Government Outside the State

Private Governance as an Alternative to State Monopoly

In modern discourse, the terms "government" and "state" are often used interchangeably. Yet, if a state is defined as an institution holding a monopoly on the use of aggression within a defined territory, does a government always fit this mold? Not necessarily. Governance also exists in various private, non-monopoly institutions—from large corporations to local tennis clubs. By thinking beyond the state, it is not that hard to imagine a world where private governments replace the state model, creating decentralized and voluntary communities able to prosper without the threat of violence from a ruling class.

Why We Need Governance

Humans naturally seek interaction and community due to the economic, social, security, and even spiritual benefits that arise from living together. Many tasks are either impossible or far more expensive to perform individually. However, as interactions grow and communities become larger, the complexity of maintaining harmony also increases.

Historically, communities have addressed this complexity by pooling resources to create and maintain common infrastructure. These shared resources encompass goods and services that benefit many people simultaneously, as well as the rules governing their use. From bridges to security, common infrastructure enables collective order and progress.

While states currently provide this infrastructure by using their monopoly on aggression to tax, legislate, and regulate, it can also emerge from voluntary collaboration. Consider the free towns of medieval Europe, which were often operated by their local citizenry independently and sometimes in spite of the landed ruling aristocracies. Similarly, modern apartment complexes utilize private governance to manage shared services and facilities for residents. These examples highlight how private governance can serve as a viable alternative to state-run systems for the provision of shared services.

Voluntary Common Infrastructure

Without state intervention in a region, voluntary organizations would be free to provide for the broader governance needs of the communities therein. Members of the private government entities could contribute fees and receive services such as roads, railways, nature reserves, policing, defense, first aid and ambulance services, firefighting, daycare, building codes, and public behavior standards. The specific services provided would depend on the demands and means of the target population. The more people and businesses governed under a single body, the greater the economies of scale and the possibility to provide more capital intensive services.

Private governance can also be layered. For instance, one governing body might manage a cluster of streets, while another oversees the broader city, and yet another coordinates regional infrastructure. Each layer would tend to provide services appropriate to its scale and capabilities. Larger, resource-intensive services like military defense would incentivize collaboration and coordination between more people and possibly between multiple governing bodies. While larger governments may have scale advantages they might also lose local focus providing a role for smaller governments to prioritize the needs of specific communities.

Another possibility is the existence of independent, self-governing entities. A family living on a country estate might pay for its own utilities, security, and transportation access without participating in any larger governance structure. Similarly, a toll highway connecting multiple towns could operate as an autonomous entity, functioning as its own government on the lands it controls.

A region that is able to take the libertarian approach to government might therefore consist of a mix of private governments. Densely populated areas would more likely have highly active governing bodies, while rural areas might have minimal governance or self-governance models given lower population density and less coordination needed for shared services. Over time, successful governance models would likely expand or be emulated, while ineffective ones would be abandoned, or restructured. The services provided by these private governments would also evolve based on changing circumstances, such as natural disasters, demographic shifts, security threats, or changes to technology and culture.

Accountability and Competition

Under state-run systems, addressing government failures or injustices is a daunting task. Citizens must navigate bureaucratic processes to lodge complaints, with limited recourse beyond elections or revolutions. Meanwhile states, as monopolies, can leverage vast resources to defend their actions, leaving citizens at a significant disadvantage.

Private governments, by contrast, rely on voluntary relationships. Residents would be either customers or employers, not subjects. This dynamic fosters accountability and competition. If a private government fails—whether from something trivial like neglecting garbage collection or from more serious violations of property rights—residents would be free to pursue various dispute resolution mechanisms and even seek alternative providers of governance services.

Unlike states, private governments could not prevent residents from seeking justice through independent institutions. If internal resolution mechanisms fail, residents would be free to contract with third-party adjudicators and enforcement agencies to resolve disputes.

The Role of Free-Market Justice

A free-market justice system would operate through independent adjudicators and enforcement agencies. A resident dissatisfied with their private government’s response could turn to these institutions to resolve disputes. The enforcement of judgments would depend on the reputation of adjudicators, the quality of their judgments, and the capabilities of enforcement agencies.

If a private government resisted a fair ruling from a recognized adjudicator, it would not only face the actions of an enforcement agency contracted by the victim but also risk losing trust and support from multiple counterparties across the community. Suppliers, employees, and financial service providers might sever ties, while other residents could withhold fees, launch their own legal claims, and join with the first resident in replacing the their private government with an alternate provider. In such a decentralized system, rogue governments would struggle to survive without community support.

A Web of Voluntary Relationships

In a libertarian society, governance would be built on a web of mutually interdependent relationships rather than a self imposed monopoly on aggression. Governments would compete to improve outcomes for their constituents, constantly optimizing services and pricing. This approach contrasts sharply with state governments, which set their own terms and must be tolerated out of necessity rather than choice.

Aiming for Better Governance

State governments are monopolies that cannot be removed or replaced other than via significant social upheaval. As a consequence they are able to provide a questionable level of service at high cost, and with a general tendency towards expansion that is difficult to check. We owe it to ourselves to explore better alternatives. By thinking outside the state, we can envision a future where governance is dynamic, responsive, and optimized for the needs of communities. The potential for superior outcomes through private governance offers a compelling case for challenging assumptions and reimagining how we organize and manage society.