Defense and the State

Now, to be sure, none of these states are perfect Rothbardian Anarcho-Capitalist societies, but they do exist, and prosper without any military. That is something that conventional wisdom, and state sponsored education would have us believe is impossible. They show that states can and do exist without a standing Army, Navy, or Air Force, which then begs the question, “If we don’t need the state to provide national defense, then what is the purpose of the state?” Can people exist and interact peacefully based on voluntary co-operation?

Those states fall into two categories. Some of these nations have no standing military and no protection agreements with larger nations. For example, Lichtenstein has been without a standing army since 1868, yet it has one of the highest per capita incomes in the world, has survived two world wars, and guarantees the right of succession in their constitution by a simple majority vote. Lichtenstein shared a border with Nazi Germany, the strongest most aggressive government in world history, and survived without a military. They even had a Jewish princess from 1929-1938, and harbored Jewish refugees during the war, but had no military.

The second category is states with no standing military that do have protection agreements with larger nations. One example of this would be the tiny nation state of Monaco, which has a protection agreement with France. However, this agreement did little to protect Monaco from being invaded by the Nazis and Italians during WWII. I think the lesson here is don’t enter protection agreements with France, but I digress. Other examples are Nauru, which has an agreement with the Australian Government, and Samoa which has an agreement with the New Zealand government.

These categories address two separate but related arguments against Anarcho-Capitalism.

The first argument goes that no civilization can exist without a state funded defense force. Countries with no protection agreements prove this is not true. The second argument goes that the state must solve the free rider problem. The free rider argument goes something like this, “No one will pay for defense services if they think someone else will cover the bill. Therefore no one will pay for defense services, and their territory will be overtaken.” Existing protection agreements show that is not the case among nation states in the 21st century.

Smaller nations are essentially free riders when they have protection agreements with larger nations. Defense services are provided for them by the larger state because it’s in the larger state’s best interest to protect both territories. So, if nation states already exist as free riders it fails as an objection that individuals or businesses might do the same in an Anarcho-Capitalist society.

There are real life examples of nations that exist without a standing military, and no protection agreement with a larger state. Lichtenstein is probably the best example of a nation that kept its sovereignty intact despite sharing the border with the most aggressive state in modern history. Costa Rica has also had no standing army since 1949 despite being located in Central America, an area known for violent dictators and revolutions. Panama abolished its army in 1990 after the United States backed dictator who ruled the country got uppity and the United States invaded and deposed the dictator. Since abolishing the army Panama has seen an unprecedented level of prosperity.

So if countries can, and do prosper without a standing military, if private arbitration is already solving disputes, and families by the millions are choosing private education and home schooling over public education, and millions more are using non-state issued currencies for their transactions, then the question must be asked, why do we need the state?