Harry Clarke blogs about the very interesting Peter Robb book on Sicily which discusses the development of the Mafia, originally as a ‘protection agency’ because of the lack of proper rule of law. However, Harry comes up with some non-sequiturs in his post:
This is a cruel organization that has penetrated the highest levels of Italian politics. But as an economist what struck me was the enormous social inefficiency of meeting a ‘property rights failure’ in western Sicily with rule by a mob of hoods which instituted killing as the punishment for rule-breaking. This sort of social history is the ultimate anti-libertarian tract since the overwhelming implication is that strong central government, based on western-style democratic values, vastly outperforms rule by a mob of hoods. Self-interest decidedly does not drive the social advantage.
Firstly, if anything, the emergence of the Mafia because of government failure in protecting property rights originally in Sicily is a validation of libertarian social theory which argues that spontaneous protection agencies and enforcement of property rights will arise in the absence of ‘government’. And no one but the most hardened libertarian-anarchists among these social theorists would argue that anything that automatically emerges would be the most optimal arrangements.
Secondly, and related to addressing the strawman that Harry has sketched, the mainstream of libertarian or classical liberal theory accepts the need for a strong government. The common fallacy of non-libertarians is to equate ‘strong’ with ‘expanded’ or ‘unlimited’ government, something which Harry seems to do here. Libertarians believe in limited government and the strong rule of law (with thinkers such as Hayek devoting volumes of his works to explicating on these concepts), not weak government. If anything it can be argued that governments which do not ‘overreach’ and try to do too many things can do those few things it sets out to do better. Third world governments which cannot ensure basic sewage services or provide the clean rule of law but spend money on industrial white elephants and micromanage their economies would be the antithesis of this ideal. Thus the classical liberal theory prescriptions for the State should promote stronger government and governance.
Thirdly, as for the role of ‘democratic control’ in all this, I would argue that its main benefit as a check on the baser instincts of the governing body arises because of the ‘credible threat’ of removal it poses. However let’s not over-estimate its importance in promoting better decision-making as such.