Economics, Hierarchy, and the Question of the State’s Inevitability

Among Christian libertarians, as with other libertarians, there are differing views concerning the legitimacy, necessity, and inevitability of the state. For some, this is the worn-out debate between a view supporting statelessness (or ‘anarchism’) for a free society, and a view supporting a limited state (or ‘minarchism’) for a free society. Can libertarians, both anarchists and minarchists, cooperate in pursuit of a free society? I think they can. Nevertheless, there is genuine disagreement between these two views, and each view is worth considering.

In a series of articles, I’ll address several common objections I’ve found to be made from a minarchist view against anarchism. The first concerns law and order and the question of the state’s legitimacy. The second concerns human sinfulness and the question of the state’s necessity. The third concerns dominance hierarchy and the question of the state’s inevitability. The fourth concerns our (in)ability to imagine a free and stateless society, and also the question of the plausibility of statelessness.

The first two articles in this series are centered around the question of the state’s supposed legitimacy and necessity. I argued that the minarchist objections to anarchism, represented by John Locke’s and James Madison’s arguments in favor of having a state, actually turn out to be strong reasons against having a state and instead favor stateless civil governance.

A third common minarchist objection to anarchism is the assumption concerning the state’s supposed inevitability. One assumption made by some advocates of minarchism is that a state would inevitably emerge (economically) as a practical monopoly in an otherwise free market. Such a view is posited by Robert Nozick in his book Anarchy, State, and Utopia. Another assumption made by some advocates of minarchism concerning the state’s supposed inevitability is based upon what I’ll refer to as “social hierarchy.” This view is expressed by Russell Kirk’s “10 Conservative Principles” in his book The Politics of Prudence.

Do either economic or social considerations entail the inevitability of the state? Must the realities of market forces and/or social relations inevitably result in a monopolization of civil governance?

Economic inevitability?

Robert Nozick makes a case for a natural economic emergence of a state in this way: he suggests that consumers in a stateless economy of competing civil governance services would naturally seek out the largest, most powerful protection agency available, creating a ‘snowball’ effect that would leave one agency with the lion’s share of the market. Having such dominance, Nozick supposes, would give that agency the legitimate authority to shut out any market competitors.

However, as Murray Rothbard and Roy Childs argued, in order to assume that the economy would naturally produce a monopoly state, one must ignore the fact that monopolies are created by the state, not by a truly free market.

Nozick’s false assumptions

Nozick’s argument that a minimal state would inevitably emerge from a free market is based on the following unwarranted assumptions:

Assumption 1: Clients of free market protection agencies must give up “inalienable” rights to private self-defense.

While a protection agency could theoretically offer a contract to a potential client requiring them to relinquish certain rights, nothing would prevent other agencies from offering a similar contract without such a requirement, nor would there be any necessity for anyone to sign contracts relinquishing their rights. After all, the concept of ‘inalienability’ means that rights are “unable to be taken away from or given away by the possessor.”

Assumption 2: Competing agencies would resort to combat instead of arbitration.

Competition between agencies is not likely to end in combat. Combat is expensive and poses both a liability and the risk of disenfranchising current and potential clients. Without the ability of a monopoly state to externalize costs and risks, there is no reason why agencies wouldn’t pursue peaceful dispute resolution between themselves.

Assumption 3: Any peaceful agreement between agencies constitutes a unification, or federalization, of those agencies.

Cooperative agreements and voluntary standardization in no way constitutes institutional merger. Tens of thousands of arbitration agencies, judges, lawyers, and private protection agencies currently exist in the United States; they are in agreement on certain rules and yet are not acting as a unified entity. They remain independent firms and could certainly continue to remain so in the absence of a monopoly state[1].

Social inevitability?

Russell Kirk makes a case for the natural social inevitability of the state (among other “long-established” institutions) from what he calls “the principle of variety.” He posits that society requires “honest and able leadership.” Human ‘equality’ as such only exists as persons stand before a just court of law (both in the civil sense and in a divine final judgment).

Kirk believes civilization requires that the healthy diversity of human inequalities be maintained. The implication is this: if those who are unequally good and capable of leadership do not effectively exercise that responsibility, then tyrants will inevitably rule and impose unnatural inequalities to the detriment of society.

No natural overall societal hierarchy

It is true that people do indeed form hierarchies and leadership structures inter-individually and within organized communities[2], whether through competence or dominance. However, that fact does not entail the inevitability of any single collective hierarchy among them. ‘Society’ is not itself a single whole, but rather a ‘plexus’ or plurality of distinct kinds of individual and communal relations.  While there are various hierarchies within society, society itself is not a single hierarchy.

There is no single kind of community that encompasses or ‘leads’ all the other kinds of community, nor does any particular community within a certain kind naturally have (or gain) a monopoly over all others of that same kind. Rather, normatively speaking, each distinct kind of community has a different basic kind of societal leadership, and within each kind of community, there naturally exists a plurality of communities of that kind[3].

The inevitability of the state fails before it begins

The problem with arguing for the state from its supposed inevitability is that one must make certain assumptions about the nature of the free market and social relations that are unwarranted (or simply untrue). Monopolization does not naturally emerge; it depends on aggression. Society is not a single entity, nor is it ordered as an overall hierarchy. Historically, every monopolization of civil governance and hierarchicalization of a society (such as feudalism or the caste system) is the result of aggression. A state is not a naturally emerging or an inevitable development, and that wouldn’t change in a free society with stateless civil governance.

  1. You can read more about this in my article on “Monopoly vs Monopolization,” but to put it briefly here, Thomas DiLorenzo of the Mises Institute gives an excellent rebuttal to the concept of natural monopolization. So-called “natural monopolies” are creations of the state. And even if it were the case that a single agency rose to the top of the market, (a) it could only have done so by producing a quality service at a competitive price and (b) it could not create barriers to entry in the market without delegitimizing itself.
  2. By “organized community,” I do not mean those in mere proximity or living in the same region, nor do I mean demographic categories. Rather, I mean associations such as the family or voluntarily-formed and relatively-enduring groups of whatever kind (e.g., churches, business firms, hospitals, schools, social clubs, etc).
  3. For example, families are one kind of community, but there is no single family that monopolizes all families. Churches are another kind of community, but there is no single church that monopolizes all churches. This applies, normatively, to all the diverse kinds of community. The nature of communities existing in plurality, and the plausibility of stateless civil governance, will be discussed in the next article.