by George H. Smith
3. Institutional Analysis
I have argued that institutional analysis is essential not only to the voluntaryist critique of electoral voting, but to anarchist theory generally. Anarchism combines the nonaggression principle with an institutional view of the State, resulting in the principled rejection of the State on libertarian grounds. For the concept of “anarchism” to be meaningful, the concept of the “State” must also be meaningful. Anarchism presupposes that the State can be defined in theory and identified in practice. The State must possess distinctive features which enable us to differentiate it from other kinds of human association; and there must be criteria by which we can distinguish members from nonmembers (a significant issue, as we shall see).
In addition, the anarchist rejection of the State is usually based on moral arguments. This carries institutional analysis from the descriptive realm to the normative realm, for we are now concerned with how moral evaluation applies within an institutional framework. If, as anarchists claim, the State is invasive per se and therefore inherently unjust, then what does this moral condemnation of an institution imply concerning those individuals who voluntarily become “members” of the State? Few anarchists restrict liability for the State’s criminal acts to direct aggressors only, i.e., to law enforcement personnel. Few anarchists exonerate dictators because they do not personally enforce their decrees. Indeed, anarchists often impute greatest liability to the highest levels of political decision-making (presidents, legislators, etc.), even though these levels are far removed from physical enforcement. (There were more condemnations of President Johnson during the Vietnam War than of individual bomber pilots.) This kind of moral analysis is understandable only within an institutional framework, where individuals are assessed according to their role in sustaining and implementing State injustice, however distant they may be from actual enforcement. Individual acts, in other words, are not judged in isolation, but within a broader context. Inevitably, as, I argued in Part One, this will entail some theory of vicarious liability. Anarchists must present a theory to explain how persons other than direct aggressors can be held accountable for criminal acts. We must explain, moreover, where liability ends and why.
These are not easy problems to solve, and they have been virtually ignored in libertarian literature, The result has been some rather wide gaps in anarchist theory, in which political anarchists have found it convenient to hide when under attack. When institutional analysis is used against the political anarchist, he will often object to this procedure as such (rather than to its particular application in his case) on the ground that institutional analysis, whether descriptive or normative, violates the time-honored libertarian principles of methodological individualism, value subjectivism, individual responsibility, and so forth. The political anarchist, of course, does not examine what these kamikaze arguments would do to his own profession of anarchism. He does not care to explain how, if institutional analysis is ruled out of court, it is possible even to state coherently what anarchism is, much less defend it. Even anarchists are afflicted with a strange blindness when they stoop to defend political power.
It is not my intention to argue for the use of institutional analysis within anarchist theory. I submit that it is already used extensively by political anarchists and voluntaryists alike, but that it usually lurks in the shadows, as if we are embarrassed to expose it to the light of day. It has a suspicious ancestry, this institutional analysis. It smacks of sociology, collectivism, holism, and other things generally repugnant to libertarians. Fear of contamination leads to a failure of nerve — there is, after all, the haunting possibility that anarchism itself will collapse if it rests on institutional analysis — so we go merrily about denouncing the “State” without specifying precisely which individuals constitute the State or how it is possible to pass moral judgment on an institution. (We have been somewhat fortunate that minarchist critics of anarchism have generally overlooked these vulnerable spots — but it is possible that they, too, succumb to institutional analysis.)
4. Describing Institutions
It is important to understand that institutional analysis, as here employed, does not contradict methodological individualism. It does not deny that only individuals act or that social phenomena are reducible to individual actions. One can speak meaningfully of institutions, associations, organizations, and so forth, without implying that these social phenomena enjoy an existence apart from individuals. Methodological individualists are not required to purge their vocabulary of terms like “family,” “church,” “state,” and “corporation.”
Indeed, staunch methodological individualists have used institutional analysis extensively as an explanatory tool. This is evident among Austrian economists who, despite their commitment to methodological individualism and value subjectivism, eagerly analyze free-market institutions (such as money) that result from human action but not from human design. “Institution,” an elusive term at best, is used here in a broad sense to designate a widely recognized and stabilized method of pursuing a social activity (exchange, in the case of money). It is possible conceptually to isolate some feature of social interaction and to study it abstracted from the particular individuals involved. Individual actors are presupposed in this procedure, but their specific identities are irrelevant to the outcome. Individual actors, within institutional analysis, are anonymous. The reason for this, as F.A. Hayek has argued, is because intentional actions have unintended consequences.
“The problems which (the social sciences) try to answer arise only in so far as the conscious action of many men produce undesigned results, in so far as regularities are observed which are not the result of anybody’s design. If social phenomena showed no order except in so far as they were consciously designed, there would indeed be no room for theoretical sciences of society and there would be, as is often argued, only problems of psychology. It is only in so far as some sort of order arises as a result of individual action but without being designed by any individual that a problem is raised which demands a theoretical explanation.”
(The Counter-Revolution of Science, Free Press, 1955, p. 39.)
It is possible to interpret Hayek to mean that only institutions which are themselves the product of spontaneous order are the proper subject of social theory. This would rule out designed institutions (often called associations), such as business organizations, fraternal clubs, and (most relevant to our purpose) modern States. But even these designed institutions exhibit many unintended consequences internally. An automobile factory is designed; its internal division of labor does not emerge spontaneously. The overall purpose guiding the design of an automobile factory is the efficient production of cars. But this may not be the purpose of many (or even most) factory workers. The machinist, the welder, the fitter, the warehouse foreman — these specialized roles can be filled even if the individuals concerned know or care very little about the overall product to which their labor contributes. The structure of a factory is designed, so we may speak of a factory’s “purpose” (i.e., the purpose of its designers). Yet the furtherance of this purpose may, from the perspective of the individual worker, be unintended. This is why it is perfectly correct to say that an individual (the factory worker) may contribute unintentionally to an institutional end (the production of cars).
The need for specialization leads to a division of labor, and this may be undesigned (as in society generally) or designed (as in business organizations). The division of labor in designed institutions (which I shall hereafter refer to as “associations”) leads to the institutionalization of labor or “roles,” to use a term common among sociologists. If a factory needs another welder, it seeks out a qualified individual to fill that role. It is possible to discuss the importance of the welder role in the overall production process without referring to any specific welder. We know, of course, that the disembodied role of welder does not actually weld anything; we always presuppose a flesh-and-blood human being who functions in that capacity. But the specific identity of the welder (his religion, personal characteristics, etc.) and his personal intentions (why he took the job) are immaterial to the successful accomplishment of the institutional end, so long as the welder satisfies the requirements of the role (i.e., “does his job”). This is what I mean when I say that the individual functioning in a role is presupposed but anonymous.
An institutional analysis of an automobile factory would examine roles within the factory, the efficient ordering of roles in relation to each other (which job should be done first? where is the best location within the plant for a particular job?), and the relation of these roles to the desired outcome (does the addition of a tape deck as standard equipment add too much to the car’s price?). We can speak meaningfully of the production process, the production result , and the contribution of roles to both process and result — even if these are unintended from the standpoint of individual workers. The welder may insist that his intention is to contribute to the building of boats — he may adamantly denounce cars as dangerous and swear his eternal hostility to them — but insofar as he fulfills the institutional role of automobile welder, we will insist that he does, in fact, contribute to the building of cars. This may be an unintended consequence of his actions, but it is a consequence nonetheless. (And we should keep in mind that “unintended” does not mean “unforeseeable.”)
Thus, institutional analysis examines individual actions not in isolation, but within the broader context of institutional roles. We can give a purely physical description of the welder’s actions; this is one kind of description. We can also give an institutional description of the welder’s actions; this is another kind of description — one that attempts to link the isolated action to a broader chain of actions performed by others within an association.
Many common terms cannot be grasped using physical descriptions. Such terms, including many political terms, must be defined institutionally. They can be understood only by relating them to the roles and procedures of an association. “Voting” is a pertinent example. Suppose that, in preparation for election day, I construct a “voting booth” in my backyard that is physically identical (within reason) to authorized voting booths located around the city. On election day I enter my booth and pull the appropriate levers. But have I voted? Obviously not. At most I have expressed a preference in a rather bizarre fashion. Unless a voting booth is authorized by the State, whatever goes on in the booth is not described as voting. The physical similarity between my action and real voting is irrelevant. What counts is the institutional framework in which the physical activity occurs. (We shall return to this in more detail in a later installment.)
Institutional analysis also permits us to understand the continuity of associations. The U.S. State, since is formal inception in 1789 (ratification of the Constitution), has undergone many turnovers in personnel. Moreover, it has expanded territorially and has experienced tremendous growth in its laws, regulations, and bureaucracy. But we still refer to it as the same State, and correctly so. This is because the basic structure of the State, including its Constitution, has remained fundamentally unchanged.
Before applying institutional analysis (descriptive) to the State in more detail, let us anticipate somewhat and touch on a problem created for ethical theory by institutional analysis.
5. Division of Labor and Moral Responsibility
The division of labor within associations creates an interesting and often frustrating problem of determining responsibility. We see this in modern States which, as they expand the range and intensity of their political power, have evolved complex and highly specialized internal functions. Attributing responsibility is especially difficult in democratic States, where locating the center(s) of power keeps political “scientists” busy arguing with each other. On the one side are defenders of “elite” theories, who see political power resting in the hands of a small group, or class. This class may be defined economically (e.g., Marxists) or politically (e.g., followers of Mosca and Pareto). On the other side are democratic pluralists (e.g., Robert Dahl) who believe there are many foci of power distributed throughout a democratic State. And there are defenders of various shades in between. (We may be thankful that few sophisticated theorists maintain any longer that political power rests in the hands of “the people.”)
Ralf Dahrendorf addresses the problem of responsibility and its connection to the division of labor in Class and Class Conflict in Industrial Society (Stanford, 1959, p. 297). “Like the division of labor in industrial production,” Dahrendorf notes, the division of labor in political power “has led to the creation of numerous specialist positions, every one of which bears but slight traces of the process of which it is a part.”
“Who produces the car in an automobile factory? The director? The fitter? The foreman? The typist? Every one of these questions has to be answered in the negative, and one might therefore be tempted to conclude that nobody produces the car at all. Yet the car is being produced, and we can certainly identify people who do not participate in its production.”
Dahrendorf applies this same reasoning to the pinpointing of responsibility in a bureaucracy:
“Nobody in particular seems to exercise ‘the authority’ and yet authority is exercised, and we can identify people who do not participate in its exercise. Thus the superficial impression of subordination in many minor bureaucratic roles must not deceive us. All bureaucratic roles are defined with reference to the total process of the exercise of authority to which they contribute to whatever small extent.”
Dahrendorf makes a point of great significance. It may be impossible in some cases to attribute exact responsibility for the exercise of political power. But the difficulty in apportioning responsibility within an association (the State, in this case) does not hinder our ability to separate those who are responsible from those who are not. We can discriminate, in other words, between association members and nonmembers. We can distinguish factory workers from nonworkers.
Similarly, we can usually distinguish members of the State from nonmembers. The President is obviously a member of the State; the factory worker is not. Between these extremes there are shades of gray. What about the executives of a munitions firm that survives entirely from government contracts? What about a mail carrier for the United States Postal Service? Such examples could be multiplied endlessly, and they pose even more problems when we examine totalitarian governments where the private sector is virtually nonexistent (except for the black market).
I shall address some of these problems at a later time. For now we should recognize that the presence of gray does not negate the existence of black and white. To ascertain a precise cutoff point may be troublesome, but this does not mean that the extremes are any less clear. Since the dispute within libertarianism concerns the election of libertarians to significant political offices at various levels, the determination of a cutoff point is not crucial to this analysis. We must first decide whether anarchists can in good conscience become overt members of the State congressmen, etc.); then we can attempt to clear up the fuzzy areas (working for the post office, state universities, etc.).
6. The Modern State
“To really understand the State,” wrote the anarchist Peter Kropotkin, one must “study it in its historical development” (The State: Its Historic Role, Haldeman-Julius, 1947, p. 7). This historical perspective teaches us that the State is a designed institution; it was forcibly imposed to accomplish specific objectives. By understanding these objectives, which have since become institutionalized, we are better able to understand the structure and internal functioning of States existing today. When we examine the division of labor within a factory, it helps to know what the factory was designed to produce. Similarly, when we examine the State, it is vital to know the purpose(s) that generated this complex and massive association. States have varied considerably in their structure and jurisdiction, but all of them fit the description by Franz Oppenheimer in The State (Vanguard, 1926). Oppenheimer distinguishes two basic methods of acquiring wealth: the economic means (labor and voluntary exchange) and the political means (“the unrequited appropriation of the labor of others”). This leads to a succinct description: “The state is an organization of the political means” (p. 27).
The State, for Oppenheimer, is organized theft — a method of systematic plunder. This is true but incomplete. The State is a union of thieves, but not all such unions are States. State theft is distinguished by being legitimized, i.e., its coercive actions are generally regarded by the subject population as morally and/or legally proper. This feature is emphasized by Max Weber in his classic discussion of the modern State:
“A ruling organization will be called ‘political’ insofar as its existence and order is continuously safeguarded within a given territorial area by the threat and application of physical force on the part of the administrative staff. A compulsory political organization with continuous operations will be called a ‘state’ insofar as its administrative staff successfully upholds the claim to the monopoly of the legitimate use of physical force in the enforcement of Its order”
(Economy and Society, Univ. of California Press, 1978, 1, p. 54).
This harmonizes with the notion of the State employed by libertarians in the debate between minarchism and anarchism. For example, Ayn Rand — perhaps the foremost proponent of minarchism — defines “government” as “an institution that holds the exclusive power to enforce certain rules of social conduct in a given geographical area ” (The Virtue of Selfishness, New American Library, p. 107).
“A given geographical area — this allusion to territorial sovereignty recurs throughout the libertarian debates on the legitimacy of government. Although this is important, it is usually overlooked that territorial jurisdiction is a feature not of all States (or governments) throughout history, but of what historians refer to as “the modern State.” This does not mean that such States did not exist before the modern era: the ancient Greek city-states exercised territorial sovereignty, as did the Han Empire of China and the Roman Empire. But the modern States of Western Europe, which were to become models of State-building throughout the world (England and France were especially influential), were not extensions of the ancient world; they developed from the successful, and often brutal, centralization of power by monarchs during the sixteenth and seventeenth centuries. (The origin of this trend can be traced back even further — perhaps to 1100, according to Joseph Strayer, On the Medieval Origins of the Modem State, Princeton, 1970.)
Historians generally regard the sixteenth century as pivotal in the development of the modern State. It was during this period that monarchs began to dominate rival claimants to power (especially the nobility and church). The march to territorial sovereignty accelerated its bloody pace. “The state-makers,” as Charles Tilly notes, “only imposed their wills on the populace through centuries of ruthless effort.”
“The effort took many forms: creating distinct staffs dependent on the crown and loyal to it; making those staffs (armies and bureaucrats alike) reliable, effective instruments of policy; blending coercion, co-optation and legitimation as means of guaranteeing the acquiescence of different segments of the populations; acquiring sound information about the country, its people and its resources; promoting economic activities which would free or create resources for the use of the state . . . Ultimately, the people paid”
(The Formation of National States in Western Europe, ed. Charles Tilly, Princeton, 1975, p. 24)
The American State was also designed, though under different conditions than those in Europe. As part of the British Empire, the colonies were subject to colonial administration. Under the aegis of Robert Walpole, however, the colonies enjoyed a lengthy period of “salutary neglect” wherein mercantilist regulations were loosely enforced, if at all. When this lax policy ended in 1763 — owing to the crushing financial burden incurred by Britain during the Seven Years War — the English found enforcement to be extremely difficult. Lax policies, plus the difficulty of governing from thousands of miles away, had permitted the colonists to evolve their own systems of local government which hindered centralization. A system of “competing governments” arose which prevented either side from attaining complete domination.
This changed with the successful completion of the American Revolution. Revolutions, however just, have unintended consequences of considerable magnitude. Two consequences of the American Revolution are important here: first, debts incurred during the war convinced many of the need for a centralized government with taxing power; second, with the British eliminated, there was no effective brake on the formation of a national State. The major competitor had been kicked out, and the field was clear for those who desired a State, provided it was not the British State.
But a new State (especially one born in revolution against monarchy) faced the considerable problem of legitimacy. A solution was readily found in a written Constitution authorized by “the people.” (We needn’t examine that fraud here.) Thus came into being one of the first modern “power maps” or “manifestoes of nationalism,” to use the apt phrases of Ivo Duchacek (Power Maps: Comparative Politics of Constitutions, American Bibliographic Center, 1973).
The national government maintained its territorial sovereignty (over a growing amount of territory) without serious internal challenge until the Civil War. Sectional conflict between the North and South had erupted long before this, of course, but the political dominance of the Democratic Party (which enjoyed support from both sides) prevented an open break. This unified support disintegrated, however, in the 1850s, largely thanks to Stephen Douglas and his support of the Kansas-Nebraska Act.
A badly divided Democratic Party lost the presidency to the Republicans in 1860; and the deep South seceded in response to the ascension of a sectional candidate to the presidency. Lincoln, an ex-Whig, was thoroughly imbued with nationalist doctrines; and this president who would not have made war to liberate slaves was — nonetheless willing to wage war in order to “preserve the union.” (“Secession,” as Lincoln correctly said, “is the essence of anarchy.”) The Fort Sumter incident provoked other southern states to join the Confederacy, and thus began the bloodiest conflict in American history. Some 600,000 people lost their lives in this titanic struggle between two States, each attempting to establish sovereignty. The most significant chapter in American State-building was written with the blood of thousands.
We see that, however modern States differ in the details of their origin, and however they differ in the extent of their power, all share a common design. All were explicitly intended to establish territorial sovereignty. All insist that they are the final arbiters in matters pertaining to law within a given geographical area. (The scope of the law varies dramatically, of. course, from State to State.) All States proclaim compulsory jurisdiction : a person is regarded as subject to the State, with or without his consent, as long as he resides in or is passing through a certain area (land, sea, or air). This territorial sovereignty is the foundation of all other State activities.
This historical digression is an important ingredient in developing an institutional analysis of the State. The State is a designed institution, forcibly imposed. State-builders had specific objectives in mind, foremost of which was to secure territorial sovereignty. The internal structure of the State was dictated (and continues its evolution today) with sovereignty foremost in mind. Virtually all functions of government — a standing army, an internal police, a monopolistic judiciary, a ruthless taxing power, public schools, etc. — may be seen as supports for the monopolization of power.
After we understand the purpose for which the State was designed, we are able to undertake an institutional analysis similar to the automobile factory discussed earlier. There we discussed how the overall product (the car) may be unintended from the perspective of specialized workers. We also examined the importance of roles in the production process. It is thus possible to refer to an institutional product and process being integral to the factory’s structure. The worker, in filling a role (doing his job), participates in the process and contributes to the product, quite apart from his personal intentions and goals.
Similarly, we may examine the “State-factory,” the institution designed to monopolize power and thereby sustain territorial sovereignty. Sovereignty is the “product” of this association (or the most fundamental among many); a monopoly on legitimized coercion is the “process.” But roles in the State apparatus, like roles in the factory, need human beings to fill them. There are increasing specialization and division of labor as the State expands its power and jurisdiction. Many of the individuals in specialized roles may have little knowledge of, or interest in, the institutionalized process and product to which their labor contributes. Their contribution, in this sense, may be unintended. (But, to repeat an earlier point, unintended does not mean unforeseeable.)
This is what I mean by institutional analysis. And this is what I believe to be implicit throughout much of the writing by libertarian anarchists. I have attempted to show what it means to say that an anarchist politician contributes to State injustice merely by filling a role (i.e., holding political office). I have attempted to show why the intentions of the politician are irrelevant to the process and product of the “State-factory” he has willingly joined. Political offices are indispensable roles in the State apparatus; and I submit that anyone who fills these roles contributes, however inadvertently, to the State process (monopoly of power) and product (sovereignty). The continuance of State power rests, not on the intentions of those who hold political offices, but on the complex structure of the State apparatus, each part of which contributes to the maintenance of State supremacy.
Thus the anarchist politician is like the auto worker who claims to be building a boat, and who professes surprise when a car comes out anyway against his wishes. And is he to blame? Not at all. True, he did voluntarily take on a job at an auto factory. True, he did get paid for it. True, he did show up for work and do the things that an auto worker is supposed to do. But what do such inconvenient facts count against his desire to build a boat?
And so our political anarchist. He gets a job with a political power factory and expects to produce freedom. He may even claim to be a clever saboteur (forgetting that authentic saboteurs never announce the fact). He goes to work, does political things (votes, etc.), receives a State salary, and even swears allegiance to the State. Because of this the voluntaryist suggests that he is in fact contributing to State power, despite his best intentions.