State-Provided Security and Market Incentives

By Jeff Deist

On the heels of recent events in Paris, French President Francois Hollande proves the old adage that when all you've got is a hammer, the whole world looks like a nail:

---

Hollande announced that France will intensify air strikes against the so-called Islamic State (IS) in Syria, and said that the French Constitution should be changed to better deal with this kind of crises in future. He also unveiled plans to boost security spending and hire 5,000 new police officers over the next two years. Hollande made it clear that, as a result, France will miss the deficit reduction targets agreed with the European Commission, adding that “the security pact prevails over the [EU] stability pact.”

It's important to note that when state intelligence and security agencies fail spectacularly, their budgets and personnel increase. Nobody gets fired, nobody apologizes. On the contrary: military, security, and intelligence bureaucrats use events like terror attacks to demand more money, more power, and an expanded mission. This represents the very antithesis of how markets should operate, where failures are swiftly punished and non-performing actors are sent into bankruptcy. Is there something magical about state-provided security that forces us to accept this? 

The left loves to talk about supposed market failures, but why don't we talk about state failures in the aftermath of tragedies like Paris? Consider the enormity of the US government's failures culminating on September 11th, 2001. Even after spending trillions on Army, Navy, Air Force, Marines, DOD, CIA, NSA, FBI, FISA, state and local police, etc. etc., a handful of middle class Saudi flight students with box cutters were able to kill several thousand Americans. But did a single American official lose their job as a result?

Without market discipline and market signals, it is impossible to judge the effectiveness of Hollande, Bush, or Obama in fighting terrorism or anything else. It is impossible to judge alternative uses of money and manpower. It is impossible to calculate whether a particular policy "works." Everything becomes a matter of good intentions.

Have you noticed that intentions loom large as a justification for the war on terror? We are the good guys, spreading democracy and fighting extremism. Thus the nobility of our mission excuses the occasional collateral damage. In this sense the war on terror brings out in conservatives the same errors, emotionalism, and blind spots that the war on poverty elicits among left progressives. 

A progressive looks at a neighborhood mired in poverty and reacts viscerally. The state must act, and act quickly, to alleviate the situation. The fastest and most obvious remedy is money, since poverty is defined by a lack of it. So we should give poor people money, and keep doing so until they are not poor. Never mind the underlying causes of poverty: criminality, unwed birth rates, drug use, and indifference/hostility to education (progressives think these are symptoms rather than causes, of course). Never mind that anti-poverty programs implemented by the state are thoroughly wasteful and create all the wrong incentives. And never mind that generation after generation remains mired in poverty, made hopelessly dependent on government despite the trillions spent since the birth of the Great Society. For progressives, good intentions are all that matters. Only a heartless conservative could look at a poor neighborhood and think government should do nothing-- or worse yet, that the private sector could attack poverty more effectively.  

A conservative looks at an act of terrorism and also reacts viscerally. The state, through its military apparatus, must get the bastards. The fastest and most obvious approach is to lash out with bombs, planes, tanks, guns, and boots on the ground. ISIS wants war, let's give them just that. Never mind that both the US and France have been thoroughly involved in destabilizing the Middle East for decades. Never mind that endless military spending has not made America or Europe one iota safer, and in fact has made them less safe due to readily predictable blowback. And never mind that Christians, who once found reasonable security in Iraq, Syria, and Libya, are now fleeing for their very lives in those countries. What matters is that we do something, and fight the bastards over there. Only someone who hates freedom could dare question whether any of this actually works, or suggest we're actually worse off than before the death, carnage, and expense of the Iraq and Afghanistan wars.

And so it goes. While states and politicians blunder about, perhaps the world will wake up to what really creates peace and security: commerce, trade, and military nonintervention. In the meantime, we might look at a place like the Bataclan Theatre in Paris and ask ourselves whether private security might have made a difference.

​This article was originally published at The Mises Institute.