The Nuclear Threat

In a recent episode (number 939 to be precise) of the Tom Woods Show, Tom Woods and Bob Murphy debated what, in an anarchist society, would prevent someone or some group - most notably one bent on wanton destruction - from obtaining a nuclear device. In response, Bob Murphy raised an argument based on liability and private property which would limit the spread of nuclear weapons because no one would rent to them due to the liability involved. This is based upon the premise that an anarchist society would have numerous, competing insurance companies providing individual coverage which would hold the insurance companies liable for damages related to the actions of their clients. On Murphy's model, this type of personal liability insurance would be required for most interactions in the society such as leaving one's own personal property.¹

For a back-of-the-envelope estimate of the potential liability, assume a bomb with a blast radius of 100 m, and assume the perpetrator lives in a typical, major US city, with a population density of roughly 4,000 people per km².^2,3,4 Finally, we assume that the insurance company would owe $1,000,000 per death caused by their client to the families of those killed by their client's actions. This yields a rough cost of $141 million dollars. This seems to be a relatively large financial incentive by the insurance companies to restrict or cancel a policy for a given client who may come to possess (or seek to possess) a nuclear weapon. Also, consider the fact that this quantity increases with the square of the blast radius, meaning that a larger nuclear bomb increases the potential liability exponentially.

However, let us assume for a moment, however, that, as Tom argued, there is a small, self-sufficient group dedicated to acquiring a bomb in order to wreak havoc upon their anarchist society. This group is not deterred by the cancellation of their policies or the subsequent restrictions that would follow, and manage to maintain access to utilities and the property where they construct their weapons. In this, admittedly improbable case, how likely would it be that they would succeed in their efforts?

To fully understand this, we must consider the various path ways that would exist in an anarcho-capitalist society for nuclear proliferation. This is a society marked by private property, private law, and a series of insurance arrangements which would constrain the actions of residents when interacting with one another on one hand, but would allow a wider variety of activities to take place on one's own property. Additionally, some of the physics of nuclear weapons - particularly regarding the fuel cycle - is relevant to our discussion because the fissile material used in nuclear weapons differs greatly from that used in conventional weapons. Obtaining fissile material in such a society would not likely be a simple task. In fact, as we shall see, it seems that there would be fewer opportunities for nuclear proliferation in an anarcho-capitalist society than in a society governed by a state with nuclear capabilities.

Paths to Proliferation

Uranium is the primary fissile material that is used in nuclear reactors and weapons, however not all uranium is created equally, only certain isotopes - atoms with a different number of electrons - are fissile. Over 99% of the uranium mass that exists in nature is the heavier, and non-fissile U-238. This must be processed in order to get a sufficient number of U-235 isotopes to reach critical mass, which is about 15 kilograms for U-235. This long, expensive process is known as uranium enrichment. Weapon-grade uranium typically requires approximately 80% enrichment of U-235 in order to achieve a critical mass that is small enough for transport.⁵ This enrichment level far exceeds the levels used by civilian, light-water reactors for power generation, which require 3-5% enrichment. In order to enrich uranium, it must be gasified and passed through a long series of centrifuges which separate the fissile from the non-fissile isotopes. This is an exponentially expensive process as the concentration of U-235 increases which also requires more uranium feed; reaching 90% enrichment costs 3,532% more than enriching to a 4% level when one considers the cost and effort of enrichment alone.

If, as often argued would be the case under an anarcho-capitalist system, nuclear weapons would be superfluous, due to the lack of incentive for offensive weapons. Consider what a defense agency would actually stand to gain by invading a neighboring society (be it a statist society or otherwise). The agency operates by voluntary fees or subscriptions, thus they can only gain from voluntary payments lest they transform themselves into a state.⁶ Further, by attacking or going on the offensive, such an agency would destroy the wealth and value of the society which they intend to protect. Consider the difference in premiums paid for insuring and providing defense to a block of apartments versus one that had suffered a nuclear attack; the latter would be relatively worthless. An aggressive agency may also quickly lose support from its customers as they change to a competitor. Some may change in disgust or outrage, others may change out of fear or for a myriad of other reasons. Regardless, the agency's aggressive actions would likely cost them dearly in the marketplace. Moreover, it seems that there would be additional disincentives for even possessing weapons-grade, fissile material. Given the probable network of contracts, insurance, and re-insurance, there would be liability issues in the case that they got into the wrong hands. Insurance companies with nuclear enrichment facilities under contract would work to ensure that weapons-grade nuclear materials would not be developed to prevent usage and potential payouts in the case that some of their other clients (local business, ordinary people, etc.) would be harmed by materials produced by their enrichment center clients. Given these considerations then what organization would engage in the cost and expense of producing uranium-based weapons-grade material in the first place?

Plutonium

What about in the case of plutonium? The physics and economics of plutonium are much different than that of uranium.

Given that we are hypothesizing an anarcho-capitalist society, it is possible, if not highly likely that regulatory burdens for nuclear power would be decreased making them more economically feasible and thus more common for power production. Plutonium is primarily produced as a by-product of uranium-based nuclear reactors rather than through explicit enrichment steps as in the case of uranium. Much of the created plutonium is burned in the reactor after synthesis, but a significant portion remains in the nuclear waste and can be recovered and processed for additional fuel or for weapons.

To put some numbers on this, a typical 1,000 MWe reactor requires approximately 27 tonnes of uranium fuel per year. Of this, about 1% of the spent fuel is plutonium with approximately 60% of that being the more relevant Pu-239 isotope. This would yield about 162 kg of Pu-239 plus other plutonium isotopes (Pu-240, Pu-241, Pu-242) for a total of 200-300 kg of plutonium produced per year from a typical light water reactor. This waste can be recycled in order to harvest plutonium and use it in other reactors.

Recovering typical waste and re-purposing the material for weapons is problematic. As the typical light water reactor processes uranium, Pu-239 is formed and Pu-240, albeit at a slower rate. Pu-240 is not amenable to bomb making, so the fuel must be removed from the reactor after ~3 months rather than the typical 12-24 month fuel cycle of civilian reactors, to ensure that the levels of Pu-240 are low. Even removing it quickly from a civilian reactor is no guarantee that the plutonium will remain under the critical threshold of 8% Pu-240, leading governments to create production reactors to fuel their bomb programs.⁷ This reduced time in the reactor would increase the fuel costs for a power plant by 4-8 times if the owners decided to pursue weapons-grade plutonium production in addition to costs for extracting the Pu-239 from the partially spent fuel. This would place them at a distinct, competitive disadvantage in comparison to other power providers. Due to the difficulties and costs involved in this process, the World Nuclear Association writes, "no weapons grade material has ever been produced from PWR, BWR, or PHWR power reactors (98% of the worldwide fleet)."

Breeder Reactors

Another proliferation pathway is through breeder reactors. These are reactors which capable of producing fissile material faster than they consume it. These types of reactors are currently operating in Russia, India, and Japan, and have been used extensively in France in the past. There are economic headwinds against breeder reactors which do limit their viability such as costing 25% more than modern light water reactors and being less safe than other reactor designs due to liquid sodium as a cooling medium. However, breeder reactors are also capable of utilizing nuclear waste and have been proposed to alleviate waste and proliferation issues.

There is a special class of breeder reactors known as Integral Fast Reactors which do manage to solve the safety issue as well as proliferation concerns due to its closed-loop fuel cycle. These reactors produce even higher levels of plutonium isotopes than light water reactors, leading to fuel that is more unsuitable for weapons than traditional plants. The IFR is able to re-use this material in its reactor without complete separation, but it would be, "impossible to handle for weapons."

It is difficult to gauge the costs of many of these reactors and designs in our hypothetical society because much of the technology has been funded or subsidized by government spending and nuclear reactors of any sort are under heavy regulatory burdens often times making their construction economically infeasible.⁸ Thus it is possible that these economic constraints would be relaxed without a state regulatory apparatus leading to the construction of breeder reactors. Given the benefits of the IFR reactors, both from a safety and non-proliferation standpoint, it is probable that the market would favor their construction over other types as their long-term benefits in reduced premiums and risk would outweigh short-term costs. Of course, this is no guarantee, so other breeder reactors which can produce fissile material do remain a potential proliferation risk.

On this point, we would come to security of the reactor and how that would be maintained. Again, there would be strong incentives from insurance and security agencies as well as the breeder reactor owners and operators to ensure secure production, storage, and transport of their fissile material lest they incur costs that would destroy their investment and reputations. We cannot guarantee that the security involved would be foolproof to deter terrorists - however this cannot be said about our current, state-managed situation either. Given the differing incentives in play, it seems the benefit of the doubt would rule that the breeder reactor in our stateless society would be at least as secure as that in the current world and no additional risk or threat would be posed.

Import

Domestic production of weapons-grade material in our anarcho-capitalist society is unlikely, however the society would not exist in a vacuum. Assuming that states with nuclear capabilities exist, we would have reason to believe that they would be producing weapons-grade material considering that in the actual world this is a standard practice. This would open the door to a dedicated band of terrorists who seek to acquire a weapon or the material to make a weapon from a foreign power, then to smuggle it into the anarcho-capitalist society and detonate it. Due to the technical and economic challenges in producing one's own fissile material, this seems to be the most plausible scenario.

Theft

Current nuclear powers maintain safeguards on their nuclear weapons stockpiles, warheads, and fuel. However, much of the defense surrounding these nuclear sources has disintegrated over the years, particularly in the Soviet Union. Famously, in 1993, highly-enriched uranium was stolen from a former Soviet Nuclear submarine, more recently in Moldova, six people were arrested for smuggling 1 kg of weapons-grade uranium, as well as a host of other attempts over the years (see more examples here and here). The former Soviet nuclear installations face numerous challenges in securing their material from reduced funding, little to no maintenance on key infrastructure, personnel reductions, and impoverishment by guards and officers of the nuclear material. There is a ready source for would-be terrorists to acquire materials, but in the 26 years since the collapse of the USSR, no nuclear terrorist attacks have occurred.

It would seem that no matter how problematic and inefficient the current system of protection against nuclear smuggling is, the system has been successful in preventing an attack and introducing an anarcho-capitalist society onto the world stage would not affect the system as a whole.⁹ For the sake of argument, however, let us assume that somehow an organization has acquired not only the material to construct a nuclear weapon, but has also managed to construct one and is seeking transport towards our unsuspecting anarcho-capitalist society. How might it prevent a catastrophe?

In such a society, ports would be privatized and have complete discretion regarding what can be transported through the port. Much like with state-owned ports,there would be restrictions certain materials and goods which they do not wish to transport such as dangerous goods or materials, or things they would find repugnant - i.e. slaves - although these would be instituted by the owners and enforced via inspections and contracts with carriers (ships, vessels, trucks, etc.). Carriers and transporters would, as they currently do, have a relationship with the port authorities and comply, otherwise risk fines due to breach of contract or restrictions on future business. This would make the carrier the first line of defense as they would seek to remain in good standing with their business partners. Of course, it is possible that one could be found to carry a known nuclear weapon -
although this begins to stretch credulity as they would be complicit in a terrorist act and would likely destroy any future business with any port. If a carrier was found who knowingly smuggled the material in or if the terrorist organization was able to conceal their goods and intent (indicating a failure by the carrier) they would encounter inspections at the port.

The port would carry out inspections for contraband to ensure no breach of contract and to ensure whatever proper billing they have agreed to for use of their facilities.¹⁰ If the smugglers are successful in clearing their port of entry - be it sea or air - then they face a similar issue with carriers to transport the material to their target. Now that we are on ancap soil, a significant difference between states and an anarcho-capitalist society will emerge. When one has entered a state such as the United States or the EU, they have unfettered access to all of the public roads. If a smuggler makes it this far (and assuming they've raised no red flags to place them under suspicion) they could travel anywhere they please. On the other hand, traveling on a series of privately owned roads would open one up for receiving permission from the owners through a contract, paying a toll, or by providing some other means of remuneration to the owner. This would also lead to increased scrutiny of users, as Walter Block writes:¹¹

In contrast, nowadays, the level of examination for major traffic arteries is much less. This might imply that the foreign immigrant homesteader or invitee might find more of a welcome on the highways rather than on the byways of the nation. But any such conclusion is fraught with danger, as ceteris paribus conditions do not at all hold at present. Specifically, the heightened scrutiny for gated communities is all private, while the more relaxed, not to say cavalier, treatment (virtual anonymity for motorists who do not negatively distinguish themselves) is almost entirely a practice of public police. Another, possible, implication, then, of an all-private roadway system might well be increased care with regard to what the customers are up to for all roads, no matter what their traffic bearing capacity. This would have greater negative implications for the freedom of movement of newcomers, and subcategories of the native population who are criminally oriented. Most likely, perhaps, is that private road owners would invest in more information gathering for vehicle owners who seek access to residential neighborhoods for those who whiz along a highway at seventy miles per hour.

This implies that such roadways would be more hazardous for would-be nuclear terrorists. The exact methods of inspection, information gathering, and requirements along each of these steps has not been enumerated, but there is good reason to believe that even granting the acquisition of nuclear material that such a catastrophe may be averted due to the privatization of transportation.

What is Safer?

When considering a hypothetical, anarcho-capitalist society and the threat of nuclear terrorism, it is important to consider the mechanics and economics for developing such threats. While the above is not exhaustive, we considered the uranium enrichment process and plutonium acquisition both from dedicated reactors and breeder reactors, as well as importing material from abroad. It is my contention that a state increases the probability of nuclear terrorism whereas an anarcho-capitalist society reduces it because states do actively pursue weaponization of fissile materials whereas economic and technological constraints discourage production under an anarcho-capitalist society. If, as many argue, the mere existence of these weapons poses a [threat to civilization}(http://www.tandfonline.com/doi/abs/10.1080/01495933.2014.941720?scroll=top&needAccess=true&journalCode=ucst20), then in conjunction with Robert Higgs, "the state is too dangerous to tolerate."

Notes

1. For additional details, see the chapter entitled ``Private Defense'' in Robert Murphy, Chaos Theory.
   2nd Ed. Auburn, Alabama: Ludwig von Mises Institute, available for free from the Mises Institute.
2. A nuclear blast has more effects than simply annihilation of those in the immediate blast radius such as radiation sickness, burns, structural damage, and long-term effects of contamination that would both extend the range of the damage and the potential liability.
3. This range is the estimated range for a 100 ton terrorist bomb.
4. This density is roughly comparable to many of the cities in the greater Los Angeles area, but could easily be much higher.
5. The critical mass required for a chain reaction is a function of the enrichment level and can be further reduced by using neutron shields which prevent escape of neutrons as the atoms divide. Small critical masses require higher enrichment levels, such that even relatively low-level enrichment is difficult to weaponize because it requires incredibly large masses which makes transportation and deployment problematic. See Figure 4.1.7.1.1 for different critical masses and enrichment levels. Additionally, see Figure 3.1 in Forsberg et al. where an ``infinite mass'' of U-235 is required for the critical, weaponized mass of uranium at 5.4% enrichment.
6. Rothbard points out that in such a society there are checks and balances which, "consist precisely in the free market, i.e., the existence of freely competitive police and judicial agencies that could be quickly mobilized to put down any outlaw agency." Murray Rothbard, Man, Economy, and State with Power and Market, Scholar's Edition, (Auburn, Alabama, Ludwig von Mises Institute: 2009), p. 1054.
7. Dual purpose Magnox reactors were built by the United Kingdom in order to generate electricity and material for bombs. However, these designs are far less efficient than single-purpose designs and led to their shuttering in the 1960's with little prospect of reopening.
8. Due to regulation and compliance costs, only one nuclear reactor has been brought online in the United States since the Three-Mile Island incident in 1979, although other countries are less stringent and have slowly increased their nuclear capacity.
9. We have not specified where this hypothetical society will arise. It could be assumed that if it does take place, that it would occur in the modern United States, Russia, or some other nuclear power and a current weapons facility would fall into private hands. In such a case, the owner would face incredible costs due to the hazard they pose on others. They would be incentivized to dismantle their weapons and down-blend their nuclear material into fuel rather than pay for the ownership. See Tate Fegley's article "How Property Rights — Properly Understood — Limit the Spread of WMDs" for further discussion on the externalities imposed on a potential nuclear owner.
10. Additionally, it is very likely that the ports would be in contact with international policing organizations and other states regarding the transport of dangerous goods or movement of dangerous people. This would serve as an economical way for one to reduce one's risk through the sharing of pertinent information. Thus if it were later discovered that nuclear material was missing or likely smuggled out of the country, the potential ports and destinations would be made aware of it through existing communication and coordination channels.
11. Block, Walter, The Privatization of Roads and Highways. (Auburn, Alabama, Ludwig von Mises Institute: 2009) pp 221-222