National Defense on the Free Market

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With one notable exception, all of my libertarian and Libertarian acquaintances steadfastly hold to the belief that, while the bureaucrats do most things quite poorly, governmental financing and provision of national defense is both legitimate and desirable. These individuals typically resort to the standard “public goods” argument to substantiate the correctness of this view. “If a system of national defense exists,” they claim, “then all who live within the area covered by that system benefit from its existence.” OK. “One’s derivation of this benefit is not contingent on one’s willingness or ability to pay.” Sounds good. “Therefore, if the government does not tax its constituents to realize the income necessary to maintain a national defense system, no one will voluntarily pay for it.” Huh?
The problem with the reasoning of my fellow libertarians, many of whom are economists, is their addiction to the ceteris paribus assumption. That is, when endeavoring to envision a society in which national defense is provided on the market, they seldom consider the vastly different institutions that would likely exist in such a society.
The purpose of a national defense system is, by definition, to defend a nation-state. In a society without government, or a society without a “state,” the permanent residents of a given geographical area would have to voluntarily pay for a defense system responsible for that area’s protection. The revenues would go to private organizations responsible for defense. It is conceivable that one firm would provide all defense services. It is also possible that one firm would be responsible for air-based, another responsible for sea-based, and yet another responsible for land-based defense. Or perhaps responsibilities would be distributed among multiple firms in some other manner.
Under such a system, who would pay for defense services? It is fathomable that Billy Bob may conclude that he’d like to continue benefiting from defense services, but that he’d prefer not to pay for them. He stops sending his monthly check to the defense company, and his fellow citizens consequently pay higher prices to compensate for his refusal to pay. But hey, at the end of the day Billy Bob is enjoying all the benefits associated with the existence of a defense system without any of the costs. Bad for society, good for Billy, and even better for the power mongers fixated on establishing a government. “This,” the latter group preaches, “is why our society needs government!”
This is indeed a fathomable scenario. It is not likely to occur, however, in a society without government. One must consider that the institutional framework that governs human interaction will indubitably be quite unlike the current one. What kinds of penalties might Billy Bob expect to suffer if he acts in such a manner? There are no legal penalties, after all, as all services in our hypothetical society are provided through trade. If he does not want to pay for defense, no one is going to force him to pay for defense. However, his fellow citizens can make the conditions of his life so uncomfortable that he finally acquiesces and resumes paying.
The market could conceivably give rise to practical methods of shunning those who refuse to pay for defense. Perhaps a chain of stores will require that all customers present a receipt from the defense company upon entering. Perhaps universities will require that all students, before enrolling, must present proof of payment for defense services, much like they now require proof of vaccinations. Maybe, upon returning on a plane from a trip abroad, you will be required by the airline to demonstrate that you pay for defense services, much like you are now required to present your passport. Chains, universities, and airlines that engaged in such practices would be praised and accepted. Those that did not would be shunned, just like individuals. Pressure from family, friends, and various organizations may further serve to incentivize Billy Bob to keep paying. The dynamics of institutional development may be such that an individual who refuses to pay for defense will be effectively unable to lead a decent life in society. Payment is, in other words, voluntary, but nonpayment is excruciatingly uncomfortable.
Such a system would also function as a check on the ambitions of the defense agency. If the agency decides to engage in an unpopular war in Iraq, many people will stop sending their payment to the defense firms. Due to the unpopularity of the military adventure, these nonpaying individuals will not be shunned by businesses and their friends and families. If it is becomes unpopular enough, the defense agencies will find that they simply do not have the resources to continue the imperialist extravaganza and will end the campaign. Contrast this to the present system in which the government directs more resources to a conflict as conditions worsen and as the effort becomes increasingly unpopular.
“Defense” of the United States currently consists, among other things, of waging two senseless wars and maintaining a vast global empire at the expense of the exploited taxpayer. Military overstretch has proven to be a contributing factor in the downfall of myriad civilizations throughout history. Our government, of which the Department of Defense is a part, has demonstrated that it is either unable or unwilling to respect our founding principles and remain limited. Perhaps we should consider abolishing it before the United States’ formal commitment to self-government, enshrined in the Constitution, becomes an even greater mockery.

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Alex Schroeder's picture
Columns on STR: 11




Suverans2's picture

According to the American declaration of independence, the only lawful purpose of a de jure government is to secure the unalienable rights of its individual members, because the moment it steps beyond this solitary rightful duty it must necessarily become an aggressor. Because of this G. Edward Griffin makes the valid point (IMO) that this organization should be called a protectorate rather than a government. This protectorate, I currently believe, must be a well-armed militia, i.e. "...the able bodied men [excluding genuine "pacifists", i.e. those who truly would not lift a finger to physically defend themselves or their loved ones if attacked] organized into companies, regiments and brigades, with officers of all grades, and required by law to attend military exercises on certain days only, but at other times left to pursue their usual occupations." I believe that this "law" would be in conformity with the natural law[1] of man. Frederic Bastiat may have said it best, I believe.

"What, then, is law? It is the collective organization of the individual right to lawful defense.

Each of us has a natural right - from the Creator[2] - to defend his person [body and soul] his liberty, and his property. These are the three basic requirements of life, and the preservation of any one of them is completely dependent upon the preservation of the other two...

If every man has the right to defend - even by force – his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly. Thus the principle of collective right - its reason for existing, its lawfulness - is based on individual right. And the common force that protects this collective right cannot logically have any other purpose or any other mission than that for which it acts as a substitute. Thus, since an individual cannot lawfully use force against the person, liberty, or property of another individual, then the common force - for the same reason - cannot lawfully be used to destroy the person, liberty, or property of individuals or groups...

If this is true, then nothing can be more evident than this: The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect individuals, liberties, and properties, to maintain the right of each, and to cause justice to reign over us all.

If a nation were founded on this basis, it seems to me that order would prevail among the people, in thought as well as in deed. It seems to me that such a nation would have the simplest, easiest to accept, economical, limited, non-oppressive, just, and enduring government imaginable - whatever its political form might be."

I suspect that this concept could be easily tested by asking each individual a question, perhaps something like this, "If you were attacked by a superior force would you want someone to aid you in your defense?" If you answer yes, then naturally you could be expected to do the same for your neighbors, it would seem to me.

[1] The law of nature is superior in obligation to any other. It is binding in all countries and at all times. No human laws are valid if opposed to this, and all which are binding derive their authority either directly or indirectly from it. - Institutes of American Law by John Bouvier, 1851, Part I, Title II, No. 9

[2] For anyone not believing in a "first cause", please feel free ignore this as ignoring it will not detract from its intrinsic value.

Diogenes5's picture

I felt this article to be half-baked. In my mind, there is no difference between a private army or a Government run army, aside from how the money is raised. Once an army is up and running it can simply take whatever it wants, from anyone, and descend into piracy. They might set up checkpoints, shake people down in their homes, or cut extortion 'protection' deals with businesses and institutions. Private armies are no more trustworthy or accountable simply because they, at the time, require contributions to keep things running.

The problem, as I see it, is that regardless of something's intentions, it's the enabling power granted by violence and brute force -- threat of harm and death by a group capable of inflicting it -- that is the problem. Cutting to the point, what I see is negative human nature (widely amplified in groups, who collectively don't have to take total individual accountability for their actions) to dominate provided the ability and power to do so. For example, corporations... they aren't ever content with their power, they don't sit around having amassed great power and not apply it to anything destructive. Power is almost always exercised, you can and SHOULD expect for that to happen.

What is there to stop any influential renegade type from influencing the command of this private army, molding it into some kind of Neo-Soviet ideology through increments and 'redistributing the wealth of the community for the greater good'? What would challenge their power as an organized force?

A standing army... I think that has been tried before...

I am in favor of a citizen's milita, with the kind of social pressure discussed in this article but far less coercive. The whole "You can't fly on our airline because you refused to pay societal protection money (taxes)" is VERY mafia-esk and really changes nothing. You could buck the 'tax law' now and have the same effect... you wouldn't be able to show your face anywhere, have a credit card, etc because the IRS would be watching. That's how the current Government operates things; "You don't agree with out politics, you're a potential terrorist and can no longer get past TSA." I would rather see voluntary positive incentives toward certain behavior put forth by the people receiving the benefit out of gratitude... such as 'You have joined the militia, to show our thanks in our ability to continue doing business without threat of outside invasion, here is some beer and a pizza.'

Since being apart of the militia doesn't come with a salary there is no need to tax, it's volunteer work. Now if there was an invasion on the East Coast that required more men than they had in the militia, I could see the East Coast citizens hiring a temporary army to supplement their militia forces. What's money mean if your entire city is going to be destroyed and you along with it? Hopefully nothing.

Nothing is perfect though, mine included, so I give thanks for the article.

Jim Davies's picture

"Defense" from whom, exactly?

Alex's article presupposes "a society without government" but also assumes that it would need a "defense system responsible for that area’s protection." Why?

A reasonable answer might be "to prevent invasion by neighboring governments." However, that assumes that neighboring societies continue to have governments, eager as ever to increase their power by raiding and looting nearby targets. Why, again, assume such a thing?

If society A rid itself of its government, would neighboring societies C and M be unaffected? - hardly. Yet that seems to be the unspoken assumption in the article. I suggest it be closely examined.

There's another aspect to this, perhaps deeper yet. If Society A shook off its governmental chains, how did it do so? - answer, by some extraordinarily powerful method, which we need not consider here - though I assume it would be a non-violent method, because of Tandy's paradox that if resistance to government is powerful enough to wage a successful violent revolution, there would be no need to wage it. Now, despite my profound doubts based on the preceding paragraph, suppose Government C does mount an invasion and re-enslave the residents of Society A, or part of it. What's to stop those residents using that same method to shake it off again in short order?

There might in a free society be a small residue of violent individuals who persist in trying to live by theft instead of voluntary exchange, hence most people will keep weapons handy to defend themselves and their families. Possibly "protection companies" will offer their services for a fee, and prosper here and there, as need may exist. But armies, navies and air forces will go in to the same historical trash can as government itself.

Spartacus's picture

"National" defense makes about as much sense as "national" cell phone service, "national" health care, "national" education, or "national" government.

Suverans2's picture

Thank you for your thoughtful reply, Spartacus. So, in the very likely event that the continent upon which you currently find yourself was attacked by the army of a collectivist nation, intent on plundering all of its natural resources, (including 'human resources'), your rational solution to a successful defense of it would be_______________________?

Suverans2's picture

I believe that the proper role of the state is negative, not positive; defensive, not aggressive. It is to protect, not to provide; for if the state is granted the power to provide for some, it must also be able to take from others, and that always leads to legalized plunder and loss of freedom. If the state is powerful enough to give us everything we want, it also will be powerful enough to take from us everything we have. Therefore, the proper function of the state is to protect the lives, liberty, and property of its citizens, nothing more. That state is best which governs least. ~ G. Edward Griffin Excerpted from Creed of Freedom

mhstahl's picture


Either you are a delicious satirist, or you have not thought things through very well.

Once an organization dedicated to violence is ensconced-no matter how it is paid for-you can rest assured that there will be a collectivist army to deal with....minus the invasion. It's the nature of the beast, always has been.

That said, it is extraordinarily difficult for a nation(a collectivist notion by the way), to actually effectively conduct an invasion, and repelling one requires less organization and resources than you might think. It took Europeans 300 years to fully disperse the technologically inferior nomadic tribes of N. America, and then only with the un-looked for aid of plagues. The Romans never did conquer the nomadic tribes of Germany and Britian, in fact, the opposite occurred.

The truth is, most of the gaudy, expensive, war weapons are designed to awe and terrify(and bleed of funds) the populace and are of little actual defense value. Saddam's armed forces were utterly eliminated in the first weeks-if not hours-of the Iraq war.....and the Taliban never really had one....yet victory certainly can't be claimed.

No, all that is needed to stymie an invasion force, as has been shown throughout the past century, and currently in Iraq and Afghanistan, and throughout history, is people willing to fight with whatever weapons they can procure. Though it does seem to help if, in the immortal words of Bert Gummer, "a few household chemicals in the proper proportions" are available.