Handbook on Contemporary Austrian Economics

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148 <strong>Handbook</strong> on contemporary Austrian economics efficient, than government, is that none of the historical examples we have of spontaneous social order demonstrate high levels of wealth. My question is, relative to what Relative to today's highest-performing governments this is certainly true. But relative to the actual political governance alternatives these societies faced at the time, it may not be. This is an empirical question and one that economists should explore rather than simply announcing the obviousness of the answer without ever considering the evidence. In any event, when this benchmark is used instead of the quite irrelevant benchmark of wealth in countries with government today, even in the worst-case scenario for spontaneous order, the "wealth gap" between what spontaneous order and government can provide becomes considerably smaller than that suggested by most of spontaneous order's critics. This brings me to the final point I want to make about assessing the comparative effectiveness of spontaneous order for securing cooperation vs. using government for this purpose. As noted above, spontaneous order's critics are happy to point out that all but one of the world's countries have government. I have already addressed why this observation doesn't imply what these critics think it does. But much more curiously, what spontaneous order critics inevitably fail to point out is that among the approximately 200 countries and thus experiments with government in the world at the moment, more than half, if evaluated in terms of their ability to promote social cooperation, must be counted as abject failures. According to the Foreign Policy/Fund for Peace Failed States Index , nearly 14 percent of the world's countries (28) have officially "failing states" (Failed States Index, 2006 4 ). In them, governments are on the verge of total collapse. Another 39 percent of the world's countries (78) have states in imminent danger of failing. This is not exactly a track record to write home about. The fact that only a minority of experiments with government actually produce social order along the lines that spontaneous order's critics imply government routinely produces has tremendously important, but totally neglected, implications for evaluating the potential effectiveness and thus desirability of spontaneous- vs. government-created social order. Of course, government's failure to effectively produce social order in most of the world doesn't necessarily mean that spontaneous order would do any better. But at the very least, the advocates of stat~-created order need to understand that what they have in mind when discussing the indispensability of government for wealth and prosperity is in fact a minority of remarkably successful governments - namely those located in North America and Western Europe. What they have in mind is the exception, not the rule.
How much order can spontaneous order create 149 Further, while to date we have but one example of a failing state that ultimately collapsed altogether leaving utter anarchy in its wake - Somalia - the evidence here favors the superiority of privately created as opposed to politically created order in this case. Somalia is not a nice place to live. It is one of the poorest countries in the world and has many other severe problems. Still, spontaneously ordered Somalia has performed better on nearly every welfare indicator for which data are available than it performed under government. The reason for this is not necessarily the amazing job that spontaneous order in Somalia has done at creating improvements. 5 Primarily, it seems that Somalia's improved welfare under statelessness is the result of a truly horrendous government that preceded anarchy. This is not to detract from the superiority of spontaneous order in this case, however. Numerous factors, especially those cultural and historical, severely constrain the extent of development Somalia could likely enjoy, at least in the short run, under any governance regime. Thus, it would be unreasonable to expect a wealthy Somalia regardless of its reliance on government or spontaneous order. But spontaneously ordered Somalia appears to be wealthier in terms of overall development than centrally ordered Somalia was. 6 And this is the relevant comparison. Note that the relevant comparison is not spontaneously ordered Somalia vs., say, the United States with government. Those who emphasize the urgency of re-establishing government in Somalia often invoke this comparison (oftentimes implicitly), similar to the way that spontaneous order critics illegitimately invoke comparisons between wealth in historical spontaneously ordered societies and wealth in modern government-ordered societies, to suggest that a centrally ordered Somalia would outperform a spontaneously ordered Somalia. But like its cousin, discussed above, this comparison is illegitimate unless a United States-quality government - that is a transparent, highly constrained government that protects citizens' private property rights and provides important public goods - is a genuine institutional option for Somalia. If it is not, then this comparison is irrelevant. Being the United States is not Somalia's opportunity cost of relying exclusively on spontaneous order. But being Sierra Leone - a country with a similar history to Somalia and thus similar institutional constraints - or Somalia when it was under government, is. And the evidence suggests that spontaneously ordered Somalia is superior to these institutional alternatives (see, for instance, Leeson, 2007; Powell et aI., forthcoming). 10.5 Concluding remarks In this chapter, I have investigated the question of how much order spontaneous order can create by considering three "classes" of spontaneous order's emergence and operation. These classes corresponded to what
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Handbook on Contemporary Austrian Economics

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