If history teaches us anything, it is that there are men and women who seek power, and if you provide them with a government, no matter how limited, you have given them a chance at their dream of control. No constitution, no matter how it is worded, will forever protect a citizenry from tyranny and from the corruption of its own ideology. What is needed is a system which is self reinforcing, which is not susceptible to the issues raised in Public Choice, or by Mises and Rothbard. I believe that Rothbard’s idea of private security companies providing the services which the government now monopolizes would be just such a system.

Of course, there are always complaints, and in outlining these ideas online I have run into fierce disagreement at worst and obstinate reluctance at best. The following are some of the issues raised by those who still trust in government.

1) The main reason why an anarchy system would fail is because there would be no effective system for dispute resolution.

If this is the main reason, it is easy enough to show how it is false. To give just one example, credit card companies have set up their own system for dispute resolution. It is cheaper and faster than the state controlled versions. The security companies, like many other instances wherein companies voluntarily agreed to certain standards, would fashion law and property rights protection to increase the value of their services. Common law would develop on the market.

2) Private securities cooperating and hammering out a justice system sounds very dangerous.

What sounds far more dangerous to me is to allow the monopolization of law, so that no cooperation is required at all. Why is it that government claims to hate monopolies, and yet the only ones that have ever existed were created and maintained by government?

The same factors that drive a company to produce a better product will drive these security companies to do the same with their services. Namely, the fact that they cannot coerce you to get your money. The government can. Consumer satisfaction is the goal of any free market company, but not necessarily of the government.

3) Let’s say you have hired a company to protect you. I assault you. I don’t have a security service to protect me. Your company comes and arrests me. First of all, there is nothing to protect me. How do I know I will receive a fair and speedy trial?

I have a simple solution: hire a security company, and do your homework so you know you have a good one. If you choose not to hire these services, that is your gamble, just like with insurance. If you choose not to insure your expensive collection of used bandages, for instance, you run the risk of losing them to fire or theft or whatever else. But is this an argument for the state forcing you to pay for this service? Obviously not. The choice is yours as you are an adult human being. Make good choices, and you'll profit. Make poor choices, and you'll suffer. That's the way life should work.

I have another simple solution: Don't assault me.

4) But what if you assault me?

These firms, like insurance companies, have an incentive to keep costs down. Insurance companies do this by rewarding safe behavior. It seems obvious that security companies would do the same, only they would reward behavior which reduced conflict.

How would they go about this? The possibilities are only as limited as human ingenuity. Perhaps they would stipulate honor codes which included not assaulting people, with penalties stipulated for infractions. Perhaps they would encourage people to police themselves, so that your friends and relatives might come to your aid with the companies' blessings, as opposed to the modern police state which prefers that you do nothing and wait for them to arrive. Perhaps, because it was in their best interests and according to the original agreement, they would prosecute their own bad seeds as a way to keep costs down in the long run. Perhaps some companies would offer to represent previously unprotected individuals who suddenly found themselves in a legal battle (either because of the good will it would foster amongst potential customers or because they believe in what they are doing and actually have an earnest desire to help people). Perhaps your rich uncle purchased a slightly more expensive option in which as a one time deal he could lend his protection services to an unprotected family member on the condition that this family member purchase that company's services in the future. Perhaps another company would make the same offer in exchange for your purchasing their services for a period of five more years to recover costs. Perhaps a charitable organization of dedicated citizens would help you for free.

Remember that the free market is a discovery process. Ideas that work are copied and spread; ideas that do not are abandoned. Whatever situation did come about, it would come about because those particular ideas were the least cost way of making the most people happy with security services. Most likely, there would be many different companies with many different policies. In my system, you choose the one that best meets your needs. In your system, you are forced to go along with the majority, who themselves rarely get what they want.

5) A bunch of security services cooperating on a legal system sounds an awful lot like international law, which basically operates on the honor system.

The enormous difference being that nation states – governments - cooperate for their own best interests, while these security companies would cooperate for their customers' best interests.

6) What is there to stop a very wealthy individual from building his own private army of mercenaries in order to bully others?

What's to stop him from doing that now?

In my system, it would be the very security companies that Rothbard proposed. That's their very reason for existence. Even Bill Gates, whose estimated worth is around 40 billion or so, cannot hope to compete against the rest of the world. With no border laws and border patrols, with no restrictions on movement, and with the rest of the wealth of the world working against his hypothetical and nefarious plans, what danger does he represent?

There is more profit to be made from cooperation and trade than war and destruction. To the extent that someone would be stupid enough to try something like that, they'd fail as surely as ice melts on a hot sidewalk.

7) Maybe a group of wealthy people with similar interests might band together. They would be able to murder and steal whatever they want. The mercenaries would have a great deal of incentive to follow orders. The more money their clients make, the more money they would earn.

This problem you present is not unique to a system of anarchy. It is also a problem that government must face. Humans are quite capable of maintaining law and order. I am simply positing a system where law and order are not monopolized.

Money is only good if it can buy something that humans produce. War does not produce, it destroys. There are plenty of these henchmen running amok right now following orders and destroying things and generally trampling on rights. They are called soldiers, and they do it for whatever nation state has ordered them around.

We currently have about 150,000 troops in Iraq. This venture is costing us about twice as much every year as what Bill Gates has earned in his life to date. Despite this, Iraq is largely a lawless land. Even doubling the troop strength, and thus increasing the costs, would not bring much more of the nation under control (a point readily conceded by most of the top generals who are calling for tripling troop strength). Add to that the fact that this troop strength is maintained by coercion (extending the tours of duty - also called the back door draft) and that recruitment is way down, I think we can assume that paying a market wage for these troops, which a hypothetical monomaniacal Bill Gates and company would have to do, would cause the costs to soar even higher. Furthermore, a truly free market would be an economic powerhouse. Our troops are having a rough time of it with the long downtrodden Iraqis; imagine how difficult it would be to dominate a wealthy people such as a free market would produce!

So Bill Gates, Ted Turner, George Soros and Warren Buffet all get together, pool all their money, buy mercenaries, and in the process manage to take control of a territory the size of Rhode Island. Assuming that people would even be willing to fight for them, and that’s a very iffy assumption, they promptly run out of funds after a year's time. They have not created any more wealth, because war merely destroys wealth. And they find that the population of this Rhode Island sized territory has been drastically reduced due to war and mass emigration, because there are no borders now. They steal some wealth, of course, so maybe they extend this period for a bit. They force the remaining population to work and give them the produce (Sort of like what governments do now), but free men turned slaves are not a productive people. Furthermore, outraged people all over the world have donated to the cause, much like they did with the recent tsunami and with Katrina, and these men find themselves quite out of money, out of troop support and facing the vengeance of the world at large.

Does this sound like an extremely unlikely scenario? Are rich men really going to risk all their wealth on an impossible venture? Even if it could happen once, do you really think it would happen again? Even if it happened once every decade, that would still entail less death and destruction than happens with our current configuration of nation states.

8) Maybe the security services could decide that they want to rule and extort money from the local people.

Only to find that the people promptly leave them and either hire other services or form their own, like a Mutual Aid Society, and are quite unmanageable. The idiots at these firms, in the highly unlikely event that they would even try it, soon realize that they were better off behaving themselves.

9) Bad things would happen because there is no check on the security service other than the principles of economics and customer satisfaction.

Good Lord! What other check do you need? They lose money if they don't please customers. No one firm can force obedience, and no cartel has ever been maintained in a free market (feel free to check up on that).

And what check do government bureaucracies have now that these security firms would not? Notice, the question is not “What check do they have now?” The question is “What check do they have now that security firms would not?”

10) These security firms would be just like any corporation: they would only be interested in profit.

And how is profit made in a free market? By pleasing the customer.

11) Laws and regulations are needed to check corporations; otherwise they would dump toxic chemicals in lakes and falsify quarterly reports.

To the extent that they pollute someone else’s land or commit fraud, they would be punished by the security firms. This is not about law vs. no law, it is about government monopoly of law vs. free market law.

12) On a larger scale, these small security services would not offer the same level of protection as a professional, state-run army. Since anarchy could not function for large communities, the money available to buy weapons would be limited.

In other words, the Gates/Turner/Buffet/Soros group is not a true danger, right?

And who said the companies were small?

And who said anarchy would not work for large communities? It is a centralized government which is most challenged by a large community, not an anarchical society where governance is, much like traffic now, decentralized.

13) Communities would only be lightly armed.

Communities would arm themselves in accordance with their perception of the threat level. As they would not be taxed, every dime they earned in this free market would go to what they chose. Security companies might even offer discounts to customers who purchased weapons and received training.

I actually agree with you to some extent. They would probably be lightly armed because there probably would be a minimum of conflict. But the important factor here is that they would be free to arm themselves better if they perceived a threat.

14) That would not deter any large, modern enemy from invading.

The same kind of army beaten, at various times, by Afghan, Ethiopian, Vietnamese and other sorts of essentially private militias? State armies lose to Fourth Generation tactics.

15) With examples such as Vietnam and Afghanistan, while it is true that the populations of those countries were successful in defeating larger, better-equipped armies, the price for them was high.

And if these militias had instead been state controlled armies, would the price have been any lower?

16) You wrote that no one would want to attack a “peaceful country with no trade barriers.” I disagree. Look at Tibet. They were a peaceful country that was willing to modernize in order to placate the Chinese.

This situation does not fit the one I am describing. China invaded Tibet, which was most definitely not a free market nation. But China did not invade Hong Kong. Germany did not invade Switzerland. People leave Luxembourg pretty much alone.

17) Anarchy cannot work in communities larger than a few hundred people.

Your idea of a community is an artificial construct. What defines a community? Where does it start? Where does it end? And why would anarchy be less apt to work with a greater population? It is a controlling central bureau which feels the stress of a large population, not the Free Market. Just consider the example of traffic. Are our cars controlled by some central bureau, or is each individual left to handle himself, so long as he obeys some simple rules?

The Free Market has many millions of times united "communities" all over the globe in peaceful trade. Economics and human decision making is a constant the world over. If people in Asia wish to deal with people in South America, they can do so whenever they wish unless some government prohibits them. Whether they choose to hire protection services for their dealings or not is their business. The security companies would have a HUGE incentive to reach out and establish connections and ground rules with companies in other parts of the planet, as that sort of international trade is a big money maker and protection in such instances would be in demand. Remember, the security companies need our consent. The ones with the best connections and the fairest ground rules are going to make the most money.

18) Since there would be no representatives in a legislative body to make laws, in order to be fair, every single law and amendment would have to be voted in by the people.

Not true. My central point here is that law would develop through the interaction of security companies and consumers, and through the interactions of rival security firms.

19) People want to be governed.

I don't. If you do, great. My system allows you to hire anyone you want to govern you. But you don't get to force me to be governed, just like I don't get to force you not to be governed.

20) Humans need laws.

I am in favor of laws. The question concerns the best way to get law and make laws. I say let it evolve on the market, you say let government monopolize it.