The Word

The illustration accompanying this post is that of an advertisement for LewRockwell.com. The logo stands for "Anarchy" and the lines at the bottom say "The State is the Problem / Anarcho-Capitalism is the Answer." Lew Rockwell is the Founder and President of The Ludwig von Mises Institute, which has for long been "advancing the scholarship of Liberty in the tradition of the Austrian School." The original Austrians - Menger, Mises and Hayek - called themselves "liberals" in the classical European sense. Hayek preferred to call himself a "Whig" - and that was the word Adam Smith applied to his own politics. How did this term "anarcho-capitalism" come about?

In America, the word "liberal" was corrupted. It was robbed by those who are essentially "socialist." Ludwig von Mises was quite horrified. In his preface to Human Action he takes pains to point out that he uses the term "liberal" as it was used in 19th century Europe. It was in America therefore that a new word had to be found by those who, like Mises, believed in laissez faire capitalism - and that new word was "libertarian." The word "anarcho-capitalist" was first used by Mises' greatest American student, Murray Rothbard, who was Dean of the Austrian School after Mises' death. Today, Hans-Hermann Hoppe, Rothbard's illustrious successor, calls himself "anarcho-capitalist."

In my own case, I have preferred to call myself "Austro-libertarian" - thereby differentiating myself from other libertarians like the Ayn Randians. My last book is titled Natural Order - and this is an expression classical liberals in Europe were quite fond of. Frederic Bastiat, for example, wrote favourably of the "natural order," contrasting it with the "artificial order" of State controls and dirigisme. Adam Smith himself championed the "System of Natural Liberty."

In my opinion, it is extremely important to stress that a "natural order" exists in human affairs - that Thomas Hobbes was very wrong. Men are NOT lawless - and the "state of nature" is NOT that of a "war of each against all." As Hayek wrote, Man is a "rule following animal." The basic rule of market exchanges is Property. We see our teeming hordes all following this golden rule in all our bazaars. Hayek wrote that this rule is the product of evolution and is part of our culture - that it is not the product of "reason." No "common will" pronounced this rule. Rather, it operates "between instinct and reason." I believe it is a fundamental aspect of our innate "sense of justice."

If I may add, I was prompted to pen the opening essay outlining the features of the "natural order" after reading, many times over, Hans-Hermann Hoppe's mind-blowing Democracy: The God that Failed a few years ago. The sub-title of this great book reads "The Politics and Economics of Monarchy, Democracy and Natural Order." However, what is conspicuously missing from this book is a description of what "natural order" is all about. I therefore decided to fill in the gap. Ever since then, my e-mail ID has been "naturalorder."

However, in America, libertarians seem to prefer the word "anarchy." There is this excellent article by Robert Higgs of the Independent Institute I read yesterday - and he too prefers to use this word. The article is an important contribution to our understanding of whether a State is necessary - for when I say "natural order" the cynic will immediately reply that "men are not angels." Higgs effectively blows this objection aside and argues thus:

A stateless society will sometimes be bad. Not only are people not angels, but many of them are irredeemably vicious. The outcome in a society under a state will be much worse, because the most vicious people will tend to gain control of the state.

I strongly recommend that you read this article - and think. Yet, as I said, Higgs prefers the word "anarchy" - although he notes that the dictionary gives three different meanings to it, including "chaos and confusion." It worries me - to use this word "anarchy" - since most people do not understand the "natural order" at all. In politics, we must convince, and words are all we have. They are labels with meaning. If most people possess a different meaning to a political word than the one intended, we are lost.

If "anarchy" is problematic - and it is - what word can replace it? Over the last few years, I finally decided on the exact word I personally want to use - and that word is "catallaxy." Ludwig von Mises was very fond of this word, and the entire section of Human Action that discusses what most people would call "Economics" is titled "Catallactics." Mises says that this word was in vogue in the 19th century too - and was first used by Archbishop Whately, who was a prominent political economist of his day, apart from being a theologian. The word is derived from the Greek word for "exchange" - and it is Hayek who researched its meaning and discovered that among the ancient Greeks this word possessed two additional meanings - first, "to welcome into the community"; and second, "to turn from enemy into friend." These additional meanings convey something about market exchanges that is extremely important in our troubled times.

The scourge of the modern world has not only been the hideous philosophy of collectivism, but also its natural corollary - something indispensable to statolatry - and that is "nationalism." The Nazis, of course, were "national socialists" - but narrow nationalism, powered by the dubious (and collectivist) idea of "community" - has torn our world apart. Protectionism and wars have been the natural outcome of the philosophy of "national economy." And we still live with these disastrous ideas.

The word "catallaxy" - and especially Hayek's discovery of the other meanings to this word - suggests something other than narrow "community." After all, the urban market economy is individualistic. Further, the most important "social" advantage provided by the urban, cosmopolitan market is that it provides a means of gainfully interacting with complete strangers - and the more strangers the merrier. This word therefore conveys a very powerful meaning - and suggests a rational, natural order in which all individuals can peacefully survive, and human civilization can progress without the "narrow domestic walls" of the closed community. I wrote a column on this word some months ago, and it concludes thus:

Thus, there is a “natural order” in all cosmopolitan open catallaxies. Posses of armed policemen are not required to “maintain order” in any crowded marketplace anywhere in the world. This order exists on its own. Without the “narrow domestic walls” of community, the idea of catallaxy solves the social problem for all individuals, while also uniting humanity in a rational, natural order.

To conclude: I am currently halfway through William Dalrymple's fascinating travels through the territories of ancient Byzantium, From the Holy Mountain. About the capital city, which is now Instanbul, Dalrymple notes that 72 languages were spoken in its bazaars in ancient times. Today, thanks to "national socialism," every minority has been chucked out, millions massacred and widespread tyranny rules. Dalrymple notes that this is where Christianity was born - and then taken to the West. He visits communities where Aramaic, the language of Jesus, is still spoken, where worship is still conducted as in those early days, where the most ancient hymns are still sung. He further writes about shrines where the common folk of today, both Muslim as well as Christian, continue to worship together. Yet, he also portrays a civilization that might just disappear - to be replaced by the uniformity of "community" imposed by the guns of "nationalists." This is what happened to India during the Partition. This is precisely the direction in which the "cultural nationalists" of the Hindutva type are leading our nation today. In the meantime, the USSA is spurring Islamophobia. War and civilization cannot go together. For the furtherance of civilization, cities, and markets, I do believe the word "catallaxy" is best.