Anyone with a little imagination can dream up a radical new structure for society, anarcho-capitalist or otherwise. The question is, will it work? Most people, when they hear my description of anarcho-capitalism for the first time, immediately explain to me two or three reasons why it won’t. Most of their arguments can be reduced to two: The system will be at the mercy of the Mafia, which can establish its own agency or take over existing ones and convert them into protection rackets. Or else the agencies will realize that theft is more profitable than business, get together, and become a government.

The main defensive weapon of organized crime is bribery. It works because policemen have no real stake in doing their job well and the taxpayers have no standard of comparison to tell them if they are getting their money’s worth. What is the cost to the chief of a police department of letting his men accept bribes to permit crime? In most cases, nothing. The higher crime rate might even persuade the voters to vote more money and higher salaries to the police department.

If employees of a rights enforcement agency accept such bribes, the situation is rather different. The worse the job the agency does, the lower the fee it can charge. If the customers of one agency find they lose, on average, ten dollars a year more to thieves than the customers of another, they will continue to do business with the inferior agency only if it is at least ten dollars a year cheaper. So every dollar stolen from the customer comes, indirectly, out of the revenue of the agency. If the agency is one that guarantees performance by insuring its customers against losses, the connection is more direct. Either way, it is very much in the interest of the men running a rights enforcement agencies to see that their employees do not take bribes. The only bribe it would pay the agency to take would be one for more than the value of the goods stolen—a poor deal for the thief.

This does not mean that employees of rights enforcement agencies will never take bribes. The interests of the employee and of the agency are not identical. It does mean that the men running the agencies will do their best to keep their men honest. That is more than you can say for a police force. Organized crime, if it continues to exist under anarcho-capitalism, should be in a much weaker position than it now is. In addition, as I shall argue later, most of the things that organized crime now makes money on would be legal in an anarcho-capitalist society. Thus both its size and its popularity would be greatly reduced.

What about the possibility of the Mafia getting its own agency? In order for such a firm to provide its clients with the service they want—protection against the consequences of their crimes—it must either get the other agencies to agree to arbitration by a court that approves of crime or refuse to go to arbitration at all. In order to do the first, it must offer the other agencies terms so good that their customers are willing to be stolen from; as in the previous case, this reduces to the thief bribing the victim by more than the amount stolen, which is improbable. If it refuses to accept arbitration, the Mafia’s agency finds itself constantly in conflict with the other agencies. The victims of theft will be willing to pay more to be protected than the thieves will pay to be able to steal, since stolen goods are worth less to the thief than to the victim. Therefore the noncriminal agencies will find it profitable to spend more to defeat the criminal agency than the criminal agency could spend to defeat them. In effect, the criminals fight a hopeless war with the rest of society and are destroyed.

Another and related argument against anarcho-capitalism is that the strongest agency will always win, the big fish will eat the little fish, and the justice you get will depend on the military strength of the agency you patronize.

This is a fine description of governments, but rights enforcement agencies are not territorial sovereigns. One which settles its disputes on the battlefield has already lost, however many battles it wins. Battles are expensive—also dangerous for clients whose front yards get turned into free-fire zones. The clients will find a less flamboyant protector. No clients means no money to pay the troops.

Perhaps the best way to see why anarcho-capitalism would be so much more peaceful than our present system is by analogy. Consider our world as it would be if the cost of moving from one country to another were zero. Everyone lives in a house trailer and speaks the same language. One day the president of France announces that because of troubles with neighboring countries, new military taxes are being levied and conscription will begin shortly. The next morning he finds himself ruling a peaceful but empty landscape, the population having been reduced to himself, three generals, and twenty-seven war correspondents.

We do not all live in house trailers. But if we buy our protection from a private firm instead of from a government, we can buy it from a different firm as soon as we think we can get a better deal. We can change protectors without changing countries.

The risk of private agencies throwing their weight—and lead—around is not great, provided there are lots of them. Which brings us to the second and far more serious argument against anarcho-capitalism.

The rights enforcement agencies will have a large fraction of the armed might of the society. What can prevent them from getting together and using that might to set themselves up as a government?

In some ultimate sense, nothing can prevent that save a populace possessing arms and willing, if necessary, to use them. That is one reason I am against gun-control legislation.

But there are safeguards less ultimate than armed resistance. After all, our present police departments, national guard, and armed forces already possess most of the armed might. Why have they not combined to run the country for their own benefit? Neither soldiers nor policemen are especially well paid; surely they could impose a better settlement at gunpoint.

The complete answer to that question comprises nearly the whole of political science. A brief answer is that people act according to what they perceive as right, proper, and practical. The restraints which prevent a military coup are essentially restraints interior to the men with guns.

We must ask, not whether an anarcho-capitalist society would be safe from a power grab by the men with the guns (safety is not an available option), but whether it would be safer than our society is from a comparable seizure of power by the men with the guns. I think the answer is yes. In our society, the men who must engineer such a coup are politicians, military officers, and policemen, men selected precisely for the characteristic of desiring power and being good at using it. They are men who already believe that they have a right to push other men around—that is their job. They are particularly well qualified for the job of seizing power. Under anarcho-capitalism the men in control of the agencies are selected for their ability to run an efficient business and please their customers. It is always possible that some will turn out to be secret power freaks as well, but it is surely less likely than under a system where the corresponding jobs are labeled ‘non-power freaks need not apply’.

In addition to the temperament of potential conspirators, there is another relevant factor: the number of agencies. If there are only two or three in the entire area now covered by the United States, a conspiracy among them may be practical. If there are a thousand, then when any group of them start acting like a government their customers will hire someone else to protect them against their protectors.

How many agencies there are depends on what size agency does the most efficient job of protecting its clients. My own guess is that the number will be nearer a thousand than three. If the performance of present-day police forces is any indication, an agency protecting as many as one million people is far above optimum size.

My conclusion is one of guarded optimism. Once anarcho-capitalist institutions are established with widespread acceptance over a large area, they should be reasonably stable against internal threats.

Are such institutions truly anarchist? Are the private agencies I have described actually governments in disguise? No. Under my definition of government—which comes closer than any other, I think, to describing why people call some things governments and not others—they are not governments. They have no rights which individuals do not have and they therefore cannot engage in legitimized coercion.

Most people, myself included, believe that an individual has the right to use force to prevent another from violating his rights—stealing from him, say, or murdering him. Most agree that the victim has a right to take back what the thief has stolen and to use force to do so. Social contract theories start from the premise that individuals have these rights and delegate them to the government. In order for such a government to be legitimate, it must be established by unanimous consent, otherwise it has no special rights over those who refuse to sign the ‘social contract’. Under a system of private rights enforcement agencies the actual agencies, like the ideal government, are acting as agents for willing clients who have employed them to enforce their own rights. They claim no rights over non-clients other than the right to defend their clients against coercion—the same right every individual has. They do nothing that a private individual cannot do.

This does not mean that they will never coerce anyone. A rights enforcement agency, like a government, can make a mistake and arrest the wrong man. In exactly the same way, a private citizen can shoot at what he thinks is a prowler and bag the postman instead. In each case, coercion occurs, but it occurs by accident and the coercer is liable for the consequences of his acts. The citizen can be indicted for postman-slaughter and the agency sued for false arrest. Once the facts that make an act coercive are known, it is no longer regarded as having been legitimate.

This is not true of government actions. In order to sue a policeman for false arrest I must prove not merely that I was innocent but that the policeman had no reason to suspect me. If I am locked up for twenty years and then proven innocent, I have no legal claim against the government for my lost time and mental anguish. It is recognized that the government made a mistake, but the government is allowed to make mistakes and need not, like the rest of us, pay for them. If, knowing that I am innocent, I try to escape arrest and a policeman shoots me down, he is entirely within his rights and I am the criminal. If, to keep him from shooting me, I shoot him in self-defense, I am guilty of murder even after it is proved that I was innocent of the theft and so doing no more than defending myself against the government’s (unintentional) coercion.

This difference between the rights claimed by a private rights enforcement agency and those claimed by a government affects more than the semantic question of what is or is not anarchy. It is one of the crucial reasons why a government, however limited, can more easily grow into a tyranny than can a system of private agencies. Even the most limited government has the sort of special rights I have described; everything I said in the previous paragraph was true of this country in its earliest and (for white males) freest days.

Such special rights allow a government to kill its opponents and then apologize for the mistake. Unless the evidence of criminal intent is very clear, the murderers are immune from punishment. Even when the evidence is overwhelming, as in the case of the 1969 Chicago Black Panther raid, there is no question of trying those responsible for their actual crime. The Cook County state attorney responsible for the raid, in which two men were killed, and the police officers who executed it, were eventually charged not with conspiracy to commit murder but with obstruction of justice—not, in other words, with killing people but with lying about it afterwards.

This is not an isolated instance of the miscarriage of justice. It is the natural result of a system under which the government has certain special rights above and beyond the rights of ordinary individuals—among them the right not to be held responsible for its mistakes. When these rights are taken away, when the agent of government is reduced to the status of a private citizen and has the same rights and responsibilities as his neighbors, what remains is no longer a government.

… a policeman … is protected by the legislative and judicial arms in the peculiar rights and prerogatives that go with his high office, including especially the right to jug the laity at his will, to sweat and mug them, and to subdue their resistance by beating out their brains.


[State attorney Hanrahan and his codefendants were eventually acquitted, but in 1982, thirteen years after the raid, a civil case by the survivors and the mothers of the two men who were killed was settled for $1.85 million, paid by the city, county and federal governments.]

[Chapter 55 explores some further issues connected with stability and economies of scale and qualifies some of the conclusions of this chapter.]

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