Anarchy and the Law pdf

Edward P. Stringham

Chapter 1: Introduction

―Political economy has disapproved equally of monopoly and communism in the

various branches of human activity, wherever it has found them. Is it not then
strange and unreasonable that it accepts them in the industry of security?‖—
Gustave de Molinari (1849)

Is government necessary? Private-property anarchism—also known as anarchist

libertarianism, individualist anarchism, or anarcho-capitalism—is a political philosophy

and set of economic arguments that says that just as markets provide bread, so too should

markets provide law. If someone agued that because food is so important it must be

supplied by government, most would respond that government provision of food would

be a disaster. Private-property anarchism applies the same logic to law and argues that

because protecting property rights is so important, it is the last thing that should be left to

the state. Under private-property anarchy, individual rights and market forces would

reign supreme; there would just be no state. Security would be provided privately as it is

at colleges, shopping malls, hotels, and casinos, and courts would be provided privately,

as they are with arbitration and mediation today.

The current volume brings together a sampling of the major essays explaining,

debating, and giving historical examples of stateless orders. Led by economists and

political theorists such as Murray Rothbard and David Friedman, the authors in this


I thank Walter Block, Mark Brady, Bryan Caplan, David Hart, Jeffrey Rogers Hummel, Benjamin Powell, Alex
Tabarrok, and David Thoreaux for helpful comments and suggestions. Andrew Neumann provided excellent research
assistance.

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volume emphasize the efficacy of markets and the shortfalls of government. To the

libertarian, the state and its enforcement apparatus is not a benign force in society—but

where limited government libertarians argue in favor of political constraints, anarchist

libertarians argue that the only way to check government against abuse is to eliminate it

completely.

Today, more and more scholars and general readers see private-property

anarchism as a viable and worthy alternative to the monopolistic and coercively funded

state. Individualist anarchism has a long history but most of the early writing was

published anonymously or in obscure places. Today, in contrast, private-property

anarchism is now discussed in top economics journals such as the Journal of Political

Economy (Hirshleifer, 1995; Dowd, 1997) and in 2002 George Mason University

economist Vernon Smith became the first private-property anarchist to win the Nobel

Prize (Smith, 2003, pp. 484-6). In addition to being a potentially important normative

position, anarchist research helps explain events and trends of historical and

contemporary relevance. Consider, for example, that private security guards now

outnumber the public police, and private arbitration—the so-called ―rent-a-judge‖

business—is booming. Private-property anarchism also sheds light on nineteenth-century

Britain, where private prosecution agencies tracked down criminals long before the

public police existed. Similarly, trade in Medieval Europe, like international trade today,

was governed for hundreds of years under competing systems of law.

The works in this volume are influential, yet many were published in relatively

obscure publications and are often difficult to track down. This editor knows this first

hand, having written a doctoral dissertation, and before that a college senior thesis, on the

Electronic copy available at: http://ssrn.com/abstract=1768172

topic. In college my professor liked my proposed topic but he doubted whether enough

material on the subject had been published. Luckily, another economics professor was

well read in private-property anarchism, and he compiled a list of books and articles for

me. Only through that guidance, and a number of interlibrary loan requests, was I able to

get a representative overview of the subject. Many of these articles are reprinted here. By

compiling all of these important articles in one place, these works are now accessible to

more than just a handful of experts or fortunate students.

This book reprints articles about anarchism from many libertarian points of view

rather than attempt to present a unified vision of anarchy. Although all anarchists agree

that the state is unnecessary, many of the specifics are still debated. For example, some

authors support anarchy using arguments about consequences, while others support

anarchy using arguments about rights. Some authors highlight how markets can function

with private law enforcement, while others highlight how markets can function without

any formal law at all. The articles in this volume will give the reader a sampling of some

of the more important works on the subject.

The book’s articles are organized in four categories: Section I presents the major

theoretical works that argue in favor of private-property anarchism; Section II contains

writings that debate the viability of private-property anarchism, presenting articles and

responses from the classical liberal and anarchist perspectives; Section III contains some

of the early works in individualist anarchism, as well as modern articles on the history of

individualist anarchist thought and the different types of anarchism; Section IV presents

case studies and historical examples of societies that functioned without public law

enforcement. The chapters need not be read in order so one can skip around depending on
one’s interests. For example, if one wants an overview of the differences between

libertarian and non-libertarian anarchism, one can skip directly to the chapter by

Osterfeld.

I. Theory of Private Property Anarchism

The articles in this first section criticize arguments for government law

enforcement and discuss how the private sector can provide law. They critique the very

notion that a government monopoly over the use of force is needed. How will a

competitive system function? How will the provision of public goods or the problem of

free riders be dealt with under anarchy? Not all private-property anarchists agree but

many of the chapters in this section offer speculative visions about how various problems

might be solved. Reading the articles in this section will give an overview of some of the

major anarchist visions.

The first chapter in Section I is Murray Rothbard’s important ―Police, Law, and

the Courts,‖ from For a New Liberty (1973). Jerome Tuccille (1971) once wrote a book

about libertarianism entitled It Usually Begins with Ayn Rand indicating how many

libertarians became interested in freedom by reading Ayn Rand. If one were to write a

book about anarchist libertarianism one might entitle it It Usually Begins with Murray

Rothbard. In the late 1940s, Murray Rothbard decided that that private-property

anarchism was the logical conclusion of free-market thinking and published his first work

on it in 1954. Rothbard was the first to merge modern economic thinking with

nineteenth-century anarchists’ distaste for the state (Powell and Stringham, forthcoming).

Rothbard wrote dozens of articles on anarchy but this, one of his most concise pieces, is

reprinted here. Rothbard argues that the way to figure out how much protection there

should be is to have a market for law enforcement. This chapter provides a speculative
account of how police and courts could be provided on the market and it offers possible

ways that people who subscribe to different protection agencies could settle disputes.

Under Rothbard’s vision each protection agency would be held accountable to respect

individual rights.

Along with Murray Rothbard, David Friedman is one of the founders of anarcho-

capitalist thinking. Friedman, too, has written many articles on this subject but his earliest

work on the subject appeared in his The Machinery of Freedom (1973). This chapter

reprints a portion of the second edition (1989) of that book. Not content to believe that

convincing people of anarchism requires changing their moral precepts, Friedman argues

that even non-libertarians can embrace anarchism out of pure self-interest. Where

Rothbard argues for anarchism based on rights, Friedman argues for anarchism based on

efficiency. Friedman’s vision differs from that of Rothbard because Friedman believes

that anarchist laws need not be libertarian. Under a market for law people would be free

to choose any rules they wish and the resulting outcome would be determined by net

willingness to pay. Friedman describes how multiple police might operate in each area

and how they would have incentives to settle disputes through bargaining rather than

violence.

Another early work that provides many details on how a competitive system

might function was self-published by Morris and Linda Tannehill in 1970 and reprinted

by Arno Press in 1972.1 This book certainly had less circulation than Rothbard (1973) or

Friedman (1973) but it clearly had influence on subsequent writers such as Friedman,

who refers to a fictional defense agency as Tannehelp, Inc. These authors are concerned

1
The 1972 volume also reprinted Wollstein’s (1969) short monograph Society Without Coercion, which advocates
anarchism but goes in less depth than the Tannehills.
with any monopoly of the use of force (regardless of whether it is agreed to) and so they

offer a system where multiple agencies compete in each geographic area. Some of the

Tannehills’ discussion may appear as science fiction or less worked out than subsequent

writing, but their book deserves a place as being one of the pioneering pieces to ponder

how private police might work.

Subsequent writers have been able to expand or refine some of the early anarchist

arguments. Boston University Law Professor Randy Barnett has contributed much to the

subject (Barnett, 1998) and this volume reprints his 1986 article ―Pursuing Justice in a

Free Society: Crime Prevention and the Legal Order.‖ Barnett discusses how much of our

current crime is caused by the fact that streets are publicly owned and not privately

policed. Instead of having government incarcerate people to produce order, Barnett

argues that simple exclusion would do much of the job. Once government monopoly is

abolished Barnett believes that competing police could pick up any remaining slack. He

offers a vision of how multiple law enforcers would operate in each geographic area and

how they might deal with unfair renegade enforcers of law.

The next chapter, ―Capitalist Production and the Problem of Public Goods,‖ is by

Hans-Hermann Hoppe, a colleague of Rothbard who edited of the Journal of Libertarian

Studies from 1995-2005. Hoppe’s subsequent books, such as Democracy—The God That

Failed (2001), have had a much wider circulation, but this chapter from A Theory of

Socialism and Capitalism (1989) contains one of Hoppe’s original contributions on the

subject. Hoppe questions the public goods justifications for government altogether by

arguing that that police and courts are excludable, rivalrous, and must be allocated in

certain areas. They are not abstract public goods as commonly presented in textbooks.
The government needs to decide whether to hire one judge and one policeman or 100,000

of each, but without a market mechanism the government has little way of figuring out

how to allocate resources. Like authors before him, Hoppe describes arrangements that

competing protection agencies might use to enforce laws, and Hoppe emphasizes the

importance of public ideology towards maintaining liberty.

What about international conflict under anarchy? Jeffrey Rogers Hummel and

Don Lavoie address the issue in ―National Defense and the Public-Goods Problem.‖

Hummel and Lavoie have two responses to those who believe that government militaries

are necessary. First, they question whether creating a national military actually solves the

free-rider problem, and second, they question the extent to which the military is

defending the public rather than defending the state. Most supporters of national defense

assume that the interests of the public and the government coincide but Hummel and

Lavoie question this assumption. In fact, militaries often pose the greatest threats to the

public. Hummel and Lavoie believe that the true public good is defending liberty and

they argue that this does not depend on the state. The important constraint against

government must always be resistance on the part of the public.2

Roderick Long also discusses the problem of national defense in ―Defending a

Free Nation.‖ Like Hummel and Lavoie, Long argues that a nationalized military actually

provides more of a threat than a defense. Long discusses that decentralized defense could

be provided in at least four ways: first, by for-profit firms that act in consortium to defend

their clients; second, by private firms that raise money through charitable means; third,

by an armed populace who defend themselves without centralization; or fourth, defense

2
These arguments are elaborated in greater detail in Hummel (1990) and Hummel (2001).
by civilians who use non-violent resistance. Long discusses the possible benefits and

possible shortcomings of each and argues that defending a free society would require

some combination of all of the above.

The final chapter in Section I is by John Hasnas, who takes a different approach

than anarchist predecessors such as the Tannehills, Rothbard, Friedman, or Barnett.

Where earlier theorists attempt to create a blueprint of how the market would handle law,

this legal philospher argues that the law will evolve in ways we cannot predict. He argues

that there is no one right way to settle disputes and we should not attempt to centrally

plan the law. Attempting to create blueprints of how all problems will be solved might

even be counterproductive because the blueprints will necessarily be incomplete. Hasnas

argues that we need not have a crystal ball yet we should be confident that market

solutions will be discovered.

II. Debate
After presenting some of the arguments in favor of private-property anarchism,

the volume gets to the debate. The authors in this section are all libertarians, although

some support anarchism while others support limited government. Early critics of

anarchism argue that the only system consistent with individual rights is a system with a

government monopoly on the use of force (Rand, 1964; Nozick, 1974). Later critics of

anarchy often accept anarchy as being morally superior yet they express doubts in the

viability of the system (Cowen, 1992; Rutten, 1999; Holcombe, 2004; Cowen and Sutter,

2005). All of these authors argue that special characteristics of law enforcement make a

competitive system unlikely or impossible. This section includes some of the major

criticisms of anarchy and some anarchist responses.

 One of the most famous supporters of minimal government was Ayn Rand. In

―The Nature of Government,‖ originally published in 1964, Rand argues that society

requires a respect for individual rights and argues that the government must enforce those

rights. She argues that the use of force—even in self-defense—cannot be left to the

discretion of individuals. Rand criticizes libertarian anarchy by saying that a system with

private police would lack objective laws and will result in conflict. She offers a

hypothetical scenario where two neighbors hire different police and then get in a dispute.

According to Rand, the only result under anarchy would be for the two parties to resort to

arms and the only solution is to have a government monopoly on the use of force.

Not all followers of Rand were convinced. In 1969 Roy Childs wrote

―Objectivism and the State: An Open Letter to Ayn Rand.‖ Childs argued that if one

supports liberty one should oppose the state in all forms. Although Rand says she is

against the initiation of the use of force, Childs points out that any government

necessarily initiates force when it prevents people from defending themselves. Childs

takes on Rand’s specific claims maintaining that many of her arguments are not as logical

as Rand implies. He argues that just because people in society should abide by objective

rules it does not follow that a government monopoly is necessary. Her argument is

equivalent to saying that because one must follow objective procedures to produce a ton

of steel, government steel production is necessary. Childs points out that Rand simply

assumes that competing police will act violently and she assumes that her benevolent

government will not. Economists call this the Nirvana fallacy. An upset Rand never

wrote a written response and had Child’s subscription to The Objectivist cancelled.

Child’s letter made its rounds and, according to Jeffrey Rogers Hummel, was one of the
most influential writings in convincing Rand-influenced libertarians to become full-

fledged anarchists.

As the 1970s progressed, the number of people writing about anarchism increased

exponentially. In 1977 Murray Rothbard founded the Journal of Libertarian Studies,

which printed many articles on anarchy. One exemplary article from an early issue is ―Do

We Ever Really Get Out of Anarchy?‖ by Alfred Cuzan. In this article he questions some

of the basic assumptions of government advocates such as Rand. If a third party is

required to settle disputes between individuals, who settles a dispute between individuals

and the state? Cuzan argues that creating government is simply replacing one form of

anarchic relations with another. Unenforceable relations between people or governments

will always exist, so Cuzan questions whether creating a government hierarchy is

desirable.

Robert Nozick provided one of the most famous critiques of private-property

anarchism in Anarchy, State, and Utopia, which ended up winning the 1975 National

Book Award for Philosophy and Religion. Nozick was a Harvard philosopher who had

become a libertarian after meeting one of Rothbard’s colleagues, and later Rothbard, in

the early 1960s (Raico, 2002). Still, Nozick was unconvinced of anarchist libertarianism,

so he devoted the first third of his treatise arguing against Rothbard’s views on law.

Nozick attempts to rebut the anarchist claim that all governments violate rights by

positing an invisible hand theory of government. He argues that out of a state anarchy, a

dominant protection agency would be justified in protecting their customers from

potentially risky firms and this dominant protection agency would be justified in

becoming a state. Even though the government would use force to prohibit competition,
Nozick argues that the government would not violate rights provided it compensated

those who wished to have an alternative arrangement. The best way of compensating

those injured parties, according to Nozick, would be to provide them with free police.

Not all libertarians were convinced. The inaugural issue of the Journal of

Libertarian Studies was devoted to analyzing Nozick’s theory of government; two of the

responses are reprinted here. Roy Childs takes on Nozick’s defense of government in

―The Invisible Hand Strikes Back‖ (1977). Childs criticizes Nozick for arguing that

smaller protection agencies might be risky but the dominant protection agency would not.

It might be the case that the government is the riskiest agency of all. Nozick gives no

reason for us expect that this government would not become abusive itself. Childs also

questions Nozick’s proposed compensation for those who do not wish to have

government. He writes, ―What is he willing to offer us as compensation?… He is

generous to a fault. He will give us nothing less than the State.‖ Does Nozick really

believe that compensating those who dislike police with more police will return them to

their original indifference curve?

In ―Robert Nozick and the Immaculate Conception of the State,‖ Rothbard argues

that even if Nozick were correct in his logical reasoning, he fails to provide a justification

for any existing government. Because no government was ever formed according to

Nozick’s process or acts in a way that Nozick wishes, Rothbard argues that Nozick

should join the anarchists in opposing government. At a more fundamental level,

Rothbard questions Nozick’s logical justification for government. Where Nozick argues

that prohibiting risky behavior is just, Rothbard argues that such a position would lead to

numerous authoritarian laws. Many people have the potential to engage in dangerous
behavior, but that does not justify prohibiting them from acting or locking them up.

Rothbard deals with many of Nozick’s claims, and in the end concludes: ―[E]very step of

Nozick’s invisible hand process is invalid.‖

Later critics of anarchy do not posit that the state is necessary or that the state is

just as in Rand or Nozick. Nevertheless, these critics of anarchy argue that the state might

be inevitable. In one of the more sophisticated criticisms of libertarian anarchy, Tyler

Cowen argues that a system with competing courts will devolve into coercive

government because law enforcement is a network industry where firms must be

interdependent on each other. Cowen’s article, ―Law as a Public Good: The Economics

of Anarchy,‖ includes ―Public Good‖ in the title, not because the government is

providing a good but because Cowen believes that a legal system must apply to everyone

in a geographic area. He argues that if firms are able to cooperate to settle disputes then

that same mechanism that same mechanism will enable them to cooperate to collude.

Even if multiple firms exist, Cowen argues the result will be a de facto monopoly that can

use force to exact taxes just like government.

David Friedman responds to Cowen in ―Law as a Private Good.‖ He agrees that

firms would have relationships with other firms, but he disagrees that the industry must

be a network industry that facilitates a cartel. He argues that a situation with bilateral

contracts between firms is quite different from a situation with one industry-wide

contract. If the only relationships in the industry are between pairs of firms, these

relationships do nothing to enhance their ability to collude. Friedman argues that the

situation is akin to the contractual relationships between grocery stores and suppliers.

Cowen’s ―Rejoinder to David Friedman on the Economics of Anarchy‖ (1994) provides a

brief response arguing that analogies from regular industries do not apply. Cowen argues

that competing firms must cooperate to enforce laws and he argues that they will be able

to use force against those who do not comply. The number of firms is unimportant

because even though the world has many different police forces and local governments

they still collude. Cowen believes that often governments do terrible things, but he is

pessimistic that libertarian anarchy offers a viable alternative.

Caplan and Stringham, in ―Networks, Law and the Paradox of Cooperation‖

(2004), question Cowen’s argument that network industries facilitate collusion. Although

enforcement of law across multiple agencies would require some cooperation, the ability

to cooperate does not guarantee they will be able to collude. Law enforcement may

require some cooperation but the network need not be all-powerful. They distinguish

between self-enforcing and non-self-enforcing agreements and argue that collusive

agreements between firms would be harder to enforce. For example, if firms attempt to

collude to raise prices, each firm would have an incentive to break the agreement. On the

other hand, if firms coordinate to boycott a bad business risk, each firm has an incentive

to follow the agreement lest it be cheated itself. Caplan and Stringham give historical

examples of network industries, such as banks and credit card companies, that have been

able to facilitate coordination but have been unable to facilitate collusion.

Cowen and Sutter reply in ―Conflict, Cooperation and Competition in Anarchy‖

(2005), arguing that Caplan and Stringham’s analysis underestimates the importance of

the use of force. Cowen and Sutter argue that the interaction between firms is a

coordination game with multiple equilibria, not all of which are libertarian. Although a

situation of armed conflict may not occur, firms might end up backing down to a coercive
firm rather than defending their clients’ rights. Because membership in a network is

valuable, the incumbents may be able to exercise their market power at the expense of

others. Such a situation will enable members of an arbitration network to enact non-

libertarian rules and then refuse to deal with new entrants who do not agree. This sows

the seeds for the creation of government whether we like it or not. Perhaps the Hobbesian

dilemma may never be solved.

One economist who accepts many of the Hobbesian arguments yet still supports

anarchy is Anthony de Jasay. In one of his many works on the subject, ―Conventions:

Some Thoughts on the Economics of Ordered Anarchy‖ (1997), de Jasay addresses the

possibility that suboptimal outcomes will result in an anarchist world. First De Jasay

criticizes the advocates of limited government who argue that the state has the ability to

eliminate these suboptimal outcomes. Just because a problem exists does not mean that

government has the ability to solve it. De Jasay argues that under anarchy individuals

would have an incentive to internalize some of the negative externalities that would result

from conflict. The key is to find market solutions to potential problems. He also

addresses the claim that people need government once people want to interact outside

small groups. He says that although any given transaction may appear to be a prisoners’

dilemma, transactions take place in the complex web of society where repeated

transactions and reputation create incentives for cooperation.

Andrew Rutten addresses De Jasay’s arguments in ―Can Anarchy Save Us from

Leviathan?‖ (1999). Although Rutten accepts most of De Jasay’s criticisms of

government, he is unconvinced that anarchy, or any other system for that matter, can

eliminate the problem of force. Rutten accepts the argument that government will always
abuse its power and that constitutions are of little use; he also accepts the argument

prisoners’ dilemmas problems are not as ubiquitous in the market as most supporters of

government believe. Nevertheless, Rutten argues that anarchists may be too optimistic in

their outlook because the incentive to abuse power and expropriate property will still

remain. Anarchists, just like governments, will have an incentive to act against the wishes

of others. According to this pessimistic anarchist, property rights may never be secure.

Another author who holds a pessimistic view towards anarchism is Randall

Holcombe. In ―Government: Unnecessary but Inevitable‖ (2004), Holcombe agrees with

libertarian anarchists that government is coercive and unnecessary for public goods, but

he maintains that nothing can be done to prevent its existence. Like Rutten, he argues that

incentives for opportunistic behavior will always exist and he argues that libertarian

anarchy would either internally devolve into government or be overtaken by force.

Holcombe points out that the world is ruled by governments, which shows that anarchy is

not an option. Instead of advocating government abolition, Holcombe argues that

libertarians should seek to find ways to make government as small as possible. Holcombe

maintains that the best course of action is preemptively creating a limited government

that will still expropriate, but will expropriate less than less limited governments.

Leeson and Stringham question Holcombe’s account in ―Is Government

Inevitable?‖ (2005), maintaining that Holcombe is too pessimistic about the possibility of

stateless orders and too optimistic about the possibility of limited government. They point

to many historical examples of anarchist societies, including modern-day Somalia, and

argue that the evidence that most nations are currently controlled by states says nothing

about the long-term prospects for anarchy. They also question the idea that society can
create a more benign government if all governments are created for the benefit of their

creators. If Holcombe’s Hobbesian assumptions are correct then nothing stops limited

government from becoming unlimited government. Leeson and Stringham argue that

limiting government ultimately depends on ideological opposition to the state, and argue

that if limited government is possible so too is anarchy.

III. History of Anarchist Thought

The next section contains a sampling of early anarchist works as well as modern

commentary on the history of anarchist thought. Two chapters are by eighteenth- and

nineteenth-century Europeans, four chapters are by nineteenth-century Americans, and

three chapters are by contemporary writers who provide overviews of anarchist thought.

Anarchist sentiment has a long history but its explicit formulation only came within the

past couple centuries with the vast majority of the work coming in the past three decades.

How does private property anarchism relate to other political philosophies and how did

anarchists arrive at their views?

David Hart provides an excellent history of how private-property anarchism

evolved. This chapter reprints portions of Hart’s three-part essay, ―Gustave de Molinari

and the Anti-statist Liberal Tradition.‖ David Hart sees private-property anarchism as

originating from classical liberal philosophy, which focused the importance private

property rights and the need to constrain the state. Eighteenth- and nineteenth-century

anarchists and quasi-anarchists ended up advancing the view to the logical extreme,

concluding that government is not needed at all. Private property was most explicitly

spelled out starting in the nineteenth century by authors such as Gustav de Molinari.

David Hart discusses the influence of these writers and how their ideas were passed on to

the anarchists who exist today.

 One of the earliest works that is clearly anarchist is Edmund Burke’s ―Vindication

of Natural Society.‖ Burke, who is often considered the father of new conservatism,

published this essay anonymously as a letter by ―a late noble writer‖ in 1757. Burke later

had political aspirations, so when people discovered he was the author Burke claimed that

the piece was a satire. The issue is debated in Pagano (1982), but Murray Rothbard

(1958, p. 114) believed, ―Careful reading reveals hardly a trace of irony or satire. In fact,

it is a very sober and earnest treatise, written in his characteristic style.‖ Burke’s piece is

a scathing attack on government. He discusses how governments have killed millions

through wars and have enslaved their citizens. It does not matter if governments are

despotic, aristocratic, or democratic; they are still tyrannical. Are not government laws

created to protect the weak? Burke responds, ―surely no Pretence can be so ridiculous.‖

We may never know Burke’s true motivation but this piece is an all time anarchist

classic.

The first person to explicitly advocate competitive law enforcement was Belgian

economist Gustave de Molinari, who wrote ―The Production of Security‖ in 1849.

Molinari argues that, because competition better serves the interests of consumers, there

should be competition in all areas, including law. He maintains that all monopolies are

coercive and argues that the natural consequence of monopoly over security is war.

Governments war only because they wish to wrest the monopoly over the use of force; if

the monopoly over the use of force could be eliminated so too would the incentives for

aggression. Molinari proposes letting individuals be clients of any enforcement agency of

their choice and provides a brief description of how such a system might work. He

believes that law enforcement would likely be territorially based but he says that
individuals should be able go to another protection agency in case of abuse. The article

was revolutionary in its day and can be considered the first piece to explain how a system

with private police might function.

In America, although the colonists were not writing economics treatises on

private-property anarchism, Murray Rothbard argues that anarchist sentiment has a long

history. In ―Individualist Anarchism in the United States: The Origins,‖ Rothbard

describes how many seventeenth-century colonists opposed taxation or any form of

government, often on religious grounds. Rothbard discusses such people as Anne

Hutchinson, who left Massachusetts and ended up setting up communities that operated

without a state. In seventeenth-century Pennsylvania, William Penn did not intend to

create an anarchist colony, but it ended up being de facto anarchy for some years. Many

of the Quakers believed that any participation in government was a violation of Quaker

principles, and when Penn tried to impose a tax he was met with strong resistance.

Eventually Penn and others created government but the legacy of anarchist sentiment

lived on.

Voltairine de Cleyre lived from 1866–1912 and wrote that the principles of the

American Revolution were anarchist. De Cleyre was one of the many nineteenth-century

individualist anarchists in America and she wrote ―Anarchism and American Traditions‖

in 1908. In this chapter de Cleyre makes the case that the principles of the American

Revolution need to be reawakened. She outlines the commonalities between the

revolutionaries and the individualist anarchists in their mistrust of government and their

goal to create equal liberty for all. Unfortunately, after the Revolution the government

has grown and the public has not done enough to stop it. In the early 1800s Americans
were concerned about having a standing army of 3,000 and in de Cleyre’s day she was

outraged that the number had grown to 80,000. (In 2005 the U.S. government has a

standing army of over 1.4 million people!3) Wishful thinking notwithstanding, the

Constitution appears to be ineffective against the growth of government.

Nineteenth-century Boston anarchist Lysander Spooner provides a scathing

analysis of the U.S. Constitution in ―No Treason: The Constitution of No Authority.‖

This chapter reprints a portion of his 1869 attack on the federal government of the United

States. How the times have changed: Whereas in modern times defenders of Constitution

are considered defenders of small government, in the nineteenth century defenders of the

Constitution were considered defenders of big government! Spooner argues that the

Constitution is an illegitimate social contract because neither he nor anyone he knows

actually signed the Constitution. Just because thirty-nine men signed the Constitution in

1787 does not mean that it should hold any moral weight on the other 3 million

Americans at the time or the 300 million Americans living today. Spooner likens the

government to a highway robber but argues that government is worse. After stealing your

money the highway robber is too much of a gentleman to follow you around and say he is

protecting you!

Lysander Spooner also criticizes the government legal system in his ―Trial by

Jury‖ (1852). Spooner, a lawyer by training, wrote volumes defending liberty. He argues

that trial by jury was created so laws would be judged by citizens rather than by

government. He describes how government courts corrupt this institution by creating the

laws of evidence, deciding who will serve on juries, and dictating the laws juries are to

3
From 1800 to 2005 the American population has increased fifty fold whereas the number of people in the U.S.
military has increased almost 500 fold.
enforce. The government co-opts this bulwark for liberty and replaces it with a trial by

government. Spooner maintains that a government legal system cannot be trusted because

it is allowed to determine the legality of its own acts. He argues that juries should be able

to judge any law to be illegitimate regardless of what government says.

Another nineteenth-century Boston anarchist was Benjamin Tucker, who

published the periodical Liberty from 1881–1908 (McElroy, 2003). Tucker wrote many

small contributions on anarchy and he also delved into philosophy and economics.

Subsequent writers, such as Rothbard (1974/2000), have criticized Tucker for his old-

fashioned economic views (and many libertarians will find he also had some odd views

on ethics), but Tucker was strong on the question of anarchy. In his ―Relation of the State

to the Individual‖4 (1890), Tucker argues that people will be better off by cooperating

without government. He says that if one opposes the initiation of the use of force one

must oppose the state in all forms. He argues that defense is not an essential of the state

but aggression is; defense was just an afterthought. In addition to violating liberty, the

state adds insult to injury by making its victims pay. These words ring true today.

The final chapter in this section puts private-property anarchism into perspective

by comparing it to other political and economic philosophies. David Osterfeld gives a

―Political and Economic Overview,‖ which is reprinted from his book Freedom, Society,

and State: An Investigation of the Possibility of Society Without Government. He outlines

how on the political spectrum one can be anywhere from an anarchist to a hyperarchist

and on the economic spectrum one can be anywhere from a capitalist to a socialist.

Osterfeld distinguishes between the various types of anarchism, from socialist to

4
This chapter reprints the majority of his article but leaves off the last few pages, most of which is a long quote from
Proudhon.
capitalist: anarcho-communism, anarcho-collectivism, anarcho-syndicalism, mutualism,

Godwinism, egoism, philosophical anarchism, and individualist anarchism. Many

mistakenly lump all anarchists together, which might be one reason why some

conservatives and classical liberals get scared if they hear the suggestion to get rid of

government police. In addition, Osterfeld distinguishes between the capitalist systems,

from statist to anarchist: conservatism, classical liberalism, objectivism, evolutionary

individualist anarchism, minarchism, ultraminarchism, and individualist anarchism.

Many people mistakenly lump all forms of capitalism together, which might be one

reason some critics of crony state capitalism believe they must oppose capitalism

altogether. Osterfeld’s chapter provides a useful roadmap for thinking about the

relationships between different political and economic philosophies.

IV. Historical Case Studies of Non-Government Law Enforcement

The chapters in this section show that the idea that markets can function without

government law enforcement is not just science fiction. Theories or speculative accounts

about how an anarchist society might function are well and good, but many people

remain unconvinced until they see something in practice. As the chapters in this section

demonstrate, the world is replete with examples of private law enforcement or markets

that function without formal law enforcement at all.5 These studies range from historical

episodes from hundreds of years ago to often-overlooked situations in modern society.

Many of these research articles have appeared in top ranked economics journals and they

show that research on private-property anarchism can be more than pure theorizing.

5
A lot of research analyzes private police or courts that operate within the context of a government system (Foldvary,
1994; Mahoney, 1997; Romano, 1998; Stringham, 1999, 2002; and 2003), but the examples in this section focus on
case studies where government police and courts are largely absent.
 Bruce Benson has two books and dozens of articles on private law enforcement;

two of his articles are included here. The first, ―Are Public Goods Really Common

Pools? Considerations of the Evolution of Policing and Highways in England,‖ appeared

in Economic Inquiry and documents how private parties in medieval England would

solve disputes without relying on government. The system was largely restitution based,

so wrongdoers would have to compensate their victims. Even though law enforcement

requires coordination between many people, Benson describes how people joined groups

of one hundred to police and settle disputes. The Anglo-Saxon kings, however, began

centralizing the law once they realized that they could use the legal system to collect

revenue. By declaring private torts to be violations of the king’s peace as well, they could

require wrongdoers to pay restitution to the king in addition to the actual victim. By the

time of the Norman invasion, the king declared that all of the restitution must go directly

to the king. Predictably, this eliminated the incentive for private law enforcement and

then created the ―need‖ for public law enforcement. The article shows that government

law enforcement was not created to deal with market failure and instead was created to

enhance revenue for the state!

Another article that shows that government law enforcement is unnecessary is

Joseph Peden’s ―Property Rights in Celtic Irish Law.‖ Peden’s article is important

because, along with Friedman (1979) and Anderson and Hill (1979), it was one of the

first to document how a system of private law enforcement actually functioned. In

medieval Ireland disputes were settled by private jurists called brehons and law relied on

the use of sureties rather than government coercion. The legal system was based on

restitution rather than punishment and people could pledge property or their own personal
labor as a bond. Peden provides many specific details about the property rights system,

which shows that our contemporary government law enforcement system is not the only

one.

Another historical case study of medieval times is David Friedman’s ―Private

Creation and Enforcement of Law—A Historical Case‖ (1979), which documents how

Iceland had a system of competing law enforcement for over three hundred years. People

had of choice of law enforcing bodies and they could join another coalition at will. If

someone committed an offense he would pay restitution unless he wanted to be deemed

an outlaw. Victims were given the right of compensation or they could transfer that right

to another party who was more likely to collect the fine. Because people would have to

pay if they committed a wrong, the system created incentives to reduce conflict.

Friedman argues that this competitive system created relatively efficient law and it led to

a murder rate that was lower than in the current United States.

In addition to providing systems of criminal or tort law, private legal systems

provided contract law as well. In the middle ages most disputes between merchants were

settled private in courts developed by the merchants themselves. Paul Milgrom, Douglass

North, and Barry Weingast document how this system functioned in ―The Role of

Institutions in the Revival of Trade: The Law Merchant, Private Judges, and the

Champagne Fairs.‖6 Milgrom, North, and Weingast represent this situation using game

theory, so for those interested in formalizing some of the anarchist theories this paper

offers a model. These authors explain how merchants would bring their disputes to

private courts, and if a merchant refused listen to the court he would be blacklisted by the

6
Between these authors, two have appointments at Stanford and one has a Nobel Prize and the article was published in
a highly ranked journal. The article demonstrates that anarchist research may have a place in mainstream outlets.
remaining merchants. These private courts show that laws of commerce can be enforced

without resorting to government or the use of force.

Examples of non-government law enforcement occur throughout the globe. Bruce

Benson, in ―Legal Evolution in Primitive Societies‖ (1988), documents how many

societies use voluntary customary law rather than government imposed law. If a legal rule

is beneficial people will have an incentive to adopt it and it need not be imposed by the

state. He describes the legal system of the Kapauku Papuans of West New Guinea in the

twentieth century who had no formal government yet had a private legal system that

evolved to meet ongoing needs. The Kapauku created reciprocal legal arrangements

based on kinship and based on the reputation of tonowi (wealthy men) who they trusted

to assist in legal matters. The legal system was mostly based on restitution or public

reprimand rather than punishment, and the system had a large respect for individual

property rights.

Non-government legal systems also have a history in America as Terry Anderson

and P. J. Hill document in ―American Experiment in Anarcho-Capitalism: The Not So

Wild, Wild West‖ (1979). Governments were unestablished in much of the frontier in

nineteenth-century America, yet it turns out that the frontier system was much more

peaceful than the depictions in movies. Anderson and Hill describe the enforcement

methods in the West: Land clubs enabled people to establish property rights even though

the federal government had yet to survey the territory; cattlemen’s associations helped

enforce property rights in the open range, which had millions of cattle and lacked

government police; mining camps established ways of settling mining claims without the

use of lawyers; and wagon trains dealt with enforcement issues once people traveling
West left the jurisdiction of the federal government. Many think of systems of private law

enforcement as completely foreign to the American experience; Anderson and Hill show

otherwise. Anderson and Hill (1975) developed these ideas further in the Journal of Law

and Economics and a book published by Stanford in 2004, but this 1979 Journal of

Libertarian Studies article is a classic.

Another study of the American West is done by Yale University law professor

Robert Ellickson. This time, however, the study is about contemporary society. This

chapter reprints part of Ellickson’s Order Without Law, which shows that examples of

non-government law enforcement are alive and well today. While many theorists assume

that individuals respect property rights only because of the threat of law, Ellickson’s case

study of farmers and ranchers in rural Shasta County, California shows nothing of the

sort. Ellickson studied the official laws to figure out how cattle trespass disputes ―should‖

be settled, and then he went to Shasta County to ask people how the disputes were

actually settled. Ellickson found that ranchers and farmers (and even town lawyers!) had

little idea what the laws actually said. Instead of relying on legalistic methods of dealing

with disputes, the ranchers and farmers relied on notions of what they considered right.

Because their norms often differed significantly from the law, their system of property

rights and means of settling disputes is clearly not a product of government.

Summary
The state has worked for years attempting to indoctrinate people of the necessity

of government law enforcement. The chapters in this volume suggest that this

government wisdom is wrong. Just because monopolization of law was a convenient way

for government to enhance revenue and exert control does not mean that government law

is necessary. The articles in this volume are important from two perspectives. From an
academic perspective they show that anarchism might be a useful lens to help us analyze

the world. Do people only cooperate because of the threat of government law? Perhaps

the answer is no. By taking a more realistic perspective, the anarchists have the potential

to shed light on many situations that others cannot explain. The articles in this book,

especially in the case study section, represent the tip of the iceberg of possible articles

about anarchy. Like the farmers and ranchers in Shasta County, self-governance is all

around us, and this presents a tremendous opportunity for academic research.

From a normative perspective private-property anarchism may be important for

promoting liberty in both the short and long run. For those interested in marginal change

in the short run, private-property anarchism has practical policy implications today. For

example, should individuals be able to opt for arbitration (if all parties agree), or should

government regulate and overturn arbitration decisions as it does today? Likewise, should

landowners be allowed to create gated communities with private security, or should

government make their streets open to the public and patrol them with government

police? Private-property anarchism sheds light in on these issues.

Private-property anarchism is also important for the long-run prospects for liberty.

Markets have been a blessing wherever they have been implemented and government has

been a calamity wherever it has been implemented. Instead of advocating a system that

we know does not work, why not advocate a system that might? Limited government

appears to be inherently unstable and anarchism might offer the libertarian the only

alternative. In the past 250 years the world has successfully thrown off the yoke of

monarchism and in the past twenty-five years the world has successfully thrown off the

yoke of communism. Why not continue and throw off the bonds of all government?
 Notes

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