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The ‘minimal’ state reconsidered: governance on the margin


Classical liberal scholars have defined a “minimal state” as performing certain basic functions that include the provision of policing, courts, and national defense. We argue that these functions need not be fully provided by the state. Private provision of all three of these functions exists. Thus a truly minimal state would provide these functions only on the margins where private provision fails. Thus, a truly minimal state is much more minimal than scholars have traditionally envisioned.

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Fig. 1


  1. Lee (1989) published an article entitled “The Impossibility of a Desirable Minimal State.” He argued that a desirable minimal state is impossible because, if attainable, it is not desirable; if desirable, it would be unattainable. We are unconvinced by his arguments but instead, in this article, offer an alternative reason why at least his title, might be correct. We suspect he might appreciate being right, even if for the wrong reasons.

  2. Although in theory there is some optimal amount of provision of each of these services, in practice, if there are positive externalities that are unaccounted for in the market process, the optimal amount will not result from voluntary transactions and would simultaneously be unknowable to any would-be planner because of the knowledge and calculation problems described by many Austrian economists.

  3. See Mueller (2003) for a summary of some of this literature. See Powell and Wilson (2008) for an example of predation in the absence of any external enforcement that shows greater cooperation in Hobbesian anarchy than game theory would predict.

  4. The origin depicts a Hobbesian anarchy for illustrative purposes only. It is beyond the scope of this paper to evaluate points to the left of the optimum shown in Figure 1. If anarchists are correct, then our graph would be a continuously decreasing function as the size of the state grows beyond zero, as markets and civil society would be able to provide the entire distance AC, so any state provision would decrease welfare and freedom. Our point here is, even with a Hobbesian baseline, minimal statism, as traditionally articulated, enlarges the state too far.



  7. Although farther from current reality, criminal law might be able to be privately provided as well. Historically, prior to royal interventions in Great Britain, crimes were treated as torts in customary law and competing courts adjudicated disputes (Benson 1990). Other customary legal systems with private enforcement have also treated crimes as torts that were privately enforced (Friedman 1979; Powell et al. 2008).

  8. Coyne and Lucas find that 94% of the textbooks that they surveyed cite national defense as an example of a public good.


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We thank the participants at the 2017 meeting of the Mont Pelerin Society in Seoul, Korea for helpful comments on an earlier draft, Ryan Griggs for research assistance, and the John Templeton Foundation for financial support.

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Correspondence to Benjamin Powell.

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Clark, J.R., Powell, B. The ‘minimal’ state reconsidered: governance on the margin. Rev Austrian Econ 32, 119–130 (2019).

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  • Minimal state
  • Private provision of public goods
  • Taxation
  • Welfare

JEL classification

  • H11
  • H21
  • H44
  • P16