Column Bitarch
When reading people’s opinions on the ideas of anarcho-capitalism (ancap), one can often hear that it is a “utopia,” “escapism,” a “fantasy world,” a “fandom,” and that libertarianism itself is a “sect,” a “cult,” or an “ideology for rich hipsters.” It is obvious that while the ideology of ancap is consistent and theoretically feasible, convincing the vast majority of people of this is quite difficult, if possible at all. Attempting to transition to ancap via minarchism, as proposed by one of the leaders of the LPR, Mikhail Svetov, is also a dead end—the instability of minarchism has been proven both theoretically and empirically through numerous historical examples.
Besides the well-known division of libertarianism into ancap and minarchism, there is another ideology that could also be called quasi-libertarian: panarchy. It appeared more than a century before Rothbard’s ideas, when in 1860, the Belgian scholar Paul Émile de Puydt wrote a pamphlet titled “Panarchy” (“pan” and “archy” meaning “power of all,” “omnipotence”) [1]. During his lifetime, he did not attempt to promote this idea, and it was only remembered in the 21st century with the growing popularity of libertarianism and blockchain technologies.
Panarchy does not aim for the complete destruction of the state, but advocates for the abolition of its territorial monopoly and for voluntary participation in it. In short—laws should apply to people, not to territory. If you dislike something, you can choose another ETC without leaving the country. You can also find like-minded people and create your own ETC with your desired laws.
Other names for this ideology are extraterritorial contractual jurisdictions (ETC, sometimes just CJ), extraterritorial state, insurance state, umbrella states, poly-state, multi-government, FOCJ, cellular statehood, virtual cantons, modular state.
In this article, I will attempt to provide arguments in favor of panarchy over ancap and minarchism, based on the criterion of the realism of implementing the theory in the real world. Pure Rothbardian ancap with the absolute non-aggression principle, of course, seems more attractive to libertarians, but it must be understood that its realization could take a long time and exceed the planning horizon of each of us.
Panarchy solves most of the problems inherent in ancap and minarchism, which are often used as criticisms against libertarians and complicate the promotion of libertarianism to the masses.
1. Social Protection
Although libertarians propose private insurance and charity as solutions, statists put forward a quite strong counter-argument, upon hearing which many people turn away from libertarian ideas: “What if a person is poor, cannot buy insurance, has no friends, and no one wants to help them? Are they left only to starve to death?”. In my observation, this is the most common objection to libertarianism, applying to both ancap and minarchism.
In panarchy, such people can choose a socialist ETC and receive social protection exactly as they do now from the state, paying voluntary contributions (“taxes”) to their ETC. This applies to all services of modern states—education, healthcare, the pension system, social insurance, security, and fire protection.
2. Public Spaces
We are used to leaving our apartments into a “public space” that belongs to no one and therefore cannot be “locked” for us. Ancaps, however, say that everything should be private, meaning that from your own territory you would step onto someone else’s. And the owner is essentially omnipotent, meaning they could simply forbid you from entering their property, effectively locking you in your own. This is a slightly contrived example, but somewhat frightening: private roads, forests, fields, seas—and the owner is an absolute ruler. It scares me. Furthermore, it is unclear how to privatize what is currently common; it is too conflict-prone a process. How do you privatize a street in Moscow to account for all interests and offend no one, without infringing on anyone’s “common rights”? I believe privatization is impossible due to the conflict-prone nature of the process and the fears associated with it. I am more inclined toward flexible forms where there is room for easements and common law, where not everything becomes private, remaining common/no-man’s-land. [2]
3. Defense
An argument often raised against ancap is that a stateless territory would quickly be seized by highly organized states with powerful military-industrial complexes. In reality, this is not the case, and a well-organized decentralized defense is capable of resisting even a strong opponent [3], making the residents of that territory an “unprofitable victim” for the aggressor.
Panarchy combines both the advantages of decentralized defense found in ancap and the resource-technological capabilities of a state [4], including for the creation of weapons that maintain peace through a deterrence doctrine (for example, ballistic missiles and stealth kamikaze drones, ensuring a high probability of destroying the enemy’s decision-makers who initiate aggression).
4. Popularity of the Idea of Freedom
If you ask a group of ordinary people “Which values are most important to you?”, the ideals of freedom will be far from the first place. Classical-liberal (minarchist) parties have existed in Europe for a long time, yet they have never achieved great success in elections. Even the most powerful class-lib party in Europe—the Swiss FDP.Die Liberalen—has garnered only 15-20% of the vote for many decades. [5]
Panarchy, instead of abstract ideas of freedom that are poorly understood by the majority, promotes the possibility of living by rules and cooperating with people you have chosen yourself without coercion (unlike modern states, where you are obliged to obey the will of the majority, even if you disagree with it). Another argument is the increase in the efficiency of state services through competition (in modern monopoly states, people clearly see how their taxes are wasted).
5. Default Choice
States usually provide standardization of product quality, testing of drug efficacy, some kind of standard for universal school education, basic emergency medical care and fire protection (available to all, regardless of purchasing insurance), protection of labor rights, and various “one-stop-shop” services. Many people do not want (or do not have the possibility for objective reasons) to spend their time studying millions of different offers on the market and prefer to receive some sort of default option.
6. Unified Understanding of NAP
Among libertarians, there are constant disputes about the permissibility of abortions, the age of sexual consent, the sale of drugs, contractual slavery, and some other issues arising from different understandings of the Non-Aggression Principle (NAP) among different people. Attempting to impose a single standard for everyone only leads to the rejection of libertarian ideas. In panarchy, each ETC can have its own understanding of acceptable norms. People and businesses may choose not to cooperate with citizens of other ETCs in certain areas of life if they diverge strongly from the norms of their own ETC. Also, if a person strongly diverges from the values of their ETC, they can seek protection from another ETC and transition to it, if they are accepted (analogous to refugee status in a modern state, which is unclear how it would operate under ancap).
7. Painless Relinquishing of Power for Government Members
The transition to panarchy can happen completely painlessly for the current authorities—a “fork” (parallel government) is created, and economic entities (schools, hospitals, state enterprises, road services, universities, etc.) will be able to choose which one to join (they can switch to another ETC at any moment if they wish) [6]. In this case, the members of the government currently in power in a centralized state will remain in power in the first formed ETC and need not fear for their personal safety. Otherwise, the lack of guarantees of inviolability greatly complicates the change of power, as the current authorities will fight to the end, knowing the fate that awaits them in the event of a violent overthrow.
8. A Clear Transition Scenario
In many countries, there is currently a strong polarization of society, as in the USA, where the division in values between supporters of Democrats and Republicans has reached a historical maximum [7]. This has a strong destabilizing effect on the government (its members are constantly unable to agree on most issues among themselves) and creates fertile ground for the formation of ETCs “from below.” For the “top-down” authority, this is also beneficial, as it minimizes the probability of a bloody revolution and reprisals against its members, as described in the previous point. Other scenarios are considered in the blog of the well-known “evangelist” of the idea of panarchy, Oleg
“Laxy Catal” Tarakanov [8].
9. Presence of Many Examples of Panarchy
Ancaps are often asked: name countries where anarcho-capitalism was or is? Aside from the well-known examples of medieval Iceland and Ireland, there is usually nothing to say. Extraterritorial jurisdictions, however, have existed for almost all of known history—these are the early (before the reforms of Cleisthenes in Attica) Greek poleis, medieval universities, religious orders, guilds and craft associations, millets in the Ottoman Empire, and partly pillarization in Holland until the mid-20th century. The modern Order of Malta, having no territory of its own, is essentially an extraterritorial state [9]. What’s more, even now diplomats of all countries in the world, according to international agreements, live under conditions of panarchy! [10]. And since the model is already well-tested, nothing prevents its large-scale implementation. The principle “all are equal before the law” could actually start working, whereas now it remains only in official declarations.
10. Compatibility with Ancap
Although panarchy looks like a retreat from ancap principles, it may nevertheless turn out to be a quite realistic precursor to it. Participation in an ETC is voluntary; accordingly, the evolutionary process will gradually weed out those that are inconvenient for clients and leave those that best satisfy the ideals of freedom.
Sources
- Paul Émile de Puydt “Panarchy“, trans. Egor Liskin
- Oleg Tarakanov “Fundamental Problems of Anarcho-Capitalism”
- Vladimir Zolotorev “Insurance Company Sonechko vs. the Tsardom of Muscovy”
- Oleg Tarakanov “Not Ancap: The Difference Between Extraterritorial States and Private Security Companies”
- Wikipedia “FDP.The Liberals”
- Anatoly Levenchuk “Providers of Cellular Statehood”
- Pew Research Center “Political Polarization in the American Public”
- Oleg Tarakanov “Insurance States (Part 2)”
- Wikipedia “Order of Malta”
- Wikipedia “Diplomatic Immunity”