Private Governance: Creating Order in Economic and Social Life, by Edward Peter Stringham, lays out the case for private organizations to do much of what government does now. Stringham gives many examples of people self-organizing to create security, both before government was ever involved and in places where government can’t effectively provide security. His examples include the first stock markets, online commerce such as PayPal (where government enforcement would be prohibitively expensive), courts (in the days in which common law was developed, England had many competing courts), and private police forces (like in San Francisco and North Carolina).
Stringham may not be an anarcho-capitalist (people who believe that government shouldn’t exist), but he definitely argues in that direction: for much less government force than even many libertarians favor. Stringham is persuasive that those who believe that markets wouldn’t be able to function without government rules and regulations are wrong. The arguments and evidence in this book are valuable, and anyone seriously interested in the subject should read it. It’s a good complement to the masterpiece of anarcho-capitalism, Huemer’s The Problem of Political Authority.
Few think we should have one global government, so why do we need national governments? Couldn’t we take it down to smaller, more competitive, privately-governed entities like clubs, malls, apartment buildings, and stock exchanges? Just as economic discovery requires the competitive process of the market to provide information and feedback to correct errors, competition in the provision of governance is essential to the discovery of optimal rules. Centralized governance faces knowledge and accountability problems similar to those of central economic planners. Ignoring private order and misattributing that order to threats are common mistakes. Governance can and should be produced by the market itself. Private governance exists in all societies to varying degrees, and how well it solves problems depends on how free it is from government interference. Stringham provides many examples of where government has encroached on successful private governance, however.
I did find the book to be a somewhat long, boring read. It’s for an academic audience: Stringham uses the word normative a lot (the quickest way to identify an academic); he seems to have read everything and gives us everyone’s opinion on every argument, with sources (plus there are plenty of footnotes); and he spends a whole chapter on how Hayek believed in competition in markets but couldn’t take the next natural step to believing in competition in governance. I would have preferred a long article catering to a broader audience to reading this whole book.
Still, I recommend Private Governance to all libertarians and anarcho-capitalistists, for the arguments and evidence about how people can organize themselves rather than have government force do it. Unfortunately, it’s very expensive ($43 for the ebook and $75 for the hardcover), so not many people will read it.