Essay:RJ Miller's draft five-point criteria for demarcating state and market

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First, the general definition: A government is a regional sovereign of legitimized coercion.

Obviously sentence-long definitions are bound to be at too high a level of abstraction to effectively demarcate state and market in all realistically plausible scenarios one would encounter in the real world. Though I think it is a "true" definition, it's not enough by itself to answer all the relevant questions one would encounter. Here I hopefully have a coherent five-trait criteria that defines government at a low-level of abstraction; a level that deals with tangible actions and tangible things.

To put it shortly, I choose to define government and market by mechanistic differences which clearly distinguish the two in terms of how they actually operate in practice.

Now for the five-point criteria:

  1. Monopoly On a Given Amount of Wealth/Labor: A portion of whatever wealth you have acquired (via gift, trade, or homesteading) is deemed property of the government (by those under it's control and/or government itself). Alternatively, this monopoly could instead be a requirement that you perform a certain form/amount of labor. Defining "monopoly" as being something on wealth (or labor) and not production of a given good or service helps account for scenarios like Federalism (two "monopolies" can exist over the same territory by this standard), and I think it successfully avoids a problem about how defining government as having a monopoly on providing something means that everyone could to some degree be a government since everyone is also to some degree a monopolist; this stemming of course from the fact that what everyone does is necessarily unique to some extent.[1]
  2. Transfers of Wealth Occur as a Result: This has some heavy overlap with #1; by transfers of wealth I am referring to repeated systematic instances in which some (if not all) people pay for things they don't use (through circumstances of #1), and/or use what they never actually paid for in the first place.[2] I know it might seem nitpicky to bring this up since most would argue that it's implied from the first trait mentioned, but I suspect a malicious critic might argue that #1 could be meaningless if "government's" orders for it's claimed assets/labor are to "let" people use it as they wish. Implied in that critique is the idea that a government could be something entirely voluntary under some circumstances. I'm just trying to be more specific here about what I refer to.
  3. Monopoly on Wealth/Labor Exists Territorially: The fact that you are subject to government having a claim on what you possess/produce/do to some degree is largely contingent on where you live. In other words, the only way you can "opt out" is if you change where you live altogether. So you are presented with a false choice of either putting up with circumstances stemming from #1 above, or pick up and leave. This is of course distinct from market institutions or associations between people which are not territorially contingent about payment. Rather you only give something in exchange for something they give you if they choose to agree upon it. So points #1 and #2 apply to individuals due to their residency. The borders themselves are usually arbitrary.
  4. Government Coercively Acquired the Territory: Here we come upon two objections that have been made towards Libertarians on this issue in some form or another. The first is whether or not a landlord is a government since the two traits listed above seem to apply to how they operate, and the second is whether US territory somehow belongs to the Indians. With respect to landlords, they are distinct from governments in terms of how they acquired the property/territory they control. A non-criminal landlord can legitimately acquire the property they control either by homesteading/building it, trading for it, or receiving it as a gift from someone else who legitimately owned it to begin with. When governments gain control over an area, it is largely by fiat (see #5). No homesteading of any kind actually was done — specific individuals themselves did such a thing. Which brings me to the problem of Native American status. First, most of the territorial "US" before it was even declared as such was unoccupied. In addition to this, Natives at the time (from what we know) did not hold property to even be a serious construct (hence their bemusement when Pilgrims attempted to "buy" land from them). In the absence of this, there can be no theft since theft presumes that someone was deprived of property. There are other nuances to this as well, such as just how many generations back is someone willing to go on these issues (what about the Vikings for instance?), and the fact that the majority of all persons in the US today do not descend directly from the earliest settlers. But for the most part I think the problem of land "stolen" from the Natives is somewhat exaggerated.
  5. "Legitimacy" from Circular Reasoning, Ad Populum, or Naturalistic Fallacies: Here we are now talking about what distinguishes governments from criminals who basically fit the four things listed above. They provide the "legitimized" in legitimized coercion. Forms of Circular Reasoning I refer to include the idea of a social contract (all of which start with the conclusion they are trying to prove[3]), as well as affirming the consequent. The latter refers to the fact that many people reflexively state that if you use government goods and services, this must therefore vindicate its existence. This argument falsely assumes that no alternative arrangement could possibly work as well for a given group of people simply because they are unable to operate under such alternatives. For example, the fact that millions rely on Social Security ignores where the money to pay for that program came from in the first place. Argument Ad Populum is simply the idea that circumstances become acceptable simply because the majority in an arbitrarily drawn district/territory claim it is. Just about every major human atrocity in history becomes acceptable to some degree if someone thinks that the acceptability of an action or broader situation is contingent on what the majority of people had to say about it at that time. Finally, naturalistic fallacies are basically claims along the lines of (for example), "government has always existed in one form or another, so therefore it must be necessary." This does not prove the acceptability of government itself or demonstrate that any alternatives are not equally so. I suppose it could be argued that this too is another kind of circular reasoning.

All five of these characteristics must be present together.

So that in a nutshell is the criteria I have so far. I'm starting to think that when I write the book itself, I might have an appendix entitled "Demarcating State and Market in Detail" in which I go over more specific objections someone might raise against this criteria. For example, I can already tell that more critical readers might assert that insurance companies would be governments since trait #2 applies to them somewhat (this is natural since insurance companies by their very nature are supposed to disperse risk amongst it's contributors). However, this line of criticism ignores the fact that all four other points would not apply (if we are talking about free market insurance that is).


  1. Mises, Ludwig von (1949). "Competition". Human Action. "The products of the processing industries are more or less different from one another. Each factory turns out products different from those of the other plants. Each hotel has a monopoly on the sale of its services on the site of its premises. The professional services rendered by a physician or a lawyer are never perfectly equal to those rendered by any other physician or lawyer. Except for certain raw materials, foodstuffs, and other staple goods, monopoly is everywhere on the market." 
  2. Rothbard, Murray (1982). "The Inner Contradictions of the State". The Ethics of Liberty. "For, given any level of taxation, the least that will happen will be the creation of two antagonistic social classes: the “ruling” classes who gain by and live off taxation, and the “ruled” classes who pay the taxes. In short, conflicting classes of net tax-payers and net tax-consumers. At the very least, the government bureaucrats will necessarily be net tax-consumers; other such will be those persons and groups subsidized by the inevitable expenditures of government." 
  3. If you want further details on this, I would be happy to show syllogistically that there is no exception to this rule.