Indian Libertarians

Minarchism: Road to Corporatism

smehra Thursday January 16, 2014

Many critics of Minarchist/Small Government argue that, as a system, Minarchism is not stable. That over the years, the “small government” will expand and take over the duties of the society or market. Such a criticism, however, assumes that a small government is something that would be desirable, if only it was maintainable.


Under a Minarchist government, whose only job is to protect life, liberty and property, it would be the government’s duty to provide “law and order” institutions like Courts and Police. The state will retain its monopoly on violence and it will be the final arbitrator for all conflicts.

For the purpose of this discussion we will ignore that no government, in history, has kept its size limited; but focus on a society under a Minarchist government.


For the state to successfully protect private property, it would have to maintain a register of private properties owned by its citizens. Otherwise it would be really tough to arbitrate property disputes. All decisions made in the “arbitration” of such a dispute would be final and enforceable by the police force. Police force would be funded by a small tax collected by the state from its citizens.But such a system of protectionism frees the owners of large properties from being affected by the market forces. It allows them to hold on to the properties that they are utilizing inefficiently, for they do not directly pay for its protection but rather depend on the entire tax system to fund it. Any violation of their “property rights”, which are granted by the state, would be dealt with tax sponsored violence. An abandoned property owned by an individual, for instance, would be protected by the state without the said individual being charged the market price for its protection. One can argue that abandoned property can be unregistered by the state, but then you have taken the first step in increasing the power of the state and given it the power to take away property rights.

Some people still argue that this would be a just thing to do. After all, the property owner still pays for the protection of his land as he too pays his taxes. But by this argument you can justify the entire philosophy of state socialism. Using this argument, you can justify state’s interference in food, clothing and shelter as the people being “benefited” are also part of the tax system. If state socialism creates distortion in every other sphere of the economy, why is property defense any different?

State interference in property rights, will therefore cause distortions in the market. A state with the sole authority to protect property rights has the sole authority to define it, control it and re-allocate it by selective implementation of its property laws. If you look at the current system of property rights, as managed by the state, the people who suffer the most are the “homeless” people who do not “legally” own any property (like the slum dwellers in India). Home owners do have “property rights” granted by the government, but their rights are easily and repeatedly violated by the police. “Property rights” of large corporates, on the other hand, are strictly enforced and violators prosecuted most efficiently. Even a minarchist state will not be free from such a systemic bias.

“Property rights”, as granted by the state, is one of the core reasons for the corporatism that follows; the massive accumulation of capital creating, what anti-propertarians call, the “capitalist” class. This does not mean that i am anti-propertarian. I just don’t think that state has any business defining, controlling and protecting private property - a job that should be left to the market, which can do this in an economic and peaceful manner. In a way anti-propertarians are right to recognize property as a means of exploitation, their failure however lies in differentiating “de-facto” property rights from “de-jure” property rights. For them all forms of property is a fiction of the state.

But it is not property rights which is the culprit here, its the entity with the absolute right of defining it. By selective enforcement of “property rights” even a minarchist state will produce large corporates whose monopoly over the land they claim to own will be protected by the state. The corporates will not be paying market price for this protection but rather the price defined by the state. If this price paid to the state is too high, it will hurt productivity. If this price paid is too low, it gives the corporates (and landowners in general) an undue advantage.

Minarchists, like other statists, are still imagining a just and controllable state which shall be the best provider of “law and order”. They are correct in condemning the monopoly of the state over the markets, but fail to recognize the reason why the state is able to maintain such a monopoly. They fail to see that monopoly over “law and order” is central to all other monopolies; other monopolies are merely a reflection.


“... monopolies are insulated from market competition and hold their customers by force, they lack both the information and the incentive to provide consumers with fair, efficient, and inexpensive service.” - Roderick T. Long

The problem with the state protecting private property lies essentially with the problem of state being the central and final arbitrator. Such an “arbitrator” suffers from a judicial bias towards the state and the status-quo.

Minarchism, even without the expected growth in the powers of the state, will lead to distortions in the market, inequality and an elite status-quo that will accumulate capital by theft.

Read More: Market Anarchism as Constitutionalism

Here is an excerpt:


Anarchy thus represents the extension , not the negation, of constitutionalism. instead of thinking of anarchy as a situation in which government has been squeezed down to nothingness, it might be more helpful – at least for minarchists – to think of anarchy as a situation in which government has been extended to include everybody. This is what Gustave de molinari, the founder of market anarchism, meant when he wrote, in 1884: “The future thus belongs neither to the absorption of society by the state, as the communists and collectivists suppose, nor to the suppression of the state, as the non-market anarchists and nihilists dream, but to the diffusion of the state within society.” A “diffused” legal system is preferable on pragmatic grounds because anarchy multiplies checks and balances; handing all power over to a single monopoly agency is too risky.