Libertarianism as a Market for Governance

One caricature of libertarianism is that its adherents advocate chaos and “anything goes”. Presumably, this is because libertarians consistently call for repealing laws and reducing the power of the state. What critics miss is much of the order in society is not imposed in a top-down fashion, and certainly less of it has been in the past.

As long as people interact with others, rules which govern their behavior will be necessary. What often goes unnoticed, however, are the myriad non-state methods and institutions which create and alter the rules of our society. Sports leagues provide their own rules and enforcement. Churches advise members on how they should regulate themselves. Firms like PayPal and eBay arbitrate disputes and provide a framework for engaging in transactions. Even security, a primary means of enforcing rules, stems from a variety of sources.

Over half the world’s population live in countries where privately-hired security personnel outnumber government police. In the U.S. there are over a million private security guards compared to less than 700,000 police. This tells only a fraction of the story. Practically every home and business bolster their security with locks, cameras, fences, dogs, or lights.

And of course, there are privately owned guns. It’s been estimated over 40% of households in America have at least one firearm. It’s difficult to determine conclusively, but there may be millions of private defensive gun uses every year in the U.S. Kleck and Gertz concluded 2.2-2.5 million. One other way security is produced is via neighborhood watch groups. Around 40% of the U.S. population is covered by one of these programs, and there is a significant decrease in crime associated with them.

We don’t usually think of it in this way, but when we buy or sell products online, almost always there is some third party that has first laid down the rules. Since people appreciate a transaction experience that is streamlined, organized, and with some assurance against fraud, countless firms have jumped at the chance to provide that service. And the best part is these firms compete for customers. In other words, instead of one central government creating rules for business that are difficult to amend in a productive manner, many companies independently seek to give people what they want while those people can leave at any time.

A Case Study

Now, it’s true some or most of these private efforts ultimately defer to the government, but there is nothing that says they would need to if they were not required to by law. As an example, western frontier towns often developed before the government arrived. Even in these instances of almost no government influence, decentralized security and order arose. Contrary to popular legend, the result was not chaos or mass violence. San Francisco developed a system of private “police” and spontaneous common law-style courts. Elsewhere, violence was relatively rare. Robert Dykstra found that throughout 5 major cattle towns, there was an average of only 1.5 homicides per year from 1870 to 1885. In their book, The Not So Wild, Wild West, Anderson and Hill describe institutions such as cattlemen’s associations, land clubs, and wagon train constitutions, which helped to bring order and provide governance in the absence of an authoritarian state.

Embedded Law

There are also instances of what David Friedman refers to as embedded legal systems. These are decentralized communities which have their own developed systems of law. One example is the Romani. The Romani are almost entirely unaffected by the laws of the states where they reside because it is a cultural norm of theirs to avoid being tracked and identified by state authorities. Since they largely do no participate in the state’s legal system, they use their own internal methods for resolving conflicts. One sect of the Romani resolve disputes by the parties agreeing on a judge. Ignoring the ruling would mean ostracism from the community. In other cases, a victim merely threatens violence from himself and his friends. There is seldom actual violence since whoever is in the right according to the norms of the community will have a great deal more support from other members.

Libertarians do not oppose organization, rules, or cooperation. We oppose the state taking over these functions and imposing universal edicts onto the populace. Governance, like any other good or service, benefits from competition and trial and error. When people are allowed more choice in governance, service-providers must be accountable to the people because the individual can leave one institution for another. Every area the state oversees is practically a guarantee of a non-consensual interaction for at least some individuals. The likely outcome is also a poor product because of no competition and therefore the right to opt out. No one knows the best way to run the lives of hundreds of millions of people. So let’s let them choose.

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