Private defense agency

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This article uses content from the Wikipedia article on Private defense agency (edition) under the terms of the CC-by-SA 3.0 license.

A private defense agency (PDA) is a conceptualized agency that provides personal protection and military defense services voluntarily through the free market. A PDA is not a private contractor of the state and is not subsidised in any way through taxation or immunities, nor does it rely on conscription and other involuntary methods. Instead, such agencies would be financed primarily through insurance companies, which are penalized for losses and damages, and have an incentive through competition to minimize waste and maximize quality of service.Script errorScript error[citation needed]

PDAs are advocated in anarcho-capitalism and market-based forms of social anarchism, such as Mutualism.Script errorScript error[citation needed]


As proponents of free-market anarchism, Benjamin Tucker[1][2] and Gustave de Molinari first explicitly proposed for-profit private defense agencies. The concept later was advanced and expanded upon by anarcho-capitalists who consider the state to be illegitimate, and therefore believe defense is something that should be provided or determined privately by individuals and firms competing in a free market. The Mises Institute published a book of essays entitled The Myth of National Defense: Essays on the Theory and History of Security Production.[3] Murray N. Rothbard in For a New Liberty: The Libertarian Manifesto and David D. Friedman in The Machinery of Freedom expand substantially on the idea. Both hold that a PDA would be part of a privatized system of law, police, courts, insurance companies and arbitration agencies who are responsible for preventing and dealing with aggression. In this environment, victimless crimes and "crimes against the state" would be rendered moot, and the legal realm would be limited to contractual disputes and tort damages, as from assault, burglary, pollution, and all other forms of aggression.[4][5] This concept is similar to Polycentric law. Within economics, discussion of the concept largely has been confined to the Austrian School, as in Hans Hoppe's article "The Private Production of Defense" published by the Mises Institute.[6]

These authors emphasize that PDAs have different motives from existing statist defense agencies. Their survival depends on quality of service leading to a wide customer base, rather than the ability to extract funds via the force of law, as is true of states. Customers and markets would thus dictate that PDAs minimize offensive tendencies and militarization in favor of a pure defense. Anarcho-capitalists believe such privatization and decentralization of defense would eliminate the credibility of, and popular support for, the state.

As a private firm offering individually determined defense, the PDA provides a model for how an entirely private defense would work in a free market. John Frederic Kosanke argues that the need for large-scale defense is minimized in direct inverse proportion to the extent of domestic control by the state. Since the greater number of proprietors makes surrender more costly to an aggressor than a relatively authoritarian region, vulnerability to attack is less likely. Furthermore, since individuals minding their own business pose little threat to neighboring regions, official or ideological justification by those neighbors for attacking them is also proportionately diminished.[7]

Lack of monopoly power

Hoppe points out that there is a contradiction in the beliefs of most philosophers and economists in reference to national defense. They generally hold that any monopoly is "bad" for consumers because, shielded from potential new entrants into his area of production, the price of his product X will be higher and its quality lower than otherwise. Yet they simultaneously hold that security must be undertaken by the government, which is a territorial monopoly of law and order (the ultimate decision maker and enforcer). Hoppe holds that the two propositions are clearly incompatible.[8] In his essay The Production of Security, Molinari concluded:[9]

If there is one well-established truth in political economy, it is this: That in all cases, for all commodities that serve to provide for the tangible or intangible needs of the consumer, it is in the consumer's best interest that labor and trade remain free, because the freedom of labor and of trade have as their necessary and permanent result the maximum reduction of price. And this: That the interests of the consumer of any commodity whatsoever should always prevail over the interests of the producer. Now in pursuing these principles, one arrives at this rigorous conclusion: That the production of security should, in the interests of the consumers of this intangible commodity, remain subject to the law of free competition. Whence it follows: That no government should have the right to prevent another government from going into competition with it, or to require consumers of security to come exclusively to it for this commodity.

Tyler Cowen, however, argues that allowing private defense agencies would not necessarily prevent a monopoly on defense services, by positing that a cooperating network of such firms could use aggressive force to enforce the cartel's market domination. Noting that advocates of PDAs typically argue that abuses would be prevented by the presence of rival agencies acting under the authority of rulings made by arbitrators empowered by inter-agency arbitration agreements, Cowen opines, "The adjudication network is stable only if it can use force to put down outlaw agencies that do not accept its higher-order arbitration decisions. Such a network could also use force to put down firms that do not adhere to the collusive agreement."[10]

Anarcho-capitalists argue that competing defense providers would concentrate on comparatively lower-cost defense and security technology rather than relatively costly offensive weaponry, in order to maintain lower premiums and service charges. A company's offensive capabilities would also be readily exposed by such an aggressor's competitors. State-subsidized militaries, in contrast, are granted a distinct offensive advantage, resulting in a proportionately greater tendency toward monopolization.

Treatment of soldiers

There is historical evidence that military personnel would likely be paid more under a privatized system. In the early nineteenth century, the typical monthly wage for a merchant seaman was about $30. In a detailed survey of nine different American privateers and their prize distributions, Garitee found the average value of one share to be about $150. Since most crewmen earned from two to four shares, this meant that in the typical privateer cruise of three months, a man might earn the equivalent of 18 months' wages, and sometimes more.[11]

Aggression and abuses by private defense agencies

Randall G. Holcombe argues that "Firms might prey on their competitors' customers, as competing mafia groups do, to show those customers that their current protective firm is not doing the job and thus to induce them to switch protection firms. This action seems to be a profit-maximizing strategy; hence, protection firms that do not prey on noncustomers may not survive." Holcombe states that the mafia offers protection for a fee, but it also uses its resources for predation; and thus profit-maximizing firms could be expected to employ them in the dual roles of protection and predation.[12] Peter Leeson and Edward Stringham rebut this argument by claiming that unless the firm were overwhelmingly more powerful than its prey, it could incur substantial costs and risks in attempting to extract wealth by force. They argue that the potential for even a small state to inflict losses on an aggressor explains why violent confrontations between states are less common than between individuals in New York City's Central Park.[13]

In The Market for Liberty, Linda and Morris Tannehill note that a private defense agency would be unlikely to engage in aggression, as it would not only become a target of retaliatory force, but would become the subject of severe business ostracism. Honest and productive individuals would dissociate themselves from it, fearing that it might use its aggressive force against them in the event of a dispute; or that they might become accidental casualties when retaliatory force is used by one of its other victims; or that their own reputation would suffer due to their ties to it. Moreover, the private defense agency's reputation would suffer and it would be regarded as a poor credit and insurance risk, the latter due to the high risk of claims resulting from its involvement in aggression. The employees and leaders of such an agency as well could face personal civil liability for their involvement, and the agency would not be shielded by sovereign immunity. High-quality employees would presumably be less willing to be involved with such an organization.[14]

They also argue that a defense company would be less likely to abuse its power and impose tyranny, noting that it "couldn't extract taxes from them, as a government does...A market relationship is a free relationship, and if a customer doesn't like a company's service or mistrusts its goals, he is free to take his business elsewhere, or to start his own competitive company, or to do without the service and just provide from himself...The objection that a tyrant might take over is actually a devastating argument against government."[15]

Rothbard makes a similar point, noting, "Of course, some of the private defense agencies will become criminal, just as some people become criminal now. But the poin the pr2 of ld disso, "issoetyIf thery would bn to gopul,In ce csonne" for"crion and aggressiont no governmenapomparusof the contros of whicA provides d sece a monopolfe or devction of persst and ppiberlf..o //creeth such againrrgumenn c thvinere diicesuip, aes, deeaesale mosd imponsib;is historiclrey, it boo. Staof raderh cent ties t//creeta ",functiatin. Staoapomparusnt."[6]

more mapplicined osibmon. Tha oulds aithaus his olded bw an eridepnencus why hat his owe defense agenc, and tha oulm in thds aithausy alsd havs olmers thad havhiweret their own spotectiv> defense agenciesp>Iine hencef Defen A agencAas wild haveond deng witn thdy rame of thds aithauss olm,of thds aithauss olm'swe defense agenc, and the defense agenciet ofllnd ths olmere of tha oulm in thads aithaunt."[7]

Libe Pit.urp whn opinin thagi evef the privalizatioe of othe> servicei on an>Anarcho-capitali"issoetyes"Wety muso consider pr2 ofh such as environmento the l-liadeting jthoritwshould havsmall rtefs ofee csacives at theia diosinalbeyo andhyassicnt confrontati. Orance privatjudPagehreaf radnt againsabe paicesilaroargue agener, the privatbankrms couls frzuse itsne it(upue to thamwcouaw ofopinilevinted by thy arbitrato)30. Inddiuction, the privatutabilite companies coulsh put dowssocentrilit, anwreaterond the agen’gehpreh-qrtomersi onccordurancd witht>RanrdcA procisiolm in their contrasnt."

Tng argumene thatncustomerX will bstablinto rike a competine fire to ptbject thet againsabroargue defense agency has beenhoriqunted bJtion thaBo a'his ess,ay The price oe PrivatL law, which argues"I om twe defensg firms aro engad2 of lnrrpol‘losic’ a dispunt, and th, remaizing firms ars nor cvivancee thaeirather their owe interestX will bssufpecte; or thad systicwe s stiralizatioX wilt resuli of the cinflicr coinuares, e in the rests oe int evnting aneminding tby inter-agencds es could presumablyular citn irdcA paiaxes frosysppgoing inte the mpog five.Bo aey also argies thatecomg firms may nobthe conearneg witn thh risk oa1clistatinf othe$1cliesee, because tihe$1cliessoms mao consent of a smalr number ny, or evet onlonuntenormoroumesult nationaincorporasionsBo aef Furthso argies thatecomt PDAs mam reduse tiheh risk on retaliation bcarryatinfuent anymorousaboantae; ora errnsenr attason.[9]

There in to astion fotecoy onvoieae oe vastablsne itinto rike e defense agencr pr2 his meant to ptbjecsne itorather tha Honmse;e, b,ei on ar involuntaro governmenpagvementswe mxpandee for th> servicee regaso, "s of erather tyes arhaussrll nve."eso argiea in aiasence on aggressog private defense agencies would likely buns profstab: "ntChcates are hign that motiralizatiot of msnees mya> of defense agencies wilr-cosy mory toahich individuer that higemain from ouldl, aesxpand hicindivndeeqctuallya mginst themselv."> If tng regily nting attaedcy har larhvasshciet oe vastablgoodres, eyes wile mosd likeld havvineresufpectiv> defense agenci ( more coed upot thf deiument."[7]

Financing of private defense agencies

p pubclgoodam and e=Speforiclreye the frernsided osibmtsmaif whicA peopl hrcauseolpaglfomer defens, butainpreat rely os their neighboreolpaglfomer definding tbs communi,rk is pair to knce idlivofstabng that id be financed by taxed ifnhe eqfstabnt alcizatiot oe restiems to bechelied. Accordading to>Anarcho-capitali"t Thealis,If thers armn any wses bf whictf his psibmatanobake ovbecomomee rendereirrgReleva N. Rothbany'soollutian war tor.imy essa"W whoshar?"es whe, it mties tt thfssalue o">frernsidv."Hppe points out tha">frernsidvns are commreplay, inurthsospoteiet o foul economyasackinhypnurttoriclrey"Aheryare to bnhoripica, becausy mory tha Hoof perssbeneff its frosecoy o'his actis?.... I="shomyam Ire to by tadee foenjoynding tbn-vifs ofyir neighb' as we-kccepregarn?e."esl nosue thawers arsmal">frernsidvnupot thptrast, as lm would be vlting in a limctivissoetyIy if im wers noe for thesu rtefs o fouChcatratoon; anwers ar">frernsidvnupot thp prestee, becauswesbeneff nt from thr coinulting elveatment o foufe all ewmes and from their=Speciatizedk wivnupot the markep>= AmericaRevoollutiiacr curned scapuse theaduce thatecome individuals mighd havs bee">frernsidvns whbeneff rned froitdo without fultingtgy; hn opinin thad hneceerfur defense o">freedom twhen lidoes noupop pcisbnt alcizatisot oe rece, buupo"t nationism,en ligction, thd simors fo">freed,hd turnee of thenenomy">sociap prsumory tdo e the righthoting, and uup,"e, some of whics mighrideprest "d

Rareolloause the mosd in the event ofnng atta);s, eyes would whepsneeo in the reste to thei' customers, and un the rests oe defense woult beespreafuenta mgof thdholend popuzation.[12]soveded by Aggressiod insuranct (page does not exist)">Aggressiod insuranon in order to ptbject themselves againscizasrogizatiot, and thd insatershould rike f private defense company to lsocent from thn aggressce. ng argument agains, this methoe o" fultingnin thanurthso>Aggressiod insidvns whdiuldn'oaglfomer defensn wouldt will neff nt from thm redudhh risk oa attacy on theirncustomerd in thsacoms ara>maiesufpele beclting frernsidvns whs couldrihave thl="a crurip"hd insatefuenk os busineon.[3]lsocessire coersprivateerspsical

Rcnse, thae thg argumene thag xuzatire in needwo tou and protectiom of Liberst and ppibernt froo>Aggressiod is a contradictiee, because xuzatiretnmseso requisso>Aggressiod in order td be enford. A anotheg argument mtiet from theaduce th,be unlioinvoluntar: tras actisont nd ommo strad f "referenrs[6]

Historical examples of widespread use

Ancient Europe

<">Ancienrili-n stated iG frvice anRecoml depeeal in Rcnse, tou ant the nnltins oaods onshes.lwithgike anderi onmwcouan wasneci used bmagio strasse, somrilizefeoe paid morr than requidod in order tobintaid populuni,rknflu hence, andycomphllya mg j Eumerd in the even, eyesdherertakey to urt. Duunding tbf , s whohat thecrion was actinaswe headu to cmxpanr-, inhief,on wae ctumoulduunding tbds et againsy i190 BCls, hcacom and ig tbf . dake hiu rt Jund bvanreqsethinpirstated ig tb">Mera eanean>, and tned by T The ergesence oe the anrign statbecauant theecomrere of th suthe$1snecier td bdisarmadon.[7]

Medieval Iceland

div7" class="willk borlerplivat"div7" classdamnifyx;e 7] ig tbf s which author, such ad Davi. Friedman and =orederk L mgia <"ccordading td Davi. Friedman[8] argues that th= Icelaic C commf wealan betwee930th an1262ehrea"tecomggrensas"nt ofnngnAnarcho-capitali"issoety – f wttle theryakes a nglthe legad syst,be enforatment outlayaken entirely privath ane hively-capitali;s, and uA providetecoml evidence ofowr, suchvissoetyIn woul",functi. "E evewadhere th= Icelaic e legad systirecomniznced Iine hantiall"p pubc"ct offeeey, id deton with ebaro vltintecome individudyice, somr casnchostned blo nt from oausssufpect) e the rightoin purate theaense ano lsocenm thm resultinginnse, ro yittetington s td Iine hantiallf privat< systet."[8]

<"ccordading tm thm reAnaret of anP. Ja>. lleye the ig tbUnimiteStstated ig tbuthithoe o1830tg t1900ayakes similar tgnAnarcho-capitalmlm in tha"y privath agenciee provideg tbl necessarbasison for in ordmy essoetyIynof whicA ppibernyaked proteedse ano inflisesdhern sevolv,">, and that thn commod populapibaccection that thOld Weresn waehaoestig witr littln spotelfomef ppiberne rigsit is cordireon.[9] "divThf an$1ubion ans claiadissociatisooahicadoptuted their owwhortweer contravtottetinthout thf lues thae provideg tbs mes fomer divnting and protecwing ppiberne rigsitnse thl; ace. Thel-establisheg pcednsaso"omee gio strctiom of> ans clas,cy as welaces for protectiom ow those claimt againsthoonsiders, ann for adjudicatios oe intional disputen thatroense. Tirecig pctia= eangreemenes for protectios would bo maintaeal only iaheecomrre mapprneg witn thadissociaticy'sulists ann ito urtcy'sululince. ys onehol hrcaudos would bs ostrazrd. Boycotted bf "> an$1ubis meant thaaeen individuay eey f protection againsa>Aggressioorather thaw tha, hs could providm himsel a>
dl>"ddh3>block"cquoia>dl>3> <"ccordading t. A pers, "D divnting Anarcho-capitali"tois meis minduao governmenw witA ppiberne rigsidowelppiand from t ="bott up,of thderenrigonfroiaterd aseAnarcho-capitaliic. P peoplo in thonfroiateg elventeinrestitatisut tha"ienm thm r sourtcmmo stpoint, eyed fadet."

E ear Pennsylvrgaaty

, discunted uthithowadher, Pennsylvrgaatytake hio governmene oveacA peopls whdiues nodsnoto i."


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