An Analysis of Variance Approach to the Question of Anarchy’s Practical Feasibility

 In this article, I plan to present a rather inchoate idea of mine, meaning that I have not yet thought this through to the point of developing it into a full system of analysis. Nevertheless, my intuition suspects that this approach might be promising. I suspect that thinking in terms of Analysis of Variance (ANOVA) […]

 In this article, I plan to present a rather inchoate idea of mine, meaning that I have not yet thought this through to the point of developing it into a full system of analysis. Nevertheless, my intuition suspects that this approach might be promising. I suspect that thinking in terms of Analysis of Variance (ANOVA) may pay off when trying to figure out whether or not anarchy can be made practically feasible.

ANOVA is one of the basic models for statistical analysis, although today it usually exists in its regression analysis form of implementation by using different coding techniques. So you may be wondering, “What on earth am I thinking?” How can a statistical technique, which might be used in an experimental design with lab rats getting different drug treatments, be applied to the question of whether or not anarchy is practically feasible? Don’t worry! I am not proposing some sort of lab rat experiment on humans. All I am suggesting is to think in terms of ANOVA analysis when pondering this question of anarchy’s practical feasibility.

My plan in this article is to explain how on earth I came to this conclusion. Briefly, I started by trying to figure out whether it is possible to have a combination of economic power and no political power. Or to put it another way, could a ruling class operate successfully without political power as long as it has economic power. Can monopolies live on even if they were to lose their government, i.e., political, privileges? These questions emerged from the works of Roderick T Long and Benjamin R Tucker. Long is a rather famous modern day anarchist (or put it this way, I like him!); Tucker is a famous American individualistic anarchist from the Progressive Era and the early 20th century (I like him too!). Both Long and Tucker wrestle with questions about whether or not anarchy—at least their conception of what anarchy is—can actually work if we were to try to implement it in the real world. They are quite forthright in expressing concerns that their free market or competition centered anarchy might not work and might not be implementable. I then remembered that the theoretical justification for what they are suggesting is presented in abstract form by Bryan Caplan and Edward P. Stringham in an essay entitled Networks, Law, and the Paradox of Cooperation. Their model argues that there is nothing to worry about with having a ton of private corporations running around the world! Why? By looking at three scenarios with regard to different combinations of “high” and “low” costs of collusion and coordination, they claim that their “Region 2” solution, i.e., one of the combinations of these two costs, will ensure the best of all worlds. Coordination can occur so that “efficiency” in the economy will be ensured; however, collusion will not occur among the producers thus protecting us from the “private tyrannies,” to allude to Noam Chomsky’s How the World Works (143). I thought to myself, it seems strange that Caplan and Stringham look at “levels” (i.e., “high” and “low”) of a variable without considering all the possible options. They seem to have three cases: “low/low,” “low/high,” and “high/high.” What about “high/low”? Why no possible “moderate” or “middle” level? This is what got me thinking about ANOVA analysis—the tool used to evaluate categorical data. So this is what led me to draw a 3 by 3 diagram. I then ponder what this all means. That is, in a nutshell, what I plan to do in this paper.

The Problem According to Benjamin R Tucker

The story begins with Tucker’s paper called State Socialism and Anarchism, originally published on March 10, 1888 but updated with a new postscript on August 11, 1926. It is fairly clear that Tucker is having second thoughts when it comes to the “power” of “competition” to effectively solve the private economic tyranny problem.

In the earlier American Progressive Era version of this paper from 1888, Tucker stresses that the path to freedom for labor is competition. He writes:

When Warren and Proudhon, in prosecuting their search for justice to labor, came face to face with the obstacle of class monopolies, they saw that these monopolies rested upon Authority, and concluded that the thing to be done was, not to strengthen this Authority and thus make monopoly universal, but to utterly uproot Authority and give full sway to the opposite principle, Liberty, by making competition, the antithesis of monopoly, universal. (emphasis mine)

By 1926, however, Tucker seems to be much more pessimistic about the possibility of competition working to break the monopolies. He seems to be saying that the anarchistic solution might have worked during the Progressive Era when the economy was less concentrated; however, now, in 1926, concentration in the economy is so high that even if the government and its privileges were to disappear, these “private tyrannies” might very well endure. He then proposes something that sounds more like something Noam Chomsky might say, namely, he suggests that the free market “competition solution” can work but only after the “great leveling.” That phrase, the “great leveling” is shocking, I think, to most individualist anarchists, and certainly to anarcho-capitalists. Leveling! That sounds like “communism”!  I think that this is an important point to examine. It is easy to say: “free market” will work its magic! Competition will crush the monopolies, and the economy can “self-regulate.” What Tucker is saying, in effect, is that even if you were to throw us onto a “free market,” the monopolies might be able to hold on because the situation has changed drastically since the late 1880s.

Let me now walk you through Tucker’s more pessimistic view from 1926. He begins by reviewing his central bank from the 1880s, namely, that the “anarchistic remedy” could work because “concentration” was not a major issue at that point in time:

Forty years ago, when the foregoing essay was written, the denial of competition had not yet effected the enormous concentration of wealth that now so gravely threatens social order. It was not yet too late to stem the current of accumulation by a reversal of the policy of monopoly. The Anarchistic remedy was still applicable. (emphasis mine)

However,

today [i.e., 1926] the way is not so clear. The four monopolies [i.e., the money monopoly, the land monopoly, the tariff monopoly, and the patent monopoly], unhindered, have made possible the modern development of the trust, and the trust is now a monster which I fear, even the freest banking, could it be instituted, would be UNABLE TO DESTROY. (emphasis mine)

His argument for why he thinks that “even the freest banking” would now be “unable to destroy” the monopolies is basically that the situation has changed. He uses Standard Oil as an example. When it was smaller and controlled relatively few dollars “it needed the money monopoly for its sustenance and its growth.” By “money monopoly” he means “the privilege given by the government to certain individuals” and enforced by other state-backed tools such as “a national tax” and “State laws.” In other words, the earlier corporate power was very dependent upon political power, i.e., the State protecting them through granting of monopoly privileges. However, Tucker continues, Standard Oil grew so big controlling “perhaps ten thousand millions” of dollars. Because it was able to grow so big, “it sees in the money monopoly a convenience, to be sure, BUT NO LONGER A NECESSITY. IT CAN DO WITHOUT IT.” In other words, the corporation’s power because of the high levels of “concentrated capital” can be maintained without the government’s privileges (without the money monopoly). Tucker, writing about this new highly concentrated economic power, says

were all restrictions upon banking to be removed, concentrated capital could meet successfully the new situation by setting aside annually for sacrifice a sum that would remove every competitor from the field. (emphasis mine)

Tucker seems to be saying that without the money monopoly—without the government granting privileges—the corporate power or economic power will endure. Competition will not be able to break this power alone. The corporate or economic power will be able to thwart new entrants and potential rivals. Tucker then proposes something that is quite radical. First there has to be a “great leveling” and then the free market solution can be utilized:

Until measures of forcible confiscation, through the State or in defiance of it, shall have abolished the concentrations that monopoly has created, the economic solution proposed by Anarchism…will remain a thing to be taught to the rising generation, that conditions may be favorable to its application AFTER THE GREAT LEVELING. (emphasis mine)

To me, what Tucker is saying is that we can’t just say “competition” and expect it all to work out for us. First, we have to—paradoxically if we go “through the State” and “forcibly confiscate” property—in order to “level” things, i.e., basically return us to a more 1880s situation in which wealth is not as concentrated as it is later in 1926.  Then, under this “less concentrated” scenario, the forces of the free market can kick in and bring about a more equitable distribution of wealth. In fact, Chomsky in How the World Works argues that this is Adam Smith’s grand scheme:

Acceptance of radical inequality of outcome is a sharp departure from the core of the humane liberal tradition as far back as it goes. In fact, Adam Smith’s advocacy of markets was based on the assumption that under conditions of perfect liberty, free markets would lead to perfect equality of outcome, which he believed was a good thing. (210, emphasis mine)

Related Problems According to Roderick T Long

In Tucker’s discussion above, his point was, I think, that even without government, i.e., in a world without governments granting monopoly privileges, these corporate or economic powers can survive just fine. They can effectively suppress competition because of the high level of wealth concentration thus maintaining their “private tyrannies” all by themselves. In other words, no political power exists but the ruling class can survive through economic power alone.

This theme of a ruling class surviving through economic power alone, without having to rely upon political power, is also stressed by Roderick T Long in his paper Can We Escape the Ruling Class? Long’s argument, actually, reminds me of something from Götz Aly’s book on how Hitler was able to maintain power and win over the masses. In both cases we see two major things at work:

  • The masses enjoy being bought off by their rulers, i.e., consent can be bought
  • Internal police power doesn’t actually have to be that large, thus reducing the policing costs or burdens on the ruling class when trying to maintain power

Let me quickly illustrate the parallels between what Roderick T Long is saying and what Götz Aly is saying.

In Long’s Can We Escape the Ruling Class, he writes that

“the city states of the ancient world—I am thinking of Greek cities like Athens, Sparta, and Corinth, as well as Rome during the early Republican period—had surprisingly weak and decentralized governments, with nothing we would recognize as a police force. (A regular police force was not introduced in Rome until the time of Augustus, the first Emperor). Yet these city-states were class societies, with a powerful and effective ruling class. Where did the power of the ruling class come from, if not from a powerful state?…In effect, the wealthy classes kept control by BUYING OFF THE POOR. (4-5, emphasis mine)”

In Aly’s book, Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State, also mentions that the strategy for the ruling class consists of, in part, buying off the poor—in this case with stolen loot—and  avoiding (at least relatively speaking) a huge police operation internally.

“Hitler was able to maintain general morale by transforming Germany’s military offenses into an increasingly coordinated series of destructive raids aimed at plundering other peoples. The Nazi leadership established a framework for directly sharing the spoils of its military victories with the majority of Germansthe profits derived from crippling the economies of occupied and dependent countries, the exploitation of work performed by forced laborers, the confiscated property of murdered Jews, and the deliberate starvation of millions of people, most notably in the Soviet Union. Those benefits, in turn, made the recipients amenable to Nazi propaganda and gave them a vested interest in the Third Reich. (4, emphasis mine)”

The Nazi regime won the support of middle- and working-class Germans by creating greater social and economic equality at home and ensuring that its own “racial comrades” would be well fed and clothed, all with the proceeds of mass murder and unprecedented continent-wide robbery. (back cover, emphasis mine)

If Hitler’s was a dictatorship of consent, that consent was not based on an ideological conviction held by the majority of Germans. It was bought and paid for through the systematic bribery of social welfare payments and services. (299, emphasis mine)

To put the level of Nazi state coercion of its citizens into perspective: Communist East Germany would later employ 190,000 official surveillance experts and an equal number of “unofficial collaborators” to watch over a population of 17 million, while the Gestapo in 1937 had just over 7,000 employees, including bureaucrats and secretarial staff. Together with a far smaller force of security police, they sufficed to keep tabs on more than 60 million people. Most Germans simply did not need to be subjected to surveillance or detention. (29, emphasis mine)

For me, this ability to dispose of the political ruling class while maintaining the plutocratic or corporate ruling class by means of “buying off the poor” with their wealth, makes the implementation of any “free market” anarchy at this time in history very risky. For example, take a look at the following chart, which reports on the food stamp usage in the United States. To me, this suggests that circumstances favor the ruling class because so many people have such a strong incentive to be bought off by the rulers. It comes down to the choice of living another day with some food given to you by the ruling class or risking starvation without taking their food. BusinessInsider.com reports that while nonfarm payrolls have remained fairly steady since 2009, food stamp usage has exploded upwards. Such a positively sloped trend in the rate of poverty is going to make people less likely to give up their lifeline.

Graf 1

Caplan, Stringham, and the Costs of Cooperation

At this point, in my brain, I am thinking to myself that to implement “free market” anarchy just will not work, or even it might be a bad time to do so. It could be counter-productive to attempt to do so right now. Benjamin Tucker has me worried. Even without political privileges, the banking monopoly will be able to hold onto its concentrated wealth. The power of competition to self-regulate the economy will not be able to kick-in because we are attempting to launch free-market anarchy from a situation of concentrated wealth. Both Aly and Long have me worried as well. The rich will just “buy off” the poor and maintain their corporate or plutocratic power even if the political ruling class side of things were to be weakened or destroyed in the attempt to establish a functioning anarchy. Moreover, the cost to the wealthy economic ruling class with regard to internal security and domestic spying might be kept relatively low since neither Rome in Long’s example nor Germany in Aly’s example had a huge investment in this department.

To attempt to allay my fears, I looked at Bryan Caplan and Edward P Stringham’s chapter entitled Networks, Law, and the Paradox of Cooperation, found as chapter 18 in the book Anarchy and the Law: The Political Economy of Choice. I especially want to discuss their proposed solution, which is found on page 302. I will first just show you their proposed solution pictorially and then I will discuss what it means. Then I will start to raise some doubts about all of this.

Graf 2

 

The first thing that they do is to break the “cost of cooperation” into two sub-components called “cost of coordination” and “cost of collusion.” When they talk about “coordination” what they mean is “compatibility;” for instance, an ATM card issued by Bank A should, we hope, work at the ATM machine owned by Bank B. They think that coordination is fairly straightforward. “If other banks issue ATM cards of standard dimensions, an oddball bank that refuses to conform hurts only itself” (300). If you are thinking that this “coordination” sounds a lot like “standardization of products,” then you would be right! They write on the next page, “Standardizing products is essentially a coordination game” (301).

Then they add, “fixing prices [are] a prisoners’ dilemma” (301). It seems to me that what they are doing is trying to break cooperation apart into “good” cooperation and “bad” cooperation. It is a “good” thing that the ATM card issued by Bank A works at the ATM machine owned by Bank B because the “convenience” is presumably good. But when we look at prisoners’ dilemmas, it seems like they are the “bad” forms of cooperation because they produce “collusion” and other nasty things such as “fixing prices or [to] attack new entrants” (302). When discussing the “prisoners’ dilemmas” they write “if all of the other banks collude to charge exorbitant fees, profits of the deviant bank that undercuts them go up” (301, emphasis mine). The “cost of collusion” comes from trying to monitor and punish the defectors, i.e., the cost of keeping the conspiracy going by keeping everyone on-board.

To put their arguments into my own words, I would begin by saying that they are concerned about costs of cooperation. They think that this is the key variable to study. They then divide this “aggregate” concept of “cost of cooperation” into two sub-components, “cost of coordination” and “cost of enforcing collusion.” Coordination costs are painted in a favorable light because the standardized products are beneficial to users maybe for the reason of convenience in use. On the contrary, the collusion costs are something looked upon negatively. If the costs of collusion are low, then the “conspiracy” can live on and successfully prevent defections by rogue members. If the costs of collusion are high then it will be hard for the conspiracy to keep going because the costs of preventing defections are high, and so defections will happen and the cartel will fall apart.

Now let me cite them on how they explain their picture and its three regions. Notice that the horizontal or “x-axis” is measuring the cost of cooperation beginning with zero on the left and extending to infinity on the right. “In Region 1, the costs of cooperation are low. It is cheap to reach and enforce agreements—even collusive agreements that require numerous actors to fix prices or attack new entrants” (302, emphasis mine). This to me seems to be what the State is. I will explain in a second. Then, on the other end of the spectrum, in “Region 3, the costs of cooperation are extremely high. Elementary forms of coordination, like language and measurement, fail to arise” (302). But then we come to the “ideal” solution, Region 2 in the middle. In Region 2 “the costs of cooperation are intermediate: High enough to prevent collusion, low enough to permit coordination” (302, emphasis mine). In other words, in Region 2 we get the best of both worlds. We prevent the “bad” cooperation of collusion because the costs of enforcing collusion are so high, and we get the good benefits of coordination, convenience, and standardization because coordination costs are low. They also add that they think that Region 2 “is not only logically possible but empirically dominant” (302).

Region 2 is supposed to be the “free market” solution; naturally, it is supposed to be the one that goes with “free market” anarchy. The corporations can be economically efficient by producing products that people need in a “coordinated” fashion, but they cannot harm the people because the collusion costs are too high. Everything is rosy!

There are at least two major problems with this analysis, but in order to avoid making this article too long, I will stick to just two. The first is that it is not clear to me why they think that Region 2 is “empirically dominant.” The second is, of course, the ANOVA thing I mentioned at the beginning, which I have finally built my discussion up to.

In Roderick T Long’s paper, he mentions that the ruling class consists of two broad factions, the political/bureaucratic class and the corporate/economic/plutocratic class. I have been using this distinction throughout this article but now I want to make this explicit. He writes that

a ruling class need not be monolithic, however. In fact, most ruling classes are divided into two broad factions, which we may call the political class and the corporate class. The political class comprises those who are in direct control of running the state—politicians, civil servants, and the like; the corporate class, on the other hand, comprises the wealthy quasi-private beneficiaries of state power—the collectors of subsidies, government contracts, and grants of monopoly privilege. These two groups might be called the Bureaucrats and the Plutocrats. (2)

If Region 2 were really the “empirically dominant” outcome, we would never see a State in existence. How could they exist in Region 2? In Region 2, the costs of collusion are “high,” yet, the State is just a collusive agreement between the political and corporate ruling classes. So the costs of collusion must be “low” because the collusive arrangement between the political and corporate ruling classes has been going on for some time now, at least since the Progressive Era when Benjamin Tucker was writing.

Another way to look at this is to consider what happens if the costs of collusion are “low” and compare that with what would happen if the costs of collusion are “high.” If the costs of collusion are “low” then the collusive arrangement can be easily and cheaply enforced. Defection will be unlikely because the collusive arrangement can be maintained so cheaply. Conversely, if the costs of collusion are “high” then enforcing the collusive arrangement will be nearly impossible. In that case, defection will happen. Do we see the political ruling class actually defecting from the corporate ruling class? Do we see Obama, part of the political ruling class, walking away from Goldman Sachs, part of the plutocrats or corporate ruling class? Do we see the corporate ruling class defecting from the political class? Do we see corporations saying to the politicians, “Stop your imperialist wars, and if you don’t, we will stop building drones for you?”

Consequently, I doubt that Region 2 is the “dominant empirical” outcome. The existence of the State suggests to me that collusion is a viable and stable outcome. The political and corporate factions of the ruling class can and do collude. Maybe anarchists should spend time thinking up ways to increase the costs of collusion and push the situation to Region 2 or even Region 3 (since why would anarchists ever want to see coordinated government solutions?)

What if the anarchists got their way and abolished the State tomorrow? The sun rises and the state is dead! Then the political ruling class would no longer exist. What happens to the corporate side of the ruling class? If Benjamin Tucker is right, then their concentration of wealth, being so high, should permit them to continue on unhindered. Following Long and Aly, they prevent any serious challenges to their rule by buying off the masses of people with their wealth. Remember that Tucker was talking about banks—his discussion was about the “money monopoly.” Why can’t the bankers—a major part of the corporate ruling class—simply hold on to and control the insurance industries. I suspect that most banks already have a lot of power over insurance companies. I know that I get my insurance from the Toronto-Dominion Bank here in Canada. This is an important point because if you look at the free market anarchist game plan, it all hinges upon private defense through insurance companies. Hans-Hermann Hoppe, for example, writes in his book Democracy: The God that Failed, that “the advantages of having insurance agencies provide security and protection are as follows” (281) and then he discusses what those specific advantages are. So, if I were part of the corporate ruling class—a banker—I would just make sure that I bought up and controlled all the insurance companies. This would make it really hard for the free market anarchist solution to work. The banker/insurance companies, remember, are now supposed to be the sole providers of protection and security. In other words, the banker/insurance companies will have all the guns. This is like putting the army directly under the control of the banks as opposed to under the control of politicians or presidents. What if one bank decides to defect from the existing collusive arrangement in banking? I suspect that the collusive banks would just use violence to force the defector back into the collusive arrangement. Probably the best thing for them to do is to go launch a war, take the stolen loot from their victims, and continually bribe the masses back at home. Then, the corporate ruling class can stay in power even if the political class is not operating, i.e., there are no politicians, no state bureaucracies etc.

It seems to me that anarchists do themselves a huge disservice by abolishing the State while still relying on insurance companies for their security and protection. From the cost analysis above, what has just happened? Prior to our anarchist assault on the state, we had corporate ruling class and a political ruling class colluding quite well. But they were still colluding—and that implies that there must have been some collusion costs, even if they were low. There might always be some rogue player who wants to whistle blow on what is going on; consequently, there is some cost to keep the rogue silent, even if that cost is the cost of an assassin’s bullet. The anarchists, by eliminating the political class will probably just lower the cost of collusion even more. Before, the ruling class has to make sure that the corporate and political classes stay well behaved by not defecting. By abolishing the political class, the monitoring costs of the collusive arrangement go down, because that whole wing disappears. Now, the corporate class only has to monitor itself. How do they do that? Well it seems like they already did that—through ownership, or co-ownership of their central bank. If I “own” something, why would I defect against it? This is like saying the banks will have some motive to burn down their own central bank, or I have some motive to throw a rock through my laptop. I doubt that either will happen. In fact, this is what Gabriel Kolko laments in his book about the American Progressive Era, called The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916. Quoting a major New York banker of the time, A Barton Hepburn, Kolko stresses that the banks are all one because of co-ownership:

the measure recognizes and adopts the principles of a central bank. Indeed, if it works out as the sponsors of the law hope, it will make all incorporated banks together joint owners of a central dominating power. (235, emphasis mine)

Analysis of Variance Framework

The second problem is that their argument looks incomplete to me. Look at what they did when they created their three regions in order to defend the free market anarchy solution, what they call Region 2. They went like this:

Graf 3

The first thing I thought was, “What about the missing combination?” Why can’t we also have the scenario of “high” costs of coordination and “low” costs of collusion? This started out innocently enough because I was thinking in terms of ANOVA analysis! We have one dependent variable, i.e., the likelihood that anarchy will work in the real world. We have two independent variables, “cost of collusion” and “cost of coordination.” Each independent variable has two levels: “high” and “low.” This creates four possible treatments. That is pretty much how I first started to think, why did they not include the fourth treatment?

My guess is that the authors think that this is a highly unlikely outcome. They seem to think that “coordination” is fairly easy thus we don’t have to worry about it too much. They write dismissively, “solving coordination problems is far easier” (301). But is it? I can think of an example of this right off the top of my head from Canadian politics that I think illustrates the missing fourth case—i.e., “high” costs of coordination and “low” costs of collusion. When I was a boy growing up in Southern Ontario, I remember that Canada went through a period of Constitutional crisis. The provinces and the federal government were trying to come up with a new constitution in order to appease Quebec, the province often threatening to secede. Obviously, the other provinces and the federal government wanted to stop this secession—they wanted to stop this defection, i.e., they wanted to keep the collusive federal-provincial arrangement going. There was a lot of “national unity” propaganda going on back then too. Let’s look at costs.

First, the costs of coordination across such a large country as Canada were probably “high.” Recall, when we are talking about “coordination” we are talking about standardization. My phone can place a phone call to any province in Canada; there isn’t one phone standard for Ontario province and a totally incompatible one in British Columbia province. There is just one system for the whole country; it is standardized. But could you imagine trying to sell the Canadian constitution as a one-size fits all document; it would be a nightmare. The last thing we have is a “coordinated” system. In fact, they can’t achieve coordination. They can’t achieve a one-size fits all solution. They usually have one policy for English speaking Canada and a separate system one for Quebec. For example, as every Canadian knows, when you fill out your income taxes (unless you are an anarchist or agorist), they will talk about CPP and QPP—the Canada Pension Plan and the Quebec Pension Plan. You can see already that we don’t have a standardized product here with regard to pension plans. Another example of this is when Quebec is referred to as a “special nation” or “distinct society” within Canada. We don’t have “one national” vision; instead, we seem to have this special vision for Quebec that the rest of us in Canada aren’t part of. Another incompatible part it seems. A third example is language. Quebec seems to be fairly “standardized” with respect to the fact that they all speak French. In fact, they are fanatical about it. They have their own “language police” who are harassing local businesses right now over use of “prohibited terms” on menus at restaurants. Here in southern Ontario, English is highly dominant with Asian languages probably more important because of immigration. So Canada doesn’t even standardize its language. They tried to make us bi-lingual but that project failed. All of this suggests to me that standardization—coordination costs—are pretty high.

Yet Canada somehow sticks together. The collusion arrangement—the provinces and the federal government sharing all the power—seems to be holding together fairly well. This seems to be done through “equalization payments,” which amount to what Long and Aly talked about—bribing the poor! In this case, it is bribing the people in the many poorer provinces. For the ruling classes—I am thinking of the federal Prime Minister and the provinces sitting around a table negotiating—the direct cost of collusion is zero. It costs them nothing because all they are talking about is redistributing the loot they stole from the taxpayers through coercion. We rob Alberta’s taxpayers in order to bribe Quebec to stay in Canada and keep the collusive agreement going, so what? That just hurts some taxpayers out west where the oil is and it benefits some other taxpayers out east in Quebec. The last thing the federal government would want is one provincial premier to be rich while the other premiers are poor. This now creates inequality among the provincial premiers—one might want to defect! It is better to—following Benjamin Tucker—do a great leveling, thus preventing any one province from getting too much “concentrated wealth.” So I suspect that collusion costs in Canada are low; the federal government is fairly secure and in charge of everything. So I think that the fourth missing case exists in reality, namely, high costs of coordination or standardization and low costs of collusion.

The last thing I want to say—the topic for a future paper I am sure—is why look at the world in terms of a simple 2 by 2 ANOVA analysis? That seems like a fairly simplistic analysis. Obviously, one can add more variables. That is always the easiest thing to do. There are more things we need to “control” for! But, we really have only scratched the surface when it comes to analyzing these two independent variables, the “cost of coordination” and the “cost of collusion.” It seems to me that digging into this in more depth would make for a nice extension of this article. I am thinking of doing what all statistics textbooks would do, namely, 3 by 3 analysis! As my sophomoric textbook, Introduction to the Practice of Statistics by David S Moore and George P McCabe says, “as is common in such experiments, high, normal, and low values” are used (802). In other words, the most obvious extension is to add in a “medium” level to each of the two independent variables. Why is this important? Where am I going with all of this? I am thinking that then we could explore both main and interaction effects. An interaction effect simply means that the effect of one variable depends on the value of the other variable. In other words, the effect of “cost of collusion” on the likelihood of anarchy depends upon the “cost of coordination.” So maybe by manipulating “cost of coordination” we can neutralize collusion—we can “indirectly” take out the collusion that exists between the corporate and political ruling classes by going after “coordination” costs. There must be some sort of way to combine these costs and get a functioning anarchy as the end result. The Zomia anarchy did it—they have been doing anarchy for a very long time in Southeast Asia as documented by James C Scott in his book The Art of Not Being Governed: An Anarchist History of Upland Southeast Asia. They also seem to be able to make a non-hierarchical society work, i.e., that dangerous idea of egalitarianism might not be so dangerous after all. So maybe I will be able to figure it all out! When I do, you will get a second follow-up article.

 

Neil M Tokar

Niagara-on-the-Lake, Ontario

March 2, 2013

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