In “Against the State,” Dr. Robert P. Murphy makes several compelling arguments opposing the existence of a government—an agency with an ultimate territorial jurisdiction over the use of force. His criticisms of contemporary and historical governments’ reliance on coercion, taxation, and suppression of free-market mechanisms are justified. However, they do not constitute a condemnation of government per se. He is correct that every hitherto existing government has been flawed and coercive—in varying degrees. This does not mean, however, that a fully free, non-coercive, properly limited government is impossible. Here, I will describe some of the principles and mechanisms by which such a government would be guided. My proposed system avoids all of Dr. Murphy’s critiques of the State while harnessing all the benefits of a body firmly devoted to the protection of individual rights.

            Dr. Murphy claims that “the State is by its very nature an institution that relies upon coercion.” Yet this does not describe the functions of a proper government. Coercion is the initiation of force against an individual; a proper government should never be allowed to initiate force against anyone. It is only legitimate insofar as it uses retaliatory force to punish violators of individual rights in proportion to their violations. A good limited government will only use force against the guilty and will leave innocent, peaceful citizens alone entirely. Government is necessary for both these outcomes to occur; as John Locke recognized, in the state of nature—where individuals have the right to fully judge and retaliate against transgressors—it is difficult to secure objective arbitration or protection from offenders in accordance to justice and not mere physical power.

            Furthermore, Dr. Murphy falsely assumes that taxation is necessary for a properly functioning government. In fact, taxation is coercion; it extorts money from people who might not have otherwise paid it to the government. A properly limited government will not use the force-initiating practice of taxation; instead, it will be funded solely by the voluntary contributions of its citizens. This assures that the government will be based on the unanimous consent of its constituents—since every citizen has the option to withhold funding from a government he disapproves of. Furthermore, it allows the government to render precisely those services that its constituents demand—no more, no less. The government’s military and police budgets will only be as large as all the constituent individuals are willing to provide. Citizens will thus be paying only for the protection services they desire; they will not bear the burden of funding expenditures they did not personally want.

            How can this be facilitated? A properly limited government will dispose of the coercive ideas of democracy, majority rule, and the “one man, one vote” principle—which allow the opinions of a majority of the population to regulate and even destroy a minority individual’s life. Rather, it will give its citizens an incentive to voluntarily contribute funds through a system I term investmentocracy.  An investmentocracy works much like a corporation: the government will have shares which citizens can buy. Every share a citizen owns will entitle him to one vote in elections for government officials or in decisions concerning government policy. The government will set a fixed price per share—say, $1000. One will be able to buy as many shares as one wishes and have one’s voting power increased accordingly. There will be free entry into the government, and nobody will be denied the prerogative to purchase shares—except by a unanimous vote of the other shareholders. Shares and votes will be transferable on a free market—which will ensure their transmission to those who most value operating a properly limited government and indicate this valuation by their readiness to purchase shares.

            Investmentocracy will give property owners a decisive stake in government and will thus allow them to use government power for the protection of vital property rights.  A majority of votes—not a majority of people—will determine the government’s course of action—meaning that one’s influence in the government will be directly proportional to one’s monetary contributions to it. No coercion is involved; one merely votes on how one wants the government to spend one’s own money. Furthermore, if one is disappointed with the government, one needs not contribute future money—but one should then expect one’s voting power to diminish over time relative to those who would be willing to buy additional shares. Any displeased party would, of course, be free to secede and establish its own government with its own property—including any territory it directly owns.

            The limited government I have described would allow the private protection agencies, insurance companies, and arbiters Dr. Murphy described to operate within its bounds—provided that they abided by the principle of non-initiation of force. Each private firm would have to receive an operating license from the government in return for a binding pledge not to coerce anyone who has broken no recognized law or contract. The development of efficient, competitive legal and defense services is desirable. However, it needs to occur under the guardianship of a sovereign agency which will ensure that the private firms do not enter into all-out aggression against one another and that the private arbiters are not deadlocked in irresolvable disagreements. Even in a system where protection and arbitration are mostly privately provided, government must still exist as a protector and arbiter of last resort; without it, no conclusive settlement of any issue can ever be guaranteed.

            A properly limited government will also be bound by other limitations to ensure that it remains non-coercive. It will not be allowed to regulate or subsidize business or commerce, confiscate property, issue fiat money, establish racial preferences, draft troops, censor media, declare amnesties for violent criminals, or perform any action which requires forcing some innocent party to act against its will. If such a government desires to build a “public” school, enough investors would need to voluntarily provide the money. If it wishes to go to war, its shareholders would need to vote with their wallets. If government seeks to provide any manner of “public service,” it would have to do so competitively—not barring other participants on the free market from doing the same and not forcefully depriving anyone of his property to fund the endeavor.

            To ensure that a properly limited government stays within its limitations, it will have an internal system of checks and balances derived from the American model. However, its number and quality of checks will improve on the American system. Instead of three branches, the government will have four. The fourth branch, the Protectorate, will have unlimited veto power over all government actions deemed coercive—but no positive law-making ability. The Protectorate will thus only be able to curtail government abuses, not expand them; it will be funded privately by its chief officer, the Protector, who will not be subject to majority rule and will have the power to designate his successor. The first Protector would be selected based on criteria of property ownership, philosophical, economic, and historical erudition, advocacy of limited government, proper crisis management skills, and sufficient health. Thereafter, the Protectorate would remain a self-sufficient, self-perpetuating branch of government; it, too, would never coerce but would only prevent the coercion of individuals by the government.  

            Dr. Murphy rightly condemns any form of governmental coercion, but he mistakenly assumes that coercion is necessary for government to function. A system where funding is voluntary, votes are determined in proportion to one’s contributions to the government, and government actions are checked by an agency with unlimited veto power is immune to all conventional criticisms of the State while harnessing the benefits of a supreme authority in the settlement of disputes and the protection of individual rights.

G. Stolyarov II is a science fiction novelist, independent filosofical essayist, poet, amateur mathematician, composer, contributor to Enter Stage Right, The Autonomist, Le Quebecois Libre, and the Ludwig von Mises Institute, Senior Writer for The Liberal Institute, and Editor-in-Chief of The Rational Argumentator, a magazine championing the principles of reason, rights, and progress. His newest science fiction novel is Eden against the Colossus. His latest non-fiction treatise is A Rational Cosmology. Mr. Stolyarov can be contacted at gennadystolyarovii@yahoo.com.