The Role of Private Security vs. State Enforcement

By: DAFCON

Private-Law Societies    

Private-law/Anarcho-Capitalist societies believe in the Non-Aggression Principle (NAP). This claims that aggression against an individual or their property is illegitimate. It advocates for resolving conflicts through dialogue and reason rather than resorting to violence. The idea emphasizes that argumentation is founded on the principle of exchanging ideas while avoiding physical force or intimidation. By being open to arguing, an individual decides to choose dialogue over the sword. This shows a natural lead towards non-aggression. Holding property rights under the NAP is sacrosanct to the libertarian. To the Libertarian, the nature of taxation is coercive. If an individual consistently refuses to pay any tax to the state, they will eventually resort to force. The fact that you decide to halt your property from the state will eventually bring the use of force from the state against you and shows that the very institution goes against the NAP. Consequently, any state-funded entity, such as the police, is illegitimate. To the libertarian, not only do the police lack legitimacy but also stand as a monopolistic force exerting their control of violence on the very populace that funds them. For clear reasons, security is key: it brings stability and confidence between the protector and the protected while guarding people, their belongings, and communities from both internal and external dangers. Any society that functions needs this. This raises very obvious concerns such as: Who will safeguard us from criminals? Especially people who stick to the NAP and consider the police as an illegitimate entity.    

The Concept of Private Security   

Private security today comes in various types. On a smaller scale, we have shopping malls, retail outlets, bodyguards, and gated communities. It may involve private security companies, maritime security, and even emergency response teams on a broader scale. Despite modern examples of private security, it is expected that the security industry, more specifically police protection in the free market, would most likely evolve into private security insurance companies. Private defense agency firms (PDA/s for short) in the absence of the police would operate differently within the free market. PDAs would have individuals or communities hiring them to provide protection, just as they would any other service. What the companies would specifically do is limited to what the contract between the individual and the PDA stipulates, ensuring that the customer receives exactly what they expect from their service provider. Communities desiring protection would opt for a collective package for the entire community. These communities might make laws based on their specific preferences, such as banning dog owners, cold callers, and gingers. Their PDAs might enforce these rules provided it's in their contract. However, if the PDA didn't want to risk its reputation with external communities, it would simply agree to protect the communities from aggression. Wealthier individuals wanting specific protection for either themselves or their business would have a direct contract with the PDA. PDAs might also come in a variety of specializations, for example, those for bodyguards, neighborhood patrol, investigations, and cybersecurity. It is also very plausible that if a PDA doesn’t cover all these areas within their firm, they will collaborate with others to provide the best possible service at the most efficient price. Okay, now we understand the concept of Anarcho-Capitalist/Private Law private security, but the benefits have yet to be explained. Even without the clear benefits, this system is already ethical and voluntary. Anyone can easily opt out of protection from the PDA and can just as easily become a customer. Due to contractual obligations, PDAs may be held responsible and required to make compensation if they fail to properly safeguard consumers. To put it in point of view, if you are the victim of a home invasion and $7000 worth of valuables are taken, the PDA will be obligated by your contract to recover your property and, if they are unable to do so, to compensate you for the loss of property. This insurance model for private defense would also provide an incentive for proactive crime prevention to reduce as many claims as possible. With multiple PDAs in the market, competition is inevitable. Such competition would promote efficiency, innovation, and quality of service, as PDAs would be motivated to retain customers and attract new ones. One theorized model of PDA agencies working together can be likened to how mobile phone companies collaborate to provide connections in other countries. Just as you have mobile data service across all of England, you can also access data in Amsterdam, Lisbon, and Istanbul. PDAs will have an incentive to protect foreign individuals operating in their areas of protection if they have a contractual agreement with that individual’s foreign PDA. 

Critique of Private Defence Agencies 

Every institution big or small, state-controlled or privatized is subject to issues. A whole new article can be written on this subject altogether, so I will focus on the more severe and popularly discussed issues.  

“Monopoly on Force” In a free market where virtually anyone can start a business, especially in private security, there will be nearly endless competition. Trying to make a monopoly would be economically and socially tricky, if not impossible. Despite this, for the sake of argument, let us consider the thought of it. “What if a wealthy PDA tries to conquer land and enforce its dominance over other PDAs?” While this scenario is possible, it's highly illogical. Engaging in aggressive means of competition is prohibitively expensive. The cost of paying officers and engaging in conflict would be added to the costs of holding domination over any territory it currently controls, including its client base. This aggressive approach would inevitably increase the costs for the very customers the PDA is contracted to protect. In response, these customers would likely turn to other PDAs offering comparable or superior security at a more competitive price, especially since the aggressive PDA's resources would be diverted to combat its competition. Another important factor to consider is reputation and trust. If a PDA gains notoriety for its aggressive tactics against competitors or external communities, the damaging effects of social ostracism would likely drive customers to choose other providers they view as more professional, trustworthy, and non-aggressive. In such a society, PDAs would likely cooperate, as previously mentioned. It's even theorized that PDAs would form alliances to address disputes among them, maximizing profits and avoiding conflict. A collaborative strategy is likely to end in the formation of private arbitration systems that would resolve conflicts. Many who argue against this perspective struggle to grasp the idea that capitalism, by its very nature, would render any natural monopoly or aggressive takeover socially, economically, and logistically challenging, making it entirely counterproductive. 

“Potential of Abuse” Some might argue that without regulations or checks, these PDAs have a high risk of abusing their power in a variety of ways, such as suppressing dissidents or outright violating an individual's rights for their benefit. As previously mentioned, monopolies are not strictly possible in most scenarios. However, if we were to assume that an entire territory is controlled by a single PDA, and no other potential PDAs exist to offer competition, then and only then would the potential for abuse be present. If a service were to emerge, whether in a few months or a few years, there would eventually be internal services offering protection as a market solution to provide a superior service. This issue can be addressed using praxeology. For instance, if you've been a customer of PDA 1 for 3 years and they have a history of mismanagement in defense and of overcharging its customers, and then a new PDA emerges promising better management and protection of individual rights, which one would you choose? The logical choice for most would be PDA 2. This shift would eventually compel PDA 1 to either improve its business ethics and services to remain competitive or risk being overtaken by newer PDAs. 

“Unequal Access to Security” can come in a variety of forms, such as economic inequalities. A PDA might be unaffordable for an entire community, or the community simply might not afford a good quality service. Communities with limited resources and industry might struggle with basic protections, or in extreme scenarios, might not have them at all. This is certainly a red flag scenario but can be refuted in several ways. Even if a community struggles to fund a PDA for protection, it might end up with none at all. Gun ownership in communities is completely legal, ranging from recreational ballistic missiles to a simple Glock. There is a lot of evidence to suggest that gun ownership correlates directly with less crime. In countries that restrict guns or even knives, homicide rates increase significantly. This could be a temporary solution to the absence of PDAs that a community might fund for protection. It is also suspected that if competition in a market free from regulations is fierce, then prices will be as low as possible, maximizing profit to attract as many customers as possible. Taking all of these things into account it would be very hard for a community to offer services for protection itself, and to eventually subscribe to a PDA. They would have to be in completely dire situations if they were not able to use their money for protection. In that case, a lack of funds to buy protection would probably be the least of their issues. It would probably be better for them to immigrate to another place that offers more opportunities in general if they were not able to support themselves. Another issue people might point out is prejudice based on race, religion, ethnicity, or possibly economic status. This is possible, but why should a company change? Whoever took the risk to build their PDA and is now in charge of defense has every right to use their property as they see fit, as long as it doesn’t affect anyone else’s right to their property. A PDA might legitimately disallow Jews, gingers, Catholics, and poor people; it's their right to do what they wish with their property, and nobody has the authority to enforce this. However, it is highly likely that even if they have prejudices, they will not bar them from using their services. If a PDA decided to reject blacks, impoverished communities, and Protestants, then those discriminated against would have no choice but to go to a competitor, which would pave the path to the PDA's downfall. 

Critique of State Enforcement 

While people often critique private defense agencies for issues like inefficiency and monopolistic fears, these have already become a reality with state enforcement. The police, reviled in some places and revered in others, hold a monopoly on violence. This monopoly not only shapes how law and order are maintained but also affects the very fabric of societal interactions. The promise of statewide protection is subject to plenty of issues as well. When comparing the potential benefits of PDAs in an anarcho-capitalist society, the flaws of state enforcers become increasingly apparent. The state's right to enforce often leads to an abuse of power. Without competition in any form, the state-owned monopoly on violence can lead to abuse, leaving no alternative policing service for those dissatisfied. In contrast, in a free market rife with competition, as previously discussed, anyone can opt out of a policing service they are dissatisfied with and become a customer of a different PDA. This not only promotes efficiency but also incentivizes the PDA losing customers to change quickly, lest they run out of customers to fund. Adding to the lack of competition, beyond the absence of options to choose from, is the fact that competition in other areas of the free market drives innovation and efficiency. With no competition, the absence of such benefits is evident. PDAs in a competitive market would consistently be pushed to enhance their service and adopt the best technologies, ensuring the most utility at the most efficient price. With a monopoly on violence, such as what the state holds, many places around the world prohibit gun ownership. Beyond gun prohibition, there's a general restriction on self-defense. Taking the UK as an example, if a home invader threatens you with a weapon while stealing your possessions and assaulting your partner, your only option is to call the police. Any retaliation can lead to charges against you, ranging from assault to manslaughter. This is not only grossly unfair but also affects law-abiding citizens more than criminals. The state has long used this narrative to demonize weapons, having stripped citizens of their right to self-defense and then expressing shock when they are victimized. As the saying goes, “When seconds count, the police are minutes away.” Mistakes or even legitimate cases of abuse will occur. When these instances arise, the mechanisms within state institutions are often slow and bureaucratic. The same institution committing the abuse is also responsible for investigating it. A PDA, being a private institution, can be held subject to public scrutiny and market pressures. Moreover, because PDAs have contractual obligations, they are held accountable if they fail in their duties, especially if they commit abuse. The state is also costly. The expenses of this institution, funded through the confiscated property of its victims, are not influenced by its level of service. In the lack of a profit incentive, economic calculation errors might arise, resulting in inefficiencies and resource waste. PDAs, driven by profit, would operate more efficiently and would be funded by those who voluntarily choose their services. The issue doesn't stop here though. As the state increases taxation, the quality of state security doesn't necessarily improve. This is a frequent issue with monopolies when a lack of competition causes stasis. In conclusion, while the concept of centralized, state-run security seems stable, it suffers from the same issues that any monopoly would, whether in security, pharmaceuticals, or agriculture. Inefficiencies, misuse, economic burdens, and a lack of accountability show the reality that alternative models, such as a private defense agency in an anarcho-capitalist society, provide an evolving, responsive, and efficient approach to security in areas where the state has obviously failed.  

Sources: 

Molinari, G. (1977). Production of Security. p. 53-61.   

Hoppe, H. H. (2001). Democracy the God That Failed. p. 132.   

Mises Institute. (2015, October 27). Pew: Homicide Rates, https://rb.gy/541qt.   

Mises Institute. (2022, March 14). Economic Calculation, https://mises.org/wire/economic-calculation. 

Birchall, G. (2017, June 3). Man arrested for carrying sharp pencil. The Sun. https://rb.gy/vantg.  

Thomas J. D. (2019, January 1) The Myth of Natural Monopoly, https://rb.gy/j8etv