The Market for Liberty

Linda & Morris Tannehill

[Online Editor: Despite falling in love with this book, I wound up with various points of contention with the Tannehills, and as such, choose to spell out these points of disagreements by placing Post-it notes on various pages.  What you find below chapter four of this fantastic work; but also you will find, in pale yellow, my comments, clarifications, and disagreements therewith.]

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Chapter 4.

Government—An Unnecessary Evil

Because the weight of governmental power has such influence on the structure and functioning of any society, ideas concerning social organization have typically centered on the structure of the proposed society’s government.  Most “social thinkers,” however, have taken government as a given.  They have debated over the particular form of government they wished their ideal societies to have but have seldom attempted to examine the nature of government itself.  But if one doesn’t know clearly what government is, one can hardly determine what influences governments will have on society.

Government is a coercive monopoly which has assumed power over and certain responsibilities for every human being within the geographical area which it claims as its own.  A coercive monopoly is an institution maintained by the threat and/or use of physical force—the initiation of force—to prohibit competitors from entering its field of endeavor.  (A coercive monopoly may also use force to compel “customer loyalty,” as, for example a “protection” racket.)

Government has exclusive possession and control within its geographical area of whatever functions it is able to relegate to itself, and it maintains this control by force of its laws and its guns, both against other governments and against any private individuals who might object to its domination. To the extent that it controls any function, it either prohibits competition (as with the delivery of first class mail) or permits it on a limited basis only (as with the American educational system). It compels its citizen-customers by force of law either to buy its services or, if they don’t want them, to pay for them anyway.

While it is obvious that any government must hold a monopoly over at least some activities (e.g., lawmaking) within its geographical territory in order to govern at all, some thinkers have held that a “properly limited” government would not initiate force and would, therefore, not be a coercive monopoly.  The government thus envisioned would be restricted to what its advocates consider to be minimum essential governmental functions, such as the defense of life, liberty, and property against both domestic and foreign aggression (police and military), arbitration of disputes (courts), and the administration of justice (courts and penal system).

There are many types of minarchists, the most radical of which advocate a form of government which these authors would claim is not a government at all.

A few of these advocates of limited government have realized that taxation is theft (theft being the act of taking the rightful property of another by force, stealth, or deceit) and have attempted to insure against governmental initiation of force by forbidding their theoretical governments to levy taxes—any taxes.  But not only are their systems of voluntary government support rather hazy and unconvincing, even if such a non-taxing government could be made to work, governmental initiation of force would still not have been eliminated.  A government, in order to be a government rather than simply another business firm in an open market with actual or potential competition, must maintain a monopoly in those areas which it has pre-empted.  In order to insure its continued existence, this monopoly must be coercive—it must prohibit competition.  Thus, government, in order to exist as a government at all, must initiate force in order to prohibit any citizen(s) from going into business in competition with it in those fields which it claims as exclusively its own.

If it could be proved to businessmen that those “basic governmental functions” of protection and defense of person and property, arbitration of disputes, and rectification of injustice could be performed very satisfactorily by private, free-market businesses (and this book will prove that they can), any supposedly non-coercive, limited government would be faced with a crucial dilemma.  Either it would have to initiate force to prevent free enterprise from entering its “market(s)” or free enterprise would push government out of “business” and, hence, out of existence.  As will be shown, government is unavoidably inefficient and expensive.  If government didn’t compel its citizens to deal with it (by maintaining itself as a coercive monopoly), the free market could offer really effective services, efficiently and at lower prices, and the government would lose all its “customers.”

Government is, and of necessity must be, a coercive monopoly, for in order to exist it must deprive entrepreneurs of the right to go into business in competition with it, and it must compel all its citizens to deal with it exclusively in the areas it has pre-empted.  Any attempt to devise a government which did not initiate force is an exercise in futility, because it is an attempt to make a contradiction work.  Government is, by its very nature, an agency of initiated force.  If it ceased to initiate force, it would cease to be a government and become, in simple fact, another business firm in a competitive market.  Nor can there be any such thing as a government which is partially a free-market business, because there can be no compromise between freedom and brute force.  Either an organization is a business, maintaining itself against competition by excellence in satisfying customer wants, or it is a gang of thieves, existing by brute force and preventing competition by force when it can do so.  It can’t be both.1

Further, since government is not a market monopoly, it can only be a coercive monopoly—no third alternative exists.

The prohibition of competition on which government depends for its existence is an aggressive interference with the free market and forms the basis for all the other many interferences with the market of which government has been guilty.  Since government must infringe the right of free trade in order to exist, how can it be expected to refrain from other interferences with the market and the rights of its citizen-subjects?

People who grow up amid the “democratic traditions of the West” are apt to feel that this governmental initiation of force and disruption of the market is justifiable as long as the government is one which is “chosen by the people through the democratic process of free elections.”  They feel that under a democratic government, whatever the government does is done “by ourselves, to ourselves” and is, therefore, permissible.  But the fallacy of this notion is readily apparent when one considers the people of the democratic country as individuals, rather than as insignificant fragments of a collective whole.

The belief that the people of a democracy rule themselves through their elected representatives, though sanctified by tradition and made venerable by multiple repetitions, is actually mystical nonsense.  In any election, only a percentage of the people vote.  Those who can’t vote because of age or other disqualifications, and those who don’t vote because of confusion, apathy, or disgust at a Tweedledum-Tweedledummer choice can hardly be said to have any voice in the passage of the laws which govern them.  Nor can the individuals as yet unborn, who will be ruled by those laws in the future.  And, out of those who do “exercise their franchise,” the large minority who voted for the loser are also deprived of a voice, at least during the term of the winner they voted against.

But even the individuals who voted and who managed to pick a winner are not actually ruling themselves in any sense of the word.  They voted for a man, not for the specific laws which will govern them.  Even all those who had cast their ballots for the winning candidate would be hopelessly confused and divided if asked to vote on these actual laws.  Nor would their representative be bound to abide by their wishes, even if it could be decided what these “collective wishes” were.  And besides all this, a large percentage of the actual power of a mature democracy, such as the U.S.A., is in the hands of the tens of thousands of faceless appointed bureaucrats who are unresponsive to the will of any citizen without special pull.

Under a democratic form of government, a minority of the individuals governed select the winning candidate.  The winning candidate then proceeds to decide issues largely on the basis of pressure from special-interest groups.  What it actually amounts to is rule by those with political pull over those without it.  Contrary to the brainwashing we have received in government-run schools, democracy—the rule of the people through their elected representatives—is a cruel hoax!

Not only is democracy mystical nonsense, it is also immoral.  If one man has no right to impose his wishes on another, then ten million men have no right to impose their wishes on the one, since the initiation of force is wrong (and the assent of even the most overwhelming majority can never make it morally permissible).  Opinions —even majority opinions—neither create truth nor alter facts.  A lynch mob is democracy in action.  So much for mob rule.

The very word “government” means some men governing—ruling over—others.2  But to the degree that men are ruled by other men, they exist in slavery.  Slavery is a condition in which one is not allowed to exercise his right of self-ownership but is ruled by someone else.  Government—the rule of some men over others by initiated force—is a form of slavery.  To advocate government is to advocate slavery.  To advocate limited government is to put oneself in the ridiculous position of advocating limited slavery.

To put it simply, government is the rule of some men over others by initiated force, which is slavery, which is wrong.

Those who maintain that government is an institution which holds monopoly on the use of retaliatory force (in a given geographical area) carefully omit to mention what kind of monopoly such an institution would be, and for obvious reasons.  To claim that a government is a market monopoly is patently absurd, since competition must be prohibited; with competition, it would not be a monopoly, and, therefore, it would not be a government (according to their “definition”).  If they admit that government is a coercive monopoly, they could not fail to see that they were advocating an institution which is inherently evil and that to advocate that which is wrong is, itself, evil.  It is perfectly clear that every government which ever existed, including today’s governments, has maintained its existence by initiated aggression against its citizen-subjects and, further, could not continue to exist without such aggression which violates human rights.  To claim, therefore, that government holds a monopoly on the use of retaliatory force is to surrender to and condone initiated force; an institution of initiated force can hardly, by any stretch of rational imagination, hold a monopoly on the use of retaliatory force.  Such a notion is worse than absurd, as it helps to maintain the idea that government is good.

Government, being a coercive monopoly, must maintain its monopoly position by the initiation of force, which requires that government be a repository of power.  Because of this concentration of power, it is held that some restraint must be put on government to prevent it from riding roughshod over its citizens.  Since government is a monopoly with which its citizens must be forced to deal, it can allow no competition which would furnish external restraints, as there are with free-market institutions.  Any outside force strong enough to effectively check the power of government would destroy its monopoly position.  Restraints must, therefore, be internal, in the form of so-called checks and balances.  But any system of governmental checks and balances is necessarily large, unwieldy, and expensive, which puts a far heavier burden on those who must support it than its functions would warrant (even if one overlooks the fact that governmental functions are coercive) [sic]

Further, a position with even a small amount of power over others is attractive to men who want to wield power over others.  A rational man—a productive man with a high degree of self-esteem—will have no desire for such power; he has more interesting and rewarding things to do with his life (and he abhors slavery . . . of any kind).  But a man who has failed to set and reach productive goals, a man who has never done anything worthwhile by his own standards, will often seek to disguise his feelings of inadequacy by taking a position of power in which he can experience the pseudo-self-esteem of telling others how to live their lives.  So government, by its very nature, tends to attract the worst of men, rather than the best, to its ranks.  Even if a government were started by the best of men with the best of intentions,3 when the good men died off and the good intentions wore off, men with a lust for power would take over and work ceaselessly to increase government influence and authority (always for the “public good,” of course!).

Because government attracts the type of men who desire power over others, no system of checks and balances can keep government permanently limited.  Even with an extremely strict constitution, it is impossible to impose limitations which some other men cannot eventually find a way to get around.  The best that can be hoped for from constitutional checks and balances is to limit the government for a longer period of time than has yet been achieved.  The U.S.A. holds the record to date—around two centuries . . . to degenerate to a mixture of fascism and socialism, a new brand of sophisticated totalitarianism.

It has been said that the price of liberty is eternal vigilance.  But such vigilance is a constant non-productive expenditure of energy, and it is grossly unreasonable to expect men to keep expending their energy non-productively out of “unselfish idealism.”  There is no area of the free market which requires the constant vigilance of the entire population to keep it from going awry.  We would all be shocked and indignant if we were admonished to give such attentions to, say, the dairy industry in order to have our milk delivered unsour.

Government consists of men who govern, or rule over, others by initiated force.  This means that government inevitably sets men against each other as each interest group seeks to be among the rulers, or at least on good terms with the rulers, instead of among the ruled.  Such conflict between interest groups is most pronounced in a democracy, because in a democracy the course of government is determined largely by pressure groups who have special pull and/or can deliver votes and money.  Each pressure group fights to gain control of the government long enough to force the passage of legislation favoring it or crippling its opponents.  The constant and inevitable political warfare makes each interest group a threat to anyone outside itself and prompts otherwise non-aggressive groups to pressure the government for legislation favorable to them, as an act of self-defense if for no other reason.  Thus, government creates a situation in which each man must fear everyone who belongs to a different interest group or has a different life-style.  Black people fear suppression by whites, while whites are apprehensive about blacks gaining “too much” power.  Middle-class, middle-aged, “straight” people dread the day when young hippies will be old enough and strong enough to seize power and force legislation favoring the “hip” culture.  Hippies, meanwhile, resent the “straight” life-style which the present laws attempt to force on them.  It’s labor vs. management, urbanites vs. suburbanites, tax-payers vs. tax-consumers, in an endless, costly, and totally unnecessary battle.  Without government, no one would need to fear that someone else’s group would gain the upper hand and use the power of law to force its will on him.  People of vastly different occupations, interests, and life-styles could live peacefully together, because none would be capable of using a politician to threaten the others.  It is the power of government which causes most of the strife between various groups in our society.

Governments have always found it necessary to use force against both their own citizens and other governments.  This isn’t surprising when one realizes that any government can continue to exist only by maintaining a monopoly in its area of operations and that it can only maintain this monopoly permanently by the use of force.  Wars and repressions are an inevitable by-product of government—they are simply the coercive monopoly’s normal reaction to external and internal threats to its position.  The more areas within its boundaries a government seeks to monopolize (that is, the more totalitarian it is), the more repressions it will have to use against its citizens, and the more bloody and violent these repressions will be.  The more areas outside its boundaries a government seeks to control (that is, the more imperialistic it is), the more wars it will have to engage in, and the more prolonged and destructive these wars will be.  Some governments are far more totalitarian and imperialistic than others and are, consequently, more cruel and bloody.  But every government must initiate force because every government is a coercive monopoly.  Wars and repressions are inevitable so long as governments continue to exist.  The history of governments always has been, and always will be, written in blood, fire, and tears.

In addition to all the rest of its defects, the structure of any government is incurably arbitrary and, therefore, without reason.  Any institution which is not a part of the free market and, therefore, not subject to the rules of the market, must be set up and operated on the basis of arbitrary rules and thus cannot be just and reality-oriented.  Private business is guided by reality in the form of the market.  A successful entrepreneur operates his business in accordance with the law of supply and demand and so has reality-centered reasons for the decisions he makes.  But government is outside the market, unguided by the realities of the market, and thus can only be operated by arbitrary decisions.  The truth of this can be seen when one honestly tries to determine just how the institution of government should be implemented (which also explains why few advocates of liberty have attempted this impossible task).  For example, how should judges be chosen—by election or appointment? If elected, to what terms and by what electorate (local, state, or national)?  Bipartisan or non-partisan designation?  If appointed, by whom and with what controls?  What are the rules for voting, who decides what they shall be, and what are the objective criteria for such decisions?  Arguments over such matters are both endless and fruitless, because there are no non-arbitrary answers.

For a private business, the primary purpose of its existence is to make profits (which it can only do by pleasing its customers).  Profit is the “success signal” for any businessman operating in a free market—the signal which tells him he is succeeding in the job of satisfying his customers.  When a businessman begins to suffer losses, he knows he has made mistakes and that consumers are dissatisfied with his product or service.  The profit signal unerringly guides businessmen toward those actions which produce the most consumer satisfaction.

But a government is a "non-profit," extra-market organization, maintaining itself, not by willing exchange, but by the forcible seizure of goods (taxation).  The success signal for a politician or bureaucrat is not profit, but power.  A government official succeeds, not by pleasing customers, but by increasing his sphere of control over the lives of others.  This is why each politician struggles so hard to win elections, pass dozens of new laws, and increase the amount of patronage he has to give out.  This is why each gray and faceless bureaucrat toils incessantly to increase the size, powers, and budget of his department, and the number of men working under him.  The power signal unerringly guides government officials toward those actions which produce the most control over other men.

Private enterprise maintains and expands itself by continually offering people things they want.  Government maintains and expands itself by depriving people of things they want, by means of forcibly seizing their goods (taxation) and forcibly preventing them from trading and living as they choose (regulation).  Thus, private enterprise continually increases the prosperity and well-being of its customers, while government continually decreases the prosperity and well-being of its citizens.

But worse than anything else it does to its citizens is the fact that government cannot avoid forcibly sacrificing the just interests of at least some of them.  Any government must make decisions and act on them, since it could claim no justification for its existence if it did nothing at all.  Theoretically, the leaders should always act “in the interest of the people” because it would be immoral to impose on the people actions which were contrary to their interests.  But, since not all the individuals who make up “the people” will find the same things to be in their interest, it follows that at least some of them must have proper, just interests which are different from or even in opposition to the supposed “public interest.”  This means that some citizens (those without political influence) must sacrifice their interests, hopes, ambitions, and even property and lives to further the “national interest.”  Since people should not and usually do not give up such values willingly, any group not based on totally voluntary membership must employ coercion to force the sacrifices which its leaders and rulers consider to be in the group’s interest.

Limiting a government to the functions of protection and arbitration would lessen the sacrifices demanded of the citizens but could never eliminate them.  The wastefulness of checks and balances and the inefficiency of an organization beyond the reach of competition makes governmental services far costlier and less effective than those provided by business.  Thus, being forced to buy “protection services” from government is certainly a sacrifice.  Any government, if it is to remain a government, must hold its monopoly status by coercion, which means it must force sacrifices on its citizens.

Every individual person has the responsibility to discover what his interests are and to work toward their achievement.  When government takes some of this responsibility away from the individual, it must also take away some of his freedom of action—i.e., it must violate human rights.  Further, when government forces an individual to act against his proper interests, it is forcing him to act against his own rational judgment.  Such an action, in effect, puts the opinions and whims of others between a man and his perception of reality and, thus, compels him to sacrifice his basic tool of survival—his mind!

Government has always been a ball-and-chain holding back human progress and welfare.  This shackle was bad enough in primitive times when life was relatively simple.  In a complex society with a complex technology and nuclear weapons, it is suicidal idiocy.  Government is simply inadequate to the complexities of modern life, a fact which is becoming increasingly apparent in the blundering ineptitude of governmental “solutions” to social problems, the perennial confusion and contradictions in governmental policies, and the successive breakdown of governmental programs.  Government, at best, is a primitive anachronism which the human race outgrew somewhere around the time when men moved out of their caves, and which we should have dispensed with long ago.

The majority of people firmly believe that we must have a government to protect us from domestic and foreign aggression.  But government is a coercive monopoly which must demand sacrifices from its citizens.  It is a repository of power without external check and cannot be permanently restrained.  It attracts the worst kind of men to its ranks, shackles progress, forces its citizens to act against their own judgment, and causes recurring internal and external strife by its coercive existence.  In view of all this, the question becomes not, “Who will protect us from aggression?” but “Who will protect us from the governmental ‘protectors’?” The contradiction of hiring an agency of institutionalized violence to protect us from violence is even more foolhardy than buying a cat to protect one’s parakeet.

In view of the real nature of government, why have the majority of men throughout history accepted and even demanded it?  Perhaps the most obvious reason is that the vast majority of men have not developed much ability to generate or even to accept new ideas, particularly those radically different from the familiar ones comprising the cultural status quo.  There have been governments as far back as recorded history reaches, and to picture, with some detail, how we would manage without one requires more mental effort than many of the people are willing to expend.  Besides, that which is new, strange, and unknown is frightening, and it’s more comfortable to push the whole matter out of one’s consideration by simply declaring that it wouldn’t work anyway (“You Wright brothers will never get that contraption off the ground!”).

Government officials have used every possible tool to convince people that government is necessary.  One of their most effective weapons has been government supported education, which brainwashes the young into patriotism before they are capable of judging for themselves and creates a class of pro-State intellectuals, whose ideas create a pro-State populace.  Another trick has been to invest government with tradition and pomp and to identify it with “our way of life” so that to be against government is seen as being against everything which is familiar, noble, and good.

Another factor contributing to the acceptance of government is that a great number of people have a nagging, and usually unadmitted, fear of self-responsibility—of being thrown completely on their own resources.  This goes far deeper than just the knowledge that with no government there would be no welfare checks or plush bureaucratic jobs.  It is a deep fear of the responsibility and risk of having to make one’s own decisions and accept the consequences, with no ultimate authority to appeal to for guidance and to blame in case of failure.  This is the reason for such cries as “We must have strong leadership in this time of crisis,” “We need new and better leaders,” and “God, give us a leader!”  People who fear responsibility find it easier to call for leaders, even when those leaders may become tyrants, than to accept the risk and effort of looking for solutions to the problems that beset them (remember the “Heil Hitler” patriotism of Nazi Germany and the horror and atrocities it led to).  Without a government to furnish this leadership, such people would feel hopelessly lost and adrift.

But even with all this, the majority of people might have accepted the idea of a government-free society long ago if they hadn’t been sold the notion that the only alternative to government is choas. [sic]  Government may be evil, they feel, but, after all, it’s a necessary evil.

Aside from the fact that there no necessary evils, when one considers all the chaos governments have caused with their violations of men’s liberty, arbitrary interferences with the market, and wars for plunder and power, the assumption that government prevents chaos appears more than a little ridiculous.  The free market is quite capable of preventing chaos, and would do so without violating men’s liberty or carrying on wars of aggression . . . as this book will demonstrate.  The actual choice is not government versus chaos, but the chaotic rigidity generated by governmental aggressions versus the peaceful, evolutionary progress which naturally results from free men trading in an open market.

Government isn’t a necessary evil—it’s an unnecessary one.

Back to Chapter Three

Forward to Part Two


1 As an example of this attempt to marry government and business, a few well-meaning souls have proposed that government should avoid forcing its citizens to deal with it by making citizenship a matter of contract, so that only those who wished to buy governmental services need do so.  But such a government, if it were to remain a government, would still have to initiate force to prohibit competition or it would lose its monopoly.  In effect, it would be saying to the individual in its territory, “You do not have to buy the protection you need from the government, but the government will not allow you to buy it from anyone else.”  The freedom from governmental coercion offered by this “voluntary” government would be meaningless.

2 The concept of “a government of laws, not of men” is just as mystical and meaningless as democracy.  Laws must be written and enforced by men.  Therefore, a “government of laws” is a government of men.

3 We do not, of course, concede such a possibility.  We use this argument only for the purpose of illustration.

Copyright © 1970 by Morris and Linda Tannehill

All Rights Reserved

I’ve provided this free online-text of the Tannehills’ book, despite the copyright status, because it is, in my opinion, such a great primer on the functions of the stateless society.  I felt comfortable making this chapter available in .html format because the Ludwig von Mises Institute has already made the entire book available in .pdf format.  If the copyright-holder contacts me with the demand I remove this chapter from the site, I will comply.