Daniel J. Mitchell
I’m sometimes accused of being too radical, though I take that as a compliment (including the time a British journalist wrote that I was “a high priest of light tax, small state libertarianism”).
In reality, I’m actually a moderate. I do not want to eliminate all government, just the 90 percent that is ineffective or counterproductive. As a result, some of my friends accuse me of being a squish, which is probably a fair characterization since I only scored a 94 out of 160 on Professor Bryan Caplan’s Libertarian Purity Quiz.
In my defense, I say let’s get rid of all the programs and departments that clearly should not exist (such as Transportation, Housing and Urban Development, Education, Energy, and Agriculture), and then we can have a fun discussion of whether the private sector can take over things like roads, policing, and the military.
And it does seem that many so-called public goods actually can be handled by the market. I’ve written about private roads and private money, for instance, but the example that really caught my attention was the private, church-run city in Nigeria.
And the New York Times has a fascinating story about similar developments in Mexico.
The authors describe the city of Tancítaro in the cartel-controlled territory of Michoacán: “Self-policing and self-governing, it is a sanctuary from drug cartels as well as from the Mexican state …. Tancítaro represents a quiet but telling trend in Mexico, where a handful of towns and cities are effectively seceding, partly or in whole. These are acts of desperation, revealing the degree to which Mexico’s police and politicians are seen as part of the threat.”
I cannot resist commenting that the reporters should have written that police and politicians “are the threat” rather than “are seen as part of the threat.”
The Mexican government is a grim example of the “stationary bandit” in action.
Anyhow, back to our story about de facto secession and privatization. The authors write that Tancítaro is one of many such “enclaves”: “Each is a haven of relative safety amid violence, suggesting that their diagnosis of the problem was correct.”
They continue: “The central government has declined to reimpose control, the researchers believe, for fear of drawing attention to the town’s lesson that secession brings safety.”
Tancítaro is not the only example of a quasi-private town. In Monterrey, for example, the business elite took over most core government functions and thus “circumvented the bureaucracy and corruption that had bogged down other police reform efforts.” The authors wrote, “Monterrey’s experience offered still more evidence that in Mexico, violence is only a symptom; the real disease is in government. The corporate takeover worked as a sort of quarantine.”
Wow, who would have imagined the New York Times would ever have a story stating that “the real disease is in government.”
Sadly, the story goes on to say traditional politicians are now regaining control in Monterrey, so the period of good governance is coming to an end.
In an ideal world, the central government would allow towns to formally secede, and those towns could then contract to have private management. But that will never happen since politicians would not want real-world examples showing the superiority of markets over government.
For now, we will have to settle for ad hoc and unofficial secession and privatization.
P.S. We can also hope that Liberland succeeds.
P.P.S. While today’s topic is de facto secession of local governments, my support for decentralization makes me sympathetic to regional secession. See, for example, Scotland, Liechtenstein, California, Italy, Belgium, and Ukraine.
P.P.P.S. I did once write about the “libertarian paradise of Argentina,” but that was mostly in jest.
Daniel J. Mitchell, chairman of the Center for Freedom and Prosperity, is on the Editorial Board of the Cayman Financial Review.