Independent Institutions and Private Force

Harvard University stands as a bastion of private education, though it often seems tangled in the shifting sands of our current political climate. Among its alumni, at least two PhD graduates in economics have found themselves in influential roles within Trump’s inner circle. One such individual has even been dismissed by Elon Musk as “dumber than a sack of bricks.” While I might not vehemently oppose that view, it’s essential to recognize that Harvard is not merely a breeding ground for “radical leftists”—it also churns out right-leaning collectivists. The university’s motto, VERITAS (“truth”), offers some comfort, even if it sometimes resembles the cryptic symbols seen in the White House.

However, the crux of my argument is this: as a wealthy and powerful entity, Harvard can act as a bulwark against the encroachment of federal power and the centralization that permeates our country. It’s true that, like many large private institutions, Harvard has unwisely grown dependent on federal funding, albeit under a somewhat naive assumption that government interests align with education, research, and the noble pursuit of free inquiry.

I wouldn’t categorize the Federal Reserve System as a paragon of excellence, as its inception was, at best, a distraction from an overregulated and thus fragile banking infrastructure. Furthermore, its structure is only marginally private, with regional components largely comprising associations of private banks, yet featuring a Board of Directors predominantly populated by public officials. In its role as a quasi-central planning agency, the Federal Reserve seems to operate without a clear vision, clumsily adjusting the money supply and interest rates while expanding its regulatory reach. Nevertheless, it introduces a much-needed layer of decentralization amid the sprawling governmental apparatus—a point worth considering when envisioning the implications of Trump or Biden controlling monetary policy.

Institutions, in my view, are frameworks of rules that facilitate organized behavior, such as families or free markets. Some institutions also function as organizations, creating structured entities with specific goals, agents, and representatives. Harvard fits this definition as an organization within the broader institution of higher education and research. In a truly free society, both institutions and their accompanying organizations help synchronize the actions of independent individuals.

Numerous institutional safeguards against the consolidation of power exist in the private sector—private property, sizable corporations, a free press, and financial markets, including even trade unions, which can have their drawbacks. In the public sector, we find essential checks through independent courts, federalism, separation of powers, inspectors general, and freedom of information laws. Montesquieu famously remarked that to prevent power from becoming tyrannical, it is necessary that “from the very [arrangement] of things, power should be a check to power.” (I would argue that “arrangement” is a more accurate translation than “nature.”) Strong private institutions are crucial in limiting the reach of political power beyond its rightful boundaries.

Anthony de Jasay, a classical liberal anarchist, posited that political power could—and should—be minimized to the greatest extent possible. He believed that the duties currently held by governments could be effectively managed by private institutions, particularly through property rights and free markets. These entities could provide private producers of “public goods.” This leads us to a notable observation from his landmark work, The State:

Self-imposed limits on sovereign power can disarm mistrust, but provide no guarantee of liberty and property beyond those afforded by the balance between state and private force.

A model frequently referenced by theorists showcases the decentralized armed power seen during the High Middle Ages when local lords were able to protect their territories and resist royal authority. However, it’s important to note that local political power can only mimic private force—unless it devolves into chaos, which the Church effectively mitigated. (For further reading, see William Salter and Andrew T. Young’s The Medieval Constitution of Liberty [University of Michigan Press, 2023]; also refer to Jouvenel.)

This equilibrium of power may have persisted until the 16th century in England. Thomas Babington Macaulay, in his History of England (Volume 1), provided a nuanced observation:

It was, however, impossible for the Tudors to carry oppression beyond a certain point: for they had no armed force, and they were surrounded by an armed people.

Two centuries later, in his Commentaries on the Laws of England (Volume 1), British jurist William Blackstone extended this notion of private force to encompass the right of the populace to bear arms:

The fifth and last auxiliary right of the subject, that I shall at present mention, is that of having arms for their defence, suitable to their condition and degree, and such as are allowed by law. Which is also declared by the same statute, 1 W. and M. st. 2, c. 2, and is indeed a public allowance, under due restrictions, of the natural right of resistance and self-preservation, when the sanctions of society and laws are found insufficient to restrain the violence of oppression.

It is true that—especially in today’s context—individuals armed with handguns or rifles may struggle against our heavily armed government entities, yet what often holds significance is the marginal cost of imposing tyranny. How much political capital and public approval is the government willing to expend to escalate its grip on power?

De Jasay, an admirer of 19th-century liberalism, likely resonated with the more radical interpretations of Blackstone rather than with the medieval lords. Strong private organizations, anchored by a collective belief in property rights and strict limitations on political authority, could embody a form of private force in the most literal sense. Whether large capitalist firms would ever leverage this potential to physically resist tyranny remains uncertain, and thus the strength of this barrier is questionable. However, they could still oppose tyranny in indirect ways, such as offering employment to unpopular dissenters, reminiscent of Hollywood’s tactics during the McCarthy era, as Milton Friedman pointed out in his Capitalism and Freedom.

Decentralized governance and its inherent checks can sometimes yield negative outcomes, as evidenced when southern states resisted federal efforts to eradicate public discrimination. No political system is immune to flaws, yet the threat of centralized tyranny is often more perilous than that of localized oppression—especially when people can move freely and at low cost. Montesquieu wisely noted:

Since a despotic government is productive of the most dreadful calamities to human nature, the very evil that restrains it is beneficial to the subject.

[French original] Comme le despotisme cause à la nature humaine des maux effroyables, le mal même qui le limite est un bien.

In conclusion, private institutions, particularly large organizations, serve as critical barriers against the encroachment of governmental power, even if their capacity for “private force” is limited. Public or quasi-public entities can play a similar role as long as they remain untainted by the central authority. When these counterbalancing organizations weaken, our freedoms grow increasingly vulnerable.

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