Chapter 7 – The demise of the state

Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

Thomas Jefferson Declaration of Independence

If it’s impossible to run government like a business, if governmental regulation prevents and punishes voluntary trade between and among consenting adults (and children), if government uses arbitrarily devised and enforced statutory law instead of natural, objective, individual rights-based law, and if government relies on immoral, unjust means to stay in business, then what exactly is it good for?

Surely Thomas Jefferson would find the present state of political affairs atrocious, an intolerable form of absolute Despotism. Consequently, what does this imply for us in the voluntary marketplace? What if we refused to continue suffering such evils? What if most people realized that it is their right, it is their duty, to throw off such Government, and to provide new Guards for their security? What if we suddenly replaced Government with something that was actually moral and rights-respecting—that is, with the unmatchable, uncompromising methods of a free market system?

Unfortunately, even the talented likes of Penn & Teller can’t perform that fantastic of a magic trick, at least not before our very eyes. But let’s consider the hypothetical scenario for now. Later, we’ll discuss some real life solutions, practical options, for getting rid of the status quo, that is, for uprooting the current rot and planting some beautiful freedom flowers.


A Fully Privatized System

Under a fully privatized system, new businesses and entrepreneurs don’t navigate financial and regulatory mazes in order to compete with established, already-conforming-to-the-racket-and-lobbying-for-more-favors-and-less-competition businesses. Banks are no longer shills for the fascist welfare-warfare State, and interest rates are accountable to the market, not to the Federal Reserve System overlords and the nobility of their various monetary subsidiaries. Free markets are actually free, and the people benefit enormously. Our standard of living—our purchasing power as well as economic opportunities—thus skyrockets.

Dispensing with government therefore entails euthanizing some quite sacred legal cows. Simply put, taxes and preventive law are laid to rest, leaving only death the last certainty for us, to be further held at bay by the biotech field and medical innovations. Remember the alphabet soup of regulatory agencies? They’re government’s way of maintaining control and overseeing affairs that they’ve no business controlling and overseeing.

Without the ability to expropriate money from a populace that’s no longer subservient, the institutions of government atrophy to a point of splendid emaciation, and then death. As government withers, people thrive. We then witness marketplace hypertrophy, an advanced economy on steroids, with no toxic side effects.

Without the State’s power to tax, which is derived from coercion and people’s compliance, we finally say goodbye and good riddance to unaccountable government. Without taxation, we finally say “Welcome to the land of milk and honey” (no offense to the lactose intolerant and to diabetics like myself, who of course would be cured through new biotech advances).

This leads directly to the question of how real accountability is created for the services that government supposedly attempts to provide us. Well, that’s easy: You vote with your money! This is the real, meaningful, and direct power that each of us possesses, and it’s indeed the genius of a free market system, a system of self-governing capitalism. We pay only for what we want, and we get only what we pay for. If we believe we’re not getting a good deal, then we stop payment and do business somewhere else.

This is the real “check and balance” of the marketplace. Actually, there’s no logical or effective or efficient substitute. You can try to make a country of laws but not of men, but men will make and maintain laws in accordance with their enforced monopoly organization called government. Therefore, the only thing that can prevent corruption, theft, waste, and injustice is to abolish their funding and look elsewhere.

A legalized monopoly on anything in the marketplace, especially a legalized monopoly on the use of force—and especially one that takes money rather thanmakes it (and I don’t mean with the printing press)—is a prescription for absolute power and absolute disaster. It means disaster for individual rights, private property, liberty, and the pursuit of happiness. And in some cases, it means suffering and death to multitudes of people. Upon some reflection, one wonders how such a diabolical system could ever be entertained, let alone implemented and continually upheld, by rational adults.

As long as people exchange values in a voluntary manner, by means of their own decisions, there’s no need for instruments of force. The only type of force warranted in a free society is retaliatory force. Reasoning beings have a need to rectify injustices and ascribe consequences for wrongdoing. And since the only moral instruments of force stem from the right to self-defense and defense of one’s property, these instruments must be enacted either on one’s own or by a chosen agent of retaliatory force, based on efficiency and reputation, or price and competence. One could call these “legal agencies,” but for all intents and purposes they more accurately are called insurance companies.

Free market insurance companies will likely become the new Guards of our future security that Jefferson spoke of, though he wisely left them to our imagination and ingenuity. What they’ll be insuring is our right to live and flourish in an environment of liberty that respects property rights, an environment of complete liberty. They’ll make sure that whatever rights-violations have occurred are rectified with reparations for damages and equitable restitution. Nonetheless, individuals will always be free not to purchase such services; no one may impose on others who live peacefully.

Notice that this will be fully possible only when private property is ascribed to every possible domain. Again, there’s no alternative if we desire to live in lands of peace and prosperity governed by respect for ownership, rather than deference to authoritarian and arbitrary power structures.

As the Austrian economist Hans-Hermann Hoppe has keenly noted, insurance companies in the business of defending rights will have every incentive to minimize risks to their clients and to exact justice when faced with a probable claim, following from a rights-violation. Those with the best reputations for competence will be in most demand. Remember, the people have decided to no longer tolerate Despotism or suffer evils. As noted by Homer in the Iliad a few millennia ago (and by Achilles in the film Troy), there are no pacts between lions and men. When some men take on the manners of lions, there can be no appeasing them.

Let’s also keep in mind that today’s corporate insurance companies have big offices on K Street. It’s no wonder; insurance is one of the most heavily regulated industries in America. We, as consumers of all forms of insurance, suffer considerably as a result. Higher prices, convoluted, almost unreadable policies that nearly require a team of lawyers to decipher, and substantially reduced choices face us daily. Additionally, insurance companies are prevented from making all sorts of practical business decisions, and many of the bigger corporations have lobbied to attain corners on the market and become immune to various market pressures (surprise surprise).


What Abouts And What Ifs: Last Ditch Attempts To Save The State

The thought of replacing the coercive operations of the State with respectful free market processes is probably unsettling for many who are accustomed to the status quo, either as rights-infringers or, ironically, as their victims. In any proposal of radical, principled, political change, some tend to fear the worst, and they tend to overlook their present yokes and chains. Let’s examine a few typical concerns.

If government essentially does things by pointing guns at people, how in the world can you give this power to more than one organization? You will never be able to keep an eye on so many powerful organizations!

Does giving absolute, or even “Constitutionally constrained,” power to initiate force to one organization somehow solve the essential problem of Government? No, it does not. Does allowing legal immunity for one group of aggressors against the sovereignty of individuals make a political system of justice? Most certainly, it does not.

Instead, monopolistic government creates the very problems that it’s purportedly designed to solve. Rather than creating law and order, it fosters lawlessness and disorder by incorporating the initiation of force as its method of operation. Instead of being accountable to citizens, it throttles them with unjust laws and expropriates and controls their property. Instead of protecting our rights, it lays a wretched foundation for criminality in society by taking revenue rather than making profits, and threatening everyone to conform to it’s collective, irrational will, as well as put up with its huge lack of customer service.

In short, the State creates massive roadblocks to peace and prosperity. Even if government were strictly relegated to the use of retaliatory force and protection of individual rights (under Laissez-faire capitalism) this would contradict it’s nature as a legalized monopoly that forcibly bars other organizations from competing, organizations that can perform the service of justice better, perhaps far better, as well as much cheaper.

The ideas of voluntary payment and rights-upholding agencies follow from the principles of justice, individual rights, and contracts. Since anyone has the right to self-defense and to rectify wrongs done to him or her, anyone can delegate enforcement of that right, or become an agent to enforce such rights for others. Logically, no one has the right to enforce a monopoly of rights-based agency on others. None of us may tell others what’s good for them and then proceed to force them to accept it. In other words, individual rights come before government, not the other way around. The concept of liberty precedes any actions to ensure it.

Organizations of people in the free market (not ones who currently use political pull) get powerful because they satisfy consumer wants and needs. As soon as they start failing at this job, they lose market share or even go out of business. People spend their money on products and services that best suit their needs, rather than on one-size-fits-all models. Therefore, the power really resides in those who decide to spend money, not in those who compete for earning it.

Won’t there be numerous overlapping jurisdictions in which violence is used to resolve jurisdictional disputes, not to mention biased judgments in cases for clients of particular insurance companies? After all, when governments disagree, they tend to go to war. Why would private enterprises, who get paid by whoever is rich enough to buy their favor, be any better? In fact, wouldn’t they be worse, creating a land ruled by warlords and Mafia-type thugs?

Such reasoning partially illustrates why we remain in our present form of Despotism. Jefferson was so right when he wrote that “all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed.” Apparently, we need to be fully enslaved by the State before any real alternatives are worth considering. Of course, by then our fates would be permanently sealed, similar to being stuck in quicksand up to your neck before attempting to extricate yourself or call for help.

In matters involving human thought and action, one must strive to avoid context-dropping as well as confirmation bias, which means only looking for what one wants to find and finding only what one is looking for. Actually, in politics it’s often worse than that: The things found are merely creations of one’s own mind. Needless to say, objectivity is thrown out the window, head first.

Scientists are probably most keen about these reasoning pitfalls, at least in their own disciplines. But immense and widespread governmental funding and influence tends to noticeably impair their better judgment. Nonetheless, an astute scientist tries to adhere to the rigors of the scientific method, such as performing controlled (especially double blind) studies to better pinpoint causal factors and rule out extraneous variables.

We don’t have all the laboratory tools of the scientific method at our disposal in politics. We can’t put randomly assigned groups of the citizenry in a controlled environment and subject them to experimental legal procedures. What we can do, however, is consider the massive weight of the evidence regarding present legal procedures, both statist and voluntary (such as arbitration and meditation). We can also use our knowledge of history, sociology, economics, philosophy, and psychology in order to derive an objective understanding of human nature. Doing so allows us to arrive at logical and practical political and ethical principles as well as sound conclusions.

In the case of insurance companies being representatives and defenders of our rights, we have to examine the essential incentives and disincentives to resolve jurisdictional and judgment disputes fairly and peaceably.

Obviously, in order to make the transition to a society of complete liberty, most people must agree to it. Most people need to understand these concepts and behave accordingly. This tellingly explains why we’re not there yet. Most today either don’t have knowledge of a better way for people to interact politically, or they defer to those who are influential and in positions of power to make their decisions for them. We certainly suffer the consequences of each, although showing deference to irrational authorities is much harder to overcome than simple ignorance. Thus, the ideas of justice and property rights that complete liberty so potently addresses are not recognized and staunchly advocated by most people. Instead, we have numerous variations on the same theme of injustice—statism—circulating in the political and moral world of “memes,” a term coined by evolutionary biologist Richard Dawkins, which refers to ideas or practices transmitted to others in a culture.

However, as new memes about complete liberty begin circulating more widely in the American population, we’ll witness a great political inoculation, a resistance to injustice and authoritarianism. The veil of ignorance will be lifted and the large wall of power structures will then begin to crumble.

Those who believe in property rights, the sovereignty of individuals, and voluntary contracts also believe in the tremendous value of justice. A society of predominantly rights-respecting people forms an impenetrable network of liberty-oriented memes, which are translated into their physical manifestations as legal agencies. In such an environment, people simply don’t tolerate—in particular, they don’t pay for—biased or unjust services rendered by insurance companies, or by any other type of competitor.

Companies of villainous intent therefore can’t gain a foothold on the free market. It’s certainly no coincidence that the Mafia and warlords thrive in unjust and chaotic political environments, where various black and gray markets, and few free markets, exist. Inherently collectivistic in nature, these tribal mentalities impose, with whatever weaponry at their disposal, their stagnating forms of rules and punishments on people. An advanced civilization of voluntarism and unfettered capitalism naturally fosters the opposite environment. Rights-respecting people are vigilant with their pocketbooks and their opinions in empowering their agents to prevent the rise of any rights-violating groups and companies. Bad organizations hence encounter severe viability problems in such a context.

As for war, remember that war is typically the result of disagreements between the actions of States, specifically their leaders’ self-serving and nationalistic choices, which then drag the tax-burdened and well-regulated populace into the bloody battlefields. In a society of rights-respecting people, funding dries up for such a destructive process. Given that a large military is incredibly expensive to operate and maintain, very few individuals or organizations have the resources to create a war machine. No war can occur without funding, and soldiers tend not to venture across borders without pay and benefits and/or a drive for revenge.

In a society of rights-respecting people, where “politics” is a thing of the past, there are no financial or ethical incentives to fight other insurance companies, let alone other, less enlightened nations. Companies are obviously encouraged to minimize their costs and discouraged from being less efficient. Competition for price, quality, and moral reputation, like in any other realm of business, serves as the ultimate inhibitor of corruption. Service to the customer is even more important in a system of complete liberty. Any deviation from the principles of justice on the part of an insurance company would spell disaster to its reputation and bottom line.

I’ve deliberately saved the idea of overlapping jurisdictions for last. Interestingly, this issue has been a central sticking point for those who favor voluntarily funded, yet still monopolistic, government (Laissez-faire capitalism). The philosophical debate of “anarchism versus minarchism” continues on forums and email lists throughout the Web. This issue has also been addressed in many other libertarian books that explain the contradictions in a “voluntary” State and the unparalleled merits of Anarcho-capitalism, which is another term for complete liberty.

The key thing to remember is this: Companies that operate in the same so-called jurisdiction are no different in principle than people in physical proximity to each other. All are capable of exercising their right to self-defense and defense of their property. Your right to self-defense doesn’t interfere with my right to self-defense. Your right to contract with a particular agent of rights-protection doesn’t conflict with my right to contract with a different agent of rights-protection. Your right to seek restitution for torts done to you doesn’t interfere with my right to seek restitution for torts done to me. Individual rights and their enforcement, by definition, can never be in conflict.

Insurance companies simply serve as professional, contracted agents who agree to exercise the more complex and less immediate aspects of the right to self-defense, pursuant to a rights-violation, on behalf of those who decide to pay for their services. This is a crucial example of division of labor and specialization in the marketplace. Just as few of us spend our time and resources growing our own food and building our own houses, few of us will want to spend our time and resources protecting our rights.

Rights-defending insurance agencies will focus on issues of justice. They’ll provide security and enforce remedies when security has been breached. These are their selling points and means of gaining customers. As in any industry that requires universal standards in order to function properly across competing platforms, insurance companies naturally institute generally agreed upon rules of operation and engagement with other parties. These assist them when they’re faced with confusing or missing evidence and contradictory claims by their clients and clients of other companies.

Insurance companies will definitely incorporate much of customary law precedents as well as arbitration and mediation methods, which are obviously non-statist, common-sense ways of restoring victims and upholding property rights. It’s in their business interest to make law simple and efficient. The principles of due process, evidentiary investigation, fair and speedy trial, objective judgment of whether force was initiated (and by whom), and appropriate restitution and/or reparation will generally govern their practices. In a just legal system, the accuser (or their insurance company) will pay compensation to the person falsely arrested and accused (or heaven forbid, falsely convicted), which provides an incentive to minimize lengthy trials and wasted resources. Hence, today’s various irresponsible lawsuits will be markedly reduced and, of course, the State’s practice of holding individuals for days, weeks, months, or even years without trial will be eliminated.

In situations where companies are at loggerheads, where they can’t reach an equitable resolution, their standardized procedures will still be followed. A previously agreed upon and outlined appeals process to third party courts will safeguard against corruption and unresolved conflicts. Moreover, the accused must retain the right to choose a third party justice service, which enables the most fair and equitable judgment and resolution, that is, objectivity in law.

Again, it behooves all companies involved to insure not only against risk to their respective clients, but also against risk to their working relationships with other companies. Because each company will profit by insuring against potential rights-violations and by enforcing correct and equitable judgments, all companies seeking a share of the market have every incentive to settle conflicts peaceably and with minimal cost, according to a uniform system of justice.

So, what is the specific legal nature of a society of complete liberty? What are the universally agreed upon principles, that is, the principles honored to enable standardization? Further, what laws will best promote our happiness? Let’s proceed.