By Carl Watner
In recent years, there have been countless words exchanged between free market anarchists and limited government minarchists concerning such questions as
- Must every human society have a government?
- Is government necessarily coercive?
- Can government be financed voluntarily (i.e., without coercion)?
Debates over these questions have been going on for well over a hundred years and include such authors as Charles Lane (A VOLUNTARY POLITICAL GOVERNMENT, ), Herbert Spencer (“On the Proper Sphere of Government” [1842/1843] and “The Right to Ignore the State” ), Benjamin Tucker (INSTEAD OF A BOOK ), and Auberon Herbert (TAXATION AND ANARCHISM: A Discussion Between the Hon. Auberon Herbert and J. H. Levy ). Although I am familiar with these authors, and have written about some of them (my Introduction to Lane’s book , and my overview of “The English Individualists as They Appear in LIBERTY” ), the article you are now reading was originally sparked by a December 20, 2009 interview with Dr. Tibor Machan in which he stated:
Rothbard said governments are necessarily coercive and I disagree; he thought government must be a coercive monopoly and I disagree. … I’m a principled minarchist like Rand. … I am convinced that minarchism can avoid all coercion and Rothbard was wrong claiming otherwise. … If all citizens select a group of them to administer the just laws of the land, coercion is absent. 
Dr. Machan then adds a parenthetic note to see his essay, “Reconciling Anarchism and Minarchism,” in ANARCHISM/MINARCHISM: Is a Government Part of a Free Country? (2008), the book he co-edited with Roderick T. Long. Of course, Dr. Machan has a long list of contributions he has made to this controversy, including his discussion of “The Anarchist Thesis” in HUMAN RIGHTS AND HUMAN LIBERTIES (1975); “Financing Government without Coercive Measures” in THE LIBERTARIAN READER (1982); and “Defining Government, Begging the Question: An Answer to Walter Block’s Reply” in JOURNAL OF LIBERTARIAN STUDIES (Spring 2007).
Undoubtedly many readers are familiar with the general principle of logic behind Occam’s razor or its popularized version, Keep It Simple, Stupid! Referred to as the “Law of Economy, or Law of Parsimony” it points out that entities and questions “are not to be multiplied beyond necessity.” So to cut to the quick and cut through the thousands of words of controversy, generated by anarchists and minarchists alike, I would like some minarchist to answer the following question:
What would their defense service organization do if it could not attract enough voluntary customers?
If the minarchist acknowledges that his limited government organization would go bankrupt or disappear, then the discussion is ended, and the anarchist argument prevails. For if the government’s response to a loss of customers is to go out of business (like every other business that loses patronage and cannot sustain itself financially), then it is clear that such a government has no coercive monopoly on the administration of justice and protection of property within the area in which it operates. Other defense agencies may arrive to take its place, and there is nothing the bankrupt defense agency can do about it, since it is no longer in existence. In short, as Gustave de Molinari described it in 1849, there would be a free market in “the production of security.”
This is nearly the exact question I presented to Dr. Machan in an email of February 21, 2010:
What happens to a minarchist government if its citizens for whatever reason withdraw their financial support and boycott it?
Such reasons might reflect the fact that they have all become pacifists, or that they all have decided to choose personal self-defense in lieu of minarchist protection, or that they have decided to choose another agency to provide them with protection.
In other words, what happens to a limited government organization if its citizen/customers choose not to patronize it? Will it go bankrupt? Will it disappear – if not, by what means will it survive?
To which Dr. Machan replied:
“Such a country would vanish, as any other establishment lacking support would.”
There are two other comments worth making. First, in the last line of the quoted interview, Dr. Machan pointed out that “If all citizens select a group of them to administer the just laws of the land, coercion is absent.” True enough, if there is unanimous consent and every “citizen” has a voluntary contract with the service provider. John Hospers made this same point in a written debate with Murray Rothbard in 1973. Here is how Rothbard responded:
Dr. Hospers maintains that if one private agency should “predominate in a certain area, it would in effect be the government. … [T]here would be very little difference” between that and a single government agency of protection. … It must be pointed out that even in these conditions, it makes a great deal of difference, because (a) individuals can always have the right to call in another, competing defense agency, and (b) the private agency would acquire its income from voluntary purchases of satisfied customers, rather than from the robbery of taxation. In short, the difference between a free society and a society with built-in legalized aggression. Between anarchism and archy. 
The second comment regards the answers to the three questions with which I opened this article. In order to do so, it is necessary to define “government” and distinguish its essential characteristics from other types of defense service organizations. In his article on “Defining Government,” Dr. Machan makes the following comments.
“The gist of my case is that the anarchists’ defense-insurance agencies or justice services are a version of noncoercive governments.” [p. 91]
“Why are we to accept that the concept ‘government’ necessarily implies coercion (e.g. taxation)? The fact that most governments have been coercive is no more of a defense of this position than it would be to claim that the concept ‘marriage’ necessarily implies adultery because most marriages throughout human history have involved adultery … . [p. 92]
“Some … libertarians chose to retain the term ‘government’ for the institution that would maintain law and order in society; others came up with new terms such as ‘defense-insurance agency.’ But both meant the same thing, namely, legal authorities who would proceed to establish, maintain, and uphold justice via a legal order without ever officially using coercive force.” [p. 92]
“Defense-insurance agencies are governments of a certain type.” [p. 94]
Apparently, Dr. Machan views government as a broad class of institutions that maintain law and order in society, and which can be either coercive or voluntary. Although I have not seen him use the terminology, he might describe the coercive versions of government as “political governments” and the non-coercive versions as “voluntary governments.” He clearly rejects political government because it is coercive, and supports only voluntary government.
But how, we ask, are we to distinguish voluntary governments from all other voluntary institutions and non-coercive organizations in society? There are many, such as the family, the church, the various businesses we patronize, the various clubs we belong to, various associations, such as the Red Cross, the American Baseball League, etc., etc., all of which contribute to the maintenance of law and order. Every legitimate property owner and every peaceful person in society help maintain law and order by their exercise of self-control (not violating other people’s bodies or other people’s property). The spontaneous, free interaction among peaceful people is the only true form of law and order that is possible. Political governments can only produce “political” law. As John Hasnas explains in his “The Myth of the Rule of Law,” coercive governments purposefully associate “law” with “order” as a way to deliberately obfuscate the fact that a voluntary social order can be had without the presence of a political government. As John Blundell and Colin Robinson write in REGULATION WITHOUT THE STATE (2000), “Rules are an essential part of life. But making them is not necessarily a [political] government function: they can be (and usually are) established through voluntary action.” The so-called law and order fashioned by political governments is not really true law or true order because it is not based on the voluntary interaction and the voluntary consent of the participants. Furthermore, whatever legitimate contribution political governments make to the voluntary social order could be provided in a far less costly and far more moral manner by private defense agencies. In short, just as we need food, shelter, and clothing, we need rules for peacefully interacting with others; but it is no more necessary that political government provide us with food, shelter, and clothing, than it provide us with the rules and regulations for peaceful interaction with our fellow man. Political government not only negates property rights, but rents asunder the peaceful fabric of society.
Finally, Dr. Machan asks “Why are we to accept that the concept ‘government’ necessarily implies coercion (e.g., taxation)?” In reply, let us quote Ayn Rand who asks: “Who has the final authority in ethics? … Who ‘decided’ what is the right way to make an automobile … ? Any man who cares to acquire the appropriate knowledge and to judge, at and for his own risk and sake.” By Dr. Machan’s own admission “most governments have been coercive.” Governments have been construed as coercive institutions because that is the way their representatives and leaders have acted historically; because that is the way they behave today; and because there is no better way to view the difference between criminal institutions and voluntary ones than to identify those as governments which exercise coercive power. A government which resorts to no coercion is not a government because it is a voluntary organization claiming no special powers of obedience. To describe some governments as non-coercive is like painting the word ‘dog’ on the side of a pig, and then calling the pig a ‘dog.’ A pig is still a pig regardless of what you call it or how many times you kiss it or how many times you bathe it. It’s the same with governments. As long as they continue to imprison people and/or confiscate the property of those who refuse to pay their taxes, they are coercive. Only when they stop doing these things and allow competition in the production of security will they have exchanged their essential coercive features for voluntary ones.
 4th and 6th paragraphs from the end of “Tibor Machan on the Free-Market, the Problems of ‘Mixed’ Economies and the Virtues of Minarchism,” December 20, 2009, in the email newsletter THE DAILY BELL, from Appenzell, Switzerland.
 Murray Rothbard, “Will Rothbard’s Free-Market Justice Suffice?” REASON Magazine, May 1973. Reprinted in Carl Watner (editor), I MUST SPEAK OUT, San Francisco: Fox & Wilkes, 1999, pp. 47-48 at p. 48.
Quote to accompany this article:
“In the real world, there is never any difficulty identifying a voluntary-funded firm and a coercive, tax-funded government agency. You simply look at how the organization obtains its funding – if the funding comes from voluntary payments, it is a firm or charity, while if the funding comes from sticking a gun to men’s heads, it is a government agency or a criminal gang.”