The Nature of the State
So far in this book, we have developed a theory of liberty and property rights, and have outlined the legal code that would be necessary to defend those rights. What of government, the State? What is its proper role, if any?
Most people, including most political theorists, believe that once one concedes the importance, or even the vital necessity, of some particular activity of the State—such as the provision of a legal code—that one has ipso facto conceded the necessity of the State itself.
The State indeed performs many important and necessary functions: from provision of law to the supply of police and fire fighters, to building and maintaining the streets, to delivery of the mail. But this in no way demonstrates that only the State can perform such functions, or, indeed, that it performs them even passably well.
Suppose, for example, that there are many competing cantaloupe stores in a particular neighborhood. One of the cantaloupe dealers, Smith, then uses violence to drive all of his competitors out of the neighborhood; he has thereby employed violence to establish a coerced monopoly over the sale of cantaloupes in a given territorial area.
Does that mean that Smith’s use of violence to establish and maintain his monopoly was essential to the provision of cantaloupes in the neighborhood? Certainly not, for there were existing competitors as well as potential rivals should Smith ever relax his use and threat of violence; moreover, economics demonstrates that Smith, as a coercive monopolist will tend to perform his service badly and inefficiently.
Protected from competition by the use of force, Smith can afford to provide his service in a costly and inefficient manner, since the consumers are deprived of any possible range of alternative choice. Furthermore, should a group arise to call for the abolition of Smith’s coercive monopoly there would be very few protesters with the temerity to accuse these “abolitionists” of wishing to deprive the consumers of their much desired cantaloupes.
And yet, the State is only our hypothetical Smith on a gigantic and all-encompassing scale. Throughout history groups of men calling themselves “the government” or “the State” have attempted—usually successfully—to gain a compulsory monopoly of the commanding heights of the economy and the society. In particular, the State has arrogated to itself a compulsory monopoly over police and military services, the provision of law, judicial decision-making, the mint and the power to create money unused land (“the public domain”), streets and highways, rivers and coastal waters, and the means of delivering mail.
Control of land and transportation has long been an excellent method of assuring overall control of a society; in many countries, highways began as a means of allowing the government to move its troops conveniently throughout its subject country. Control of the money supply is a way to assure the State an easy and rapid revenue, and the State makes sure that no private competitors are allowed to invade its self-arrogated monopoly of the power to counterfeit…