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The problem of maintaining a reliable national defence in a libertarian society has exercised many minds. National defence is a quintessential public good; only in concert can a country hope to fend off a foreign invasion. How then can it be funded without resorting to taxation? How can it be organised without the domineering inefficiencies of central government? How can free riders be discouraged?

I suggest that the answer lies in a system of mutual defence associations or militias. For the most part I shall be describing a system appropriate to an anarcho-capitalist society, but similar arrangements will also be applicable to ultraminimal or other limited states.

No single person can expect to have much influence on the effectiveness of the defence of his country. Whether or not he contributes his personal share of the defence costs will almost certainly make no difference; the country will survive without him, or be defeated either way. If he doesn't pay, but most other people do, he gets a free ride. He gets to be defended for nothing. If he does pay, but most other people don't, the country goes down the tubes and he wastes his money. Unless he can somehow be confident that the others will pay up if and only if he also pays, it is not in his self-interest to do so. This is the classic public good trap.

A central state can escape the public good trap and provide for national defence by means of taxation or conscription; cooperation becomes compulsory. Such methods are morally dubious at best and libertarians would prefer to avoid them. Under anarcho-capitalism they would be unavailable.

However, public goods can be provided without compulsion if they are at one and the same time private goods. Attractive gardens are a public good; but each gardener enjoys his own garden as a private good too; thus it is in his own interest to look after his own garden, whether or not his neighbours do likewise. Since it is in almost everyone's personal interest to see to the upkeep of his own garden, almost everyone does so, and everyone then benefits from the public good; there are few free riders, because this "free" riding actually imposes the significant cost of having to put up with one's own untidy garden.

Thus the key to providing the public good of national defence is to turn it into what is largely a private good. Defence begins at home. If the mechanism of personal defence against crime and internal enemies is mostly the same as that against external enemies, the public good is also a private good, and the incentives are right for its provision.

Consider an anarcho-capitalist regime of competing courts or protection agencies; it is through these that most individuals will secure their rights. Such agencies could take many forms, but one important class is the mutual defence association.

A mutual defence association (MDA) comprises a group of persons who mutually pledge to defend each others' rights and who organise themselves accordingly. The association is jointly owned by its members. It may perform all the standard functions of an anarcho-capitalist protection agency, where appropriate subcontracting them to other agencies, especially the arbitration and court services. It can be of any convenient size and may freely enter into agreements with other like associations, and form networks and hierarchies of MDAs. It may also hire specialist staff. It stands ready to use force, where necessary, to come to the assistance of its members in emergencies; to enforce judgements against convicted offenders, both members and non-members; and to defend the association against organised opposition, rogue agencies or foreign invasion.

Crucially, the power of enforcement remains with the members themselves; they serve as their own militia. They do not contract out enforcement to another agency (though they may enter reciprocal arrangements with other associations, much like conventional police forces). They will presumably arrange rotas for duty personnel, jury service and the like, and procedures for calling out the rest of the troop in emergencies. Most of their weaponry will be the personal property of individual members.

Ownership of personal weapons is in the self-interest of most individuals, since one cannot always rely upon immediate help in emergencies; sometimes one may need to defend one's self from robbers or one's home and family from burglars. At the same time, it is also in one's interest to belong to some larger organisation, capable of providing protection against gangs too strong to handle alone, and access to courts of law that respect and enforce one's rights.

One of the objections to the idea of private protection agencies has always been the danger that they will turn into protection rackets, preying on the very people they have been hired to protect. Machievelli was not the first to point out the folly of hiring mercenaries, whose loyalty can never be guaranteed; yet standing armies, bolstering the power of the state over its citizens, are little better. Here, the mutual defence association or militia has the advantage over the hired protection agency, in that the firepower remains in the members' own hands. Such mutualisation, eliminating one of the main threats to the peaceful enjoyment of property rights, should prove popular with most people, though unfortunately even a mutual association can become oppressive or behave in a criminal manner. Mutual defence associations, by virtue of their communal ownership and service, should also be capable of fostering much of the personal loyalty that nation states readily attract but which commercial operations seldom if ever can.

It might be argued that hired professionals would be more efficient than amateur militiamen, and on a one-to-one basis this is probably true. However, the establishments of professional police forces and armies are typically of the order of 0.1% - 1% of the population, as against a nominal 100% for citizens' militia. Thus, even after allowing for the greater skill of full-time professionals, the reserve of strength in a mutual defence association will be of order 10 - 100 times greater than that of a hired agency, something that will be especially valuable in case of war.

It is likely that mutual defence associations would agree to extend their protection to a few non-combatants, like the local doctor or minister, to those like ambulance men and firemen who provide a public service of a similar nature, or to previous members now too old or infirm for service. However, they would be unlikely to look kindly on those unwilling to shoulder their share of the burden or who expect to buy coverage with mere money (I do not say that there is anything morally wrong with hiring protection for money — only that in practice MDAs will tend to look down on it).

Will personal weapons be sufficient against a fully equipped invading army? Perhaps not entirely. We can assume that members of a mutual defence association will club together to buy occasional items of hardware beyond their private pockets; perhaps a heavy tank or fire-control centre. Those members that contribute the most may be put in charge of the new toy, or get to play with it more often. Sometimes more than one MDA may go shares, along with other MDAs, in something really big. There will also be mutual defence associations whose members are companies, and large companies who can afford expensive weapon systems for the defence of their own properties. For example, capital warships might be purchased by commercial shipping lines, or by an association of shippers.

However, conventional states have a tendency to think that big is best and to spend far too large a proportion of their defence budgets on a relatively small number of absurdly expensive weapon platforms and other systems. This behaviour yields very poor value for money. In a free market we could expect a preference for mass-produced and inexpensive alternatives. Better a few million jet helicopters the size and price of a private car than a few score stealth fighters individually perhaps a hundred times more deadly, but a hundred thousand times more costly. There is no reason to believe that even ordinary private individuals could not afford to purchase quite devastating weapons, from pulsed electron-beam anti-aircraft systems all the way to thermonuclear devices.

Thus dependence on mutual defence associations would tend to modify the mix of military hardware in favour of smaller more numerous but still deadly armaments, though probably not to the complete exclusion of heavy weapon platforms and sophisticated command and control systems. The net effect can be expected to be a major improvement in cost-effectiveness.

Is it necessary that everyone join a mutual defence association for this scheme to be viable? Fortunately not. Those independents who disdain to join even an MDA will have to look after themselves; they have made defence even more of a private good, so we need not concern ourselves with them further. There may also be quasi-mutuals, agencies which although not owned or controlled by their customers nevertheless employ them in place of professionals for all their protective and enforcement activities, in essentially the same manner as a militia; that is, the customer's contract with the agency requires him to take his place on the duty roster, and to answer emergency call-outs when needed. It is only the hired agencies with dedicated personnel that fail to contribute adequately to national defence. So long as a reasonable proportion of the population belongs to a mutual defence association (or quasi-mutual) the public defence will be adequately secured.

Now, a limited state has the advantage of being able to make militia membership a condition of citizenship, but an anarcho-capitalist society may have another more ironic advantage - the likelihood of occasional violent disputes between protection agencies bridging the gap between ordinary crime and outright war. This will give our mutual defence associations, and their suppliers, valuable experience of small-scale military conflict, greatly enhancing their probable effectiveness in a subsequent major war (conventional states sometimes use border disputes and foreign adventures for a similar purpose).

The presence or potential of internal rivalries also means that it makes sense for small MDAs (perhaps a hundred households) to join with other similar MDAs (perhaps a few dozen) to form a larger MDA, whose members are the small MDAs, pledging each other assistance. In turn, these MDAs of MDAs may associate themselves into city-sized MDAs, then those into regional MDAs and so on until we reach one or more top-level or national MDAs. Each association gives the associating MDAs more security and a stronger bargaining position; they therefore find it in their private interests to join and contribute their pledged share; the public good is thus built up progressively out of private goods at each stage. Any who attempt to free ride will suffer from the unwillingness of the rest to assist them against domestic aggression, such as that from rogue agencies, or to co-operate with them in settling ordinary legal disputes between their members.

In this context it is worth considering the appropriate response, in the event of foreign invasion, to any remaining free riders, or clients of commercial agencies unprepared for war. Should the mutual defence associations refuse to give them any help at all? Let the enemy attack them at will? In my opinion that would be inadvisable. Naturally, and very properly, each association will be most concerned with its own members. But leaving free riders undefended will simply encourage them to throw in with or surrender to the enemy, to the detriment of one's own defence.

It has often been argued that an anarcho-capitalist society would be far harder to conquer than a central state of comparable military strength, because it lacks any central body with the authority to order a national surrender. The enemy would need to pacify each and every private protection agency. So far as it goes, this is true enough. However, the other side of the coin is that it is far easier to conquer part of an anarcho-capitalist society, because any protection agency or group of individuals can surrender unilaterally. It is unclear which effect would be more important. I incline to the view that they would more-or-less tend to balance out (single nations do not seem to be significantly harder or easier to defeat than alliances of nations of equivalent total strength).

Finally, we may address the question of insurance and war damage. It is not essential that mutual assurance be arranged through the mutual defence association, but in most cases that is probably the most convenient option. For ordinary criminal or civil damages the association can compensate any victim immediately from a general fund, ultimately recovering from convicted wrongdoers. For war damage that may not be practicable. Unless full reparations can be extracted from a defeated enemy, society, in some form or other, will have to bear the costs.

For mutual assurance, each member of the association pledges to contribute his share of the total war damage, proportional to his insured property value, net of the damage to his own insured property (including his person). Everyone can afford to give such a pledge, and everyone ends up suffering to the same degree (losing the same fraction of his total wealth). Associations may make agreement with other associations to spread the risk further (since a war may happen to hit one defence association harder than another).

Associations may wish to treat different types of property separately, or weight them according to their vulnerability to enemy action, but I suspect that most would not feel the need to define more than a small number of categories or make their agreements overly complex. Because a major war could easily destroy ~50% of the total assets of the country it is unlikely that ordinary people would be able to insure themselves against war losses entirely; no insurer could afford it. This is just as well, since any person seen to have profited from the war, or escaped any loss while others suffered, could expect to find himself highly unpopular as a result, and his property despoiled.

In conclusion, mutual defence associations provide a mechanism whereby the public good of national defence can be turned into a largely private good; and mutual assurance provides a similar mechanism for spreading the cost of war damage. Both are likely to prove popular in an anarcho-capitalist setting, but do not rely upon universal acceptance for their viability; free-riding is possible only to a limited degree and at some risk to the personal liberty and property of the subject. Mutual defence associations and citizens' militias can provide an enormous reserve of military strength, which should enable a libertarian society successfully to protect itself against foreign invasion or attempted conquest.

© Paul Birch, 9th Dec. 2002.