Is the Private State Always Parasitical?

Atlantis is an island ruled by a single state. This state – call it Atlantia – was founded in conquest, pays for itself with coercively extracted taxes, maintains a navy to repel foreign invasion, and makes all of its citizens wear plaid and set aside every Sunday to prepare a feast in honor of the ruling party. Atlantis allows immigration and emigration, though airfare out of the country isn’t cheap. And it’s governed by a parliament, with seats open to anyone who wants to run.

The whole of the island’s landmass is consumed by ten arcologies, with free migration among them. Provided the citizens of each pay taxes, wear plaid, and prepare a feast every Sunday, the state of Atlantia largely leaves them alone. Most of the things we tend to associate with governments are provided by the private corporations who own the arcologies. They charge dues to live within them, but in return give residents housing, schools, police protection, and courts. All privately, and all overseen by a resident board, which anyone is free to run for. The arcologies compete with each other for residents by lowering their fees or offering better services, more housing options, etc. They also allow other, likewise private organizations to operate within them, from stock exchanges to bowling clubs.

Atlantia looks like any other government we’re all used to, albeit with some weird rules and relatively limited meddlesomeness. It’s very clearly public. The arcologies would seem to fit Stringham’s model of private governance. They’re basically big apartment buildings, overseen by an HOA. They don’t restrict resident movement, which means I can pack up and leave if I don’t like the amenities – though for most, leaving means going to one of the other nine arcologies, given the high cost of travel to another landmass.

But this is where I get confused, and Stringham’s reply to my essay doesn’t quite clear it up. How do I know the arcologies are, by definition, private governance? They meet our criteria for being states as I set them out and as Stringham agreed to – even though we’d be inclined to call them “private states,” I suppose. Given that we have a clear instance of a “public” government – the government of Atlantia – we might call the archologies private simply by way of contrast. They’re not Atlantia, but they operate within Atlantia, and public governments claim a monopoly on public governance within their borders, so these therefore must be private.

Stringham says the difference is “choice.” Private governments compete for clients, because the clients are free to choose other private governments if they’d like. And while that sort of choice certainly applies to our arcologies, it also applies, perhaps to a lesser degree, to Atlantia. Citizens can fly to another country, just as they can move to another arcology. Both “choices” have costs, of course. Neither is entirely free. Given that, how do we recognize that the degree of choice a citizen of Atlantia has is sufficiently low to turn Atlantia “public,” or sufficiently high for the arcologies to keep them “private?” Consider as well that how easy it is to exercise the choice to move from arcology to arcology, or from Atlantia to another country, depends a great deal on the specific circumstances of individual citizens and residents. It would be odd to draw a line between public and private such that what’s public for a poor student with deep, local family ties (and so low “choice”) is private for a rich orphan (with high “choice”).

Coming at it from another direction, imagine that tomorrow the parliament of Atlantia hears an orator read Lysander Spooner, converts to political anarchism, and dissolves the government. Now we don’t have a public government we can point at in order to declare the arcologies private by contrast. Instead, we have a land mass controlled by ten smaller governments, each charging taxes, maintaining a monopoly on the use of force, and offering a (varying) level of choice to their residents. If we came across that Atlantis, knowing nothing of once proud Atlantia, and having read Private Governance, would we identify it as a group of ten private communities, which it was just 24 hours earlier? Or as an island controlled by ten small, public states? Nothing’s changed about the governing structure of the arcologies, but without the overarching public government to point at, I think we’d have a difficult time not seeing them as public.

That’s the definitional question I sought to raise in my first essay. Of course, in the world as we find it today, telling the difference between public and private governance isn’t terribly hard. But the conceptual framework, as outlined in Stringham’s book, still strikes me as leaving “private” governance definitionally unstable. I might even go so far as to argue that within that framework, actual political anarchism is impossible, because the very concept of private governance is always parasitic on the existence of a public state.

Also from This Issue

Lead Essay

  • How Private Governance Made the Modern World Possible by Edward Peter Stringham

    Edward Peter Stringham argues that private governance isn’t a fiction. It’s a key, though unappreciated, aspect of modern life. Much political economy begins with the assumption that markets require external, nonmarket institutions to provide services of assurance and trust, without which markets cannot function. Stringham suggests that this is not necessarily so, and he uses evidence from real-world private governance to make the point. Private governance has existed and continues to exist in markets both simple and highly complex.

Response Essays

  • Public Governance All the Way Down by Aaron Ross Powell

    Aaron Ross Powell questions whether private governance is truly possible, and if so, what that would mean. Much of our current private governance would clearly never exist if it were not backed by the persuasive threat of force from some state-like entity. Both in his lead essay and in his book, Edward Stringham fails to draw a clear distinction between public and private, and as a result, it is unclear how these two terms should be deployed in many plausible situations, both hypothetical and in our own world. Powell questions whether these terms are not used in an ad hoc manner, robbing Stringham’s work of any significant normative force. The state we have may still be inefficient and cruel, and private institutions may commonly still be better, but the line between them isn’t so clear.

  • Private Police and Crime by James E. Hanley

    James E. Hanley argues that private institutions may be ill-suited to certain forms of governance. In particular, violent crime lacks the iterative nature that makes private governance work in many other situations. Moreover, as private institutions assume more and more of the duties of criminal punishment, they increasingly risk taking on the attributes of criminal enterprises themselves, particularly if their procedures lack legitimacy. Those who choose to say under their care will find themselves at the mercy, perhaps, of “stationary bandits” - and yet it is commonly observed exactly such organizations may have been the state’s progenitors.

  • Private Governance and Low-Frequency Preferences for Violence by Mark Lutter

    Mark Lutter cites evidence that suggests that even in the realm of finance, private governance can’t always deliver. He questions Stringham: How far, exactly, does he think private governance should go? All the way to anarchy? If so, what does he think will happen to the problem of violent competition among agencies with varying degrees of legitimacy? Lutter also raises the problem of low-frequency preferences: One of the great things about the market is that, unlike in democratic decisionmaking, minority tastes in the market can commonly be satisfied. That’s a wonderful thing when it’s a matter of deodorant or sneakers. It’s not so great when a small minority has a taste for violence, as with, for example, the Ku Klux Klan: A market for violence might see much more of the Klan’s demand satisfied.

The Conversation