I often hear it said by those who have not yet gotten on board with the idea of a stateless society that such a society would not be able to survive as it would be overrun by something like the Mafia on steroids. They argue that even if there existed a free market in protection services, or dispute resolution organizations (DROs), it would fairly quickly be overrun by a rogue DRO, thus returning society to statist rule but possibly without the checks and balances of our current constitutional republic.
Setting aside for now my contention that our “checks and balances” have utterly failed to restrain the state, let me explain what I think is wrong with this argument (probably poaching some ideas from Rothbard, Molyneux, and others). Quite simply, a rogue DRO would almost certainly be unable to get away with it.
The typical DRO customer is going to demand some kind of assurance from his DRO that it will act properly and not engage in aggression. So market pressure will arrange for any even moderately successful DRO to be of the type that will almost certainly not go rogue. Furthermore, most DROs would be on the lookout for competitors who may start engaging in aggressive behavior and be ready to suppress such aggression, both to comply with the contracts they have with their customers and to prevent the reemergence of a state, which would promptly prohibit all other DROs.
But assume there was a DRO whose owner suddenly went insane and believed he could profit by aggressing against customers, potential customers, and other DROs. In order to have a chance at success, he would have to somehow build a sizable and sophisticated force in total secrecy. Perhaps this sort of thing would have been possible in a primitive world with sparse populations and a lack of advanced sensing and communications technology, but it’s thoroughly inconceivable in our world. And what about funding? To pay for it all, he would have to do one of the following: 1) dramatically raise rates, which would immediately put him out of business; 2) attract outside investors, who would quickly discover what he was up to and walk away; or 3) simply be ridiculously independently wealthy, in which case he would have no reason to engage in such an expensive and risky undertaking.
But suppose such a group did somehow materialize and move against a free society. True, it would lack the so-called “checks and balances” of a Constitution, but it would also lack the legitimacy in the eyes of its subjects that the current state enjoys, and that legitimacy is the only thing that allows the state to exist, especially in the face of a massive population of well-armed, freedom-loving people.
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