Skip to main content

The ‘minimal’ state reconsidered: governance on the margin

Abstract

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.

This is a preview of subscription content, access via your institution.

Fig. 1

Notes

  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.

  5. https://www.bls.gov/ooh/protective-service/police-and-detectives.htm

  6. https://www.bls.gov/ooh/protective-service/security-guards.htm, https://www.bls.gov/ooh/protective-service/private-detectives-and-investigators.htm

  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.

References

  • Benson, B. (1990). The Enterprise of law: Justice without the state. San Francisco: Pacific Research Institute for Public Policy.

    Google Scholar 

  • Buchanan, J. (1975). The limits of liberty: Between anarchy and leviathan. Indianapolis: Liberty Fund.

    Google Scholar 

  • Coyne, C., & Lucas, D. (2016). Economists have no excuse: A critical review of national defense in economics textbooks. The Journal of Private Enterprise, 31(4), 65–83.

    Google Scholar 

  • DeAngelo, G. & Smith, T. (2015). Private security and the provision of international public goods. Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2621850.

  • Friedman, D. (1979). Private creation and enforcement of law – A historical case. The Journal of Legal Studies, 8, 399–415.

    Article  Google Scholar 

  • Friedman, D. (2014). The machinery of freedom: Guide to a radical capitalism. Chicago: Open Court Publishing Company (Original work published 1973).

    Google Scholar 

  • Friedman, M. (1979). Milton Friedman on Donahue (Full Segment). Filmed 1979. YouTube video, 45:11. Posted November 13, 2012. https://www.youtube.com/watch?v=IYNSrQLtjKI.

  • Hummel, J. R. (2001). The will to be free: The role of ideology in nation. The Independent Review, 4, 523–537.

    Google Scholar 

  • Jervis, R. (2016, September 22). 3% of Americans own half the country’s 265 million guns. USA Today, http://www.usatoday.com/story/news/2016/09/22/study-guns-owners-violence/90858752/

  • Kessler, A. (2012, March 7). Stuck in arbitration (p. A27). New York Times.

  • Kramer, A. (2016, October 31). Spooked by Russia, tiny Estonia trains a nation of insurgents. New York Times. https://www.nytimes.com/2016/11/01/world/europe/spooked-by-russia-tiny-estonia-trains-a-nation-of-insurgents.html?_r=0.

  • Lee, D. (1989). The impossibility of a desirable minimal state. Public Choice, 61, 277–284.

    Article  Google Scholar 

  • Leeson, P. (2008). How important is state enforcement for trade? American Law and Economics Review, 10(1), 61–89.

    Article  Google Scholar 

  • Leeson, P., Coyne, C., & Duncan, T. (2014). A note on the market provision of national defense. The Journal of Private Enterprise, 29(2), 51–55.

    Google Scholar 

  • von Mises, L. (2006). Economic policy: Thoughts for today and tomorrow. Chicago: Regnery/Gateway Inc. Reprint. Auburn: The Ludwig von Mises Institute. Citations refer to the Ludwig von Mises Institute edition (Original work published 1979).

    Google Scholar 

  • Mueller, D. (2003). Public choice III. Cambridge, UK: Cambridge University Press.

    Book  Google Scholar 

  • Nozick, R. (1974). Anarchy, state, and utopia. New York: Basic Books.

    Google Scholar 

  • Powell, B., & Wilson, B. J. (2008). An experimental investigation of Hobbesian jungles. Journal of Economic Behavior & Organization, 66, 669–686.

    Article  Google Scholar 

  • Powell, B., Ford, R., & Nowrasteh, A. (2008). Somalia after state collapse: Chaos or improvement? Journal of Economic Behavior & Organization, 67, 657–670.

    Article  Google Scholar 

  • Rand, A. (1964). The virtue of selfishness. New York: Signet.

    Google Scholar 

  • Rothbard, M. (2006). For a new liberty: The libertarian manifesto. Auburn: The Ludwig von Mises Institute (Original work published 1973).

    Google Scholar 

  • Spooner, L. (1867). No treason. Boston: Lysander Spooner.

    Google Scholar 

  • Stenning, P. (2000). Police powers and accountability in a democratic society: Proceedings, reports presented to the 12th criminological colloquium. Strasbourg: Council of Europe Publishing.

    Google Scholar 

  • Stringham, E. (2015). Private governance: Creating order in social and economic life. Oxford: Oxford University Press.

    Book  Google Scholar 

  • Tullock, G. (1974). The social dilemma: The economics of war and revolution. Blacksburg: Center for Public Choice.

    Google Scholar 

  • U.S. Bureau of Labor Statistics, Occupational outlook handbook: Arbitrators, mediators, and conciliators. (2014). Office of Occupational Statistics and Employment Projections: Washington, D.C. Retrieved from https://www.bls.gov/ooh/legal/arbitrators-mediators-and-conciliators.htm.

  • U.S. Bureau of Labor Statistics, Occupational outlook handbook: Police and detectives. (2014). Office of Occupational Statistics and Employment Projections: Washington, D.C. Retrieved from https://www.bls.gov/ooh/protective-service/police-and-detectives.htm.

  • U.S. Bureau of Labor Statistics, Occupational outlook handbook: Private detectives and investigators. (2014). Office of Occupational Statistics and Employment Projections: Washington, D.C. Retrieved from https://www.bls.gov/ooh/protective-service/security-guards.htm.

  • U.S. Bureau of Labor Statistics, Occupational outlook handbook: Security guards and gaming surveillance officers. (2014). Office of Occupational Statistics and Employment Projections: Washington, D.C. Retrieved from https://www.bls.gov/ooh/protective-service/security-guards.htm.

  • Urbina, I. (2009, October 30). Debate follows bills to remove clotheslines bans (p. A23). New York Times.

  • Williamson, O. (1996). The mechanisms of governance. Oxford: Oxford University Press.

    Google Scholar 

Download references

Acknowledgements

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.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Benjamin Powell.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Clark, J.R., Powell, B. The ‘minimal’ state reconsidered: governance on the margin. Rev Austrian Econ 32, 119–130 (2019). https://doi.org/10.1007/s11138-017-0400-5

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11138-017-0400-5

Keywords

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

JEL classification

  • H11
  • H21
  • H44
  • P16