war, maintained and developed the apparatus of the armed peace, increased instead of decreased the activities and functions of governments.

He will go into this in more detail in a later book, Les Problèmes du XXe siècle (1901), which is discussed below. He provides more detail about the shifting class relations which were appearing in the late 19th century which left the groups who might have supported further liberal reforms caught between the "law and order" offered by a coalition between the old elites and the new wealthy commercial and industrial elites on the one hand, and the turmoil and potential confiscation of private property threatened by the socialists and their supporters among the working class, on the other hand. Molinari's only hope seems to be that the "natural laws of political economy" would still continue to function and that the inefficiency, high cost, and lack of innovation caused by government monopolies and regulation would be exposed for all to see. Eventually …

In the meantime, the choice faced by Europeans was either the "étatiste" status quo, " l'État socialiste" (the socialist state) promised by the socialist and labour parties, or limited " l'Etat-Gendarme " (the gendarme state) advocated by a diminishing number of liberals like him.

Précis d'économie politique et de morale (1893) "Les Doits et la Lois positive" (Rights and the Positive Law)↩

Introduction↩

In many ways this is one of Molinari's oddest books. [212] It should be seen alongside his two books on religion written at much the same time. [213] They seem to show a man who has become increasingly pessimistic that economics alone will be able to stem the tide of socialism and protectionism which seems to be threatening France at this time. As many conservatives and liberals were arguing at the time it appeared that "moral values" (such as respect for property rights and belief in free markets and free trade, and what Molinari also called individual "self-government") had not kept up with progress in the areas of technology and what is now called "globalization" ; that those who were increasingly prepared to vote for socialist or labour parties on the one hand, or more "conservative" regimes like Bismarck's on the other, did not understand that by doing so they were undermining the moral and economic principles upon which their increasing prosperity depended; and that this would ultimately lead to a new form of political servitude under what he called "le politicianisme" (politicianism, or rule by politicians and the new political class of bureaucrats). As he noted in the resume at the end of the book: [214]

C’est ainsi que le progrès économique a suscité le progrès moral en le rendant nécessaire. Jusqu’à ce qu’il ait été pourvu à cette nécessité par l’adaptation du gouvernement collectif et individuel aux nouvelles conditions d’existence que l’accroissement de la puissance productive et destructive a faites à l’espèce humaine, cet accroissement se trouve ralenti et ses résultats sont, pour la plus grande part, affectés à des destinations nuisibles. Telle est la cause de la crise que traversent actuellement les sociétés civilisées, et à laquelle l’accord du progrès moral avec le progrès économique pourra seul mettre fin.

It is in this way that economic progress has supported?? moral progress by making it necessary. Up until (now?) it (progress) has been provided with this necessity by the adaptation of both collective and individual government to the new conditions of existence which the increase in the productive and destructive power have made possible for the human race. However, this increase has slowed and its results have for the most part has resulted in harmful outcomes. This is the cause of the crisis which is affecting civilized societies at this time, and which only the coming together (l’accord) of moral and economic progress will be able to resolve ring to an end.

These works written in the early 1890s were his attempt to understand the moral foundations which underlay a free society, especially the way in which religion had historically provided that foundation, and to make a plea for their protection.

The format of this relatively short book (278 pages) suggests that it was a kind of primer or introduction to classical liberal and economic ideas; it contained an introductory overview of his ideas about the natural laws of political economy and how they related to human nature, followed by a brief outline of the basic principles of political economy itself, and concluded with a section on "la morale" (morality or moral philosophy). It was in the latter section that Molinari discussed the role religion had played in originally establishing the moral and legal foundations for a free and prosperous society, how this was gradually taken over by the state during the era of monopoly (where it interestingly took over the church's dubious claim to infallibility in matters moral and legal), [215] and then how in the modern period a more secular moral and legal foundation emerged to create a new moral support for a free society. This new moral foundation was a mixture of utilitarianism (it was in our self-interest to support free markets because each party to an exchange benefited, history showed the great benefits of the division of labour, etc.), traditional natural law and natural rights theory (the right to individual liberty and the right to own property), and historicist inevitability (his idea that society was moving from the era of monopoly into a new and better age of competition). Although religion continued to a play an important part in providing this moral foundation, most particularly for the less educated individuals who were still not ready for full "self-government" and thus still needed some form of "tutelage," there were two other forces at work helping to provide this moral foundation, the emergence of "public opinion" as a new force in the modern era, and the rule of law.

The Rule of Law and Positive Law↩

The "Fees of Court" and "ad hoc justice"

Although Molinari did not use this latter expression he develops at some length for the first time in his writing the part played by "la loi positive" (positive or manmade law) and "des droits conventionnels" (conventional or customary laws, or agreed upon law) in both creating the conditions which make a free and market-based society function and also how it could adapt to the ever changing legal needs of a growing, expanding, and developing world. I want to discuss the latter as it addresses what I think is the weaker and much less developed part of Molinari's ACT, namely "the private production of law."

Molinari was not trained as a lawyer but was a self-educated economist. This might explain his neglect of the legal dimension to his ACT. We have mentioned above two earlier examples of his foray into legal matters where he quoted with approval more than once Adam Smith on "the fees of court" [216] where litigants could "shop around" for a court or judge to hear their case and would thus voluntarily pay whatever they were charged for the service, the fees of course being subject to market and competitive forces and thus quite reasonable. That Molinari would quote this important and key passage at the beginning and near the end of his career strongly suggests that he hadn't changed his mind on this key aspect of ACT.

Secondly, he discussed the idea of judge made law which he called "ad hoc justice" which was his term to describe how courts would create laws or rulings on their own when necessary to solve any new legal problems which had emerged. You could call this Molinari's version of English common law. (See above in the discussion of his Cours .)

The discussion of law in the Précis is the third occasion for Molinari to deal with this matter.

The Code of Law and the Positive Law

In the Précis the relevant chapters for this discussion are Chap. V "Les Doits et la Lois positive," pp. 195- 202, Chap. VI. "Le droits politiques," pp. 209- 8, and Chap. IX. "Les servitudes," pp. 223-29.

Molinari believed that an individual's natural rights existed prior to any form of society and that these rights were "carried over" (apporter) by individuals when they entered into any association whether private (such as a family or economic enterprise) or political in nature. [217] And it was the task of any government which might arise to protect these pre-existing natural rights (interestingly he does not stipulate that it had to be "un gouvernement monopole" only that it was "une association spéciale" which was unlike other associations in that it was "au-dessus" (above) the other associations in society). [218]

It was the task of government to recognize these natural rights of individuals in "un code des lois positives" (a code of positive law) and to create the legal institutions which were needed to enforce them, such as "une armée, des tribunaux et une police, qui forment la machinerie nécessaire pour opérer cette sorte d'assurance" (an army, courts, a police force, which form the machinery which was required to carry out this kind of insurance). [219] Although the natural rights of individuals were universal and unchangeable (immuable) [220] the code of positive law which was needed to protect them varied according to time and place, local customs, and the level of economic development, and were thus diverse and changeable (mobilité). [221] He does not say this explicitly, but it seems that Molinari thinks that no positive law should ever violate these natural rights. [222]

Il faut donc encore que la loi positive garantisse la propriété que chacun a acquise en usant de sa liberté dans les limites de son droit, sauf les restrictions et les charges nécessaires pour opérer cette garantie.

Furthermore it therefore necessary that the positive law protects the property that each individual has acquired while exercising his liberty within the limits of his rights, except for the restrictions and charges necessary to provide this guarantee.

He describes how individuals might go about forming such a government which he somehow believes could both be in accord with the pre-existing natural rights of individuals and preside "above them" (much like Dunoyer and Bastiat had argued in 1849): [223]

En constituant une société, en vue de se défendre contre les espèces concurrentes et contre leurs semblables, comme aussi de jouir des avantages économiques de l’association, de la division du travail et de l’échange, les hommes y apportent leurs droits naturels, et ces droits se ramifient et se multiplient en raison de l’emploi que les associés font de leurs forces et de leurs ressources. Avant tout, ils reconnaissent la nécessité de posséder un gouvernement qui se charge d’assurer leurs droits naturels contre toute atteinte intérieure ou extérieure. Ce gouvernement, tantôt ils le constituent eux-mêmes, tantôt ils l’acceptent ou le subissent lorsqu’ils n’ont point contribué à le fonder. Mais, quelle que soit son origine, il se compose d’un certain nombre d’individus associés à des conditions diverses dans un but commun. C’est une association spéciale qui se place au sommet de la société générale.

By creating a society with the purpose of defending themselves against competing races and against their own fellows, as well as to enjoy the economic benefits/advantages of association, the division of labour, and of exchange/trade, men carry over (apporter) to society their natural rights, and these rights are expanded/spread and increased as a result of the use that those in the association make with their forces and their resources. Above all, they recognize the necessity of having a government which is responsible for insuring (assured) their natural rights against all domestic and foreign attack. This government, whether they have created themselves, or whether they accept or subject to one even if they haven’t contributed to founding it. But, whatever its origin might be, it is made up of a certain number of individuals who are associated under diverse conditions with a common goal. It is a special kind of association which is found/located at the summit of the general society.

Au-dessous de cette association supérieure, il s’en forme une multitude d’autres pour satisfaire les besoins individuels ou collectifs des membres de la société: associations de famille, de production, de consommation. Dans chacune apparaissent des droits que la loi positive doit reconnaître, et auxquels le gouvernement, la religion, l’opinion et la conscience individuelle apportent, tantôt de concert, tantôt séparément et diversement, leurs sanctions.

Below this superior/upper association is formed a multitude of others in order to satisfy the individual or collective needs of the members of society: associations like the family, for production, and for consumption. In each of them appears/ we can see the rights which the positive law must recognize, and which the government, the church, public opinion, and individual conscience have to apply their sanction, whether collectively or individually and variously.

What is not clear from this account is whether Molinari is speaking historically, politically (what is possible in the here and now), or prescriptively ( what he thinks should be the case). Is he being deliberately vague or has he really changed his mind? It is hard to tell.

The Development of Contractural or "Conventional" Rights

In addition to the codification of abstract individual natural rights in a formal code of law, Molinari thought "une foule" (a multitude) of other rights emerged out of the commercial transactions which were entered into in a large and complex modern economy. These types of laws and "rights" were the product of the contracts and agreements that individuals and voluntary associations drew up with each other and were thus "librement stipulées et consenties" (freely stated and agreed to). Molinari thought the formal legal code should act as a kind of "filter" (my word) to ensure that these contractual or conventional rights or laws (that is "agreed to" rights) were consistent with the natural law: [224]

Dans les associations de production et de consommation, elle (la loi positive) intervient pour définir et assurer les droits de l’association vis-à-vis de chacun de ses membres et de ceux-ci vis-à-vis d’elle. Ces droits dérivent de la nature de l’association, et ils sont déterminés par son objet. Ils résultent de conventions faites entre les associés; mais ces conventions ont beau être librement stipulées et consenties, elles sont soumises à des règles générales; la loi positive ne doit les reconnaître et les garantir qu’autant qu’elles sont conformes aux droits naturels de l’individu, qu’elles n’augmentent pas la liberté et la propriété de certains associés en diminuant celles des autres, enfin qu’elles ne portent point atteinte aux droits des tiers.

In the associations (made) for production and consumption, it (the positive law) intervenes in order to define and guarantee the rights of association concerning each of its members and those regarding itself. These rights come from the nature of the association and they are determined by its purposes. They are the result of agreements (conventions) made between the members of the association; but (even thought) these agreements may well have been freely stipulated and consented to, they are (still) subject to general rules; the positive law ought to only recognize and guarantee those agreements to the extent that they conform to the natural rights of the individual, that they do not increase the liberty and property of certain members of the association at the expense of the others, and finally that they do not infringe upon the rights of third parties.

There were also other rights and laws which sprang out of the relations between individuals and their associations which were created by the ever deepening division of labour and the growing extent of trading relationships. These "conventional laws" governed the relationships between every buyer and seller, every lender and borrower, and every property owner and renter, and although these emerged in an infinite variety of forms they too were subject to the confirmation of the positive law in order to ensure conformity to the natural rights of those engaged in the transactions. [225]

D’autres droits conventionnels — ceux-ci innombrables dans les sociétés arrivées à un haut degré de richesse et de civilisation — naissent des rapports que créent la division du travail et l’échange, soit entre les individus, soit entre leurs associations. Tout échange, vente, prêt ou location, fait apparaître deux droits : droits du vendeur et de l’acheteur, du prêteur et de l’emprunteur, du propriétaire et du locataire.

Other conventional rights - which are countless in societies which have achieved a high degree of wealth and civilization - originate from the relations which the division of labor and exchange, whether between individuals or between their associations. Every exchange, sale, loan, or lease gives rise to to rights/laws: the rights of the seller and the buyer, of the lender and the borrower, of the property owner and the renter.

Thus, in Molinari's idea of a legal system suitable for a modern, advanced, and competitive economy there were three tiers of law which had to be taken into account. The first and most basic were the abstract natural rights of the individual to life, liberty and property. The second was the codification of these natural laws into a form specific to certain times, places, and local customs, which also called the "positive law." And the third were the mass of laws and rights created by all the individuals who entered into economic relations with each other. The role of the code or positive law was to act as a kind of referee between the myriad of laws and agreements thrown up by the economy and the underlying natural laws and rights of individuals.

Law and the Production of Security↩

In chapters VI "Les droits politiques" (Political Rights) and IX "Les servitudes" (Different Types of Servitude/Slavery) Molinari turns to the production of security and it here that he appears to make several concessions to the government monopoly provision of security for the first time, although the matter is somewhat clouded by other statements he makes about the "rights of consumers of security" which might suggest he has not fully gone down this path yet.

In order to protect the rights of citizens guaranteed in the legal code of positive laws there needs to be certain institutions set up up to protect them, which in turn requires the production of security. He returns to the idea that security cannot be be produced by an individual (individuellement) since it is a "collective good" but only by an association which is called "the government." The relationship between the government which produces security and the consumers of security is now for the first time described in terms of "les droits politiques" (political rights) which are the product of a "convention" (agreement) or "un marché" (a deal), the conditions of which could not be negotiated (débattues). This was a major reversal of his long standing belief that the conditions of any contract between producers and consumers of security could and should be openly discussed, negotiated, and consented to by both parties. He did prevaricate to some degree by stating that in its "essence" this agreement or deal was no different from any other agreement to satisfy one's other "material or moral needs" but this is a spurious claim which he probably did not entirely accept himself. [226]

Cette association, dont l’industrie principale, sinon unique, consiste à produire de la sécurité, c’est le gouvernement.	This association, whose principle industry, if not its only industry, exists to produce security, is the government.
Les gouvernements sont des producteurs de sécurité; les individus auxquels ils fournissent cet article de première nécessité sont des consommateurs de sécurité. Leurs droits respectifs sont des droits politiques.	Governments are the producers of security; the individuals for whom they supply this article/good of the first necessity are the consumers of security. Their respective rights are political rights.
Ces droits résultent d’une convention ou d’un marché dont les clauses peuvent n’être point débattues, mais qui, dans son essence et son objet, ne diffère point des conventions ou des marchés auxquels donnent lieu les autres besoins matériels ou moraux.	These rights are the result/product of an agreement or deal the clauses/conditions of which cannot be negotiated, but which in its essence and its goal, does not differ from the agreements or the deals produced by (the provision production) of all the other material or moral needs (of people).

But this seems to be contradicted a few lines later when he appears to revert to his previously held belief that consumers of security did have the right to negotiate the terms of any "deal" with a producer: [227]

Mais, en regard de ce droit du producteur de sécurité apparaît le droit du consommateur. De même que celui-là a le droit de produire et d’offrir ses services, celui-ci a le droit de les accepter ou de les refuser, d’en débattre le prix et d’en contrôler la qualité, exactement comme s’il s’agissait de toute autre marchandise.

But alongside the right of the producer of security there is the right of the consumer. Whereas the former has the right to produce and to offer his/these services, the latter has the right to accept them or to refuse/reject them, to negotiate the price and to monitor the quality, exactly as if it were a matter of any other good/product.

And then again at the close of the chapter where he reminds the reader that historically consumers of security have always suffered at the hands of the government monopoly provision of this important service, to point of consumers being "enslaved" by the producer: [228]

En résumé donc, le fondement des droits qualifiés de politiques réside simplement dans les droits naturels des producteurs et des consommateurs de toutes sortes de produits et services. La production de la sécurité ne présente, au point de vue du Droit, qu’une particularité qui la distingue de la généralité des industries — encore retrouve-t-on cette particularité dans les autres espèces d’assurances, — c’est d’imposer au consommateur des restrictions à l’exercice de la liberté et à l’usage de la propriété, qu’elle a pour objet de garantir. Mais, dans la pratique, les rapports des gouvernants et des gouvernés ont subi l’influence de faits et de circonstances qui en ont singulièrement altéré le caractère, en déterminant l’asservissement du consommateur au producteur.

So in summary, the foundation of the rights described as political can be found simply in the natural rights of producers and consumers of all kinds of goods and services. The production of security demonstrates/shows, from the perspective of the law, only one particular (difference) which distinguishes it from the majority of (other) industries - a difference which is found also in other kinds of insurance - namely to impose on the consumer restrictions on the exercise of (their) liberty and the use of (their) property which it (the production of security) has as it task/goal to protect. But in practice, the relations between governments and the governed have suffered under the influence of costs and circumstances which have especially altered the character (of this protection/service) by causing the enslavement of the consumer to the producer.

One explanation for this confusion might lie in the tension the sometimes arises between Molinari's description of what has historically happened and what is the current practice today, and what should the ideal at sometime in the future. He appears to oscillate back and forth between the two thus producing some confusion for the reader.

Another troubling and confusing passage is where he attempts to explain how the government comes to have this exclusive right to produce security for its "clients" or "consumers." After a brief discussion of the various groups which historically have made and enforced the law he asks the pertinent question, where did they get this right? His rather weak conclusion is that their right comes from the quite abstract "right one has to work in order to satisfy one's needs," the "need" of the government being understood as the need to provide security hence they have a right to do so - which sounds rather circular to me: [229]

Mais où les législateurs et les prophètes qui conçoivent la coutume, les gouvernements qui chargent leurs jurisconsultes de confectionner la loi, enfin qui font observer et respecter la coutume ou la loi, puisent-ils leur droit?	But where does their right come from, (these) legislators and prophets who came up with the customs, the governments who instruct their jurists to make the law, and finally who get customs or the law to be observed or respected?
Ils le puisent dans le droit de travailler pour satisfaire soit leurs propres besoins, soit les besoins d’autrui. Le droit d’un gouvernement à se charger des deux sortes de services qu’implique la production de la sécurité n’est qu’une manifestation spéciale du droit d’employer son activité, ses forces et ses ressources à l’exercice d’une industrie et à la satisfaction d’un besoin.	They get it (the right) in the right (one has) to work in order to satisfy either their own needs or the needs of others. The right of a government to take care of the two kinds of services which the production of security entails is only a particular manifestation of the right to use one’s activity, strength, and resources to carry out an industry or to satisfy a need.

This statement seems to beg the question completely of where governments get the right to exercise the production of security as a monopoly against the will of the consumers of that service, and is one of the weakest arguments the usually hard hitting and uncompromising Molinari ever put forward.

After these confusing passages Molinari then returns to setting out the conditions for security to be produced in similar but not identical terms to those he first set out in the PoS article 44 years previously, although he does not cite this directly in a footnote which was had been his customary practice. The producers needed to cover their costs and make the industry standard profit in doing so, and so for this they needed to be able to charge appropriately. The producers also needed to be able to have "le droit de rechercher" (the right to search, investigate) to find the violators of the law and punish them, and for this to happen the consumers had to submit to certain restrictions on their liberty. But once again, he slips in a comment at the end which undermines what he had previously said about NOT allowing the consumers of security to refuse to enter into a contract against their will since they reserved the right to seek out an "autre producteur de sécurité" (another producer of security) if they were unhappy: [230]

Si nous examinons les conditions auxquelles la sécurité peut être produite et fournie à ceux qui en ont besoin, nous trouverons que ces conditions sont de deux sortes:	If we examine the conditions under which security can be produced and supplied to those who need it, we will find that these conditions are of two kinds:
1° Il faut que l’association spéciale qui la produit couvre ses frais de production avec un profit en harmonie avec ceux des autres industries. Ses frais consistent dans la constitution et l’entretien de l’appareil qu’elle met en œuvre, dans la rétribution de son personnel militaire et civil, dans l’établissement et l’entretien de son matériel de forteresses et d’armements, de ses tribunaux, de ses prisons, etc. Il est indispensable que le prix de la sécurité couvre ces frais, et, en conséquence, que le producteur ait le droit de le fixer, de le percevoir sous une forme ou sous une autre, enfin d’en assurer le recouvrement, sauf à s’accorder sur ces différents points avec le consommateur;	1. It is necessary that the specialized industry which produces it (be able) to cover its cost of production and (makes) a profit similar to those in other industries. Its costs consist in building and maintaining the apparatus which it uses to pay its military and civile employees, in the creation and maintenance of its equipment like fortresses and armaments, courts and prisons, etc. It is essential that the price of security cover these costs and, as a result, the the producer should have the right to set (this price) and to collect it (percevoir) in one form or another, and finally to insure its collection, unless it has made other agreements with the consumer on some of these points.
2° En vertu de la nature même de la sécurité, il faut que l’association qui la produit ait le droit de rechercher ceux qui portent atteinte à la liberté et à la propriété individuelle ou collective, et de leur infliger des peines dépassant la jouissance que peut leur procurer cette nuisance. De là l’obligation, pour le consommateur, de se soumettre aux restrictions à sa liberté, autrement dit aux servitudes que nécessitent la recherche et la répression ou la prévention des atteintes à sa liberté et à sa propriété, mais toujours sous la réserve de son droit d’accepter ou de refuser ces conditions ou d’en réclamer la modification, enfin de s’adresser à quelque autre producteur de sécurité.	2. Given the very nature of security, it is necessary that the association which produces it should have the right to investigate those who violate the liberty and property of individuals or the collective/group, and to impose penalties which exceed the benefits which they can get from this harm (they cause others). From this comes the obligation on the consumer to submit to restrictions on their liberty, in other words to the servitude which the investigation, the suppression, or the prevention of these attacks on one’s liberty and property necessitate, but always subject to one’s right to accept or to refuse these conditions, or to request a modification of them, and finally to turn to some other producer of security.

Once again, the reader is left confused about what Molinari really thinks about the private and competitive versus government monopoly provision of security in this rather unsatisfactory discussion in this book. It seems to be a bit of one and a bit of the other. The final sentence seems to suggest he is still his old radical AC self: "but always subject to one's right to accept or to refuse these conditions, or to request a modification of them, and finally to turn to some other producer of security."

Comment se résoudra la question sociale (1896) "La révolution silencieuse" (The Silent Revolution)↩

Introduction↩

In this late work [231] (Molinari was 77 years old) he is becoming rather repetitious and more concerned with the growing threat of socialism. This book has a first section which summarizes his thoughts on the natural laws of political economy; a second section on his theory of political and economic evolution; a third section on the present "crisis," a critique of the socialist solutions to "the social question," and his counter proposals; but its fourth and final section contains some new content on "the silent revolution" by which competition is radically changing the world, in both economics and politics. How he thought the law of competition applied to government and its functions is what concerns us here.

On the Eve of the Regime of Competition↩

As he had stated several times previously, Molinari believed that the coming "le régime de concurrence" (the regime or system of competition) would appear when a number of conditions had been satisfied. Firstly, that the market had become so extended that it was world wide and "universal;" secondly, that competition had become generalized and applied to everything (first in the economic realm and then increasingly in the political); thirdly, that all industries were increasingly obliged to adapt and improve as these competitive forces swept over them. The main question Molinari wanted to answer was why this "silent revolution" of competition had not had the same effect on government as it had had on other sectors of the economy.

His answer was that the application of competition to "le gouvernement collectif de la société" (the collective government of society) was still at a very early stage (suggesting it had much further to go); that there was still widespread popular ignorance of economic laws and how the market economy worked; and perhaps most importantly that the vested interests of those in power worked hard to prevent this from happening. The greatest obstacle came from "les intérêts à courte vue de la classe en possession de la machinerie du gouvernement collectif" (the short term interests of the class in possession of the machinery of the collective government), yet he was still confident that "the silent revolution" would continue to eat away at these vested interests and the costly and inefficient political system that they had constructed: [232]

Elle agit cependant, et son action, quoique silencieuse et lente, devient tous les jours plus efficace pour contraindre la société et l’individu à adapter leur gouvernement aux nouvelles conditions d’existence que les progrès de la puissance destructive et productive leur ont faites.

However, it does act, and its action, although silent and slow, becomes every day more effective in forcing society and individuals to adapt their government to the new conditions of existence which progress in the destructive and production powers have done/made for them.

Associations of Consumers of Public Goods↩

He thought it was inevitable that "political consumers" would gradually come to feel the growing burden of the state, what he called "le triple government" of the central state, provinces, and communes, as it steadily grew into what he feared might become "le communisme d'État" (state communism). The political consumers would be driven to put up some resistance by forming "associations of consumers." Since governments seemed to be pushed by some "une impulsion irrésistible" (irresistable force) to expand their power and seize control of more and more sectors of the economy, and since politicians seemed willing or unable to stop this, it was up to private associations of consumers to take matters into their own hands, to bypass the official representative body (Parliament or the Chamber of Deputies) and organised political parties, and force local governments to reduce their functions and lower their costs. How he expected them to do this is not clear, but the force of public opinion and local lobbying seems to be what he had in mind. These associations would perhaps be modeled on the powerful British Anti-Corn Law League which had forced parliament to repeal the protectionist corn laws in 1846 with their mass demonstrations, collections of signatures, press campaigns, and lobbying parliament. Parts of his program seem genuinely revolutionary in that he is suggesting that "consumers" (especially of security) step outside the normal political institutions in order to achieve greater choice and lower costs in the provision of these public goods. He pointed out with some irony "l'inefficacité du constitutionnalisme pour remédier aux effets du protectionnisme politique" (the uselessness of constitutionalism to remedy the effect of political protectionism), [233] as if one political problem could be used to solve another. On the other hand, it seems a bit naive and desperate since it was a strategy which was most unlikely to have been taken up by French "consumers" in the late 19th century, given their political and economic views about the proper role of government. This curious passage needs to be quoted at length for it to be appreciated: [234]

Selon la nature des services qu’elles consomment, ces associations doivent être plus ou moins nombreuses et s’étendre sur un territoire plus ou moins vaste. S’il s’agit de la sécurité extérieure, elle doit comprendre la totalité de la population et du territoire. S’il s’agit de besoins d’un caractère local, tels que ceux de la viabilité, du pavage, de l’éclairage, de l’écoulement des immondices, c’est l’espace dans lequel ces besoins se font sentir qui constitue la sphère naturelle de l’association. De là les associations nationales, provinciales, communales, correspondant chacune à des catégories particulières de besoins collectifs. L’association des consommateurs des services propres à pourvoir à ces besoins, peut en entreprendre elle-même la production, de même que l’individu peut produire les articles propres à la satisfaction de ses besoins individuels de nourriture, de vêtements, de logement. Mais, comme l’individu, elle peut aussi s’adresser à des entreprises spéciales en se bornant à conclure avec elles des contrats pour la fourniture de la sécurité, de la construction et de l’entretien des digues, du pavage, de l’éclairage, des égouts, et des autres services naturellement collectifs. Que ce second système soit plus conforme que le premier à la loi de l’économie des forces, l’expérience le démontre pour la satisfaction des besoins collectifs comme pour celle des besoins individuels. Toutefois, c’est dans l’un et l’autre cas à la condition que l’échange s’opère ou que le contrat se conclue sous un régime de concurrence. Si la concurrence n’existe point ou est insuffisante, il pourra être plus avantageux à l’association des consommateurs, aussi bien qu’au consommateur isolé, de produire le service que de subir les conditions d’une entreprise de monopole. Seulement, il peut arriver que les consommateurs de ce service soient incapables de le produire, et s’il s’agit d’un service indispensable, tel que celui de la sécurité, ils seront à la merci du producteur investi d’un monopole. Dans ce cas, leur seule garantie efficace contre l’abus résidera dans l’intérêt du producteur lui-même. Mais, en supposant que la concurrence existe ou soit possible entre les producteurs de services naturellement collectifs, les consommateurs trouveront plus de profit à les demander à une entreprise spéciale qu’à les produire eux-mêmes, comme le consommateur individuel trouve plus de profit à se pourvoir de pain chez un boulanger dans une localité où il existe des boulangeries concurrentes qu’à le fabriquer lui-même. Dans ce cas, enfin, et dans les autres analogues, la fonction de l’association de consommation se réduira à conclure des contrats pour la fourniture des services naturellement collectifs et à en surveiller l’exécution, ou pour mieux dire, à nommer des délégués auxquels elle confiera les pouvoirs nécessaires pour remplir cette fonction, en se réservant seulement le droit de contrôler leurs actes.

According to the nature of the services which they consume, these associations need to be more or less numerous and extend over a territory more or less large. If it is a matter of external security it will have to include the entire population and the entire country. If it is a matter of needs of a local character, such as roads, paving, lighting, collecting rubbish, then it will be the locality where these needs are most felt which will be the natural region for the organisation. Reaching out from here there will be national, provincial, and communal associations which will correspond to the particular character of collective needs. The association of consumers of the services suitable to provide these needs can undertake the production of these themselves, in the same way as an individual can produce the goods suitable for the satisfaction of his individual needs such as food, clothing, and housing. But like an individual it (the association) can also turn to specialized firms (des entreprises spéciales) and agree to conclude contracts with them for the provision of security, for the construction and maintenance of dykes, footpaths, lighting, sewers, and other services which are naturally collective (des autres services naturellement collectifs). That the second system conforms more than the first to the law of economizing on resources ( la loi de l’économie des forces) has been been demonstrated by experience in the satisfying of both collective and individual/private needs. However, for both cases this is on condition that an exchange takes place or that the contract is concluded in a régime of competition. If competition does not exist or if it is insufficient, it would be more advantageous for the association of consumers, as well as for the individual consumer, to produce the service (themselves) than to be subject to a monopoly (une entreprise de monopole). But, it can happen that the consumers of this service are incapable of producing it, and if it is a matter of an indispensable service such as security, then they will be at the mercy of the producer who holds this monopoly. In this case the only effective guarantee against abuse will lie in the self interest of the producer themselves. But, supposing that competition exists or is possible between producers of services which are naturally collective the consumers will find it more profitable to do business (demander) with a firm which specializes in this (une entreprise spéciale) than to produce it themselves, just as an individual consumer finds it more profitable to get bread from a baker in a location where there are competing bakeries than to make it themselves. In this case, finally, and in other similar cases, the function of the consumer association (l’association de consommation) comes down to concluding contracts for the supply of naturally collective services and in supervising their execution, or rather, nominate delegates/representatives to whom it confers the necessary powers to carry out this function, while reserving for itself only the right to control their actions.

Telles sont les données que fournit l’économie politique pour la solution du problème de la limitation des attributions des collectivités nationales, provinciales et communales. La nécessité de résoudre ce problème se fera sentir davantage à mesure que l’accroissement de la pression de la concurrence contraindra les gouvernements comme les autres entreprises à se conformer de plus près à la loi de l’économie des forces. Malheureusement, la concurrence, en matière de gouvernement, se trouve- aujourd’hui, sinon annulée, du moins singulièrement amortie par la persistance du régime de la sujétion politique. Tandis que le consommateur a été, du moins pour une bonne part, affranchi de la sujétion économique pour les produits et services naturellement individuels, il est demeuré complètement sous le régime de la sujétion politique pour les services naturellement collectifs.

These are the facts which political economy give us for solving the problem of limiting the functions of national, provincial, and communal bodies (collectivités). The necessity of resolving this problem will make itself felt all the more as the increase in the pressure of competition forces governments, like other enterprises, to conform more closely to the law of economizing on resources. Unfortunately, competition when it comes to government, finds itself today if not cancelled (annulé), at least softened/weakened (amorti) by the persistence of the regime of political subjection. While the consumer has been, at least for for great part, freed from economic subjection for products and services which are naturally individual, he has remained completely under the regime of political subjection for services which are naturally collective.

What Molinari is pointing out here is the growing tension between "economic liberty" (which in many cases was still growing though more slowly than before) and "political subjection" which remained firmly in place and was getting worse. This was something he had first pointed out in the Cours about the problem that arises when there was no longer "harmony" between the political and the economic realms of human activity. [235]

The tension, he thought, could only be resolved if governments were forced to endure the curative pressure of competition in some way. Until his "associations of consumers" could show some positive results, there was still the possibility of emigration and secession. The free movement of people to the Americas and Australia, and the movement of capital to less restrictive jurisdictions were still powerful forces for European states to contend with, but he was frustrated that it was taking so long to have an impact. So, perhaps the threat of secession could hasten things along a bit: [236]

Le ralentissement et l’insuffisance de la concurrence, voilà quelle est, en définitive, la cause de l’aggravation progressive du poids des gouvernements. Sous sa forme destructive de guerre, la concurrence ne s’exerce et ne peut plus s’exercer qu’à des intervalles de plus en plus longs. Sous sa forme productive, elle est limitée par le régime toujours subsistant de la sujétion politique et ne peut agir que d’une manière indirecte et lointaine. On a essayé de remédier à son insuffisance, par un système analogue à celui qui limitait le monopole des corporations industrielles, mais l’expérience se charge tous les jours de démontrer l’inefficacité de ce système : le prix des services des gouvernements va s’élevant sans cesse dans les pays où leur pouvoir est limité et réglementé par une Constitution aussi bien que dans ceux où il ne l’est point. D’où il est permis de conclure que le remède à cet état de choses est le même que celui qui a suscité depuis un siècle les merveilleux progrès de l’industrie; il consiste à affranchir de la sujétion politique les consommateurs des services des gouvernements, comme ils ont commencé à l’être de la sujétion économique. Nous avons vu ailleurs comment cette réforme s’opérera par la reconnaissance et la mise en pratique du droit de sécession.

The slowness and inadequacy of competition, here finally is the cause of the progressive worsening of the weight of governments. In its destructive form of war, competition is practiced and can no longer be practiced only at longer and longer intervals. In its productive form it is limited by the still surviving regime of political subjection and can only act in an indirect and distant manner. People have tried to remedy its inadequacy with a system analogous to the one which limited the monopoly of industrial corporations, but experience shows us everyday the inefficiency of this system: the price of government services continues to rise without stopping in countries where their power is limited and regulate by a Constitution just as must as in those where there is none. From which it is permitted to conclude that the remedy for this state of affairs is the same as the one which has sustained the marvellous progressive of industry over the past century; it consistes in liberating consumers of government services from political subjection, as they have begun to be (liberated) from economic subjection. We have seen elsewhere how this reform has been brought about by the acknowledgement and the putting into practice of the right of secession.

Modern Governments have become "Monsters"↩

When it came to "internal security" or the provision of police and judicial services things were even worse, he thought. This was because these essential services were even more shielded from competition than many other government services. The government's monopoly here was total and unbreachable. The end result was that governments were nothing more than "monsters." [237]

En revanche, le service non moins nécessaire de la sécurité intérieure, qui se trouve entièrement à l’abri de la concurrence, est le plus arriéré de tous. La justice n’a pas cessé d’être coûteuse, lente et incertaine, la police insuffisante et vexatoire, la pénalité tantôt excessive et tantôt trop faible, le système pénitentiaire plus propre à développer la criminalité qu’à la restreindre. Comment en serait-il autrement? Comment les fonctions naturelles des gouvernements ne souffriraient-elles pas de l’accroissement incessant de leurs fonctions parasites ? Quelle entreprise particulière pourrait subsister si elle était constituée et gérée comme un gouvernement, et accaparait, à son exemple, des industries multiples et disparates ? Au point de vue économique, les gouvernements modernes sont-ils autre chose que des « monstres » ?

On the other hand, the equally necessary service of internal security, which is completely shielded from (any) competition, is the most backward of all. Justice has not stopped being costly, slow, and uncertain; the police inadequate and troublesome; penalties are sometimes excessive and at other times too weak; the prison system is more suited to increasing criminality than in reducing it. How could it be otherwise? Why wouldn’t the natural functions of government suffer because of the constant increase in the parasitic functions (leurs fonctions parasites)? What private enterprise could survive if it were constituted and run like a government, and monopolized, by following its example, multiple and disparate industries? From the economic point of view, aren’t modern governments nothing other than “monstres”?

Molinari's solution was to turn to his friend and colleague from the 1840s, Frédéric Bastiat, who thought the French state could be cut so drastically that it could do all it needed to do on a budget of only 200 million francs out of total level of expenditure of about 1,600 million francs. [238] Molinari agreed with this figure, even though the French population and economy had considerably increased in the intervening 50 years, [239] and even though he expected "le gouvernement assureur" (the government as insurer) should reimburse citizens for losses caused by theft and the destruction of life and property out of this amount as well. He thought a low premium proportional to the value of the property the citizens wanted to insure would be sufficient to keep the government functioning as it should. [240]

Supposons maintenant que les gouvernements soient réduits à leurs attributions naturelles, que le gouvernement national ait seulement à pourvoir à la sécurité intérieure et extérieure des individus et de la nation, et qu’une assurance internationale contre la guerre réduise les armements des peuples civilisés au minimum nécessaire pour les préserver des agressions des peuplades ou des hordes barbares pour lesquelles la guerre n’a pas cessé encore d’être une industrie productive, les frais de cette assurance de la vie et de la propriété ne dépasseraient pas sensiblement ceux des assurances contre l’incendie. Il y a un demi-siècle à peine que Bastiat ne les évaluait pas à plus de 200 millions pour la France, et ce chiffre suffirait encore aujourd’hui, même en admettant que le gouvernement assureur fût, comme il est juste, tenu au remboursement des pertes, et dommages causés par le vol et la destruction de la vie et de la propriété. Il suffirait alors d’une faible contribution, proportionnée à la valeur de la propriété immobilière, mobilière et personnelle des assurés pour y pourvoir, et cette contribution pourrait être prélevée directement et à peu de frais.

Now let us imagine that governments have been reduced (in size) to their natural functions, that the national government had only to provide internal and external security for individuals and the nation, and that an international guarantee against war had reduced the armaments (needed) by civilized nations to the minimum necessary to protect themselves against the agression of tribes and barbarian hordes for whom war has not stopped being a productive industry, the cost of this insurance for life and property would not be significantly more than insurance against fire. Scarcely half a century ago Bastiat estimated the value of (this insurance) at no more than 200 million francs for France, and this figure would still be sufficient today, even taking into account that the government insurer ( le gouvernement assureur) would be responsible, as justice demands, for reimbursing the losses and damages caused by theft and the destruction of life and property. Then, a low contribution would sufficient to provide (this service), one proportional to the value of the movable, landed, and personal property of the insured; and this contribution could be levied directly and at little cost.

Thus, Molinari concluded, once the full force of competition was applied to all government services France could have its true utopia: [241] "le gouvernement à bon marché, qui est demeuré jusqu'à présent une utopie, deviendrait une réalité" (cheap government, which has remained up until the present a utopia, would become a reality). [242]

La Société future (1899) "La constitution libre des gouvernements" (The Free Constitution of Governments)↩

Introduction↩

This work [243] was only the second of Molinari's many books (44 whole books and 12 other book-length works for a total of 56 by my last count) to be translated into English. The first was Religion (published in 1892 and translated in 1894) and Esquisse de l'organisation politique et économique de la Société future (1899) which was translated as The Society of Tomorrow: A Forecast of its Political and Economic Organization (1904). [244] This a pity as they were not representative of Molinari's lifetime work and did not show him at his most radical.

The book needs to be seen alongside his other "turn of the century" pieces in which he attempted to summarize the achievements of the 19th century and his hopes and fears for the coming century: Grandeur et decadence de la guerre (1898); Esquisse de l'organisation politique et économique de la Société future (1899); Les Problèmes du XXe siècle (1901); and his articles "Le XIXe siècle," Journal des Économistes , 5e série, T. XLV, Janvier 1901, pp. 5-19; and "Le XXe siècle," Journal des Économistes , 5e série, T. XLIX, Janvier 1902, pp. 5-14. [245]

The book (which is relatively short - 205 pages of text and 40 pages of appendices) is divided into three parts; the first is yet another survey of his theory of the "Natural Laws" which governed political economy; the second a summary of his theory of evolution in which "The State of War" played an important and initially positive role (e.g. in warding off barbarian invasions); and the third is a discussion of the kind of state and society which would emerge in the next phase, if it were to come about, which would be "The State of Peace," which in earlier versions of his theory had been called "the era of competition." In this latter, future phase of societal development political subjection would be replaced by individual sovereignty (la souveraineté individuelle), destructive competition ("la concurrence destructive," or "la concurrence politique et guerrière") would be replaced by the life-giving competition (la concurrence vitale) of the free market (la concurrence productive ou industrielle), and compulsory and coercive taxes would be replaced by "la contribution" (voluntary payments, fee for service) or an insurance premium (la prime d'assurance).

Because of its differences to the views he expressed in his youthful and more radical PoS article of 1849 Rothbard was convinced Molinari had "backtracked" significantly in Société future . He first made this point in the foreword he wrote to Huston McCulloch's translation of the PoS article published by The Center for Libertarian Studies in May, 1977 (which incidentally was my introduction to Molinari's writings when I first came to the US in 1978 to attend the second ever Cato Summer Seminar in Political Economy at Stanford University) and singled out La Société Future (1899) as the work in which he had "partially retreated to an advocacy of a single monopoly private defense and protection company, rather than allowing free competition." The full quotation is: [246]

Four decades later, in his Les Lois Naturelles de l'Economie Politique (1887), Molinari was still a firm believer in privately competitive police companies, public works companies, and defense companies. Unfortunately, in his only work to be translated into English, La Societé Future ( The Society of Tomorrow, New York: G.P. Putnam's Sons, 1904), Molinari hadpartially retreated to an advocacy of a single monopoly private defense and protection company, rather than allowing free competition.

Rothbard made a similar statement twenty years later as this passage from his History of Economic Thought makes clear: [247]

Molinari only backtracked on his anarchistic views in his very late works, beginning in his Esquisse de l'organisation politique et économique de société future (1899). Here he retreated to the idea of a single monopoly defence and protection company, which service would be contracted out by the central state to a single private corporation.

However, as he often does, one can point to some backtracking on the one hand, as well as some other arguments which are radical and original which complicates or qualifies any assessment of his ultimate position.

The Production of Security in the "Society of the future"↩

The Functions of the State are now "Naturally Collective"

In this work Molinari reiterates his earlier argument that the state has a number of "natural functions" (attributions naturelles) which it alone can provide because they are "naturellement collective" (naturally collective) in nature and cannot be supplied "individually." They are internal and external security and a handful of local public services such as roads, water, and sewers. These "collective goods" were a combination of "general" or national services and local ones which needed to be paid for "collectively" by the consumers but with the interesting proviso that the level of the payment had to be determined "en proportion de la valeur des biens garantis" (in proportion to the value of the goods being protected) which was a return to the ideas he had first expressed in his 1846 article on the reform of "The Electoral Law." [248]

Les services qui constituent les attributions naturelles des gouvernements sont de deux sortes : . généraux et locaux. Les premiers sont du ressort du gouvernement proprement dit, les seconds appartiennent aux administrations provinciales et communales. Le service principal qui incombe au gouvernement consiste dans l’assurance de la sécurité extérieure et intérieure de la nation et de l’individu. Ce qui caractérise ce service et le différencie de ceux de l’industrie privée, c’est qu’il est naturellement collectif. Un appareil de guerre assure toute la population d’un pays contre le péril d’une invasion étrangère, et un poste de police garantit la sécurité de tous les habitants d’un quartier, comme une digue protège contre l’inondation tous les riverains d’un fleuve. Cela étant, il est juste et nécessaire que les consommateurs de ces services naturellement collectifs en paient, collectivement aussi, les frais, en proportion de la valeur des biens garantis. Si l’un d’entre eux se refusait à fournir sa quote-part de ces frais, ce serait aux dépens des autres assurés dont la contribution devrait être augmentée d’autant. Mais nous n’avons pas besoin de dire que ce caractère de collectivité n’appartient qu’à un petit nombre d’articles. Tandis qu’un poste de police procure de la sécurité à l’ensemble des habitants d’un quartier, il ne suffit pas d’établir une boulangerie pour apaiser leur faim. C’est que le pain, comme les autres aliments, les vêtements, etc., etc., est un article de consommation naturellement individuelle, et la sécurité un article de consommation naturellement collective.

The services which constitute the natural functions of government are of two kinds: general and local. The first are the responsibility of real governments; the second belong to provincial and communal administrations. The principal service which falls to the government is that of assuring external and internal security for the nation and for the individual. What characterises this service and differentiates it from those of private industry is that it is naturally collective. The apparatus for (fighting) a war protects (assure) the entire population of a country from the danger of a foreign invasion, and a police station protects the security of all the inhabitants of a town district (quartier), as/like a dike protects all the inhabitants alongside a river. This being the case, it is just and necessary that the consumers of these services which are naturally collective pay for their costs also collectively in proportion to the value of the goods being protected. If one of them refuses to provide his share of these costs, this would be at the expense of the other insured/protected parties whose contribution would have to be increased by this amount. But we shouldn’t have to say that the characteristic of collectivity (being a collective good) only belongs to a small number of goods. While a single police station provides security for a group of inhabitants of a town district it is not enough to have one bakery to satisfy their hunger. This is because like other food and clothing etc., bread in a consumption good which is naturally individual and security is a consumption good which is naturally collective.

En supposant donc que la sécurité extérieure des nations civilisées soit assurée par leurs forces associées au lieu de l’être par leurs forces isolées, les fonctions naturelles et essentielles de leurs gouvernements se réduiront: 1° à participer à la défense commune de l’association et au maintien de la paix entre ses membres; 2° à pourvoir à l’assurance de la sécurité intérieure et aux autres services naturellement collectifs.

Thus by implying that the external security of civilised nations should be assured by their associated forces (leurs forces associées) instead of being assured by their isolated/individual forces, the natural and essential functions of their governments will be reduced (to the following): 1. to participate in the common defence of the association and in maintaining the peace between its members; 2. to provide a guarantee of internal security and the other naturally collective services.

He illustrates this in the above passage with an interesting example, it is interesting because he reverses one of his earlier "simple hypotheses" of the monopolist grocer or baker which he had used to argue the very opposite. [249]

Tandis qu’un poste de police procure de la sécurité à l’ensemble des habitants d’un quartier, il ne suffit pas d’établir une boulangerie pour apaiser leur faim. C’est que le pain, comme les autres aliments, les vêtements, etc., etc., est un article de consommation naturellement individuelle, et la sécurité un article de consommation naturellement collective.

While one police station provides security to a group of inhabitants of a district, it is not sufficient to establish (only) one bakery to satisfy their hunger. This is because bread, like other food products, clothes, etc., etc., is a consumer/consumption good which is “naturally individual,” and security is a consumption good which is “naturally collective” (in nature).

He pairs this apparent backdown from his earlier position by arguing that these services will be be paid for not by compulsory taxes but by voluntary "contributions" (which sometimes sounds like paying a "fee for service") which would vary "en proportion de la valeur des biens garantis" (according to the value of the property which is being protected), so more like an individual insurance premium than a collectively imposed tax. [250]

The Conditions necessary for the Production of Security

In chapter IV in which he continues his discussion of "La constitution libre des gouvernements" (the free constitution of governments) Molinari returns to the list of three conditions for the proper production of security which he had first put forward in his PoS article [251] - which suggests his continued radicalism - however, he adds a fourth proviso at the end - which suggests a weakening of that radicalism. This proviso reads: [252]

A quoi il faut ajouter l’interdiction de juger dans sa propre cause et de se faire justice soi-même

to which must be added the prohibition of judging in own’s own cause and of carrying out justice oneself

He also adds to these conditions a number of other requirements which previously he had not mentioned, namely "l'institution d'une justice" and "l'institution d'une police" (a system of justice and police). [253]

L’exécution de ces lois et conditions de la production d’un service indispensable à la conservation de toute société, nécessite encore:	Furthermore, the execution/carrying out of these laws and conditions for the production of a service which is indispensable for the preservation of the entire society, requires the following:
1° L’institution d’une justice ayant en premier lieu pour mission d’ordonner la recherche des auteurs présumés des délits et des crimes commis contre les personnes et les propriétés, de constater s’ils sont innocents ou coupables, et, dans le cas de culpabilité, de leur appliquer les pénalités édictées par le code; en second-lieu, de juger les différends et les procès;	1. An institution of justice which has as its first goal to order an investigation/inquiry into the alleged perpetrators of the attacks and crimes committed against person and property, to determine if they are innocent or guilty, and in the case of being guilty, to impose on them penalties dictated by the Code; in the second place to judge the different arguments (presented) and the legal proceedings;
2° L’institution d’une police chargée de la découverte et de la poursuite des auteurs des délits et des crimes; ensuite, de l’exécution des pénalités répressives.	2. The institution of a police force charged with discovering and pursuing the perpetrators of the attacks and crimes; and then to carry out the imposed penalties.
Telles sont les différentes parties de l’organisme de la production de la sécurité intérieure et les conditions de son fonctionnement.	These are the different components of the organization of the production of internal security and the conditions for its functioning.

As he had also done in the Précis (1893) he argues that this system of providing security required a Code of laws which would define the nature of the crimes against person and property and specify the nature of the punishments. He does not say who or what should draw up this legal Code.

Problems with the current system and the need for improvements

Unfortunately, government providers of security are responsible for the considerable problems which exist today (1899). A major cause of these problems is that the powerful elites who control or even "own" the state use the powers of the state to further their own interests not those of the ordinary "consumers of security." This ownership and control of the state is getting worse and it is something he discussed in more detail in his quite pessimistic book Les Problèmes du XXe siècle (1901) (discussed below).

In addition, the return of the arms race between the major European powers and the creation of a costly "armed peace" during the 1890s meant that governments were reluctant to cut the size of their military and thus allow cuts in taxes and other burdens (like conscription or the national debt) on their own citizens. This dangerous state of an armed peace meant that further progress in reducing the size and functions of the state had become frozen/stalled, which I think was a major source for Molinari's growing pessimism and "backtracking" from his earlier more radical position. He thus had to keep pushing his ideal future free society further and further into the future.

Then there was the high cost of justice and police due to the inherent inefficiencies of a market without competition between suppliers to keep prices low and the quality high. Like most advocates of government provided services Molinari had to resort to a quasi-political solution to this intractable economic problem, which was the appointment by consumers of "les mandataires" (representatives, delegates) who would choose the private supplier of security, sign the contract, and see that the conditions of the contract were fulfilled. It is not made clear whether these representatives are elected or appointed in some way. By excluding individual consumers of security from making these decisions themselves directly was a major step backwards in his ACT.

It was also clear that his hope for the "smaller states" (or sub-governments) of the communes and the provinces to compete against each other to attract new "clients" or inhabitants by lowering the cost of public goods and hence the taxes and charges they imposed, was fading since they were doing the opposite, expanding their activities and raising taxes. This was a major blow to his theory as well.

What might the government of the future look like↩

Another Hypothesis

As he often did when he had something more radical to say and wanted to disguise it for the reader he introduces "a supposition" or conjecture about the future provision of the PoS. Here the supposition is based upon the idea that the "state of war" and the armed peace which Europe had been experiencing had finally come to an end. International agreements were now in place to ensure the peace, the size of the armed forces could be reduced dramatically and taxes as well as a consequence. States could then start looking for a cheaper alternative to state provided security by shopping around the private firms which would have entered the security industry as a result of the inexorable spread of competition. The end result would be progress in the future production of security which would have seemed unimaginable in the present. [254]

Mais supposons que l’état de paix succède à l’état de guerre, que la sécurité extérieure des nations soit assurée par leur association collective et qu’elles puissent en conséquence se constituer librement, que les gouvernements soient réduits à leurs attributions naturelles, on verra se réaliser, sous l’impulsion de la concurrence, dans la production de ce service essentiel, des progrès qui sembleraient aujourd’hui chimériques.

But let us suppose/imagine that a state of peace follows that of the state of war, that the external security of nations is assured by a collective association among them, and that they can as a result set themselves/arrange themselves freely, that governments have been limited/cut down to their natural functions, one will then witness/see under the force of competition progress in the production of this essential service (security) which today would seem “chimériques” (utopian, fancifull, hard to believe).

Dans ce nouvel état des choses, une première question se posera, celle de savoir s’il est plus avantageux pour une nation d’entreprendre elle-même la production de la sécurité dont elle a besoin ou d’en charger une « maison » ou une compagnie possédant les ressources et la capacité techniques qu’exige ce genre d’industrie. L’expérience ayant suffisamment démontré l’infériorité économique de la production dite en régie, on peut prévoir que la nation contractera de préférence, par l’entremise de délégués ou autrement, avec la maison ou la compagnie qui lui offrira les conditions les plus avantageuses et les garanties les plus sûres pour la fourniture de cet article de consommation naturellement collective.

In this new state of affairs the first question to be asked would be to know if it were more advantageous to engage a “House” or a firm which had the resources and the technical capacity which this kind of industry required. Since experience has sufficiently demonstrated the economic inferiority of production done by a state run entity (la production dite en régie), one could predict that the nation will prefer to contract (it) out via delegates or otherwise, with the House or company which offered the most advantageous conditions and the best guarantees for the supply of this naturally collective article of consumption.

Two Improvements that need to be made

Molinari stresses two such hard to imagine improvements in the future production of security. The first would be a shift away from the traditional practice of merely discouraging crime by having a police presence on the streets and frightening would-be criminals with criminal punishment like prisons. Molinari imagined that when producers of security began behaving more like insurance companies they would do what most insurance companies did, namely to reimburse the person insured with a monetary payment or replace the property which was stolen or damaged. Thus restitution for the victim rather than just punishment of the criminal would become the normal practice: [255]

Ces conditions ne différeront, théoriquement du moins, de celles du régime actuel de production de la sécurité que sur un point, mais sur un point essentiel, savoir : l’obligation imposée à l’assureur de payer aux assurés, victimes des atteintes à la vie ou à la propriété, des indemnités proportionnées au dommage causé, sauf recours aux auteurs de ces atteintes.

These conditions will only differ, theoretically at least, from those of the present regime for the production of security, only on one point, but one which which is essential, namely an obligation would be placed on the insurer to pay to those they insured, who were victims of attacks on their life or property, compensation which was proportional to the damage caused, without any reference to (??) the perpetrators of these attacks. …

This would result in a radical change in the nature of criminal justice where the victim would be immediately compensated by his insurance company for any losses or damages from any criminal act and it would then be the job of the insurance company to claim damages from the perpetrator in order to cover their costs. This is quite a remarkable argument Molinari was making, one which Rothbard himself would take up in his own critique of the criminal justice system. [256]

A second important cost saving would come about as a result of the introduction of one of Molinari's pet solutions to the high cost and slowness of criminal justice via the court system. He again uses the rhetorical trope of quoting Adam Smith's "fees of court" passage from The Wealth of Nations about competing courts and litigants "shopping around" for the "best court with the best judge" to have their cases speedily and efficiently heard. This was the third and last time Molinari would do this and in the past it had been an indicator of his radical AC perspective. [257] What is unusual in this version is the addition of an explanatory paragraph in which he inserts one of his most radical AC descriptions of these competing courts. He predicts that "des compagnies judiciaires pleinement indépendantes et concurrentes" (fully independent and competitive judicial companies) will solve the problem of the high cost and slow service provided by the court system. [258]

Quant aux conditions qui concernent le prix de la sécurité et les servitudes qu’elle nécessite, elles différeront d’un pays à un autre, selon le degré de moralité et de civilisation de la population, selon encore les difficultés plus ou moins grandes de la répression. En ce qui concerne le jugement des délits et des crimes, l’assureur et la collectivité assurée seront également intéressés à ce qu’il émane d’une justice éclairée et impartiale. Comme le constatait Adam Smith, la concurrence a déjà résolu ce problème. Il n’est pas douteux que des compagnies judiciaires pleinement indépendantes et concurrentes le résoudront de même dans l’avenir.

As for the conditions concerning the price of security and the servitude (restrictions) which it requires/imposes, these differ from country to country according to the level of morality and civilisation of the populations, according as well to the more or less greater difficulty of repressing (crime). Concerning the judgement against offences and crimes, the insurer and the group which is insured will be equally interested that there be enlightened and impartial justice. As Adam Smith stated, competition has already solved this problem. There is not doubt that fully independent and competitive judicial companies will solve the problem again in the future.

A Weakening of the Right of Communes to Secede

What seems to have dropped out of his discussion in this 1899 work are the many innovative ideas he presented in Les lois naturelles (1887) concerning the vigorous competition between various levels of government (the "double right of secession" ) such as commune vs. commune and province vs. province; the pressure which might be brought to bear on domestic governments by the threat and the reality of exit by both populations (emigration to the Americas or to Australia) and capital (to anywhere in the world); and the prospect on entirely privately built new cities and towns springing up in the "interstices" as it were within French and European societies. The driving force behind these kinds of secession was largely economic in his view, people fleeing high tax jurisdictions for lower ones. When he spoke of secession in this work it is in the context of the "nationalities problem" rather than the "tax problem." Again, as a result of the new era of peace which states would be entering in the future, there would be less need for them to jealously guard the integrity of the national state (for taxing or conscription purposes) so he thought they would be more relaxed about allowing ethnic or national minorities to split away from the central state. The examples he gave were the Poles in Russia, the Irish against the English, and within France there were the Belgians, Nice, Savoy, and in the empire, Arab north Africa and Indochina. [259]

Although he drops the idea of communes and provinces seceding from the national state (his "double right of secession") he continues to argue that increasing competitive pressures will apply to these "sous-gouvernements" (the provinces and communes) which will be driven to become more efficient and cheaper by privatizing their activities "par des entreprises spéciales" (enterprises which specialize in this). However, with the rise of democracy and the increasingly centralised nation state the hands of these "sous-gouvernements" were increasingly tied by the veto power of the central state which was hampering this competitive process from going as far as it might. He cites his earlier work on this matter: Les lois naturelles de l'économie politique, (1887), chap. xiv. La constitution naturelle des gouvernements. La commune. La province. L'État. [260]

A ces services qui sont du ressort du gouvernement de l’État se joignent ceux qui appartiennent aux sous-gouvernements des provinces et des communes. Comme le gouvernement de l’État, et sous la pression des mêmes influences, ces sous-gouvernements augmentent continuellement leurs attributions aux dépens de l’activité privée, et le fardeau de leurs budgets locaux s’ajoute à celui du budget général. Ils ne possèdent point, à la vérité^ un pouvoir illimité sur la liberté et la propriété individuelles, mais les limites de leur pouvoir ne sont point marquées, et son extension n’est arrêtée, dans quelque mesure, que par le veto du gouvernement de l’État qui les tient dans une dépendance plus ou moins étroite. Seulement, ce veto, il ne l’applique guère que lorsqu’il juge que le pouvoir local empiète sur le sien, et ce que l’on désigne sous le nom de « libertés communales » n’est autre chose que la latitude qu’il laisse aux sous-gouvernements de réglementer la liberté et de taxer la propriété individuelle. En réalité, le domaine des gouvernements locaux est fort étroit, il ne s’étend qu’à un petit nombre de services naturellement collectifs, tels que l’établissement et l’entretien de la voirie, le pavage, l’éclairage, l’enlèvement des immondices, etc., (on n’y doit même pas comprendre la police qui est plutôt du ressort du gouvernement de l’État), et ces différents services locaux, comme les services généraux de la sécurité intérieure et extérieure, peuvent être effectués avec plus d’efficacité et d’économie par des entreprises spéciale que par le gouvernement provincial ou communal lui-même.

To these services which are the responsibility of the State are added those which belong to the “sous-gouvernements” (lower level governments) of the provinces and the communes. Like the government of the (central) state, and under the pressure of the same forces, these sub-governments also are constantly increasing their functions at the expence of private activity, and the burden of their local budgets is added to that of the general (national) budget. It is true that they do not possess unlimited power over individual liberty and property, but the limits of their power are not specified, and its extension is to some degree only stopped by the veto of the government of the central state which keeps them in a more or less dependent state. However, this veto is only used when it (the central government) thinks that local power encroaches upon its own, and what is called “communal liberty” is nothing more than the latitude it gives to the sub-governments to regulate the liberty and tax the property of individuals. In reality, the domain of the local governments is quite narrow and it only extends to a small number of services which are naturally collective, such as the building and maintenance of roads, footpaths, lighting, the collection of rubbish, etc. (one shouldn’t even include among them the police which is rather the responsibility of the central government), and these different/various local services, like the general/national services of internal and external security, can be carried out with greater efficiency and economy by businesses which specialise in this (des entreprises spéciales) than by the provincial or communal government itself.

There will still be Competition between Nation States

One of the main reasons why competition between the different levels of government within France was in decline in Molinari's view was the rise of democracy, mass political parties, and socialism. There was little support for smaller and cheaper government within the country, quite the contrary, so he turned his hopes outward to competition between states on the international level. He still thought this was possible once the immediate threat of war had been lifted by the signing of various international peace treaties and when mechanisms for international arbitration to resolve disputes had been set up. [261] This international peace would permit competition between nation states for citizens and capital by offering low taxes, reduced economic regulation, and good and reliable protection of property and commercial contracts. If states did not offer this then individuals and companies would literally vote with their feet and go elsewhere in order to avoid living under what Molinari called "ce système de renchérissement" (this system of increasing costs). Competition even at this level of government was inevitable, Molinari thought perhaps naively, because the influence of the natural laws of economics were unavoidable and impossible to resist. [262]

Cependant, à mesure que la concurrence internationale ira se développant et fera sentir davantage sa pression dans toutes les parties du marché des échanges, la nécessité de mettre fin à ce système de renchérissement deviendra plus urgente. Sous peine de succomber dans la lutte et de disparaître, les nations concurrentes seront obligées de réduire les attributions de l’État au lieu de les accroître et, finalement, de se borner à charger le gouvernement de la production des -services naturellement collectifs de la sécurité intérieure et extérieure.”

However, as international competition continues to develop and its pressure/force is felt even more in all the various parts of the market for goods and services, the necessity of putting an end to this system of increasing costs will become more urgent. Under penalty of losing this struggle and disappearing, the competing nations will be obliged to reduce the functions of their state instead of increasing them, to limit themselves to making the government responsible (only) for the production of services which are naturally collective, such as internal and external security.

The Rise of Individual Sovereignty and their Mandataires

If a more secure situation of international peace could be established, the European powers would gradually be able to leave "the state of war" they had been in for centuries and begin to enter the new "state of peace" which would usher in an opportunity to drastically cut the number of state functions and the costs of providing those functions. This would also make possible the bringing to an end of "la servitude sans limites" (unlimited servitude) which had been the condition of humanity for most of its existence and the evolution of which he had described in his two volume work of historical sociology some twenty years previously. Unlimited servitude would be replaced at first/initially by "une servitude limitée" (limited servitude) as governments began to lower the cost of government and thus the level of taxes they imposed on their citizens. This form of servitude in turn would be replaced in the future society with a condition of full "la souveraineté individuelle" (individual sovereignty) in which every individual would have complete economic liberty to do what they liked, and where the tax burden of paying for government services would be dramatically lifted and replaced by voluntary contributions, fee for services rendered, and low insurance premiums. [263]

Mais que l’état de paix vienne à succéder à l’état de guerre, que la sécurité des nations civilisées soit garantie par un pouvoir collectif, émané d’elles, aussitôt la situation change. Ce pouvoir possédant une prépondérance assez grande, sinon pour supprimer le risque de guerre au moins pour le réduire dans des proportions telles qu’il suffise d’une faible prime pour subvenir aux frais de la sécurité collective, la servitude illimitée à laquelle l’individu était assujetti cesse d’avoir sa raison d’être. Elle est remplacée par une servitude limitée à l’obligation de fournir une quote-part minime de la prime d’assurance, part toujours réductible jusqu’à ce que l’extension de la civilisation la rende inutile.

But as the state of peace comes to replace the state of war, as the security of the civilised nations comes to be guaranteed by a collective power (arrangement) organised among themselves, then the situation will change. Since this power possess sufficient strength, if not to suppress any risk of war but at least enough to reduce it to a size which a small/very low premium (une faible prime) would be sufficient to cover the costs of this collective security, then the unlimited servitude to which individuals have been subjected to ceases to have any raison d’être. It will be replaced by a servitude which is limited to the obligation to provide a minimal share of the insurance premium, a share which will always be reduced as the extension of civilisation renders it no longer necessary.

La souveraineté individuelle, voilà donc quelle est, en dernière analyse, la base des institutions politiques de la société future. La souveraineté n’appartient plus à une société propriétaire d’un territoire et d’une population esclave ou sujette, ou à une sorte d’entité idéale héritière de rétablissement politique de sa devancière et investie, comme elle, d’un droit illimité sur la vie, la liberté et la propriété individuelles. Elle appartient à l’individu lui-même. Il n’est plus un sujet, il est son maître, son propre souverain, et il est libre de travailler, d’échanger les produits de son travail, de les prêter, de les donner, de les léguer, etc., suivant sa convenance. Il peut employer à son gré les forces et les matériaux dont il dispose à la satisfaction de ses besoins physiques, intellectuels et moraux.

So here we have individual sovereignty which is, in the final analysis, the foundation of the political institutions of the future society. (This kind of) sovereignty no longer belongs to a society/group which owns a territory or a population of slaves or subjects, or to a kind of abstract ideal which is heir to the political restoration of its ancestors and which is endowed, as it was, to the unlimited right to the lives, liberty, and property of individuals. It (this sovereignty) belongs to the individual himself. He is no longer a subject, but is his own master, his own sovereign, and he is free to work, to exchange the products of his labour, to lend them, to give them away, to bequest them, etc. as he likes. He can use as he wills the forces and the material things he has at his disposal to satisfy his physical, intellectual, and moral needs.

However, compared to the kind of individual sovereignty Molinari envisaged in the PoS article and S11 in 1849 the kind of individual sovereignty put forward 50 years later is more limited. Instead of being exercised literally by each and every individual on their own behalf, security and other public goods are now mediated through "des mandataires" (representatives or delegates) the method of selection of which is left unclear to the reader. He seems to have in mind a variation of the "consumer associations" he discussed elsewhere [264] who would behave like advocacy groups at the local and national level to put pressure on the security and other public goods companies to live up to their contractual obligations to provide these services. It is also not clear in this work how large or small these companies would be (at the communal, provincial, national level). He does however revert to using the older terminology of consumers, producers, and entrepreneurs of security. (The latter term "entrepreneurs" - note that it is in plural - is a term he hasn't used in connection with the production fo security for some time).

What he has in mind here is the following: consumers of security (les consommateurs de sécurité) will join together to form a collective body which will choose representatives ("les mandataires") who will choose from among the competing firms the best one to provide them with this insurance service (la production de ce service d'assurance); the representatives will negotiate with "les entrepreneurs de cette sorte d'assurance" (entrepreneurs in this kind of insurance industry) for the best price and conditions. The provision of security is the only such service they negotiate as a collective; everything else would be done individually. [265] [266]

Cependant, quelques-uns d’entre ces besoins ne peuvent, en raison de leur nature particulière, être satisfaits isolément, tel est le besoin de sécurité. Que font les individus, consommateurs de sécurité?Ils s’associent et forment une collectivité assez nombreuse pour y pourvoir d’une manière à la fois économique et efficace. Ils choisissent des mandataires qu’ils chargent de traiter, en faisant appel à la concurrence, avec une entreprise, — maison ou société, — réunissant les aptitudes et les capitaux nécessaires à la production de ce service d’assurance. Comme toute autre assurance, celle de la vie, de la liberté et de la propriété individuelles implique des conditions de deux sortes : conditions de prix (paiement d’une prime destinée à couvrir les frais de avec adjonction d’un profit), conditions techniques (imposition aux assurés des servitudes indispensables à la production de ce service). Ces conditions sont librement débattues entre les mandataires de la collectivité des consommateurs et les entrepreneurs de cette sorte d’assurance. Lorsque l’accord se fait avec l’un d’entre eux, les conditions du marché sont spécifiées dans un contrat, conclu pour un terme plus ou moins long, à la convenance des parties. Il en va de même pour les autres besoins naturellement collectifs, besoins locaux de voirie, de salubrité, etc. La collectivité qui éprouve ces besoins contracte elle-même, si elle est peu nombreuse, ou élit des mandataires qui contractent en son nom, avec une entreprise capable de produire le service dont elle a reconnu la nécessité.Dans ces différents cas, l’individu exerce collectivement sa souveraineté, soit par des mandataires, soit par lui-même, tandis qu’il l’exerce isolément pour la généralité de ses autres besoins.

However, some of these needs cannot, because of their particular nature, be satisfied in an individual manner (isolément), such as the need for security. What do the individual consumers of security do? They join together and form a collective group which is numerous enough to provide them with this (service) in an economical and efficient way. They choose representatives/delegates which they entrust with negotiating, by calling upon competition, with a business enterprise - a house or a firm - which combines the skills and the capital required to produce this service of insurance/assurance. Like any other form of insurance, whether for life, liberty and individual property, (this) implies conditions of two kinds: that of price (the payment of a premium intended to cover their costs and provide a profit), that of a technical nature (the imposition on those they insure of some servitude which is required for the production of this service). These conditions are freely negotiated between the representatives of the group of consumers and the entrepreneurs of this kind of insurance. When an agreement has been reached between both parties, the conditions of the deal are set down/specified in a contract and agreed to for a longer or shorter period of time. The same thing applies to the other needs which are naturally collective, such as local roads, public health, etc. The group which has these needs will contract out for them themselves, if it (the group) is not very numerous, or elects/chooses (élit) representatives/delegates who will contract out in their name, with an enterprise which is capable of producing this service which the groups recognises as necessary. In these different cases, the individual exercise his sovereignty in a collective manner, whether by means of representatives or by himself, while he exercises it individually for the majority of his other needs.

However, it seems that this indirect way of choosing a security firm from among the competition becomes a bit complicated, as one might expect when the direct connection between the individual consumer and the market for goods and services gets broken. Once the representatives or delegates of the group of consumers of security have fulfilled their duties their mandate expires. Now all that is necessary Molinari believes is for a sub-committee of "permanent delegates" to remain on hand to supervise the activities of the company contrasted to supply these collective goods to the community. Furthermore, Molinari is naive to think that such a company with a monopoly, even if it is for the short time, will behave "like" other companies which are exposed to competitive forces every day. It is here that Molinari seems to fulfill Dunoyer's old criticism that he had been "swept away by illusions of logic" [267] and has forgotten his own skepticism about the "anti-economic nature" of governments. [268]

L’office des mandataires se réduit à la conclusion des contrats ; cet office rempli, leur mandat expire. Cependant, il peut être nécessaire de surveiller l’exécution de ces contrats et d’en modifier les termes quand l’expérience en a montré les défauts ou les lacunes, ou bien encore quand des faits nouveaux apportent quelque changement dans les conditions d’existence de la société. Une délégation permanente des consommateurs de services collectifs peut donc avoir sa raison d’être. Mais il se peut aussi que l’observation des clauses du contrat soit suffisamment garantie par la surveillance de la presse ou des associations librement instituées dans ce but, et que ces clauses n’aient pas besoin d’être modifiées. Dans ce cas, une représentation officielle des consommateurs serait inutile et la collectivité nationale pourrait en faire l’économie.

The duty of the delegates is reduced when the contracts have been concluded. Once this duty has been fulfilled their mandate expires. However, it might be necessary to supervise the carrying out of these contracts and to modify their terms if experience reveals any faults or omissions, or especially when new developments change conditions in the life of society. A permanent delegation of the consumers of collective services might then have some reason to exist. But it could also be the case that observing the conditions of the contract are sufficiently protected by the surveillance of the press or free associations established for this purpose, or that clauses in the contract do not need to be changed/modified. In this case, an official organisation representing the consumers would not be needed and the national group could do without it.

Si, comme il y a apparence, la production de chacun des services naturellement collectifs était entreprise par une société, celle-ci s’organiserait et se comporterait comme toute autre société industrielle; elle aurait son conseil d’administration, son directeur chargé d’exécuter les décisions du Conseil et des assemblées générales auxquelles il serait publiquement rendu compte de ses opérations.

If as it appears, the production of each of these naturally collective services were undertaken by a company the latter would be organised and operated like any other industrial firm/company; it would have an administrative council/board, a director charged with carrying out the decisions of the Board and general meetings at which it would have to publicly account for its operations.

Compulsory Taxes will be replaced by Fee for Service

Molinari is very clear that there is a fundamental difference between "taxes" which are collectively and coercively imposed on individuals and "contributions," "abonnements" (subscriptions), or "premiums" which are specific charges or fees for services which are provided to citizens. It was Molinari's hope that coercive and all-purpose taxes would be replaced by these very specific fees for service as society moved out of the state of war (elsewhere what he called the era of monopoly) into the state of peace (or era of full competition). These fees or premiums were the result of kind a "reciprocal contract" between the government and its citizens the exact details of which are not specified. He hints at times that there might be some individuals who might refuse to pay their "fair share" of these obligatory "contributions" but he is never clear on what he thought the state or local government would do if they refused to pay their share. He never says outright that the state or local government should use force to enforce compliance. He seemed to be confident that when the functions of government had been drastically cut and when the costs of providing these essential services had been cut to the bare minimum individual consumers wouldn't mind paying them. He thought that in the middle ages such fees for service had been more common but the rise of the modern nation state had changed these into coercively imposed taxes of a more general nature: [269]

C’était la « contribution » et elle était caractérisée par une obligation réciproque ou un contrat synallagmatique (bilateral??) entre la société représentée par son gouvernement et chacun de ses membres : la société fournissait aux contribuables les services de sécurité, etc., dont ils avaient besoin; les contribuables lui fournissaient, en échange, les moyens de production de ses services. Mais où la contribution était-elle puisée? Pour la plus grande part dans l’impôt.

This was a “contribution” and it was charactarised by a reciprocal obligation or a bilateral contract between society represented by its government and each of its members: society would provide those who contributed with the services they needed such as of security and so forth,; in return (exchange) those who contributed would provide it with the means for the production of its services. But where did this contribution (fee for service) come from? For the most part from taxes.

Molinari thought that this shift from paying "taxes" to making "contributions" for specifically contracted services was one of the "greatest revolutions" which had been introduced in the 19th century, the full effects of which were still to be felt by consumers. This revolution would eventually be applied to "toutes les branches de l'activité humaine" (all branches of human activity), including eventually that of the production of security. [270]

Est-il nécessaire de rappeler que la production directe disparaît à mesure que le progrès rend, en comparaison, plus économique la production divisée et spécialisée ; que celle-ci se constitue naturellement sous forme d’entreprises ; que les entreprises se multiplient et se développent en raison de l’étendue de leur débouché, qu’elles se font concurrence, et, lorsque aucun obstacle naturel ou artificiel ne s’y oppose, que cette concurrence presse sur chacune et l’oblige à réduire incessamment ses frais de production. Sous un régime où l’impôt sera remplacé par la contribution, les obstacles artificiels qu’implique la perception des impôts, perçus soit au profit de l’État, des provinces et des communes, soit au profit des particuliers privilégiés (tarifs protectionnistes), ces obstacles non moins nuisibles que les impôts eux-mêmes disparaîtront. Quant aux obstacles naturels, l’extension de la sécurité, la multiplication et le perfectionnement des moyens de communication de toute sorte ont commencé à les supprimer. De toutes les révolutions qui se sont accomplies au xixe siècle, la plus importante et la plus féconde en résultats a été celle qui a agrandi les marchés d’échange et étendu ainsi l’aire de la concurrence. En supposant que rien ne vienne arrêter eu progrès, que dans toutes les branches de l’activité humaine la concurrence puisse se développer sans entraves et acquérir son maximum utile d’intensité et de pression, les entreprises devront, sous peine de ruine, réduire au minimum leurs frais de production, par conséquent s’établir et fonctionner de la manière la plus conforme à la loi de l’économie des forces. Non seulement elles devront employer la machinerie la plus perfectionnée et le personnel le plus capable, mais encore être constituées sous la forme la plus économique et la mieux appropriée à leur destination.

We need to remember that direct production disappeared as progress made production more economical in comparison by the division and specialisation of labour; that this specialisation was established naturally by business enterprises; that these enterprises multiplied and developed as a result of the extent of the market in which they competed and when there was no natural or artificial (man-made) obstacle which got in their way; that this competition pressed down on each (enterprise) and obliged them to constantly reduce their costs of production. Under a regime where taxes will be replaced by contributions the artificial obstacles which the levying of taxes implies, whether levied for the benefit of the State, the provinces, of the communes, or whether for the profit/benefit of particular privileged groups (such as protectionist tariffs), these obstacles which are no less harmful than the taxes themselves will (also) disappear. As for natural obstacles, the spread of security, the multiplication and improvement of the means of communication of all kinds have started to remove/abolish them. Of all the revolutions achieved in the 19th century, the most important and the most productive of results has been that which expanded the markets for trade and thus extended the sphere of competition. If we imagine/suppose than nothing will appear/arise to stop this progress, that in all branches of human activity competition will be able to develop without restrictions and will acquire its useful maximum of intensity and pressure, business enterprises will have to, under threat of being ruined reduce to a minimum their costs of production, and as a result be established and run in a manner which is in most conformity with the law of economizing on (scarce) resources. Not ony will they have to use the most improved machinery and the most capable personnel, but also be set up in the most economical and most suitable form for their purpose.

The question the reader must ask is whether or not Molinari believed these strictures, conditions, and predictions also applied to the production of security. I think ultimately he did, in the long run, but not in the immediate future given the dire situation for liberty in the early 20th century. One clue that this might be the case can be found in a section in chap. XIII "On Consumption" dealing with the way the modern state has inherited the taxation practices of the old regime and mixed together things which can and should be produced competitively on the market and purchased by individual consumers, alongside collective goods which should be provided collectively but also competitively and paid for specially by the local communities in which consumers lived and worked. Untangling this mess of taxation was something Molinari advocated. In this particular passage he claims that in the cost of "la consommation obligatoire" which was that part of consumption which was collective, could be cut by 90 per cent or even more when there was "la liberté de gouvernement de la société future" (the freedom of government in the society of the future). This is the only use of this important term in this book and we need to recall that it was one of the phrases he used as part of his theory of AC. The relevant passage reads: [271]

Sous le nouveau régime, l’impôt est, au contraire, en droit comme en fait, la rétribution d’un service. Mais les gouvernements ayant conservé le droit illimité de taxer les consommateurs de sécurité, en raison du risque illimité qu’implique l’état de guerre, et les mécanismes constitutionnels et parlementaires n’opposant qu’un frein illusoire à l’abus de ce droit, quand ils ne le favorisent point, la portion des revenus individuels, absorbée par les impôts de toute sorte, perçus tant au profit de l’État qu’à celui de ses protégés, égale, si elle ne la dépasse point, celle qui leur était enlevée d’autorité sous l’ancien régime.

Under the new/current regime, taxes are on the contrary (compared to the ancient regime), in law and in fact, payment for a service. But governments have maintained the unlimited right to tax the consumers of security because of the unlimited risk which the state of war creates, and because the constitutional and parliamentary mechanisms only pose an illusory break on the abuse of this right, when they (governments) are not in favour of it, the proportion of an individual’s income which has been absorbed by taxes of all kinds which have been imposed as much for the profit of the State as for those whom it protects, is equal to, if it does not exceed, that which was taken by the authorities under the old regime.

Sous le régime de paix assurée et de liberté de gouvernement de la société future, cette part de la consommation obligatoire pourra certainement être réduite des neuf dixièmes et davantage; mais, si grande que soit la portion du revenu, qui restera disponible pour la consommation libre, celle-ci n’en devra pas moins être réglée.

Under the regime of guaranteed peace and of the liberty of government in the society of the future, this part of compulsory consumption will certainly be reduced 90 per cent or more; but however large the share of revenue might be, that which will remain available for free consumption will be much less regulated.

I would also like to express as a side note, that Molinari expressed his opposition to indirect taxes compared to direct taxes in a manner which used the terminology made famous by Bastiat in his distinction between "the seen" and "the unseen" (this was in relation to opportunity costs): [272]

Car, sous l’influence de l’augmentation continue des dépenses de guerre, il a fallu élever partout la proportion des impôts indirects qu’on ne voit pas, relativement aux impôts directs que l’on voit.

Because under the influence of the continued increase in the expence of war it was necessary to increase everywhere the share of indirect taxes which are not seen, relative to the direct taxes which are seen.

Conclusion

In the concluding paragraphs of the book Molinari expresses his confidence that the "life-giving force of competition" (la pression de la concurrence vitale) will continue to stimulate the invention of new mechanisms and structures of government (and for many other things as well). The other natural law of economics which he thought would drive this process was that of "la loi de l'économie des forces" (the law of economizing on scarce resources). The two together would transform he believed both "le gouvernement collectif" (collective government) as well as "le gouvernement individuel" (individual government, or the self-government of individuals) which would ultimately drive the size of government down to its absolute minimum size or its "ses limites naturelles" (its natural limits). A figure he believed which would be so small it would be practically negligible - one tenth or less of a government which was relatively small already by late 20th century standards.

Conclusion↩

What we can see in this book which supports Rothbard's argument about Molinari's "backtracking" is the disappearance of the some of the key phrases and rhetorical tropes he used in his more radical phase - but not all, which complicates matters when trying to assess Molinari's position. There is also his increasing use of the problematical term "la tutelle" or tutelage or guardianship of those individuals or groups who are not yet "ready" to exercise "self-government." [273]

For example, as evidence he has "backtracked" we can see

1. the unequivocal statement that the natural functions of the state are to provide "naturally collective goods" like security and some other public goods (with security provided by the central state and the others provided by local and provincial governments) - unlike his book Les Soirées (1849) where he argued that every public good could and should be provided privately and competitively
2. that although there might be competition among private security producers for a government contract, there will be only one company which will be awarded the contract - not multiple entrepreneurs competing for consumers' business at the same time
3. that instead of consumers of security contracting individually for a security producer/provider, this will be done on their behalf by their representatives or delegates (mandataires); the terms and fulfillment of the contract will be not be monitored directly by the consumers but indirectly (perhaps more "politically") by their representatives (mandataires); this is a serious weakening of the supposedly greater efficiency of the free market where consumers make their own decisions by buying and selling (or by refusing to buy) goods and services, and his earlier arguments about the inherent and unavoidable "anti-economic" nature of governments
4. there is no more mention of privately owned property development companies building communities which are fully supplied with privately provided public goods as an alternative to the state

On the other hand, evidence that he still retained many aspects of his more radical theory come from the following:

1. his use of key terms such as the production of security, consumers of security, and producers of security; insurance companies and premiums
2. his quoting the important Adam Smith trope of the "fees of court" passage about competing judges and courts
3. his extension of this idea of Smith to refer to "des compagnies judiciaires pleinement indépendantes et concurrentes" (legal or judicial companies which are fully independent and competitive) (trans. by Warner as "competition between fully independent judicial "companies") online
4. his quoting the list of the three conditions which he first drew up in the PoS article, but where he admittedly he adds a new and more conservative proviso at the end
5. his approximation of his "simple hypothesis" trope which here becomes a "supposition" (conjecture) or "let us imagine" a state of peace has been achieved on earth when "the society of the future" can be constructed
6. his use (admittedly only once) of one of his key AC terms, "la liberté de gouvernement" (liberté de gouvernement de la société future) and this has been relegated to some undefined future
7. his continued support (though admittedly more moderate) for the right of secession
8. his continued support for competition on price and quality of services between local and provincial government, and internationally between nation states
9. and his closing hope that once society enters the era of peace the "la pression de la concurrence vitale" (the pressure of life-giving competition) will continue to transform and improve governments and then the societies will enter the era of "full and complete competition"; also this statement in Chap. XIII "La consommation" which is his only use of the key AC phrase "la liberté de gouvernement" but which is now linked unequivocally to the future not the present: [274]

Sous le régime de paix assurée et de liberté de gouvernement de la société future, cette part de la consommation obligatoire pourra certainement être réduite des neuf dixièmes et davantage; mais, si grande que soit la portion du revenu, qui restera disponible pour la consommation libre, celle-ci n’en devra pas moins être réglée.

Under the regime of guaranteed peace and of the liberty of government in the society of the future, this part of compulsory consumption will certainly be reduced nine tenths or more; but however large the share of revenue might be, that which will remain available for free consumption will be much less regulated.

What can we conclude from this? I would argue that his vision of a fully free and competitive society had become pushed much further into the future as he realized what advances socialism, protectionism, and militarism were making; that he now admitted that a single producer of security was necessary at the national level (since it was a collective good), but that this service would be put out to competitive bids by private firms and whose provision of security would be monitored by representatives of the consumers of security (so politically rather than economically) - much like he thought the East India Company did; [275] that there would be competition at the national, provincial, and communal level to attract consumers of security to the lowest cost and most efficient jurisdictions; that even if police and national defense could no longer be provided by competing firms the provision of legal services (judges and courts) could still be provided competitively; and that in the far distant future societies might be ready for the next stage of competition which was the "hypothesis" he had first put forward 50 years previously. This would happen he thought when the natural laws of political economy would eventually come together with individuals' insatiable desire for liberty and work towards achieving a common and achievable goal: [276]

Il resterait à rechercher quelle a été dans ce grand travail de la civilisation la part des lois naturelles et celle de la liberté de l’homme; enfin, quel est le but en vue duquel s’est accompli ce travail qui a élevé successivement l’espèce humaine au-dessus de l’animalité avec laquelle elle était, à l’origine, confondue.

It remains for us to explore what has been the role played by the natural laws (of political economy) and human liberty in this “great work” which is civilization; and what is the end towards which this “great work” has striven, which has gradually lifted the human race above that of the animals of which the human race at its beginning was part.

Que la part des lois naturelles ait été prépondérante, en ce qu’elles ont déterminé les progrès dont l’ensemble se résume dans ce mot : civilisation, en les imposant sous peine de décadence et de mort, aux différentes sociétés entre lesquelles s’est partagée l’humanité, que la pression de la concurrence vitale, sous ses formes successives, ait provoqué l’invention et l’application de mécanismes et de procédés de gouvernement, de destruction et de production de plus en plus efficaces et puissants, c’est-à-dire de plus en plus conformes à la loi de l’économie des forces, cela ne saurait être contesté, mais il ne s’ensuit pas qu’aucune part n’ait été laissée à la liberté de l’homme dans l’œuvre de la civilisation. Il en est, à cet égard, des lois économiques comme des lois physiques. L’homme est libre de se conformer ou non à la loi physique de la pesanteur dans la construction de ses habitations, mais s’il contrevient à cette loi naturelle, elles ne tarderont pas à s’écrouler. De même, il est libre d’observer ou non les lois économiques; mais les sociétés qui se dérobent à la pression de la concurrence, et au sein desquelles les hommes usent de leur liberté, dans leur gouvernement collectif comme dans leur gouvernement individuel, pour gaspiller leurs forces au lieu de les conserver et de les accroître, ces sociétés tombent en décadence et font place à celles qui ont mieux obéi aux lois économiques. Il en a été ainsi dans le passé, il n’en sera pas autrement dans l’avenir. Seulement, dans l’ascension de l’humanité, la part de la liberté de l’individu sur la destinée de la société dont il est membre et de l’espèce tout entière, cette part s’est continuellement accrue. Dans les anciennes sociétés, l’intelligence et la volonté d’une minorité dirigeante, seules, étaient à l’œuvre, la multitude obéissant passivement à l’impulsion qu’elle en recevait et suivant les règles qui lui étaient imposées sans user de sa liberté pour les contrôler. Il en est encore trop souvent de même dans les sociétés actuelles; mais, lorsqueles servitudes nécessitées par l’état de guerre auront disparu, lorsque le gouvernement collectif sera réduit à ses limites naturelles, lorsque l’individu aura acquis toute sa liberté d’action, la part du libre arbitre de chacun sur les destinées de la société et de l’humanité ira grandissant; seulement l’obligation s’imposera aussi, plus rigoureusement que jamais, de connaître les lois dont l’observation est nécessaire à l’existence de la société, et de s’y conformer.

That the part played by natural laws has been predominant in that they have determined the progress of many things, which is summarised in the word “civilisation,” by imposing upon them under pain of decline and death, in the different societies into which humanity is divided; and that the pressure/force of life-giving competition in its various successive forms have stimulated the invention and application of mechanism and processes of government, of destruction and production which are more and more efficient and powerful, that is to say more and more in conformity with the law of economising on scarce resources (la loi de l’économie des forces), this would not be contested. But it does not follow that no part was played by human liberty in (building) the work which is civilisation. Concerning this (liberty) there are economic laws just like physical laws. Man is free to conform to/follow/obey or not the physical law of gravity (weight) in the construction of his buildings, but if he contravenes this law they will sooner or later fall down. Similarly, he is free to observe or not economic laws, but societies which try to hide from the force of competition, societies in the heart of which men use their liberty, in both their collective government and their individual government, to waste their energies instead of preserving and increasing them, these societies will decline and make way for those societies which have better obeyed these economic laws. It has been thus in the past and it will not be otherwise in the future. Only, in the rise of mankind the part played by the liberty of the individual in the fate of the society of which he is a member and of the species as a whole, has steadily increased. In ancient societies the mind and the will of the ruling minority alone worked at doing this, while the multitude of people passively obeyed whatever they received/resulted from this, and followed the rules which were imposed upon them without being able to use their liberty to influence this (process). It is still too often the same in our society today; but when the servitude required by the state of war have disappeared, when collective government has been reduced to its natural limits, when the individual has acquired all of his freedom of action, the part played by the free will of each person on the fate of society and of the human race will grow; then the only obligation (which) will be imposed, more rigorously than ever (is) to recognise the laws the observation of which is necessary for the existence of society and to act in conformity with them.

Les Problèmes du XXe siècle (1901) "Le problème du gouvernement collectif" (The Problem of Collective Government)↩

Introduction↩

This late work is part of his summing up of the achievements and failures of the 19th century and his hopes and fears for the coming 20th century. [277] It needs to be read alongside the two articles he wrote for the JDE at the turn of the century in which he summarises the achievements of the 19th century and warns of the serious problems liberty will have to face in the coming century. [278]

The problems he discusses are religious, moral, economic, colonial, and that of "individual government" and of "collective government." For our purposes here it is his changed view of the production of security which should be noted. He has adopted the very pessimistic idea that societies are now dominated by powerful groups who literally "own" the state and use it for their own purposes at the expense of ordinary taxpayers and consumers. He still talks about governments being a kind of insurance company which is designed to reduce internal and external risks, but this insurance company is now owned and controlled by these powerful groups who use it to control the risks they face from below from their own citizens who might rise up in revolt and reform the political system to ease their burden of taxes and regulations which have been imposed upon them by these ruling classes. It is as if the entire structure of government has been turned upside down and has become the plunderer and oppressor of "the consumers of security" instead of their protector.

Security now only for the Owners of the Political State↩

In his view, what appears to have happened is that "les sociétés propriétaires des États politiques" (societies which own or control the political State) have emerged to control and dominate in a more organized way those who are engaged in productive activities. This creates a serious risk of exposing "cette société à un risque de destruction et de dépossession, provenant des révoltes de ses esclaves ou de ses sujets" (this society to the risk of destruction and dispossession coming from revolts by its slaves or its subjects). Government then becomes nothing more than a special kind of insurance company (sui generis) designed to control this risk of revolt faced by certain of its members, rather than protecting the entire population of its citizens. [279]

Comme tous les organismes, le gouvernement des sociétés a sa constitution naturelle déterminée par son objet. Cet objet, c’est la conservation de la société, impliquant celle du domaine qui lui fournit ses moyens de subsistance. Or, les sociétés propriétaires et exploitantes des États politiques ont été, comme nous venons de le voir, exposées dès l’origine à des risques de deux sortes, extérieurs et intérieurs, auxquels il a été nécessaire de pourvoir sous peine de destruction de l’État et de la société. C’est par l’institution d’un gouvernement qu’il y a été pourvu. Un gouvernement n’est donc autre chose qu’une entreprise d’assurance sui generis .

Like all organisms the government of society has its nature determined by its purpose. This purpose is the preservation of society and by implication the preservation of the domaine which provides it with its means of subsistance. Now, societies which own and exploit political states (les sociétés propriétaires et exploitantes des États politiques) have been, as we have seen, exposed from their beginning to risks of two kinds, external and internal, which it has had to address under pain of the destruction of the state and of society. It is by the institution of a government that it has been above to address /deal with (this problem). A government is nothing more than an insurance company (une entreprise d’assurance) of a unique kind (sui generis).

However, most frequently "la machinerie de cette sorte d'assurance" (the machinery for this kind of insurance) has been designed and used to preserve the state rather than to protect individuals. And as the number of functions of the state has dramatically increased over the past century billions of francs and millions of government employees are now needed to run "les grands États modernes" (the large modern states): [280]

Dans les grands États modernes, c’est par milliards que se comptent les capitaux investis dans un gouvernement, et par millions les individus qui constituent son personnel, surtout depuis que les gouvernements ont joint à leurs fonctions primitives d’assureurs de la sécurité de l’État une foule d’autres fonctions et attributions.

In the large modern states it is in the billions that are counted the capital invested in a government, and in the millions the individuals who make up its personnel, especially since governments have added a multitude of other functions and duties to their original function as insurers of the security of the state (d’assureurs de la sécurité de l’État).

Even in countries with written constitutions designed to limit the power of the state, such as the United States, powerful vested interests have been able to "own" the state and work it to their advantage as the widespread corruption there suggests: [281]

… aux États-Unis même le régime républicain et démocratique n’a pas été un préservatif plus efficace de la corruption du personnel politique et administratif que le régime autocratique en Russie.

… even in the United States the republican and democratic regime has not been able to more effectively prevent the corruption of political and administrative personnel than the autocratic regime in Russia.

In France, Molinari argues that a new constellation of classes are fighting for control of the government with dire consequences for ordinary taxpayers and consumers. They are the descendants of the old governing aristocracy from the old regime; the new, wealthy class which draws its membership from finance, industry and commerce; and a new third group made up of the small urban bourgeoisie and workers in industry. These three groups contend for control of the newly powerful modern state and seek to become "la caste propriétaire de l'Etat" (the caste which owns or controls the state). At the moment the first two classes are in control of the French state but he does not think it will be long before the third class is able to seize control of the law-making machinery of the government and turn it to their own purposes. The people are promised economic and political improvements by democratic reformers and revolutionaries (such as cutting the cost of government services and improving their quality) but they fail to deliver when they seize control of the state machine. The response of the ruling elites is to impose even greater control on the people to prevent them rising up in rebellion and "assurer la sécurité des détenteurs de cette machine" (in insure the security of those who hold the machinery of government) not the people: [282]

Les conspirateurs excitaient le peuple à la révolte, en lui promettant une amélioration des services du gouvernement, lorsqu’il serait entre leurs mains, et surtout, une diminution du prix dont il les payait, mais ils oubliaient volontiers leurs promesses après qu’ils avaient réussi à s’emparer de la machine à légiférer et à taxer. De là, tout un appareil de restrictions et de pénalités destinées à assurer la sécurité des détenteurs de cette machine, restriction et réglementation de la liberté de s’associer, d’écrire, de parler, de circuler, autorisation préalable, imposée aux associations et même aux simples réunions, censure, passeports, institution d’une police politique et d’un « cabinet noir », lois et pénalités draconiennes, comminées en vue de prévenir ou de réprimer les crimes contre la sûreté de l’État, en y comprenant la critique des tactes du gouvernement et jusqu’au simple défaut d’approbation. De là, encore, l’imperfection grossière des services destinés à assurer la sécurité des gouvernés, le gouvernement se préoccupant avant tout d’assurer la sienne.

The political conspirators excite the people to revolt, by promising them an improvement in government services when they are in charge and most importantly a reduction in the amount they have to pay; but they willingly/are happy to forget their promises once they have managed to seize control of the law-making and taxing machine. As a result of this, (we see) an entire apparatus of restrictions and punishments (erected) designed to insure the security of those who control this machine; restrictions and controls on the freedom to associate, to write, to speak, to circulate newspapers, the need for prior authorization (by the police) is imposed on associations and even simple meetings, censorship, work passports, the creation of a political police and a “cabinet noir” (mail inspection), laws and draconian penalties, which are judicial threats designed to prevent or repress crimes against the security of the state, which crimes include criticism of the actions (tactes??) of the government up to simple lack of agreement. Furthermore, as a result of this, (we see) the gross imperfection/inadequacy of services intended to insure the security of the governed, (since) the government is preoccupied above all to insure its own.

Molinari calls this "les abus du monopole gouvernemental" (the abuse of the monopoly of government). Even in so-called representative regimes, like France was under the Third Republic, power was only nominally in the hands of the people as "the industry of government" was tightly controlled by a powerful elite and the "consumers" of government services were prevented by this monopoly from carrying our/performing this industry themselves: [283]

Telle était la situation lorsqu’une série de progrès de la science et de l’industrie ont fait surgir, dans la région moyenne des sociétés les plus avancées, une classe, dont la puissance a fini par dépasser celle de l’aristocratie gouvernante, affaiblie par l’abus de son monopole. Elle s’est emparée de ce monopole pour le remettre nominalement du moins à la nation. Nominalement, disons-nous, car le gouvernement est une industrie que les consommateurs de ses services ne peuvent exercer eux-mêmes. Ils en sont les propriétaires, soit! mais ils sont obligés de remettre la gestion de cette propriété et l’exploitation de cette industrie à des professionnels, qui ont pour devoir de s’acquitter de leur mandat dans l’intérêt non plus d’une classe, mais de la nation tout entière. Telle est la théorie du gouvernement, dit représentatif. Seulement l’application de cette théorie se heurte à un état moral et à une tradition d’exploitation politique, que la Révolution n’a pas eu la vertu de changer.

Such was the situation when progress in science and industry brought forth a class in the middle ranks of the most advanced societies, whose strength/power ended up surpassing that of the governing/ruling aristocracy, which had been weakened by the abuse off its monopoly. (This new class) seized control of this monopoly to return it, nominally at least, to the nation. I say “nominally” because government is an industrie which the consumers of its services cannot exercise/undertake themselves. Indeed, they are its owners! but they are obliged to return the management of this property and the administration of this industry to the professionals, who have as their duty to carry out their mandate in the interest, no longer of one class, but of the entire nation. Such is the theory of government known as representative. However, the application of this theory collides with/bumps into a moral world/situation (un état moral) and a tradition of political exploitation which the Revolution did not have the courage/moral capacity (vertu) to change.

One of the worst offenders in the new, powerful French state was the military which, in Molinari's view, was no longer a producer of security for the citizens of France but had become a "plunderer" of the consumers of security in its own right: [284]

Mais, en abusant de sa prépondérance dans l’État pour imposer à un prix de plus en plus élevé des services de moins en moins utiles, la classe dirigeante et exploitante des ateliers de destruction ne commet-elle pas, au détriment des consommateurs de sécurité, un acte de spoliation? Le militarisme n’est-il pas une forme et non la moins dommageable du vol?

But by abusing its predominant position in the state by imposing a higher and higher price for services which were less and less useful, doesn’t the class (la classe dirigeante) which rules and manages “the workshops of destruction” (des ateliers de destruction) commit an act of plunder against the consumers of security? Isn’t militarism a form, and not the least damaging form of theft?

Paying Taxes instead of Premiums↩

Since the functions of government had increased so dramatically, and since taxes had risen so much to pay for them, the insurance or security "premium" part of what they paid had become lost in the mass of new taxes and had become just another payment made under threat of government coercion. It was no longer seen as a voluntary contract between the producer of security and the consumers of security for a freely negotiated service at an agreed upon price. And since the law of competition was not allowed to function in this industry, the provision of this service was poor or inadequate and the cost higher than it should be: [285]

Mais, d’une part, les institutions qui les assurent ne répondant jamais qu’imparfaitement à leur objet, les entreprises de production demeurent toujours de ce chef grévées d’un risque plus ou moins élevé, et la prime nécessaire pour couvrir ce risque s’ajoute au montant des frais de la production, vers lequel gravite le prix des produits ou des services; d’une autre part, sous l’influence même de la tendance au vol, les gouvernements assureurs de la sécurité ont, de tous temps et partout, élevé au-dessus du taux nécessaire la prime d’assurance, laquelle s’ajoute encore aux frais de la production des matériaux de la vie, et oblige ceux qui les consomment à dépenser une somme plus considérable de travail et de peine pour les obtenir. A ces obstacles, insuffisance de la sécurité et exagérration du prix dont on la paie, — qui ralentissent le développement de la production, la rendent précaire et l’enchérissent, — s’ajoutent d’autres obstacles, provenant encore de la tendance atavique au vol. Telles sont les barrières artificielles qui ont été substituées, sous l’influence de cette tendance, aux obstacles naturels pour entraver l’opération régulatrice de la concurrence, en restreignant l’étendue des marchés d’échange.

But on the one hand, (since) the institutions which insure them (the consumers of security) only ever imperfectly reach/achieve their goal, industrial enterprises always remain as a result (de ce chef) weighed down with a risk which is more or less high, and the premium required to cover this risk is added to the sum of the costs of production, towards which the price of goods or services gravitates; on the other hand, even under the influence of its tendency towards (to engage in) theft, the governments which insure security have always and everywhere raised (the price) above the rate required for an insurance premium, which is again added to the cost of production of the goods necessary to live, and obliges those who consume them to spend a much greater amount of labour and pain to get them. To these obstacles - that is the inadequate amount of security and the high price one has to pay, which slow down the development of production, makes it insecure, and makes it expensive - are added other obstacles again arising from this atavistic tendency towards theft. Such are the artificial barriers (arising from) this tendency which have replaced the natural obstacles and which hinder the regulatory operation of competition, by restricting the extent of the markets for exchange.

He notes the change which had taken place from a system in which "une contribution" (a tax, but it could also mean something like a fee for service) was made based upon a set fee for a specific service (like security) to one where coercively imposed general taxes were leveed for many services, transfer payments, and subsidies to special interests. This change, he laments, broke "le contrat d'échange" (the exchange contract, or contract for an exchange) which had existed between the government (the producer of security) and the consumers of security: [286]

Nous avons signalé la différence essentielle qui existait dans les anciennes sociétés entre la contribution et l’impôt. La contribution était la part proportionnelle de produits et de services que devait chacun des membres de la société propriétaire de l’État au gouvernement chargé d’assurer sa sécurité intérieure et extérieure, et en échange desquels celui-ci à son tour lui devait ses services. C’était un contrat d’échange dont les conditions étaient tantôt ouvertement spécifiées et débattues, tantôt tacitement entendues. Mais il en était autrement de l’impôt. Le contrat d’échange qui donnait naissance à la contribution n’existait point entre les membres de la société propriétaire de l’État et la population asservie. …

We have noted the essential difference which exists in old societies between a “contribution” and a “tax.” A contribution was the proportional share of the goods and services which each of the members of the society which owned the state owed to the government responsible for insuring its internal and external security, and in exchange for which the latter in its turn owed its services. This was an exchange contract the conditions of which were sometimes overtly specified and negotiated, and at other times tacitly understood. But it was otherwise with a tax. The exchange contract which gave rise to a contribution did not exist between the members of the society which owned the state and the enslaved population …

The Need for a New Group of Liberal Reformers↩

In order to remedy this situation Molinari wants to see the emergence of another more liberal group of political "reformers" who will put pressure on the government to drastically limit its functions to its "natural ones" of internal and external security, and to contract out these security services to a suitable private firm "une maison ou une société" with clearly specified conditions and terms for all the parties involved. In other words he wants to see "l'application du principe de l'échange libre" (the application of the principle of free trade) to the security industry so that "l'individu, consommateur de sécurité, aurait pu désormais obtenir cet article comme tous les autres, au meilleur marché possible" (the individual consumer of security could from then on be able to get this good like all the others at the best possible price). [287]

Qu’avaient à faire les réformateurs? Ils avaient à appliquer pleinement, puisqu’ils en étaient les maîtres, le procédé de l’échange libre aux services du gouvernement. Et cette application ne se heurtait à aucune difficulté insurmontable. Il s’agissait simplement de limiter les attributions du gouvernement aux services naturellement collectifs de la sécurité intérieure et extérieure de la nation, et de contracter pour la fourniture de ces services avec une maison ou une société réunissant les aptitudes et les ressources nécessaires, en spécifiant les conditions d’un contrat librement débattu et accepté des deux parts, et en déléguant des mandataires chargés d’en surveiller l’exécution, après en avoir réglé les conditions. Par cette application du principe de l’échange libre, l’individu, consommateur de sécurité, aurait pu désormais obtenir cet article comme tous les autres, au meilleur marché possible.

What do these reformers have to do? They have to fully apply, since they have become the masters (of the state), the method of free trade to government services. And this application will run into no insurmountable obstacle. It is simply a question of limiting the functions of the government to the naturally collective services of the internal and external security of the nation, and to contract (out) for the supply of the services with a “House” or a firm which brings together/combine the necessary skills and resources, and specifying the conditions of the contract which has been freely negotiated and accepted by the two parties, and by delegating (the task) to representatives who have been charged with looking after its execution, after having set the condition (for it). By the application of the principle of free trade, the individual consumer of security will henceforth be able to get this good (article) like all the others, at the best possible price.

We do not see any reference here to individual insurance companies competing among themselves to get customers for their security insurance policies, as we once did in 1849, but instead to a government contracting out to one firm for these services (presumable after some kind of a bidding process among competing firms, although this is not made clear). Clearly this is somewhat of a compromise from his earlier more radical position, but it is still very radical compared to the ideas his contemporaries were putting forward.

Where is the Classical Liberal Utopia? (1904): A Final "Fanciful" Hypothesis↩

Where is Utopia? (1904)↩

In this late work from 1904 [288] (an article written when he was 85 and still the editor of the JDE ) Molinari returns to one of his favorite rhetorical devices which he uses when he wants to make a radical point but doesn't want to shock his reader immediately - "faisons maintenant une hypothèse" (let me now put forward an hypothesis (for you to consider)). Here he wants the reader to imagine a world in which the natural laws of economics, which he had first defended 55 years ago in Les Soirées (1849) and then again 17 years previously in an entire book Les Lois naturelles (1887), have been acknowledged by people and given free rein to operate without government restrictions. In this "régime of complete and free competition" all artificial (i.e. government imposed) obstacles to universal, world-wide trade have been abolished/removed; there is complete freedom of movement of people, goods, and ideas (information) across this "seul et vaste march" (single and vast market); that no industry in any country is exempt from "l'opération propulsive et régulatrice de la concurrence" (the driving and regulating force of competition); and the threat of war has been eliminated by international agreements and disarmament has reduced the size of the parasitical military establishments to the bare minimum.

In such a system the three most important natural laws of political economy would be able to finally work their magic for the benefit all mankind: "la loi naturelle de la concurrence" (the natural law of competition) would force producers to lower the cost of their goods and services and increase the choice and quality of these goods and services for consumers; "la loi naturelle de l'économie des forces" (the natural law of economizing on (scarce) resources), would force producers to innovate and constantly reduce their costs; and "la loi naturelle de la valeur" (the natural law of value) would force producers to reduce their prices to the bare minimum, which was the cost of production, and their profits to the industry average.

As the following rousing quotation shows, there is no hint here that the production of security would be exempt from these powerful and universal competitive and economic forces. In addition, his admission that this "hypothesis" might appear to be "chimérique" (wild, fanciful, utopian) seems to me to be a direct rebuke to the hurtful charge leveled against him by Dunoyer in the October 1849 meeting of the Political Economy Society, the he had been "carried away by delusions of logic." This suggests that, whatever minor compromises he might have made in the meantime, he still fervently believed in the final goal of the private and competitive production of everything: [289]

Faisons maintenant une hypothèse. Supposons que cette action de la concurrence puisse, un jour, s’opérer sans obstacles sur toute la surface du globe et dans toutes les branches de l’activité humaine ; que tous les marchés, maintenant encore séparés par des barrières naturelles ou artificielles, ne forment plus qu’un seul et vaste marché, dont toutes les parties seront éclairéesàgiornoet mises en communication instantanée par des instruments et des agents de mobilisation des produits, des capitaux et du travail, supposons encore qu’aucune des industries qui, dans chaque pays, fournissent les produits ou les services nécessaires à la satisfaction des besoins de l’homme ne soit soustraite à l’opération propulsive et régulatrice de la concurrence, que tous les obstacles qui entravent cette opération monopoles, douanes, règlements restrictifs du travail et de l’échange, viennent à être levés ; enfin que l’expérience ayant suffisamment démontré que la guerre a cessé d’être un mode avantageux d’acquisition de la richesse, les nations civilisés réduisent leurs armements au quantum nécessaire pour se préserver des invasions des peuples arriérés qui continuent à demander leurs moyens d’existence à la conquête et au pillage, quel sera le résultat de cette élimination des obstacles que le protectionnisme, l’étatisme et le militarisme opposent au développement naturel de la production et de l’échange, et des charges dont ils les grèvent ? Ce sera, dans un marché élargi jusqu’aux limites de notre globe, et débarrassé de l’énorme fouillis des lois artificielles, dictées par des intérêts égoïstes et aveugles, la loi naturelle de la concurrence vitale, désormais libre de ses mouvements et en possession de toute sa puissance qui assurera la conservation et le progrès de l’espèce humaine, comme elle assure ceux de toutes les autres espèces vivantes.	Let me now put forward a hypothesis. Let us suppose that one day this process of competition is operating across the entire surface of the globe and in all areas of human activity without any obstacles in its way; that all the markets which are currently separated by natural or artificial barriers now make up one single vast market, in which all parties will be enlightened “àgiorno”(with the most up to date information) and be put in immediate communication (with each other) by means of the tools and methods used to organise (mobilise) goods, capital, and labour; let us further imagine that none of the industries, which in every country supply the products/goods and services which are necessary for satisfying men’s needs, were exempt from the driving and regulatory effect of competition, that all the obstacles which hamper this effect, such as monopolies, customs duties, restrictive regulations on labour and trade, are eventually lifted/removed; finally, that when experience has sufficiently demonstrated that war has ceased to be a beneficial way to acquire wealth, the civilised nations will reduce their armaments to the amount necessary to protect themselves from invasion by backward nations who continue to get their means of existence/livelihood by conquest and pillage, what will be the result of the elimination of these obstacles which protectionism, statism, and militarism place in the way of the natural development of production and exchange, and (the elimination) of costs with which they burden them? In a market which has been enlarged up to the limits (the four corners) of our globe and rid of the enormous hodgepodge of artificial laws imposed by egotistical and blind (vested) interests, it will be the natural law of (life giving) competition, henceforth free to act and in full possession of its power, which will insure the preservation and progress of the human race, as it insures these things for all other living species.
Or, nous avons vu comment procède cette loi pour multiplier la production des matériaux de la vie et en déterminer la distribution utile. D’une part, associée à une autre loi naturelle, la loi de l’économie des forces, elle oblige tous les producteurs, sous peine de ruine, à réaliser incessamment les progrès qui augmentent la puissance productive de l’industrie et abaissent les frais de la production.	Now, we have (already) seen how this law operates to increase the production of the material things needed for life and causes them to be usefully distributed. On the one hand, when is it is associated with another natural law, that of the law of economizing on resources (la loi de l’économie des forces), it (competition) obliges all producers, under penalty of financial ruin, to constantly make progress in increasing the productive power of industry and in lowering the costs of production.
D’une autre part, associée à la loi de la valeur, elle fait graviter par une impulsion irrésistible les prix des matériaux de la vie vers le niveau des moindres frais, et en détermine la répartition utile entre les coopérateurs de la production.	On the other hand, when it is associated with the law of value, it makes, by an irresistible force, the prices of material things needed for life gravitate towards the level set by the least cost (of production), and causes them to be usefully distributed among those who cooperated in their production.
En supposant donc que les hommes, après avoir supprimé les obstacles naturels qui entravent l’opération propulsive et régulatrice de la concurrence, cessent de les remplacer par des obstacles artificiels, le résultat final sera l’accroissement continu de leur puissance productive jusqu’à la limite marquée par la nature, l’acquisition de la plus grande somme possible des matériaux de vie en échange de la moindre somme de travail et de peine et la distribution de ces matériaux la plus utile, partant la plus conforme à l’intérêt général et permanent de l’espèce humaine.	So, imagine that mankind, after having abolished the natural obstacles which hinder the driving and regulating force of competition, does not replace them with artificial obstacles, (then) the final result will be the continued growth of their productive power up to the limit established by nature, the acquisition of the greatest amount possible of the material things needed for life in exchange for the least amount of labour and pain, and the distribution of the most useful of these material goods/things, therefore being most in accordance with the general and permanent interests of the human race.
Nous convenons volontiers que cette hypothèse peut sembler chimérique, mais lorsque nous considérons l’avenir que nous prépare le régime protectionniste, étatiste et militariste actuellement en vigueur dans toute l’étendue du monde civilisé, et celui par lequel le socialisme se propose de le remplacer, nous nous demandons si cet avenir ne serait point par hasard encore plus utopique que le nôtre.	We readily agree that this hypothesis might seem fanciful, but when we consider the future being prepared for us by the protectionist, statist, and militarist regime which is at present in power throughout the entire civilised world, and that which the socialists plan to put in its place, we have to asks ourselves if this future wouldn’t end up being even more utopian than ours.

Another point that should be made is that in his last years Molinari seemed to pepper his writings with flashes of both considerable optimism along with flashes of pessimism, as if he were not sure exactly where he stood at any given moment. When he was thinking of the short to medium term he was very pessimistic about the prospects for liberty. However, when he was thinking about the long term (many decades or even a century or so into the future) he was more optimistic about the inevitable triumph of "the natural laws of political economy" over protectionist, statist, militarist, and socialist folly. The above quotation is definitely one of his more optimistic. Perhaps to rephrase Lord Keynes, in Molinari's view "in the long run we will all be free (eventually)."

The hope for an "Association pour la liberté de gouvernement"↩

It was at moments like this that Molinari liked to remind his readers of Adam Smith's pessimism in 1776 about the chances of free trade being introduced in Britain against the prejudices of the general public and the powerful self-interest of politically well connected lobby groups who benefited from protection. In spite of these obstacles the Corn Laws were repealed some 70 years later: [290]

To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia should ever be established in it. Not only the prejudices of the public, but what is much more unconquerable, the private interests of many individuals, irresistibly oppose it. Were the officers of the army to oppose with the same zeal and unanimity any reduction in the number of forces, with which master manufacturers set themselves against every law that is likely to increase the number of their rivals in the home market; were the former to animate their soldiers, in the same manner as the latter enflame their workmen, to attack with violence and outrage the proposers of any such regulation; to attempt to reduce the army would be as dangerous as it has now become to attempt to diminish in any respect the monopoly which our manufacturers have obtained against us. This monopoly has so much increased the number of some particular tribes of them, that, like an overgrown standing army, they have become formidable to the government, and upon many occasions intimidate the legislature. The member of parliament who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services, can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists.

If the powerful and entrenched interests which had benefited from mercantilism and tariff protection could be overcome only 70 years after Smith wrote these despairing lines, in 1846 when Cobden and the Anti-Corn Law League were successful in having the lynch pin of the protectionist regime repealed, then perhaps Molinari likewise might have thought that his dream of a society based upon competitive markets in everything could be achieved in an other 70 years after he wrote his essay "Where is Utopia?" in 1904. That would mean he might have expected to have seen a new Cobden or a new Bastiat emerge at the head of an "Association pour la liberté de gouvernement" (the Association for Freedom of Government) sometime in 1974. His calculations are obviously incorrect, but he was partly right in that it was in the late 1960s and early 1970s that a new generation of libertarians in the United States rediscovered his ideas and began to discuss them in earnest.

Conclusion: Was Molinari a True 'Anarcho-Capitalist'? ↩

Introduction↩

I would like to return to an earlier discussion of the intellectual stages through which Molinari moved over the course of his long life, "The Stages in his Intellectual Evolution." There I identified four stages which I termed the "metaphor stage" (1846-49), the early most radical phase in the exposition of his ACT which lasted nearly 20 years (1849-68), a gap brought about by a change in career and then a second more mature radical phase which lasted about 7 years (1884 to 1891), and then the fourth and final stage where he "backtracked" (to use Rothbard's term) on a number of key issues, but not all, during the last two decades of his life (1893-1912).

The turning point seems to have been sometime after the publication of Les Lois naturelles (1887) when he stopped using a couple of key phrases in his ACT, such as "la liberté de gouvernement" by which he meant I think "competing governments," and the "les companies d'assurances" (private insurance companies) which would contract security services directly with consumers. Henceforth he would talk about "insurance" as being a core function of governments which would do the contracting out and supervise the provision of services on behalf of the consumers who would now play only an indirect role in the proceedings. In addition, Les Lois naturelles (1887) is the last time he used the "simple hypothesis" argument to imagine what a society which had introduced true "la liberté de gouvernement" would look like, along with the demurral of the economist to predict in any detail what such a market would look like when it eventuated.

The reasons for his change of mind are hard to determine exactly. Perhaps after 40 years of being the only defender of AC he had become tired (he was now in his seventies) and began to make some compromises; perhaps he was losing hope about the chances of his "utopia" coming to fruition in the near future given the rise of protectionism, socialism, colonialism, militarism, and statism; perhaps he had become disillusioned that ordinary people were capable of exercising "self-government" and that therefore they needed a form of "tutelage" to guide them; or perhaps he had really become convinced by the other economists that there really were some goods and services like police and national defence which were "naturally collective" which had to provided by a government monopoly.

There are also some aspects of his thought which he did not compromise which still made him overall much more radical than his colleagues and contemporaries, which I will discuss below.

The Different Components of Molinari's ACT↩

Introduction↩

I think we can identify four different aspects of Molinari's ACT:

1. the (private) production of security, such as police and national defence
2. the (private) production of law, especially de facto justice, conventional law, and private fee charging courts
3. competing governments both within and without the nation state; in other words a theory of political polycentrism
4. the voluntary vs. the compulsory payment for services rendered

I would also argue that the first two comprise what I call "hard" ACT along the lines first put forward by Murray Rothbard, and that the last two comprise what I will call "soft" ACT. At different times Molinari seemed to fluctuate between the two forms. He supported "hard" ACT in his younger more radical phase, and drifted toward a softer form later in life. However, it should be noted that even in his "softer" form Molinari was very hostile towards the state and wanted to see it cut drastically in size and cost, to a level which I would describe as "ultra-minimal limited government," not just "limited government" which most classical liberals advocated. One might say he drifted from being a "Rothbardian" AC in his younger days to being an ultra-minimalist classical liberal like Bastiat in his old age - which is not something to be sneered at!.

The (private) production of security↩

One can summarize the range of Molinari's thinking on this topic as follows, that:

1. competing private property insurance companies run by entrepreneurs offer security services to individual consumers who pay a premium (first argued in 1849 and maintained until about 1887)
2. a single company competes for a government contract which is supervised by representatives of the consumers (post 1888)
3. privately owned property development companies build new towns, cities, and suburbs outside of existing cities and towns and bundle security with other public goods which are charged for in an annual fee to home owners or renters (1884)
4. all government agencies are "anti-economic" by their nature and must be subjected to the discipline of the market (he lists six natural laws of political economy; especially competition and the economising of scarce resources); Molinari wanted to apply the discipline of the market to every government activity, even ones in which it had a monopoly like security (1855 onwards)
5. all individuals retained their natural right to provide security for themselves, and they can refuse to agree to a security contract if they wish

Items 2 and perhaps 4 are not part of a "hard" ACT.

The (private) production of law↩

The idea of the private "production of law" (the counterpart to the private "production of security") was the weakest aspect of Molinari's ACT. He was not trained as a lawyer and neglected the law in favour of treating the economic aspects of government in general and the production of security in particular. Nevertheless, he did make reference to the law on several occasions, which can be summarized as follows; that:

1. the cost in money and time of getting judicial services could be kept low when judges and their courts competed for business among would-be litigants. This was his rhetorical trope of "the fees of court" which he quoted from Smith'sWealth of Nations. He did this three times, twice in 1849 (PoS article and S11) and very surprisingly for a third and last time inLa Société future (1899). If in the latter he had abandoned his idea of competing private producers of security, he still believed that the production of judicial services could and should remain free and competitive. He even wrote one of his most radical descriptions of this service in the 1899 work, calling them "des companies judiciaires pleinement indépendantes et concurentes" (fully independent and competitive judicial companies/firms).
2. as economic relations expanded and became more competitive this would create a demand for new kinds of what he called "de facto justice," or what we might call "judge made law" to solve these new legal disputes and adjudicate new kinds of contracts (1855)
3. there would also be the emergence of "conventional" law which would be based upon the private contracts and legal agreements made between individuals (1893)
4. there needed to be a "Code of laws" which would turn the abstract notions of the natural law into specific laws required by particular societies in a specific place, time, and stage of economic development. It is not clear what role governments would play in this, but it seems that they would set the "ground rules" as it were and step back and let the economy take its course (1893)

Only item 4 is not compatible with a "hard" version of ACT.

Competing governments↩

This aspect of Molinari's thought I have called part of a "soft" theory of AC because it does not technically advocate the replacement of government by competing private agencies (as a "hard" AC like Rothbard would), but the drastic reduction in size and the increase in the number of "states" which might compete with each other for inhabitants or taxpayers (consumers) by offering lower taxes and better services. The idea is that by making states smaller they could be made less powerful, more accountable to their inhabitants, and less likely to be oppressive if their citizens can flee to a neighbouring jurisdiction (the right of exit). One might describe this as wanting to return to something like the complex and fragmented political system of the middle ages before the rise of the modern nation state; or perhaps something like Dunoyer's notion of "the muncipalisation of the world." Molinari, to his great credit, kept coming up with new and interesting ways in which this might happen, perhaps as an interim measure before the coming of the new "era of full competition" made true "la liberté de gouvernement" possible. His suggestions for this included the following, that:

1. large nation states needed to be broken up or "fragmented" (1853)
2. there should be competition between nation states in the form of the emigration of citizens (to freer countries like the Americas or Australia) and the movement of capital to lower tax jurisdictions. States which refused to lower taxes and improve services would suffer a loss in population and capital to other nations. (1887, 1896, 1899)
3. there would be competition between communes and between provinces to attract inhabitants/taxpayers by offering lower costs and better services. This was what Molinari called the "double right to secede" - the right of the commune to secede from the province and the right of the province to secede from the central state (1887)
4. there would spring up privately owned property development companies which would create new communities which would compete with nearby communes for inhabitants (1884) (see above, as these would also provide security services to their inhabitants)

It is not clear which of the above a "hard" AC would support as an ideal: possibly all as transitional steps towards full AC.

The voluntary vs. the compulsory payment for services rendered↩

Even later when he had given up his idea of privately owned individual insurance companies contracting with individual customers for security services Molinari still believed as he had done in 1846 that governments should function "as if they were" insurance companies and only charge their citizens the equivalent of a very low "premium" for a limited number of their services which he regarded as being "naturally collective." This premium should be variable according to the amount of property the insured wanted to have covered. All other activities of the government should be abolished, as should all forms of compulsory "taxation." If premiums were not appropriate for the service rendered by the government they should charge users with a fee for service or a subscription of some kind. What is not clear, unlike in the case of Émile de Girardin who came up with a similar scheme in the early 1850s (see above), what Molinari would have the government do if a citizen refused to pay their "fair share" of these collective services. The range of views Molinari held include the following, that:

1. a premium be paid for a freely negotiated insurance policy with a private insurance company with the premium based upon the amount of property insured or the amount of protection required (1849)
2. a similar premium be paid to the insurance company selected by the government as the (perhaps temporary) monopoly provider, where the terms of the contract and the amount of the premium have been negotiated by representatives of the consumers (1884)
3. a fee for service (la contribution) or subscription (abonnement) be paid to a private firm or local government (monopoly) for local public goods such as streets, lighting, sewers, trash collection (1887, 1899)

A "hard" AC would support item 1 and the first part of item 3 but not item 2 and the second part of item 3.

Conclusion↩

My conclusion is that Molinari was indeed a "hard" AC in his youth and for much of the rest of his life. He backtracked slightly when he reached his 70s when it came to the production and sale of security, but not when it came to the production and sale of justice, a position which he held to the day he died. He also did not have a well thought out theory of private law, only a few scattered ideas which were nonetheless very suggestive. He is thus deficient in this aspect of ACT.

Another view he held until the end was his belief that there would one day be an "era of full competition," one in which his "fanciful hypothesis" would become a reality and there really would be on earth "la liberté de gouvernement de la société future" (the freedom of government in the society of the future).

Why Molinari is sometimes hard to pin down↩

Molinari's exact thoughts on what he called "le problème du gouvernement" (the problem of government) are sometimes hard to pin down. This is partly because he lived so long and wrote so much and it would be churlish to expect him to remain perfectly consistent in his thinking over this period. It is also partly a methodological problem, in that he would switch between three different ways of looking at this problem, sometime as an historian looking at the past evolution of states and economies, sometimes as a political scientist looking at the present and its problems, and sometimes as a futurist attempting to describe his hopes for the future and the likelihood of these hopes actually coming to pass. Perhaps some (but probably not all) of his inconsistencies and seeming changes of mind might be explained by these different way of looking at things.

When he was wearing his historian's or sociologist's hat he explored how actual European states had evolved over the centuries, how actual markets had evolved, how political classes arose to exploit productive workers, and how economic forces like competition and the division of labour changed the nature of markets, trade, and government services. Like his English counterpart Herbert Spencer in these works there is a sense that "progress" is inevitable and this progress is moving towards his radical ideal of a fully free and competitive society. The best examples of this way of looking at the world can be found in his books on historical sociology:

1. Les Révolutions et le despotisme envisagés au point de vue des intérêts matériel (1852)
2. L'évolution économique du XIXe siècle: théorie du progrès (1880)
3. L'évolution politique et la Révolution (1884)
4. Grandeur et decadence de la guerre (1898)
5. Économie de l'histoire: Théorie de l'Évolution (1908)

When he was wearing his political theorist or critic's hat he was examining current political and economic events, describing how governments interfered with markets in the here and now, trying to determine which groups benefited from this intervention and which ones suffered, and what options existed realistically for improving the situation. The policies he was most interested in were free trade and protection, the abolition of slavery and serfdom, the rise of socialism and other forms of economic interventionism, and the problem of armaments and war. Except for his early book Les Soirées de la rue Saint-Lazare (1849) his books in this genre tended to be pessimistic and more realistic in their proposals for change, especially as his pessimism deepened in the 1890s with the return of protectionism, and the rise of socialism and militarism. On this approach, see:

1. Études économiques. L'Organisation de la liberté industrielle et l'abolition de l'esclavage (1846)
2. Histoire du tarif (1847)
3. his three collections of "conversations":
   1. Les Soirées de la rue Saint-Lazare (1849);
   2. Conservations familières sur le commerce des grains (1855);
   3. Conversations sur le commerce des grains (1886)
4. La République tempérée (1873)
5. Comment se résoudra la question sociale (1896)

When he was wearing his economic theorist's hat he explores where the logic of economic theory and the laws like competition and free trade take him no matter what the consequences. His youthful radicalism began when he was a budding economic theorist and continued into his late 60s, in works like:

1. Les Soirées de la rue Saint-Lazare (1849)
2. Cours d'économie politique (1855, 1863)
3. Les Lois naturelles de l'économie politique (1887)

There was a period in his life when he did not appear to be wearing a hat at all. There was a hiatus in his own intellectual evolution during the 1870s when he returned to full-time journalism writing for the prestigious Journal des débats (he was in his fifties). For the Journal he reported on the socialist movement in Paris during the Commune and then became its travel writer, reporting on his visit to North America for the Centennial celebrations held in Philadelphia in 1876. I am not sure why he abandoned economic theory at this stage of his life. Perhaps it had something to do with the death of his wife Edmée in 1868. He returned to theoretical and historical matters in January 1877 when he began publishing a series of articles in the JDE which later became his first book on evolution, L'évolution économique du XIXe siècle , which was published in 1880. It seems he had nothing to say about the production of security until he wrote a second series of articles for the JDE in August 1881 which became his second book on evolution, L'évolution politique et la Révolution which was published in 1884. On this approach, see:

1. Les Clubs rouges pendant le siège de Paris 1871).
2. Le Mouvement socialiste et les réunions publiques avant la révolution du 4 septembre 1870 (1872).
3. La République tempérée (1873).
4. Lettres sur les États-Unis et le Canada addressés au Journal des débats à l'occasion de l'Exposition Universelle de Philadelphie (1876).
5. Charleston - la situation politique de la caroline du sud (1876).
6. L'Irlande, le Canada, Jersey. Lettres adressées au "Journal débats" (1881).

When he was wearing his futurist's hat he tried to predict the direction in which societies will move given the current power relations between the different classes and the inevitable impact the violation of economic laws will have on societies and economies (a source for short term pessimism) and his hopes and/or predictions about how societies would function in the future if certain conditions were met to allow competition and markets to operate at their best (his long term optimism). It was as a futurist that he seem to fluctuate the most between radical idealism, pessimistic realism, historical inevitablism, and optimistic futurism, in works such as:

1. L'Évolution politique (1884) in the final Chap. X. "Les gouvernements de l'avenir"
2. La Société future (1899)
3. the pair of articles written at the turn of the century:
   1. "Le XIXe siècle" ( JDE , Jan. 1901, and
   2. "Le XXe siècle"( JDE , Jan. 1902)
4. Les Problèmes du XXe siècle (1901)
5. "Où est l'utopie?" ( JDE , 1904)

A good example of how wildly his hopes for the future fluctuated can be seen in his two predictions, separated by over 50 years, about how soon a "fully free and competitive" society might be implemented: in S11 (1849) he was confident that if the state abolished its monopoly of the production of security, new police forces and court systems would spring up in the free market by the end of the year; by 1904 he was not so confident and was talking about a century being needed to sweep away all the false old ideas about protectionism, socialism, and interventionism, before a new liberal world might be built. But he was confident that one it would be.

How much did the "Founding Father of ACT" really "backtrack"?↩

Whatever he finally thought about the proper role of government, Molinari is still one of the most radical and consistent classical liberals the world has ever seen. He certainly deserves the honour of being called "the founding father of ACT" for his work during a very productive 40 year period of his life (1849-1887) when he was clearly an advocate of "hard" ACT. This included both the private production of security (police and defence) and the private production of law, although the latter was less developed in his thinking. From the early 1890s onwards he wavered in his support for the private production of security, now seeing it as a "naturally collective good" which should be a monopoly of some kind (nominally private but put out to contract by the government). However, he continued to advocate the private production of law to the end of his life, by which he meant competition between courts and judges which charged fees for their services. Given how radically liberal (libertarian) he was in so many areas this "backsliding" needs to be seen as relatively minor, especially when one remembers that he is still giving us hints at the very end of his life that he still believed in a future in which there would be complete and full freedom and competition in all things, that there would be "la liberté de gouvernement de la société future" (the freedom of government in the society of the future), which in my view is his "code word" for AC.

So, in spite of his "backtracking" on the private production of security he remained more radical than any of his colleagues right up to the end. We will admit that the 80 or 90 year old Gustave was not as radical as the 30 year old Gustave - but who could be? We can support this claim by looking at several aspects of his thought in his later decades which belie the outward appearance that he had become more "conservative" with advancing years. This includes his idea of what a "community" in fact meant; his strong support for the right of secession; his support for competing courts and judges; and his long term optimistic vision of the future.

1. what he meant by the word "community" or "collective" was variable - he thought the group which could negotiate a contract with a security provider (a firm) to supply this collective good might be a province, or a commune (municipality) , or most radically perhaps, a real estate or property development company which would sell a "bundle" of collective goods (such as roads, lighting, selectivity, gas, sewers, as well as security) to those who bought into the community (when they bought a house and presumably paid some kind of annual maintenance fee for these services). As late as 1899 he was still talking about the need for these "collective" consumers of security "affermer" (outsourcing) the provision of security services to a "maison" or private company to keep costs down.
2. his strong support for the principle of secession which would allow "consumers of security" to break away from a political community (like a large nation state, or even a province - his theory of "the double right of secession" (i.e. the province from the state, and the commune from the province) to form their own separate community which would provide them with collective goods at a better price and with better service. He also advocated competition between nation states for citizens and capital in oder to put pressure on them to liberalize their societies.
3. his late reference to his radical rhetorical tropes in favor of his AC ideas, namely quoting Adam Smith's "fees of court" passage. He quoted Smith on fees of court in PoS and S11 in 1849, and inLa Société future(1899), interestingly a full 50 years apart. In this book he also gives another version of his "simple hypothesis" - this time a "supposition" or conjecture - where he supposes that a state of peace has replaced that of war, thus allowing progress to be made in the production of security, namely the outsourcing ("affermer") of security services to "une maison" (family owned business) or "une compagnie" (private firm) which will lead to competition between security providers and thus economic "progress." He comments that competition will allow a much better service to be provided at a better cost than the security previously provided by "la production dite en régie" (regulated or controlled production (of security)). When he again quotes Adam Smith on the fees of court he predicts the appearance of "des compagnies judiciaires pleinement indépendantes et concurrentes" (judicial companies which are fully/completely independent and competitive). It would be hard to find a clearers statement of the AC principle than this.
4. his repeated and continuing references to a much freer, competitive, and market-oriented "society of the future" in which the old "machinery of government" (i.e. monopoly governments) would finally give way to his ideal of "la liberté de gouvernement" (the political equivalent of "la liberté des échanges" (free trade)). I think he still believed in the AC ideal but was obliged to push its ultimate realization further into the future as he realized that the rise of socialism, statism, protectionism, colonialism, and militarism which were appearing the 1890s and 1900s made any kind of liberal reform impossible in the short term. Related to this was his increasing "historicism" in his sprawling works of historical sociology where he saw societies locked into an historically determined path of development from the era of monopoly to the era of competition. True "liberty of government" could not be achieved until certain requirements had been met (expansion of the free market, a more extensive division of labour and specialization, a state of peace, and the moral development of individuals to the point that they would increasingly reject the use of violence and defend private property). His long term optimism thus contained within it a realization that there were grounds for short term pessimism (much like Rothbard as well I think) and perhaps some compromise. Nevertheless he would cheer himself up by quoting Adam Smith on the eventual inevitability of a free trade movement rising up to defeat the centuries old policy of mercantilism. Given the fact that for Molinari the expression "la liberté de government" was a political version of "la liberté des échanges" (free trade) I think his quoting Smith on this was his way of making a similar point about how "free government" would eventually replace "monopoly government" just as free trade had replaced mercantilism tariffs and monopolies.

Endnotes↩

[1] Gustave de Molinari (1819-1912) was born in Liège when it was still part of the United Kingdom of the Netherlands (it was later incorporated into the new Kingdom of Belgium in 1830) but spent most of his working life in Paris, becoming the leading representative of the laissez-faire school of classical liberalism in France (the so-called "Paris School" of political economy) in the second half of the nineteenth century. The first biography of Molinari only appeared in 2012 for the 100th anniversary of his death: Gérard Minart, Gustave de Molinari (1819-1912) (2012). A shorter biographical sketch is by David M. Hart, "Molinari, Gustave de (1819-1912)," The Encyclopedia of Libertarianism (2008), pp. 336-37 online; and Jean-Michel Poughon, "Gustave de Molinari: une approche de la démocratie économique," in Aux sources du modèle libéral français (1997), pp. 169-86. The older obituary by Yves Guyot is still useful: "M. G. de Molinari," JDE (Février 1912), pp. 177-96. On his political thought see, David M. Hart, "Gustave de Molinari and the Anti-statist Liberal Tradition," JLS (1981, 1982). See also my papers "The Struggle against Protectionism, Socialism, and the Bureaucratic State: The Economic Thought of Gustave de Molinari, 1845-1855" (2016) online; and "Gustave de Molinari (1819–1912): A Survey of the Life and Work of an "économiste dure" (a hard-core economist)" (2019) online.

[2] Gustave de Molinari, "De la production de la sécurité," JDE, T. 22, no. 95, 15 February, 1849), pp. 277-90, online and PDF. English translation online.

[3] Murray N. Rothbard, Man, Economy, and State: A Treatise on Economic Principles, with Power and Market: Government and the Economy. Second edition. Scholar's Edition (Auburn, Alabama: Ludwig von Mises Institute, 2009).

[4] Gustave de Molinari, The Production of Security, trans. J. Huston McCulloch and a Preface by Murray N. Rothbard. Occasional Papers Series #2 (Richard M. Ebeling, Editor), New York: The Center for Libertarian Studies, May 1977.

[5] This appeared as an Appendix to my article "Gustave de Molinari and the Anti-statist Liberal Tradition" Journal of Libertarian Studies, in three parts, (Summer 1981), V, no. 3: 263-290 PDF; (Fall 1981), V. no. 4: 399-434 PDF ; (Winter 1982), VI, no. 1: 83-104 PDF. S11 was translated as an Appendix to Part III, pp. 88-102. It had first appeared as an Appendix to my Undergraduate Honours Thesis Gustave de Molinari and the Anti-étatiste Liberal Tradition (Department of History, Macquarie University, September 1979), pp. 120-47 online.

[6] Gustave de Molinari, "Le XIXe siècle," Journal des Économistes, janvier 1901, pp. 5-19 PDF; "Le XXe siècle," Journal des Économistes, janvier 1902, pp. 5-14 PDF. Both articles combined in HTML online.

[7] See Murray N. Rothbard, "11. The Public Sector, III: Police, Law, and the Courts," For a New Liberty (New York: Macmillan, 1973), pp. 219-52. Quotes Molinari p. 224 but not the PoS article. He quotes this in Houston McCulloch's 1977 translation in the second revised edition: "12. The Public Sector, III: Police, Law, and the Courts," For a New Liberty: The Libertarian Manifesto. Revised Edition (New York: Collier, 1978), pp. 215-41. Quotes Molinari and PoS p. 219.

[8] Andrew Morriss "Anarcho-Capitalism," The Encyclopedia of Libertarianism, ed. Ronald Hamowy (Los Angeles: Sage, 2008), pp. 13-14 online.

[9] See, Gilbert Faccarello, "Bold ideas. French liberal economists and the State: Say to Leroy-Beaulieu," in The European Journal of the History of Economic Thought, 17 (4), 2010, pp. 719–758. Faccarello traced this tradition back even further to Jean-Joseph-Louis Graslin, Dissertation sur la Question proposée par la Société économique de St. Pétersbourg (1768) but this work was not known to Molinari and the other Economists.

[10] Jakob Mauvillon (1743-1794) wrote Physiokratische Briefe an den Herrn Professor Dohm oder Vertheidigung und Erläuterungen der wahren staatswirthschaftlichen Gesetze, die unter dem Nahmen des Physiokratischen Systems bekannt sind (Braunschweig: Waisenhaus-Buchh, 1780). Mauvillon is discussed by Ralph Raico, "Authentic German Liberalism of the 19th Century" Ecole Polytechnique, Centre de Recherche en Epistemologie Appliquee, Unité associée au CNRS (2004). Online at Mises Institute online; and Ralph Raico, "Jakob Mauvillon" in Histoire du libéralisme en Europe, Philippe Nemo (dir.), PUF, p.886-887.

[11] Desttut de Tracy, Traité d'économie politique. Paris: Bouguet et Lévi, 1823. online

[12] French from Destutt de Tracy, Antoine. Commentaire sur l'esprit des lois de Montesquieu; suivi d'observations inédites de Condorcet sur le vingt-neuvième livre du même ouvrage. Édition entièrement conforme à celle publiée à Liége en 1817. Paris: Delaunay, 1819, pp. 263-66. English from Commentary on "Book XIII: Of the Relation Which Taxes, and the Amount of the Public Revenue, Have to Public Liberty," p. 264, in Antoine Louis Claude, Comte Destutt de Tracy, A Commentary and Review of Montesquieu's 'Spirit of Laws': To which are annexed, Observations on the Thirty First Book by the late M. Condorcet; and Two Letters of Helvetius, on the Merits of the same Work, trans. Thomas Jefferson (Philadelphia: William Duane, 1811).

[13] These unpublished manuscripts have been published in J.-B. Say, Œuvres complètes, vol. 4 : Leçons d'économie politique, ed. Gilles Jacoud and Philippe Steiner (Paris : Economica, 2003), pp. 51-262; Politique pratique in J.-B. Say, Œuvres complètes, vol. 5 : Œuvres morales et politiques, ed. Emmanuel Blanc and André Tiran (Paris : Economica, 2003), pp. 287-822.

[14] This was first noticed by Amadeus Gabriel, "Was Jean-Baptiste Say a Market Anarchist?" Mises Daily, 28 March, 2007 online.

[15] Say, Leçons d'économie politique, vol. 4, "Cours à l’Athénée," Troisième séance (1819), pp. 93-109, quote pp. 101-2.

[16] Say, "Politique pratique," vol. 5, pp. 324-5.

[17] "Letter 43 to Félix Coudroy" (London, July 1845), Bastiat CW2, p. 71. online

[18] See my essay on “Ulcerous, Leprous, and Tax-Eating Government.”

[19] Leçons d'économie politique, vol. 4, "Cours à l'Athénée," Quatrième séance (non prononcée) (1819), pp. 112-19, quote p. 117.

[20] Dunoyer, L'industrie et la morale considérées dans leurs rapports avec la liberté (Paris: Sautelet, 1825). online

[21] Molinari would argue the same in his article "Nations,” DEP (1853) online which is discussed below and can be found in the Appendix.

[22] Dunoyer, L'Industrie et la Morale, p. 366, fn 246 online.

[23] Originally published in the Le Courrier français, 23 juillet 1846; reprinted in Questions d'économie politique et de droit public (Paris: Guillaumin; Brussels: Lacroix, 1861), 2 vols. Vol. 2, pp. 271-275 in a section entitled "La liberté de government" (along with a reprint of "De la production de la sécurité" and the Political Economy Society (henceforth "PES") debate in the JDE, which can be found in the Appendix. vol. 2 PDF.

[24] Le Courrier français (1820-1846) was a liberal and anti-clerical newspaper founded by the constitutional monarchist Auguste-Hilarion, comte de Kératry (1769-1859) during the Restoration. It remained a small circulation paper during the July Monarchy and was forced to close in 1846. Bastiat also wrote 10 articles for it in its last two years of operation, many of which ended up in his books Economic Sophisms (1846, 1848) online.

[25] Other words he would use to suggest the same things is “la cotisation" (subscription or membership dues), "la contribution" (tax or contribution), and "l'abonnement" (subscription).

[26] "Le droit électorale," p. 272. This article can be found in the Bicentennial Anthology of the Works of Molinari online

[27] Bastiat's term for this minority which controlled the French state was "la classe électorale," the voting class. See ES3 6 "The People and the Bourgeoisie" (LE, 23 May 1847), online and in CW3, p. 286.

[28] "Le droit électoral," p. 273.

[29] These ideas have some similarity to the constitutional proposals Molinari put forward in 1873 when the new constitution for the Third Republic was being discussed. Here Molinari proposed two chambers, an upper house elected by the largest tax payers, and a lower chamber elected by universal suffrage, with an executive with very limited powers elected by both chambers. See Molinari, La République tempérée (Paris: Garnier, 1873) PDF.

[30] These are collected in Adolphe Thiers, Discours parlementaires de M. Thiers, publiés par M. Marc Antoine Calmon (Paris: Calmann Lévy, 1880), vol. 7 (Jan. 1846 - Feb. 1848); vol. 8 (July 1848 - Feb. 1850).

[31] Adolphe Thiers, De la propriété (Paris: Paulin, Lheureux, 1848). online and PDF. Also in English: Adolphe Thiers, The Rights of Property: A Refutation of Communism & Socialism . By Adolphe Thiers. (London : R. Groombridge & Sons, Paternoster Row, And All Booksellers. MDCCCXLVIII. (1848)). online and PDF.

[32] Molinari, review of Thiers' "De la propriété," JDE, T. 22, N° 94, 15 janvier 1849, p. 162-77.

[33] He referred to "une Compagnie d'actionnaires" (a company owned by shareholders) (p. 355 link ), "une Compagnie d'assurance" (an insurance company) (p. 348 link), and "une Compagnie d'assurance mutuelle" (a mutual insurance company (p. 353 link).

[34] The French version: Thiers, De la propriété (Paris: Paulin, Lheureux, 1848), pp. 348-49, 352-53, and 362-63. For the English version we have used the contemporary translation: Adolphe Thiers, The Rights of Property; A Refutation of Communism and Socialism (London: R. Groombridge & Sons, 1848).

[35] See the "French Government Budgets 1848-49," Table 1, in Bastiat, CW3, p. 510.

[36] Molinari, CR Thiers, p. 171.

[37] Emile de Girardin (1806-1881) was the first successful press baron of the mid-19th century in France. He began in 1836 with the popular mass circulation La Presse which had sales of over 20,000 by 1845.

[38] Émile de Girardin, "Le Socialisme et l'impôt," La Presse, 25-30 Sept. and 1-2 Oct. 1849. This was republished as Les 52. XIII. Le socialisme et l'impôt (Paris: Michel Lévy, 1849) and then expanded into a more substantial work on the history of taxation and Girardin's proposals for reform, L'impôt (Paris: Librairie nouvelle, 1852. 6th edition).

[39] Girardin, Les 52. XIII. Le socialisme et l'impôt (1849), p. 128.

[40] Girardin, L'impôt (1852), pp. 229-31.

[41] Girardin, Les 52. XIII. Le socialisme et l'impôt (1849), p. 213.

[42] Adam Smith, Wealth of Nations, part ii: Of the Expence of Justice. Also Adam Smith, Wealth of Nations (Cannan ed.), vol. 2, pp. 210-11, online.

[43] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith, edited with an Introduction, Notes, Marginal Summary and an Enlarged Index by Edwin Cannan (London: Methuen, 1904). Vol. 1. Book IV, chap. 2.

[44] Cours, Douzième leçon, "Les consommations publiques," pp. 480-534 online.

[45] Joseph Garnier, introductory footnote to Molinari's essay "De la production de la sécurité," JDE, T. 22, no. 95, 15 February 1849, p. 277 online. Molinari's article and book would spark a lengthy discussion in the PES between November 1849 and February 1850 on this very topic. I have translated the minutes of these meeting in my Anthology of his writings. [Link??

[46] Coquelin, Charles. "Les Soirées de la rue Saint-Lazare, Entretiens sur les lois économiques et défense de la propriété, par M. G. de Molinari," JDE, T. 24, No. 104, 15 novembre 1849, pp. 364-72.

[47] Charles Dunoyer (1786-1862) was a journalist, an economist, a politician, a member of the Académie des sciences morales et politiques (1832), the author of numerous works on politics, political economy, and history, a founding member and President of the Société d'économie politique (1842), and a key figure in the French classical liberal movement of the first half of the nineteenth century. Dunoyer studied law in Paris where he met Charles Comte (around 1807) with whom he was to edit the liberal periodical Le Censeur (1814-15) and its successor Le Censeur européen (1817-19). His magnum opus was the three volume De la liberté du travail (1845).

[48] Molinari, Gustave de. De la Production de la sécurité, par M. G. de Molinari. Extrait du n° 95 du "Journal des économistes," 15 février 1849 . (Paris : Guillaumin, 1849). In-8° , 16 p. online. An English translation online.

[49] PoS, pp. 279-80. link

[50] S11, pp. 327 link. See my essay "The Dreamer (le Rêveur) of Radical Liberal Reforms.”

[51] Les Soirées, p. 327 link. Molinari would expand his ideas about how the state should organise itself to be more "economic" in its provision of services to taxpayers in his Cours, vol. 2, pp. 522-26 link, which is discussed below.

[52] PoS, end of section V and beginning of section VI, pp. 281-82 link.

[53] Molinari, L'évolution politique et la Révolution, p. 404-10 link. The full passage can be found in the Appendix.

[54] He would much later write an entire book about the natural laws of economics, Les Lois naturelles de l'économie politique (1887) PDF. See my essay on “The Natural Laws of Political Economy.”

[55] Later he would refer to the take-over of the state by particular powerful groups which he termed "les sociétés propriétaires des États politiques" (societies or groups which own or control the political state). See the discussion below on Les problèmes du XXe siècle (1901).

[56] "De la production de la sécurité," Section 6, p. 284. link

[57] This is similar to the stark choice the Economist gives the Socialist and the Conservative at the end of Les Soirées, p. 363 link] “Deux systèmes, sont en présence: le communisme et la propriété. Il faut aller vers l’un ou vers l’autre. Le régime mi-propriétaire, mi-communiste sous lequel nous vivons ne saurait durer” (Two systems are before us: communism and property. We have to go in one direction or the other. The regime under which we live of part-private property and part-communist cannot be sustained for long).

[58] Adam Smith, Wealth of Nations, part ii: Of the Expence of Justice. Online: Adam Smith, Wealth of Nations (Cannan ed.) link.

[59] La Société future (1899), p. 85 link.

[60] “De la production de la sécurité," p. 288 link. This key passage would be changed slightly for S11 link where Molinari replaced the terms "le producteur" (the producer of security) with "les compagnies d'assurances" (insurance companies) and "les consommateurs" (consumers) with "les assurés" (the insured). The word "prime" (premium) remained the same in both cases.

[61] Much like Say argued in his lectures in 1819. See the discussion above.

[62] Molinari, Gustave de. Les Soirées de la rue Saint-Lazare; entretiens sur les lois économiques et défense de la propriété (Paris: Guillaumin, 1849). online and PDF. I first translated S11 in my 1979 undergraduate Honours Thesis "Gustave de Molinari and the Anti-statist Liberal Tradition" which was later published as an article in the JLS in 1982. It can be found in the Appendix below.

[63] For a discussion of whom these protagonists may have represented in real life, see my essay on "The Identity of the Speakers.”

[64] Molinari may have been the first person to write a comprehensive one volume statement of the classical liberal world view which encompassed political and economic theory, history, as well as specific proposals to reform society in a liberal direction. This would become more common in the 20th century with works such as Ludwig von Mises's Liberalism (1929), Milton Friedman's Capitalism and Freedom (1962) and Murray Rothbard's For a New Liberty (1974). In his own day this was much rarer but might include such works as Wilhelm von Humboldt's Ideen zu einem Versuch, die Gränzen der Wirksamkeit des Staats zu bestimmen (Ideas in an Attempt to determine the Limits of the Activity of the State) (1792, 1851); Benjamin Constant, Principes de politique, applicables à tous les gouvernemens représentatifs (The Principles of Politics) (1815); Herbert Spencer's Social Statics: or, The Conditions essential to Happiness specified, and the First of them Developed (1851); and John Stuart Mill, On Liberty (1859).

[65] See the Appendix for the full quote of "the fees of court" passage from Smith's Wealth of Nations.

[66] See my essay on “The Story of the Monopolist Grocer" and the long quotes about the monopolist grocer and the baker in the Appendix.

[67] See S11, pp. 308 link, and Molinari, Cours, vol. 2, pp. 512 link.

[68] S11, p. 328 link.

[69] The phrase "un gouvernement à bon marché" (a cheap or bargain priced government) was later adopted by Molinari to describe the kind of government he wanted to see. It was also a slogan used by Lamartine and adopted by the French Free Trade Association in their propaganda. A similar phrase “on ne gouverne pas à bon marché” (one does not govern cheaply) was used in Soirées, p. 308 link. The opposite of “à bon marché” is “plus cher” (more expensive), “antiéconomique” (anti-economic), or “pécher” (to be guilty of, or sinning against) which are terms he also used frequently. See for example, “plus cher” Cours, II-531 link; “antiéconomique” Cours II-510 link; and government’s economic “sinning” Cours II-522 link.

[70] Soirées, p. 329 link.

[71] Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books, 1974) in chapter 5 "The State," pp. 88-119. See also the articles responding to Nozick: Roy A. Childs Jr., "The Invisible Hands Strikes Back" and Murray Rothbard, "Robert Nozick and the Immaculate Conception of the State" in Anarchy and the law: The Political Economy of Choice. Edited by Edward P. Stringham (New Brunswick: Transaction Publishers, 2007), pp. 218-31and pp. 232-49 respectively.

[72] The pubic debt and the growth of the state worried him greatly in his pair of articles summarising the achievement of the 19th century and his fears for the coming 20th century and his late book on Économie de l'histoire (1908), pp. 235-37: "Le XIXe siècle," JDE, S. 5, T. 45, N° 1, janvier 1901, pp. 5-19.; "Le XXe siècle," JDE, S. 5, T. 49, N° 1, janvier 1902, pp. 5-14.

[73] Joseph Garnier, introductory footnote to Molinari's essay "De la production de la sécurité," JDE, T. 22, no. 95, 15 February 1849, p. 277. link.

[74] De la Production de la sécurité, par M. G. de Molinari. Extrait du n° 95 du "Journal des économistes," 15 février 1849 . (Paris : Guillaumin, 1849). In-8°, 16 p.

[75] This was the first of three meetings of the Political Economy Society on the proper limits to the power of the state which Molinari's book provoked and it was followed by similar discussions in January and February 1850. The first meeting was followed in November by a critical review by Coquelin in the JDE. The minutes of these meetings have been translated and can be found in the Appendix. See Part 1 in "Chronique," JDE, T. 24, no. 103, Oct. 1849, pp. 315-16; Part 2 in "Chronique," JDE, 15 Jan. 1850, T. XXV, pp. 202-205; and Part 3 in "Chronique," JDE, T. XXV, no. 107, 15 fev., 1850, pp. 202-5.

[76] Charles Coquelin reviewed Les Soirées in November 1849. See, ,Compte-rendu par M. CH. C. , "Les Soirées de la rue Saint-Lazare, Entretiens sur les lois économiques et défense de la propriété, JDE, T. 24, N° 104, 15 novembre 1849, pp. 364-72.

[77] Bastiat, "L'État," DEP (1852), vol. 1, pp. 733-36.

[78] Clément, Ambroise (1850). "Des attributions rationnelles de l'autorité publique," ( JDE, February, 1850), pp. 228-250.

[79] Charles Dunoyer, "Les limites de l'économie politique et des fonctions du gouvernement" ( JDE, December, 1852), pp. 217-231; "Gouvernement," DEP (1852) , vol. 1, pp. 835-841; and "Les limites de l'économie politique et la nature des richesses," ( JDE, February, 1853), pp. 223-237.

[80] See my essay on “Bastiat's Anti-Socialist Pamphlets.”

[81] The DEP is a two volume, 1,854 page, double-columned, nearly two million word encyclopedia of political economy which was published in 1852-53. It is unquestionably one of the most important publishing events in the history of mid-century French classical liberal thought and is unequalled in its scope and comprehensiveness. The project was undertaken by the publisher Gilbert-Urbain Guillaumin (1801-1864) with the assistance of Charles Coquelin (1802-1852), and Molinari was a co-editor.

[82] See all of Molinari’s entries for the DEP (in French) Gustave de Molinari, The Collected Articles from the Dictionnaire de l'Économie politique (1852-53)" online.

[83] Seven of Molinari's articles were translated and published in Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States (1881) online.

[84] "Nations," DEP, T. 2, pp. 259-62 online; and "Nations, in Political Economy," Lalor's Cyclopedia, vol. 2, pp. 956-59 online.

[85] For a convincing argument that Say in his private and unpublished lectures was a near anarchist, see Amadeus Gabriel, "Was Jean-Baptiste Say a Market Anarchist?" Mises Daily, 28 March, 2007 online.

[86] See my essay on “Ulcerous, Leprous, and Tax-Eating Government.” On "Le gouvernement-ulcère" and “les gouvernements sont les ulcères des sociétés” see his discussion in Cours, vol. 2, pp. 530-31 link.

[87] "Paix - Guerre," DEP, T. 2, pp. 307-14 online.

[88] "Villes," DEP, T. 2, pp. 833-38 online ; and “Cities and Towns," Lalor's Cyclopedia, vol. 1, pp. 468-73 online.

[89] In L'Évolution politique et la Révolution (1884) online discussed below.

[90] In L'Évolution politique (1884) and on the “double right of secession" in Les Lois naturelles (1887) PDF discussed below.

[91] Bastiat, Harmonies économiques. 2me Édition. Augmentée des manuscrits laissés par l'auteur. Publiée par la Société des amis de Bastiat. (Paris: Guillaumin, 1851) online.

[92] While in his voluntary exile in Belgium Molinari wrote two books criticising the illiberal interventionist Bonapartist state, beginning with this important work of classical liberal class analysis, Les Révolutions et le despotisme envisagés au point de vue des intérêts matérie (1852) online in part and in full PDF; and on Napoléon’s economic and political thought, Napoleon III publiciste (1861) PDF.

[93] Cours, vol. 2, Quatrième Partie. De la consommation; Douzième Leçon. "Les consommations publiques," pp. 480-534 online.

[94] See on "la production de la sécurité" (the production of security) Cours, vol. 2, p. 503 link; "un régime de pleine concurrence" (a regime of full/complete competition), Cours, vol. 2, p. 503 link; and "la liberté de gouvernement" (the freedom of government, or free government, or competing government), Cours, vol. 2 p. 532 link.

[95] Not quoting "the fees of court" passage here might suggest a weakening in Molinari’s ACT, but it should be noted that he did quote it again 40 years later in La société future (1899) which would suggest the opposite. In this late work he quotes Adam Smith again on "the fees of court" and predicts the emergence of "des compagnies judiciaires pleinement indépendantes et concurrentes" (judicial companies which are fully independent and competitive) which will solve the problem of keeping legal costs down in the future. This term is probably the most radical AC one he used in all his writings, so it is interesting to see him using it in this supposedly more "conservative" work. See, La Société future, p. 85 link.

[96] Cours, vol. 2, p. 484 link. This is a very Bastiat-like term to use. See my essay on “Disturbing and Restorative Factors.”

[97] Molinari first used the expression "le problème du gouvernement" at the end of the PoS article p. 290 link; and then again through the mouth of the Socialist at the end of Soirées, p. 337 link.

[98] These topics are both raised in L'Évolution politique (1884) and discussed below.

[99] Cours, vol. 1, p. 121 link, where he also cites S11 and the PoS article.

[100] Cours, vol. 2, p. 311 link. Molinari cites again here his article on the PoS.

[101] Cours, vol. 2, p. 483 link.

[102] Cours, vol. 1, p. 288 link.

[103] "Nations," DEP, T. 2, pp. 259-62 online.

[104] Cours, pp. 365 ff. link

[105] Cours, vol. 2, p. 497 link.

[106] Cours, vol. 1, p. 65 link.

[107] Cours, vol. 1, p. 192 link.

[108] Cours, vol. 2, p. 523 link.

[109] He discusses the high cost and poor efficiency of government police and law courts in "De l'administration de la Justice," L'économiste belge, No. 11, 5 Juin 1855, pp. 1-3; and is still doing the same 40 years later in La Question sociale (1896), p. 338 PDF and Les Problèmes du XXe siècle (1901), p. 283 PDF.

[110] See, Dictionnaire de l'Économie Politique, contenant l'exposition des principes de la science, l'opinion des écrivains qui ont le plus contribué à sa fondation et à ses progrès, la Bibliographie générale de l'économie politique par noms d'auteurs et par ordre de matières, avec des notices biographiques et une appréciation raisonnée des principaux ouvrages, publié sous la direction de MM. Charles Coquelin et Guillaumin (Paris: Librairie de Guillaumin et Cie, 1852-1853), 2 vols. online.

[111] Cours, vol. 2, p. 521 link.

[112] James M. Buchanan and Gordon Tullock, The Calculus of Consent (1962) in The Collected Works of James M. Buchanan (Indianapolis: Liberty Fund, 1999), vol. 3; and Douglass C. North and Robert Paul Thomas, The Rise of the Western World: A New Economic History (1973).

[113] Molinari, "Villes," DEP, T. 2, pp. 833-38 online; "Cities and Towns" Lalor's Cyclopaedia, vol. 1, pp. 468-73 online.

[114] Cours, vol. 2, pp. 516-17 link.

[115] Cours, vol. 2, p. 517 link.

[116] Cours, vol. 2, pp. 520-21 link.

[117] Cours, vol. 1, p. 192 link.

[118] Friedrich August von Hayek, "The Use of Knowledge in Society," American Economic Review, XXXV, No. 4; September, 1945, pp. 519–30.

[119] Cours, vol. 2, p. 524 link.

[120] Coase, Ronald, "The Nature of the Firm," Economica, 1937, 4 (16): 386–405.

[121] Molinari criticised the idea of a "universal monarchy" or a "universal republic" as utopian dreaming and called for the break up human societies into smaller and smaller units ("le morcellement de l'humanité" and "le fractionnement des sociétés") in his article "Nations" in the DEP (1852), T. 2, pp. 259-62; quote on p. 259. He also likened universal monarchy or any similar state structure to "un seul troupeau gouverné par un berger omniarcal" (a single flock of sheep ruled by an omnipotent shepherd), quote on p. 261. This article can be found in the Appendix.

[122] Cours, vol. 2, p. 524 link.

[123] Cours, vol. 2, p. 524 link.

[124] Cours, vol. 2, p. 527 link.

[125] Cours, vol. 2, pp. 524-25 link.

[126] Gustave de Molinari, Comment se résoudra la question sociale (Paris: Guillaumin, 1896), "La Révolution silencieuse," p. 338.

[127] Cours, vol. 2, p. 484 link.

[128] See for example his article on "Nations" in DEP, vol. 2, p. 261. See my essay on "Ulcerous, Leprous, and Tax-Eating Government.”

[129] Cours, vol. 2, pp. 530-31 link.

[130] Molinari probably had in mind the idea of "la spoliation légale" (legal plunder) which Bastiat had developed in the late 1840s. See "Bastiat on Enlightening the 'Dupes' about the Nature of Plunder," in the Introduction to CW3, pp. lv-lviii. Molinari also borrows Bastiat’s theory of "the seen" and "the unseen" in his critique of indirect taxes (which are largely unseen by those who have to pay them). He does this in La Morale économique (1888) "une tendance naturelle à multiplier ces taxes qu'on ne voit pas de préférence à celles qu'on voit" (pp. 356-57); and in La Société future (1899) "des impôts indirects qu'on ne voit pas, relativement aux impôts directs que l'on voit." (p. 108) link.

[131] Cours, vol. 2, pp. 434-35 link. Bastiat had planned to write a "History of Plunder" after he had finished his treatise Economic Harmonies but did not live to finish it.

[132] Cours, vol. 2, pp. 434-45 link.

[133] Cours, vol. 2, pp. 427-79 link.

[134] Cours, vol. 2, p. 443 link.

[135] Cours, vol. 2, pp. 442-43 link.

[136] See "Nation," DEP, vol. 2, pp. 259-62. Quote is from p. 261.

[137] Cours, vol. 2, pp. 499-500 link.

[138] Cours, vol. 2, p. 523 link.

[139] Cours, vol. 2, p. 509 link.

[140] Cours, vol. 2, pp. 509-10 link.

[141] His friend and colleague Frédéric Bastiat had developed a theory of the "apparatus of exchange or commerce" to describe the complex system of interconnected institutions, beliefs, and practices which made commerce possible. Molinari had a similar notion in mind concerning the "legal apparatus" and "the machinery of government." See my essay on "The 'Apparatus" or Structure of Exchange.”

[142] Cours, vol. 2, p. 503 link.

[143] The other is in Précis de l'économie politique (1893) PDF where he talks about positive law.

[144] Cours, vol. 2, pp. 502-3 link.

[145] See my essay on "The Story of the Monopolist Grocer. "

[146] It should be remembered here that Molinari got quite angry in the PoS article and Soirées because his economist colleagues couldn't or wouldn't accept the logic of his arguments about monopolies and competition. Perhaps this is why he reverted to the trick of using this rhetorical trope to try to get around this reluctance. See the discussion above.

[147] Cours, vol. 2, p. 512-13 link.

[148] See my essay on "The Story of the Monopolist Grocer" and the long quotes about the monopolist grocer and the baker in the Appendix.

[149] Cours, vol. 2, pp. 514-15 link.

[150] L'Évolution politique (1884), pp. 404-10 link. This long quote on the "simple hypothesis" about the monopolist baker can be found in the Appendix.

[151] "Remplacez la fabrication du pain par la production de a sécurité" (Just replace the making of bread with the production of security), in L'Évolution politique (1884), p. 407-8 link.

[152] Cours, vol. 2, p. 531 link.

[153] Cours, vol. 2, p. 532, fn 104 link.

[154] Cours, vol. 2, p. 534, fn 105 link.

[155] His support for secession is discussed below.

[156] Cours, vol. 2, pp. 531-32 link.

[157] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith, edited with an Introduction, Notes, Marginal Summary and an Enlarged Index by Edwin Cannan (London: Methuen, 1904). Vol. 1. Book IV, chap. 2. link.

[158] Les Soirées, p. 329 link.

[159] This is the closing paragraph of the book, Cours, vol. 2, p. 534 link.

[160] Gustave de Molinari, Questions d'économie politique et de droit public (Paris: Guillaumin; Brussels: Lacroix, 1861), 2 vols. vol1 PDF and vol2 PDF. “Introduction," vol. 1, pp. v-xxxi; "La liberté de gouvernement," pp. 245-70; and "Le droit électorale," pp. 271-75.

[161] Questions d'économie politique, vol. 1, p. vi.

[162] Questions d'économie politique, vol. 1, p. ix.

[163] Questions d'économie politique, vol. 1, p. xi.

[164] Questions d'économie politique, vol. 1, p.xiii.

[165] Questions d'économie politique, vol. 1, pp. xxv-xxvi.

[166] Questions d'économie politique, vol. 1, pp. xxvi-xxvii.

[167] One of the things he did was to visit the U.S. for the centennial celebrations which produced two books: Lettres sur les États-Unis et le Canada addressés au Journal des débats à l'occasion de l'Exposition Universelle de Philadelphie (Paris: Hachette, 1876) and Charleston - la situation politique de la caroline du sud (Paris: Librairie Hachette et Cie, 1876).

[168] Molinari, Gustave de. L'évolution économique du XIXe siècle: théorie du progrès (Paris: C. Reinwald 1880). It was serialised in the JDE first, beginning with Molinari, "L'Évolution économique du XIXe siècle," JDE, T. 45, N° 133. Janvier 1877, pp. 11-32. online and PDF.

[169] Molinari, Gustave de. L'évolution politique et la Révolution (Paris: C. Reinwald, 1884). It was serialised in the JDE first, beginning in August 1881 and continuing until December 1883: "L'Évolution politique et la Révolution," JDE, T. 15, N° 44. Août 1881, pp. 165-81. online and PDF.

[170] Molinari, L'évolution politique et la Révolution, pp. 381-82 link.

[171] Say, "Cours à l'Athénée" (1819) Quatrième séance, Leçons d'économie politique, in Oeuvres complètes, ed. Gilles Jacoud et Philippe Steiner (Paris: Economica, 2003), p. 117.

[172] Molinari, L'évolution politique et la Révolution, "Les gouvernements de l'avenir," § 2. Forme de gouvernement adaptée au régime de la grande industrie," pp. 364-70. link.

[173] See "V. La souveraineté individuelle et la souveraineté politique," L'évolution politique, pp. 394 ff. link.

[174] Molinari, L'évolution politique et la Révolution, p. 379, link.

[175] Molinari, L'évolution politique et la Révolution, p. 381, link.

[176] Molinari, L'évolution politique et la Révolution, Section IV. "La commune et son avenir," pp. 382-394 link.

[177] Molinari, L'évolution politique et la Révolution, pp. 388-89, link.

[178] See the discussion in Les lois naturelles (1887) below.

[179] Molinari, L'évolution politique et la Révolution, p. 389, link.

[180] Molinari, L'évolution politique et la Révolution, pp. 391-92, link.

[181] Molinari, L'évolution politique et la Révolution, pp. 392-93, link.

[182] Molinari, L'évolution politique et la Révolution, V. La souveraineté individuelle et la souveraineté politique" pp. 394 ff. link.

[183] Spencer define this "law of equal freedom" as the principle that "every man has full liberty to exercise his faculties, provided always he does not trench upon the similar liberty of any other." Spencer, Social Statics, p. 80 link.

[184] Molinari was very taken with an essay by Louis Leclerc on Victor Cousin's theory of "le Moi" (the Self) which appeared in the JDE . See Louis Leclerc, "Simple observation sur le droit de propriété," JDE, T. 21, no. 90, 15 October 1848, pp. 304-305.

[185] Molinari, L'évolution politique et la Révolution, pp. 394-95 link.

[186] Molinari, L'évolution politique et la Révolution, p. 399 link.

[187] Molinari, L'évolution politique et la Révolution, p. 402 link.

[188] Molinari, L'évolution politique et la Révolution, pp. 389 ff. link The long quote about this can be found in the Appendix.

[189] Molinari, L'évolution politique et la Révolution, p. 405 link.

[190] Molinari, L'évolution politique et la Révolution, pp. 402 ff. link. The full passage can be found in Appendix 2.

[191] Molinari, L'évolution politique et la Révolution, p. 412 link.

[192] Évolution politique, Chap. VIII. "Évolution et révolution." pp. 239-40 link.

[193] Molinari, L'évolution politique et la Révolution, pp. 381-82 and FN 62 link.

[194] Dunoyer, L'Industrie et la Morale, p. 366 fn 246 link.

[195] Molinari, L'évolution politique et la Révolution, pp. 393-94 link.

[196] The book was first published as four articles in the JDE between December 1884 and July 1885.

[197] There is a small chapter devoted to this in Molinari, Les Lois naturelles, Part IV, chap. 15 "La liberté de gouvernement," pp. 260-68. PDF.

[198] Molinari, Les Lois naturelles, p. 44.

[199] Molinari, Les Lois naturelles, pp. 248-49.

[200] He begins this chapter with this statement: Molinari, Les Lois naturelles, chap. XV "La liberté de gouvernement," pp. 260-61.

[201] Molinari, Les Lois naturelles, pp. 264-66.

[202] Molinari, Les Lois naturelles, p. 267.

[203] In Les Soirées Molinari showed a certain sympathy for another form of "piracy," that of the "interloper" or the privateer who flaunts government restrictions to trade such as illegal private mail delivery or unregulated prostitution. See my essay on "Interlopers and Pirates.”

[204]: Molinari, Les Lois naturelles, p. 268.

[205] "Le XIXe siècle," JDE, 5e série, T. XLV, Janvier 1901, pp. 5-19; and "Le XXe siècle," JDE, 5e série, T. XLIX, Janvier 1902, pp. 5-14. Both essays are available online.

[206] See, see his "Programme Économique" in Notions fondamentales (1891), section III, chap. 3, pp. 381-96 link.

[207] Molinari, Notions fondamentales économie politique (1891), pp. 379-80 link.

[208] "Chapitre III. Programme Économique. Le libre-échange. — L'assurance contre la guerre. La simplification de l'État., section III. La Simplification De L'état," pp. 381-96 link.

[209] See his discussion of the "anti-economic nature of the state" in Cours, p. 759, discussed above.

[210] Molinari, Notions fondamentales économie politique (1901), pp. 394-96 link.

[211] Molinari, Notions fondamentales économie politique (1901), p. 395 link.

[212] Molinari, Gustave de. Précis d'économie politique et de morale. (Paris: Guillaumin et cie, 1893).

[213] Religion (Paris: Guillaumin et Cie, 1892). Second edition. and Science et religion (Paris: Guillaumin, 1894). The former was translated into English: Religion, translated from the second (enlarged) edition with the author's sanction by Walter K. Firminger (London: Swan Sonnenschein, 1894).

[214] Précis, chap. XII, p. 263.

[215] In the Précis, chap. IV he states that "son infaillibilité prétendue ne résiste pas à l'examen" (its so-called infallibility does not stand up to examination), p. 192.

[216] In the PoS article and in S11 (both 1849), and in the late book Esquisse (1899).

[217] Précis, Chap. V, p. 199.

[218] It is interesting that here Molinari has adopted the very expression used by his critics at the PES meeting in October 1849 , where his old nemesis Dunoyer and even his friend Bastiat argued that government exists "above" every other organisation and its function is ensure law and order for everything "below" it.

[219] Précis, Chap. VI, p. 204.

[220] See Précis, chap. IX, p. 223.

[221] In the Précis, chap IX he says that "les lois positives soient diverses et variables" (positive laws are diverse and variable), p. 224. He also refers to "un code de lois, de coutumes ou d'usages" (a code of laws, customs, and common usage/practice) in Précis, chap. 2, p. 177.

[222] Précis, chap VI, p. 197.

[223] Précis, pp. 199-200.

[224] Précis, pp. 200-1.

[225] Précis, p. 201.

[226] Précis, pp. 204-5.

[227] Précis, p. 206.

[228] Précis, p. 208. See also his discussion of political servitude in L'Evolution politique et la Révolution link and Les Lois naturelles de l'Economie politique, 4e partie, "La Servitude politique."

[229] Précis, pp. 205-6.

[230] Précis, p. 207.

[231] Molinari, Gustave de. Comment se résoudra la question sociale (Paris: Guillaumin, 1896).

[232] Molinari, La question sociale (1896), pp. 281-82.

[233] Molinari, La question sociale (1896), p. 308.

[234] Molinari, La question sociale (1896), pp. 305-7.

[235] Cours, vol. 2, p. 484.

[236] Molinari, La question sociale (1896), pp. 313-14

[237] Molinari, La question sociale (1896), p. 338. See also a similar argument in his magazine L'Économiste belge : "De l'administration de la Justice," L'économiste belge, No. 11, 5 Juin 1855, pp. 1-3.

[238] Bastiat gave this low figure in a couple of places: in "The Utopian" and in a speech on the tax on alcohol in the Chamber of Deputies in December 1849. See, ES2 11 “L’utopiste” (The Utopian) (LE, 17 Jan., 1847) SE2, p. 101 link; in CW3, pp. 187-98; "Speech on the Tax on Wines and Spirits" (12 Dec. 1849), OC5, pp. 468-93 link, in CW2, pp. 328-47.

[239] In 1895-96 the budget for the French government was about 3.4 billion francs, so more than double what it had been in Bastiat's time. A total expenditure of only 200 million francs would have been only 1/17 of what as actually spent that year. See The Statesman's Year-Book: Statistical and Historical Annual of the State of the World for the Year 1896 . Ed. J. Scott Keltie (London: Macmillan, 1896), pp. 481-82.

[240] Molinari, La question sociale (1896), p. 341-42.

[241] He would return to the topic of utopia in his essay "Où est l'utopie?" (Where is Utopia?) (JDE, 1904) reprinted in Questions économiques (1906), pp.377-80. This is discussed below.

[242] Molinari, La question sociale (1896), p. 343.

[243] Molinari, Esquisse de l'organisation politique et économique de la Société future (Paris: Guillaumin, 1899). online

[244] Religion, translated from the second (enlarged) edition with the author's sanction by Walter K. Firminger (London: Swan Sonnenschein, 1894); and The Society of Tomorrow: A Forecast of its Political and Economic Organization, ed. Hodgson Pratt and Frederic Passy, trans. P.H. Lee Warner (New York: G.P. Putnam's Sons, 1904).

[245] See my unpublished paper "Gustave de Molinari and the Future of Liberty: 'Fin de Siècle, Fin de la Liberté'?" A paper presented to the Australian Historical Association 2000 Conference on "Futures in the Past." The University of Adelaide, 5-9 July, 2000. online.

[246] Gustave de Molinari, The Production of Security, trans. J. Huston McCulloch, Occasional Papers Series # 2, Richard M. Ebeling, ed. (New York: The Center for Libertarian Studies, May 1977).

[247] Rothbard, An Austrian Perspective on the History of Economic Thought Volume II: Classical Economics, (Auburn, AL: Ludwig von Mises Institute, 2006), pp. 453-55.

[248] La Société future, chap. III, pp. 74-75 link.

[249] La Société future, chap. III, p. 75 online.

[250] La Société future, chap. III, p. 75 online.

[251] He quotes the passages from the PoS article where he talks about "le producteur" in the singular and "les consommateurs" in the plural. pp. 77-78; but not the S11 where he talks about private insurance companies FN 9 link.

[252] La Société future, chap IV, p. 78 link.

[253] La Société future, chap IV, pp. 78-79 link.

[254] La Société future, Chap. IV, p. 83-84 link.

[255] La Société future, Chap. IV, p. 84 link.

[256] See for example chap. 13 "Punishment and Proportionality" in The Ethics of Liberty (Atlantic Highlands, NJ: Humanities Press, 1982), pp. 85-95.

[257] La Société future, Chap. IV, pp. 85-86 fn 10 link.

[258] La Société future, chap. IV, p. 85 link.

[259] La Société future, chap. II, pp. 62-65 link.

[260] La Société future, chap. V, pp. 92-93 link.

[261] He had been active in trying to raise awareness of the need for international arbitration in an article he wrote for the Times of London In July 1887 the London Times published his scheme to eliminate war by organizing a "Ligue des neutres" (League of Neutrals). This league had as its aim the combination of the armies of the smaller, neutral nations of Europe in order to discourage the larger, more warlike nations from threatening them with invasion or attack. His hope was that "the more aggressive powers would ultimately disarm if, every time they menaced the peace, they were confronted by a greater force determined to defend it." See, "Projet d'association pour l'etablissement d'une ligue des neutres," initially published by the Times (July 28, 1887), was reprinted in Molinari, La Morale économique, p. 438.

[262] La Société future, chap. V, pp. 91-92 link.

[263] La Société future, chap. VI, pp. 96-97 link.

[264] In Comment se résoudra la question sociale (1896).

[265] La Société future, chap. VI, pp. 97-98 link.

[266] Note that the conditions he sets here are very similar to the conditions he first set out in the PoS article and S11.

[267] La Société future, chap. VI, pp. 99-100 link.

[268] Dunoyer remarked in the October 1849 meeting of the PES that "Molinari s'est laissé égarer par des illusions de logique; et que la concurrence entre des compagnies gouvernementales est chimérique, parce qu'elle conduit à des luttes violentes" (Molinari let himself be mislead by illusions of logic, and that competition between companies exercising government-like functions was utopian, because it would lead to violent struggles). See the Appendix below.

[269] La Société future, chap. VII, p. 102 link.

[270] La Société future, chap. VII, pp. 112-13 link.

[271] La Société future, chap. XIII, pp. 172-73 link.

[272] La Société future, chap. VII, p. 108 link.

[273] An entire chapter was devoted to "Tutelage and Liberty" in See section in L'Évolution politique (1884), pp. 424-85 link.

[274] La Société future, chap. XIII, p. 173 link.

[275] See L'évolution politique et la Révolution, pp. 364-70, p. 364 fn 59 link.

[276] La Société future, chap. V, pp. 202-4 link.

[277] Molinari, Les Problèmes du XXe siècle (Paris: Guillaumin, 1901). PDF.

[278] Gustave de Molinari,"Le XIXe siècle," Journal des Économistes, 5e série, T. XLV, Janvier 1901, pp. 5-19; and "Le XXe siècle," Journal des Économistes, 5e série, T. XLIX, Janvier 1902, pp. 5-14. online.

[279] Molinari, Les Problèmes du XXe siècle (1901), pp. 188-89.

[280] Molinari, Les Problèmes du XXe siècle (1901), pp. 190-91.

[281] Molinari, Les Problèmes du XXe siècle (1901), p. 202.

[282] Molinari, Les Problèmes du XXe siècle (1901), pp. 212-13.

[283] Molinari, Les Problèmes du XXe siècle (1901), pp. 213-14.

[284] Molinari, Les Problèmes du XXe siècle (1901), p. 229.

[285] Molinari, Les Problèmes du XXe siècle (1901), p. 283.

[286] Molinari, Les Problèmes du XXe siècle (1901), pp. 289-90.

[287] Molinari, Les Problèmes du XXe siècle (1901), p. 293. I have changed the tense to make it easier to follow.

[288] "Où est l'utopie?" (Where is Utopia?) ( JDE, 1904) reprinted in Questions économiques (1906), pp.377-80.

[289] "Où est l'Utopie?" Questions économiques (1906), pp.377-80

[290] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith, edited with an Introduction, Notes, Marginal Summary and an Enlarged Index by Edwin Cannan (London: Methuen, 1904). Vol. 1. Book IV, chap. 2. online.