I’ve seen progressives derisively refer to a “libertarian paradise” in Somalia, where the government is largely absent. While it’s true that Somalia is a good example of the importance of having enough “state capacity” to protect property rights, even Somali anarchy has some unexpected benefits. Here is The Economist:
Thirty years ago, making a phone call from Somalia meant crossing the border into better-connected Kenya or Ethiopia. Yet by 2004 the lawless nation had more telephone connections per capita than any other east African country. Today, the Somali state is still fragile: insecurity is rife and government services are poor. But mobile data in Somalia is cheaper than in Britain, Finland or Japan—and the signal is good, too. . . . How has dysfunctional Somalia managed to develop such an outstanding telecoms network? The answer lies in the state’s very weakness. Three decades of chaos and conflict have forced hundreds of thousands of Somalis to flee their country. Those who have stayed depend on them: the diaspora sends home around $2bn a year, roughly double the government’s budget. An extensive phone network was needed to handle those vast remittance flows. In Somalia’s radical free market, the invisible hand did the rest. The upside of a lack of government is that there is no need to pay for licences or to bribe corrupt officials to get the job done.
The article cites some other advantages as well:
Social media is filling in for the failing state in other ways, too. WhatsApp groups serve as virtual courts, for instance, where clan elders, rather than corrupt or distant judges, resolve disputes. These online groups have revenue-raising powers; members are required to make monthly contributions, which are then used to offer payments if someone is short of money, or as a kind of health insurance to pay if they or a family member are ill.
In areas such as protecting property rights, state capacity is very useful. In other areas, the best thing the state can do is to get out of the way.
If you are willing to devote 41 minutes to a very interesting Youtube video, you will see a good explanation of my version of libertarianism. The video shows how Hong Kong’s government delegated responsibility for the construction and operation of a subway system to the private sector:
Is the hero of the story a highly competent government? Or is it the private firm that built and runs the system so effectively? As long as it works, who cares?
