The Kn@appster picks a fight with Brian Holtz over the public goods rationale for the State, and Holtz is only too happy to offer his rejoinder in the comments section. Holtz is a self-described "minarchist" who is more or less antipathic toward "market anarchists," especially those of the Rothbardian variety.

Let's review Holtz's argument:

Public Goods, that is, goods that are non-rivaled and non-excludable, will be under-produced by the market. Quoting Holtz:

Underproduction of public goods is inevitable in the presence of 1) the ability to free-ride (i.e. non-excludable goods) and 2) rational self-interest.

Knapp attacked this position by claiming "underproduction" to be subjective measure, a measure typically proclaimed by fiat by the central planner. Holtz's rejoinder to Knapp was that Knapp didn't understand "higher mathematics" and that economists have in their toolbox mathematical measures of optimality, including such measures of Pareto or Kaldor-Hicks Efficiency.

However, as someone who has a mathematical background and used to be persuaded by these types of algorithmic measures, allow me to hoist Holtz by his petard, with no malice intended. It goes without saying that the fundamental flaw with minarchism is that it either lacks or fails to sufficiently take into consideration a theory of class. Once you take libertarian class theory into consideration, you really are forced to abandon the notion of monopoly enforcement(the State) if you are going to stick with libertarianism, unless you are content with simply operating under a delusion. From a left-libertarian perspective, I identify this problem as the "Redistribution Problem." However, i don't need to resort to the philosophical language of left-libertarianism to make this case. It's analytical, academic cousin, Public Choice Theory, will do just fine, In Public Choice theory, the "Redistribution Problem" is recast as "Government Failure." Government Failure more or less holds that public goods will be systematically over-produced. It should be noted that "over-production" violates any algorithmic standard of optimality just as under-production does; and,in fact, the violations can be much worse.

The classic example of a public good supposedly is "national defense." Of course, it's difficult to justify why the US needs to spend roughly a trillion dollars a year on national defense. National Defense is Exhibit A of "government failure." The government failure is not in providing the public good of "defense," but that the overproduction of this public good is orders of magnitude more inefficient than any "market failure" could ever possibly be. The spectre of overproduction yields the scenerio where government defense contractors benefit handsomely but the rest of humanity is faced with the spectre of mass extinction orders and orders of magnitude over.

The apparent possibility a potential catastrophic, Pareto-inefficient allocation of WMD resources from Saddam's state to a "terrorist network" is what led the likes of Holtz to to support the US invasion of Iraq, which then, however, inflicted a particularly pareto-inefficient outcome on the Iraqi professional class and Christian population on the false pretense of Saddam's "threat" of a Pareto-inefficient allocation of WMD to terrorists. Seriously, if you can't recognize that over production of defense as a public good is a much greater threat to humanity than any such "underproduction" of defense, you are hopeless muddled, at least from libertarian perspective. If you seriously believe that the US military industrial complex, with all it's stockpiles of WMD, is somehow a legitimate consequence of meeting a "public good," a re-examination of first principles should be in order. Keep in mind, merely claiming disapproval of the extent of such over-production does not let you off the hook in terms of the reality of such over production.

However, I'm not through with Holtz. Let us return to his assertion:

Underproduction of public goods is inevitable in the presence of 1) the ability to free-ride (i.e. non-excludable goods) and 2) rational self-interest.

Holtz seems unaware that human instrumental rationality, point (2), has been debunked by experimental economics, sociology, and game Theory for some time now. In fact, experimental testing of the "Public Goods Game" has repeatedly demonstrated that players resort to defection as a response to free-riding only toward the end of the game. Only a fraction of players conform to the "Homo Economicus" model. In fact if the Game allows some mechanism for retaliation, even nominal, the free-rider problem is largely incidental. In short, even without any mechanism of retaliation and with full knowledge of free-riding by participants, behavior only "decays" to "Homo Economicus" towards the end.

I should point out that Freedom Democrats utilizes Drupal Open Source Software. According to Holtz, I really shouldn't be even posting on this site, because Open Source Software should have long ago been killed by the non-excludable, free-rider problem. Yes, Open Source Software satisfies the definition of a "public good," however no one seriously would even dare to make a Pareto-optimality argument against it's under-production. Holtz's "inevitably argument" is empirically debunked. The Open Source Model, indeed the "Free Software" model figured out it's pricing model sufficiently enough that the State needed to resort to desperation to deploy the Drug War model for IP protection.

The fundamental problem that occupies market anarchism is the "coordination problem," not the "public goods" problem. However, in the end, the coordination problem is much less a problem to overcome than the "redistribution problem" that Statists have to grapple with. The redistribution problem is intractable, not so much when it comes to coordination problem.