State vs. Statelessness

Two fundamental differences between centralized government & decentralized self-governance

Nov 07, 2024

When I explain to people (those willing to listen) how a society can make laws without government, and how stateless societies punish criminals, a reasonable objection emerges: “So, what’s the difference between state and statelessness, when without government, there are still laws about everything, and I still have to pay to have my rights protected?”

Indeed, both threat-based centralized government, as well as incentive-based, voluntary, decentralized self-governance, require regulations - and money to maintain those regulations. However, there are two fundamental differences between statism and statelessness.

1. Inalienable rights and over-and-above privileges

The state enforces its regulations through the threat of violent deprivation of inalienable rights. It also defends you against aggression through the implied threat of defensive violence (which is fair). But the state may protect you only when its inefficiencies inherent in its monopolistic disincentives and corruptibility don’t get in the way.

For example, in your self-defense, you are allowed to use appropriate violence - so where is the need for the state there, the same state that limits your defense capabilities? But most laws aren’t for the protection of your bodily integrity or your property. Most laws under statism exist to force you into involuntary action: pay X amount of your labor, conduct business this way, don’t step out of the lines that the government lays out for you (lines which don’t apply for the few elite in and around government). And you don’t get a say in lawmaking, because lawmaking by representation (parliament/congress) doesn’t take into consideration public opinion at all. Why? Because politicians are unaccountable, and they never tell you what they actually regulate, and why.

Statelessness, on the other hand, encourages people to abide by certain rules through the provision of incentives, not threats. It incentivizes preferred behaviors, and it disincentivizes undesirable behaviors through the “threat” of deprivation of privileges (not rights). See Rothbard, Hoppe, Murphy, and my own work on voluntaryism on how this works. Statelessness also (just like the state) defends you through the implied threat of defensive violence (which is again fair); only this time, free-market competition makes security (policing) efficient and effective.

For example, if you want to use a private network of roads (as you do even today under a state (e.g. the private roads of a mall or private living compound), you are advised to follow certain traffic rules. If you keep breaking them, the owners have every right, not to take your property (fine), but to blacklist you (deprivation of a privilege). In a stateless world where lawmaking is basically risk management by insurance businesses, your constant rule breaking means you increase your risk score, so insurance company are entitled to raise your premium, or deny you coverage altogether. These are deprivations of privileges; not rights. And you are also well within your right to choose not to use their services at all. You just understand that, without insurance, you are more incentivized to follow other people’s rules (more so even), because if you don’t, you motivate begrudged people to reciprocate against you - and without any consequences from their insurance companies, since you are not insured.

Therefore, in a stateless word, people aren’t terrorized to follow certain rules; they are incentivized to follow them, because it means they can use more services, interact with more people, and keep their insurance risk rating low.
Following rules in statelessness creates over-and-above value. Following rules under the state simply avoids punishment.

Psychologically speaking, it is more meaningful, encouraging, and rewarding to have an incentive to follow rules, rather than just be threatened into obeying them. Incentive rewards you with something you didn’t have before, if you choose to comply, but threat doesn’t reward you for your obedience; it just doesn’t take what you already have. Similarly, if you don’t want follow a rule under statelessness, you just choose not to use a privilege offered to you. Under the state, you have no choice but to obey, and if you don’t, you lose what you already had (your right to your labor, your freedom, your bodily integrity). This is why we can predict that, people in statelessness, will abide by social rules more willingly than they do now under a state, especially when lawmaking without a state will more accurately reflect what society wants to be regulated, and how much it wants it.

“But what about those who choose not to follow certain rules?”

I remember once I wanted to try out a new gym because it looked cool in its social media presence. As I was browsing its photos, I stumbles upon a list of its rules. Its rules were crazy, and written with an attitude, literally ending with “If you don’t like it, get out of here.” Fair enough, but not being allowed to bring a towel other than the ones belonging to the gym was a bit wild to me. So, I chose not to subscribe. Soon after, I heard that the gym loosened up its ridiculous rules, and it even halved its subscription price.

Under seamlessness, you can choose not to follow certain rules. You then lose the privilege to use certain businesses requiring those rules, and your privileges to association with the people who also require those rules. But remember: they can’t demand insane illogical rules either, because then, they also deprive themselves of the privilege of your company and business. They are also free to decide with whom they associate, and in which circumstances, and under which rules. If a society truly wants a certain rule, then it will get most people to comply through the above market pressures. Government, however, has no such feedback mechanism. It enforces something, even if the vast majority of people oppose it.

You can’t get all people to comply with a rule, not even under the violence of the state. Those few who don’t comply with laws also exist under the state, which proves useless to enforce its own rules on the very people that those rules are most relevant. Their violent persecution, though (instead of passive marginalization under a stateless society), pushes them to extremes in a reciprocal violent reaction. Violently imposed rules only create more violence. The prohibition era, and the ongoing pointless war on drugs, taught us all we need to know about state enforcement. Yet we still refuse to learn.

2. Organic laws

Without a government, civilized societies create organic laws as a consequence of free expression of actual societal needs.

Under a state, we vote for people instead of individual policies. And they get to do whatever they want without ever being held personally accountable. We vote for unaccountable representatives, granting them almost absolute power over us, then cross our fingers hoping they’ll do something nice for us, even after the break every campaign promise again and again. Their campaign promises are vague. They are never punished for failing to keep even the few specific promises, because government and its branches are designed so that the blame game absolves them all of responsibility. We keep voting for them because they can always blame their broken promises on some other branch of government. This is why branches of government exist: it’s the ping-pong of responsibility, the blame game, the absolution of any and all accountability.

Lawmaking under a state is even more inorganic when we vote for representatives who then supposedly vote for laws on our behalf, and they package them into “bills” that include all sorts of other pointless laws, funding (embezzling), aid (money laundering), and corrupt regulations that nobody’s asked for (nobody except lobbyists and embezzling state bureaucrats).

Under statelessness, lawmaking is organic because is represents what society wants, and how much it wants it. Stateless lawmaking doesn’t only account for what people want, but also how much they want it, and if they have skin in the game they are voting for. Are they willing to put their money where their mouth is? Do they actually have skin in the game, or are they just throwing a vote where they have no business having an opinion about the first place?

Further objection - Paying for laws?

“But if laws are made by those who have money, doesn’t that mean that the rich get to rule?”

The “ultra rich” already rule now under a state; and more so, especially when there is a single centralized power (the state) that is on sale to the highest bidder. Your government makes laws based on lobbying and legalized bribes, not based on your worthless vote. So, already, the state represents a platform for lawmaking exclusively for the rich, and the rich only.

Moreover, the state, and only the state, is the reason why there is so much wealth disparity. The state is the main cause of poverty in the first place. If we are arguing from first causes, then we must accept that the state - which causes poverty through taxation, inflation, and corrupt monopoly-inducing regulation - cannot be the solution to the problem it deliberately creates.

Yes, there will always be economic disparity, even under statelessness. But a free market, and the fierce self-regulating power of relentless unforgiving competition, is the great wealth equalizer.

It’s almost impossible to monopolize under a free market. You cannot become a big corrupt corporation without a lobbied state to grant you favorable regulations that kill off your competition. You can’t become a big corporations without the state granting you unjust ‘legal entity’ status, and without the state handing you “funding” and bailouts at the expense of the already impoverished. You can’t become a big corporation without a state enforcing your monopoly, and disincentivizing re-innovation, through patents.

Politicians lie every time when they claim they seek income equality - they don’t want income quality. All politicians do is regulate SMEs to take them out of the competition, so that their donors, the big corporations, get to monopolize. All politicians do is impoverish the middle class to equate it with the poor. And they make the poor even poorer through the artificial monopolies and inflation that fiscal and monetary policies deliberately cause.

Note: By “ultra rich” I mean the people who are inorganically and undeservingly wealthy - those who would not have been able to make their fortunes without hijacking state powers that grant the an unfair oligopoly/monopoly in a market regulated in their favor. In a free market, there is no greater regulating force than free-market competition: what the market demands, it will be supplied. The free market is a level playing field.

Consider: If, under a state, market demand is enough to convince even the monopoly of government to enforce certain rules, then more so is the case for a free market. If the regulated market wants a public good enough to make government pretend to do something about it, then a free market would be even more inclined to provide that public good.

A competitive free market is the greatest wealth equalizer.

A centralized “authority” is inevitably subject to corruption. An individual or business at the mercy of free-market competition has no choice but to obey the actual authority of consumer market demands. It is extremely difficult to corrupt a business that is subject to free market competition.

Yes, you need to pay money for someone to protect your rights. You already pay money to protect your rights even today under a state; and most of it go to secret “services” and wars that erode your rights.

Money is value, and we need a measure of value to show that we are serious about what we claim we value. You must pay for lawmaking because they are a privilege, not a right. If protecting your rights requires the labor of others, then you must pay for it with yours. You have no right to the labor of others. You have a right to protect yourself, but you have no right to expect others to protect you - that is a privilege. And the great thing about statelessness is that nobody forces you to pay for a law you don’t want to pay for.

We already pay to the government the vast majority of our labor in taxes, hidden taxes and fees, and inflation. The biggest part of any price tag is taxes, tariffs, and fees. You pay taxes on your already taxed income. Most of your labor goes to the government. And most of those taxes don’t even fund the services that your government fails so miserably to provide. Most of the taxes go to big-corpo funding (so that big corpos get their taxes back many times over and your expense), and other wasteful spending like embezzling and war. When there is an unaccountable central authority with a monopoly of violence, it will use that violence in war. The existence of government is the only reason we have war.

State vs. Statelessness - Summing up

Yes, rules exist in societies without government. We do not need a arbitrary, centralized, violence-based “authority” to dictate rules. History is full of instances of societies that managed to function without government - until a neighboring state with its centralized monopoly of violence conquered those societies. This is not a pro-state argument; it is an argument that shows the evil, infesting nature of statism.

One difference between laws from a state and laws from statelessness is the difference between threat and incentive, coercion and consent. It is the difference between rape and making love; subtle but massively different in its implication, meaning, and consequence.

Another difference is that laws without a state more accurately represent what society as a whole wants, and how much those who want it specifically actually want it. Are they willing to have skin in the game, to put their money where their mouths are? Conversely, under a state, people think they have a right to vote for things that do not concern them. And a vote costs them nothing, so a vote does not represent how much voters want something, nor if it is their business to want it imposed on others.

Without a state, however, people have to be more morally consistent. Do they want a rule about something? Then they can’t force rules. They have to first insure something, let’s say, their right to be free from sound pollution in their area. If enough of them want this enough, then they will want to insure it, and their insurance company will have to pay them indemnity whenever they fall victim to sound pollution (imagine the government ever paying you for the crimes you suffer from others). So, if the insurance company wants to keep its risk low, it will have to include ‘not making measurable noise in specific areas’ as a clause in its insurance contracts. This means that, if you want to be insured about anything, then you must abide by other rules too, otherwise you are too much of a risk to the insurance company. This is a way for insurance businesses to reduce their overall risk: they can require you to follow the rules that other people pay money to have (at least the most paid for). If you keep breaking insured rules, then represent a high risk for insurance companies. So, insurance companies may have to increase your insurance premium, or deny you insurance altogether. Without insurance, you might lose access to many businesses who might choose not to risk letting someone without insurance enter their venues. This way, you may be denied certain privileges - not rights. It’s that simple.

“But without a state, who will enforce insurance company contracts?”

We already have business transactions outside of the state’s legal framework. The same people in government - the corrupt politicians and bureaucrats - already use the concepts of voluntary stateless incentives to conduct their under-the-table dealings. They used stateless interaction for their bribes, their embezzlements, their domains, their property. The same goes for organized crime. Every day they conduct business based on mutual incentives, reputation, and credit scores, just like you conduct all your affairs in all your personal relationships.

And even stateless transactions by corrupt politicians and gangsters seem to work more smoothly than the awful and unjust dispensing of “(in)justice” by the state - a state that lets the worst war criminals and pedophiles and rapists walk away with a slap on the wrist. The same state that deliberately ships and funds the worst people from all over the world to abuse your welfare systems, and brutalize you and your children. The same state that brainwashes the foreigners it imports to blame and hate you, and then lets them off the hook while it criminalizes your freedom of speech and dissent.

Even today, private banks share credit scores. The internet is full of reviews and ratings, and businesses seem to go to great lengths to maintain a good standing with their online community. The state does not force an online commerce business to give you a refund or replace your lost package; this shows how government is unnecessary.

We don’t need the state to enforce anything, especially when private standards and certifying businesses are already doing a better job than any government ever could. Without a state to supposedly enforce contracts, the business of credit rating would boom.

In a nutshell

The state motivates by terror. Statelessness motivates by value offering.

Statelessness also retains the last resort of defensive violence, whenever one faces aggression. But violence in statelessness is the last resort; in statism, it is the first preferred option.

The state has no way of ensuring that the rules it creates accurately represent what people actually want. There is no free-market feedback mechanism, because politicians are unaccountable, and a worthless vote every few years - between two identical generic lying candidates - isn’t an intelligent way of figuring out what society wants. Government is incapable of gauging what rules people want, let alone discern how much they want each individual rule, and if they have the right to want it imposed on others.

Under a state, you vote indirectly through a useless vote that everyone has, regardless of whether they have skin in the game, or how much they value what they claim they value. Under statelessness, you vote every day with your purchasing choices. Only those who want something enough, and who put their money where their mouth is, will get to affect lawmaking. And the poor who can’t pay? There are no poor under statelessness; the state creates the poor.

Poverty is literally an inalienable and deliberate consequence of government intervention:

the slowing down of the economic cycle (unemployment) through taxation and corrupt regulation,
the economic suppression of restrictions and welfare,
the crippling effect of inflation due to monetary and fiscal policy,
the creation of monopolies through lobbying and corruption,
the monopoly-inducing patent protection, and the disincentive to re-innovation it represents,
the further slowing down of the economic cycle through money laundering and tax evasion/avoidance schemes (charities, foreign “aid,” arbitrary funding),
and waste from inorganic spending, especially insider-info grifts, and unending war.

If poverty is a concern, and if we’re arguing from first causes, then statelessness is undeniably a solution to poverty.

Statelessness makes rules that aren’t subject to the fine-tuning pressures of the free market. Statelessness is superior; it takes a superior civilization to recognize this. Monkeys laugh off things they cannot comprehend.

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