Friday, June 15, 2007

Stateless Dictatorships: How a Free Society Prevents the Re-emergence of a Government

By far the most common objection to the idea of a stateless society is the belief that one or more private Dispute Resolution Organizations (DROs) would overpower all the others and create a new government. This belief is erroneous at every conceivable level, but has a kind of rugged persistence that is almost admirable.

Here is the general objection:

In a society without a government, whatever agencies arise to help resolve disputes will inevitably turn into a replacement government. These agencies may initially start as competitors in a free market, but as time goes by, one will arise to dominate all the others militarily, and thus impose a new state upon the population. The instability and violence that this civil war will inflict upon the population is far worse than any existing democratic state structure. Thus a stateless society is far too risky an experiment, since we will just end up with a government again anyway!

This objection to an anarchic social structure is considered self-evident, and thus is never presented with proof. Naturally, since the discussion of a stateless society involves a future theoretical situation, empirical examples cannot apply.

However, like all propositions involving human motivation, the "replacement state" hypothesis can be subjected to logical examination.

Premises

The basis of the "replacement state" hypothesis is the premise that people prefer to maximize income with the lowest possible expenditure of energy. The motivation for a DRO to use force is that, by eliminating all competition and taking military control of a geographical region, a DRO can make as much money as possible, with the lowest possible expenditure of energy.

We can fully accept this premise, as long as it is applied consistently to all human beings in a stateless society. To make the "replacement state" case even stronger, we will also assume that no moral scruples could conceivably get in the way of any decision-making. By reducing the "drive to dominate" to a mere calculation of economic efficiency, we can eliminate any possible ethical brakes on the situation.

Starting Point

Let's start with a stateless society, wherein citizens can voluntarily choose to contract with a DRO for the sake of property protection and dispute resolution. Each citizen also has the right to break his contract with his DRO.

There are essentially three possible ways that a DRO could gain military control of an entire region:

  1. By secretly amassing an army, and then suddenly unleashing it upon all competition.
  2. By openly amassing an army, and then doing the same thing.
  3. By posing as a voluntary "Defense DRO," amassing arms supposedly for the legitimate defense of citizens, and then turning those arms against the citizens and instituting itself as a new government.

There is one additional possibility, which is that a private citizen can try to assemble his own army.

Let's deal with each of these in turn.

The Secret Army

In this scenario, let's say that a DRO manager called "Bob" decides that he is tired of dealing with customers on a voluntary basis. He decides he is going to spend company money buying enormous amounts of armaments and training an Army. (For the moment, let's assume that Bob can make this decision all on his own, and does not need to submit it to any sort of Board, bank or investor review.)

Let us assume that Bob's DRO has annual revenues of $500 million a year, and profits of $50 million a year.

The most immediate challenge that Bob is going to face is: how on earth am I going to pay for all of this? Given that, in a free society, there is no way of knowing how many citizens are armed – or what kinds of weapons they have – it would be necessary to err on the side of caution and assemble a prodigious and overwhelming army to gain control of an entire region, otherwise the investment would be totally lost in a military defeat. Such armies are scarcely cheap! For the purposes of this argument, let's say that it is going to cost $500 million over five years for Bob to assemble his army – surely a lowball estimate! How is he going to get the money to pay for this?

Raising Rates

The most obvious way for Bob to raise the extra $500 million is to charge his customers more. The $500 million Bob needs represents more than 10 years of his DROs annual profits of $50 million a year (reinvesting the $50m for 5 years at 10% yields $805.26m). Thus, in order to pay for his army within five years, Bob is going to have to more than double his prices. Since we have already assumed that it is Bob's greed that makes him want to create a new government – and that this greed is common to all citizens within the society – we can also assume that his customers share his motivation. Thus, just as Bob wants to have an army so that he can maximize his income, his customers just as surely do not want Bob to have an army, for exactly the same reasons! The moment that Bob informs his customers that he will now be charging them more than double for exactly the same service, he will lose all his customers, and go out of business. No army for Bob!

Full Disclosure

Perhaps, though, Bob recognizes this danger, and plans to keep his customers by telling them that he is raising their rates in order to fund an army. "Help me fund an army by paying me double the price," he tells them, "and I will share in the plunder I'll get when I take over such-and-such a neighbourhood!" Even if we assume that Bob's customers believe him, and are willing to fund such a mad scheme, Bob's secret is now out, and society as a whole – including all the other DROs – become fully aware of Bob's nefarious intentions. Clearly, all the other DROs will immediately cease doing business with Bob's DRO. Since a central value of any DRO is its ability to interact with other DROs – just as a core value of a cell phone company is its ability to interact with other cell phone companies – Bob's DRO will thus be crippled. In other words, Bob will be more than doubling his rates for many years while providing far inferior service for a highly uncertain and dangerous "profit."

In addition, Bob's bank would immediately cease doing business with him, rendering him unable to pay his employees, his office rental, or his bills. Bob's electricity company will cease supplying electricity, he will find his taps strangely dry, his phones would be cut off, and many other misfortunes may arise as a result of his desire to become a new dictator. It is hard to imagine him lasting five days, let alone retaining all of his paying customers at double the rates for the five years required to build his army!

Even if all the above problems could somehow be overcome, it's also hard to imagine that Bob's customers would be happy to arm Bob in the hopes of sharing in his plunder. Unlike the government, which can tax at will, DROs must actually protect their customer's property in order to retain their business. Given that those who contract with DROs are those with the most interest in protecting their property, it makes little sense that they would fund Bob's DRO army, since they would have no actual control over that Army once it was created, and thus would have no way of enforcing any "plunder contract" created beforehand. In a free society, people would not try to "protect" their property by funding a powerful army that could then take it away from them at will. That sort of madness requires the existence of a government!

Alternative Funding

Perhaps Bob will try to fund his army in other ways. He may try and borrow the money, but of course his bank would only lend him the money if he comes up with a credible and measurable business plan. If Bob's business plan openly states his desire to create an army, his bank would cease supporting him in any way, shape or form, since the bank would only stand to lose if such an army were created. If Bob took the money from the bank by submitting a fraudulent business plan, the bank would be aware of this almost immediately, and would take the remainder of the money back – and impose stiff penalties on Bob to boot! Again, no army for Bob!

What if Bob tried to pay for his army by reducing the dividends that he was paying to shareholders? Naturally, the shareholders would resent this, and would either have him thrown out, or would simply sell their shares and invest their money elsewhere, thus crippling Bob's DRO. Perhaps Bob would try paying his employees less, which would only drive his employees into the arms of other DROs – also destroying his business.

It's safe to say that it is practically impossible for Bob to get the money to pay for his army – and even if he got such money, his business would never survive such a dangerous transgression of social or economic norms. There are other dangers, however, which are well worth examining.

Defense DROs

The most likely threat would seem to come from "Defense DROs," since those agencies would already have weapons and personnel that might be used against the general population. However, this would be very difficult for two main reasons. First, "Defense DROs" would require investment and banking relationships in order to grow and flourish. Given that investors and banks would not want to fund an army that could steal their property, they would be certain to insert myriad "failsafe" mechanisms into "Defense DRO" contracts. They would make sure that all arms purchases were tracked, that all monies were accounted for, and that no secret armies were being assembled.

"Defense DROs" would also be subject to the same kinds of funding problems as Bob's DRO. Let's say that Dave was the head of a "Defense DRO," and was also one day seized with the desire to assemble his own army and pillage society. First of all, citizens would be unlikely to contract with any "Defense DRO" that would not submit to regular audits of its weapons and accounts to ensure that no secret armies were being created. If Dave decides to bypass this contractual obligation, and start secretly funding his own army, how is he going to pay for it? The moment that he raises his rates without increasing his services, his customers will know exactly what he's up to, and withdraw their support. Bye-bye army. Dave's funding would also be subject to all the other problems raised above.

It can thus be seen that there is no viable way for any DRO to pay for an army without destroying its business in the process. Armies are only really possible when the government can force taxpayers to subsidize them.

Independently Wealthy?

Perhaps, instead of Bob or Dave, we have a privately wealthy individual named Bill, a multibillionaire who decides to raise an army and institute himself as a new dictator. Due to his immense wealth, he is not dependent on any customers, employees, or shareholders. Let's say that he can pay for an Army out of his own pocket, immediately.

Bill's challenge, of course, is that in a free society, he cannot go and pick up a complete army at his local Wal-Mart. Armies are fundamentally uneconomical, expensive overhead at best, and thus it seems likely that geographical defense in a free society would be limited to a couple of dozen nuclear weapons, to deter any potential invader. Thus even if he could get a hold of one, buying a nuke would not help Bill very much, since he would not be able to use it to overwhelm all of the other "Defense DROs."

What about more conventional weapons? Part of the service that "Defense DROs" would offer to subscribers would be a guarantee that they would do everything in their power to prevent the rise of an independent army – either of their own making, or of anyone else's. Thus arms manufacturers would have to provide rigorous accounts of everything they were making and selling, to be sure that they weren't selling arms to some secret army, probably in the foothills of Montana. If people were really worried about the possibility of someone creating a private army, they would only do business with "Defense DROs" that guaranteed that they bought their arms from open and legitimate arms dealers – subject to independent verification, of course.

Thus when Bill came along trying to buy $500 million worth of weapons, and hire an army of tens of thousands of soldiers, one question would be: where on earth would they come from? Arms manufacturers would not be sitting on $500 million of inventory, due to the limited demand for such products. Thus the arms manufacturers would have to really crank up their production, which could not be hidden from the general population, or the Defense DROs that such extra production would directly threaten. In order to make all the extra armaments, manufacturers would have to borrow money to expand production. Where would they get this extra money from? Their bank would surely not fund such a dangerous endeavour, and would immediately notify any Defense DROs it had contracts with, and drop the rogue arms manufacturer as a customer. Defense DROs would also never to do business with such a dangerous arms manufacturer ever again, thus driving it out of business.

Secondly, even if Bill could somehow get his hands on the necessary weapons, where would these tens of thousands of new troops come from? The military would not be exactly the same kind of "in demand" career that it is today. In order to assemble an army of tens of thousands of men, he would have to advertise, recruit, pay them, train them, etc. This would be a pretty hard thing to hide. Since it would be completely obvious that he was assembling an army, what could people in society conceivably do to stop him?

First of all, if this were a conceivable risk, his bank would have a clause in its service agreement giving it the right to refuse to honor any payments clearly designed to fund a private army. Secondly, no DRO would do business with Bill – or his soldiers – the moment that it became apparent what he was up to. This would mean that none of Bill's soldiers would have any guarantees that they would get paid, grocery stores would not sell them food, electricity companies would cut them off, gas stations would not sell them gas, etc. When society as a whole wants to stop doing business with you, it becomes very hard to get by!

The Question of Profit

Let's say that DRO Bob can somehow get his army – the question is: can he make that army pay? The initial premise of the "replacement state" argument is that people prefer to maximize income with the lowest possible expenditure of energy.

Remember, it costs Bob $500 million over five years to assemble his army – let's say that it costs another $1 billion over the next five years to subdue a reasonably-sized region, due to the loss of life and equipment involved in combat. What kinds of financial returns can he expect?

If you know that Bob's Army is going to be at your house in two weeks, and there is no way to stop it, you would just pull a "scorched-earth Russian defense" and leave, right? You would take everything of value with you, and destroy everything that you could not bring. Thus what would Bob's Army end up getting control of? Not much.

However, let's imagine that Bob's Army could somehow seize assets that would be worth something. How much would they have to seize in order to make a profit?

Well, let's look at the alternatives. Bob has to invest $100 million each year over five years to assemble his army – what does that cost him overall?

We know that if Bob invested $100 million back into his DRO, he will likely get 10% ROI. In five years of compound interest, that translates to $832.61m.

Then, Bob has to invest another billion dollars over the next five years invading a series of neighbourhoods. How much does that really cost him? $1,665.22m, or $1 billion invested at 10% over five years. But that's not all – the $832.61m above would also have gained 10% per year over the remaining 5 years, resulting in a total of $1,340.93m.

Thus Bob's five years of preparation and five years of military rampaging have cost him over $3 billion. Given the enormous risks involved in such an endeavour, investors would likely demand at least a 10:1 pay off – similar to the software field. Thus Bob would have to steal well over $30 billion, given that he would likely want to keep some money for himself.

Where would this $30 billion come from? The burned-out houses? The abandoned cars? It's hard to imagine that anything Bob got his hands on would be worth very much at all.

The evidence of history tends to support this conclusion. Economically, imperialism is a disaster for everyone except those intimately connected to the coercive power of the state.

What if Bob wanted to spring an attack on citizens and start taxing them? Again, all the other DROs would stand to lose all their customers in the event of such a situation, and would take all necessary steps to prevent that from occurring. They would have to provide innovative “checks and balances” solutions to potential customers, to win them as clients.

However, even if all of the above problems can be somehow overcome, and the creation of a rogue army in a free society became both possible and profitable, the solution is simple. Any "Defense DRO" would simply buy the trust of its clients by promising to pay them a fine in excess of any potential military profits if that DRO was ever discovered to be assembling an army. DROs would simply put ten million dollars in trust, payable to any customer that could find evidence proving that a rogue army was being assembled. Problem solved.

When we look at a series of steps required to make the creation of a private "rogue" army economically profitable, we can see that it becomes so unlikely as to be functionally impossible. If we assume that the economic incentive of maximizing profit would drive anyone to consider such a course, we can easily see that the fears of inevitable private tyrannies are merely imaginary. The "replacement state" mythology is just another ghost story invented to keep us in cages whose bars are merely fictional.

12 comments:

Anonymous said...

Stefan,

First let me say I agree with the stateless society and DRO concepts, but I think you missed two other scenarios in this essay:

1) Defense DROs band together to face an "outside" threat (natural disaster, 'foreign' invasion, bioweapon, etc.), convincing people that they need to give up liberty for safety for as long as the threat lasts. The evil DRO's might even have caused the threat.

2) Many generations after a stateless society is founded we can assume (because of the greed premise) that an economic disparity will arise (yes, the 'poor' will probably be many times more wealthy than we are today, but the 'rich' could become millions of times more wealthy). Could not a (evil) leader arise and convince the mass of poor to overthrow the few wealthy?


My point in both these examples is someone convinces the majority that their lives would be better (more wealthy, more safe, etc.), if only they do 'evil'. If a majority chooses evil (even if tricked or temporary) I believe that 'stateless' loses and 'stateful' wins.

Today, as you well know, our biggest obstacle is convining the majority that 'stateless' is better. We not only have to win this war of ideas with one generation, but will all that follow.

Thanks for all your ideas and writings.

J said...

The idea that one can profit from others in a hierarchical way always sums back up as a simple Ponzi Scheme, or pyramid scam.

Basically, a state is nothing more than a massive Ponzi Scheme in which participants are told they'll profit from there being a way for someone to get something that someone else has to produce - if only they agree NOW to give to the leader something in exchange of the promise that, somehow, later, they'll also get more for free.

Of course, it is evident, once exposed, that any work saved (by making someone else do it in your place) still has to be done by someone anyway, and that there is a finite supply of people "lower" than you in the pyramid to provide it. Additionnally, maintaining the pyramid in place requires a lot more work than expected. Even though this repressive work is less than what it would cost, for people at higher levels of the pyramid, to do all the things they profit from themselves (which is why there still are states in place today), the total sum of efforts that can be extracted from the basis of the pyramid is limited, and much less than a free society with no such pyramid would produce.

So, bringing a stateless society back to a statist society would require no less a feat than enlisting half of the population into a single massive Ponzi Scheme. How likely is that ?

J said...

"Defense DROs band together to face an "outside" threat (natural disaster, 'foreign' invasion, bioweapon, etc.), convincing people that they need to give up liberty for safety for as long as the threat lasts."

That's nothing more than classical cartel-thinking. As XIXth century industrial history shows, it does not work in the real world. What's funny with the idea is that it is the exact opposite to the popular idea that a stateless sociatey would NOT be able to "band together" against an invasion :D

But, then, all the countries that put the defense of territory in the hands of militias have never once since been successfully invaded (Switzerland, Israel, etc...).

What I think would happen in such a case (stateless society with a fictional external threat motivated by greed from DROs) is that a significant fraction of the customers would simply not believe it. Others would buy their security at an artificially inflated rate for a moent, sure, but then the competition between the remaining DROs would still be there, and they would have a smaller pie to share because of the non-believers. How long do you think this could hold ? Experience says a mere months, and then the edifice collapses and customers lash back.

J said...

"Many generations after a stateless society is founded we can assume (because of the greed premise) that an economic disparity will arise"

No, we cannot assume this, because evidence from the real world shows that there is, among rich families, a cycle of three generations:
- first generation builds up and grows rich
- second generation manages that treasure and grows it some more
- third generation spends it

That's what happens in the real world, with real people in real conditions that are not very different from those of a free society. In addition, there is little incentive to grow extremely rich when there is no absolute leader position to be conquered in the first place. In statis societies a number of people are motivated by the prospect of one day being able to use the power that exists to their own profit. Absent that power, the motivation dissolves. This can be seen in decentralised societies of the past.

Anonymous said...

I agree with the premise of a stateless society, and I find no self-contradiction in the arguments made in this article. However, the reasoning does not appear to account for the actual existence of governments, for the military campaigns by those governments to achieve hegemony, for the financial support provided by banks, etc., or for the moral support lent by populations at large for those campaigns. A treatise that accounts for such things in a convincing manner would go a long way toward increasing my comfort with this paradigm. Understand that I subscribe to and support establishing a society such as the one described, and I believe that at its very worst it would be far better than what we now have for a very long time, but there is an absolutism expressed here that I have some difficulty in accepting. Ayn Rand used to ask "Why don't people behave rationally?" It is still a good question, and one to which I do not have a good answer.

-Roland

J said...

Roland: states exist because enough people have bought the idea that they could get things they did not labor for in exchange, if they support the hierarchy of state. In this sense, the state is an emergent phenomenon, based on the simple fact that people want to believe there is such a thing as a free lunch. This belief is absolutely irrationnal, but is the reason why such pyramid scam (or Ponzi schemes) work so well at eperating people from the fruit of their labor.

Let's review how it came into being this way: at the beginning, humans were scattered as little packs of hunter-gatherers. At the moment humans started dividing labor, there was civilisation, which is social cooperation: one hunts, the other keeps the fire lit, another gathers berries, etc... and they all share their part of the work on a basis of consensual exchange. This is the horizontal relationship known as "catallaxy".

Then there is one who thinks he can get something for "free" if he only makes someone else make it for him. Consent is broken, this is the appearance of a vertical relationship known as "domination".

He does not get anything for "free", actually, but he saves some work because threatening others is less work than doing everything by himself. Others see that he saves work, but they do not see that the burden is just shifted and that there even is an excess of useless work spent maintaining the domination, and they start dominating others as well as a way for them to save work in the same fashion. That's when dominations spontaneously organize to form what is known as "hierarchy".

When this hierarchy organises human action across a definable territory, we have what is called a "state".

This can be explained as a classical prisonner's dilemma problem: as long as the participants think they can get better off at the expense of someone else, the hierarchy continues to exist. The solution to this situation is to "iterate the dilemma": in an iterated prisoner's dilemma, the participants know that there will be ne iterations of the problem over and over again so that if they shift their burden onto others, then the others will try shifting their own back and everyone will lose. This gives an incentive to cooperate instead of predate.

When applied to the situation of a state, this solution means resisting tax and trying to get or steal the most from the state as possible, as ell as informing other plundered people of the pyramid scam they have been enlisted into.

Nathan said...

What fightens me in this case is people banding together because of a rationality-overriding religion (e.g., radical islam) and establishing a state in its name (e.g., to enforce the Sharia). Rational economic considerations go out the window if you think God needs you to kill unbelievers and force women to wear veils. If you have everyone on the hook for their "immortal souls", you can distribute the costs of army-building among the faithful, who will gladly volunteer their services and wealth. This is how Islam was spread so well initially -- conquering volunteer zealot armies winning converts throughout the middle east and northern Africa.

Anonymous said...

Somalia, QED.

Anonymous said...

Mafia. QED.

Anonymous said...

Very enjoyable article. I am a little disturbed by the tone of some of the presentation, however. The author has presented some very interesting and compelling arguments for why a dominant DMO would not arise, but to suggest that this has been rigorously proved, or that a dominant DMO has been demonstrated to be purely "fictional" is absurd.

Where did you get the figures that you seemed to have magicked up for modeling the cost of a DMO or private army taking over?

Obviously it would be very foolish indeed for a group or individual to attempt to achieve dominance by hiring an army of thousands in the open or on the sly. This is a Roman-era way of examining how to best achieve military dominance. Without doubt, it would be far more economical to achieve an advantage technologically.

I can anticipate a possible response to this argument: It merely shifts the use of soldiers to the use of technology to gain an advantage; and it is the best interest of DMO's to avoid one group or individual gaining technological dominance, and remaining aware of the technological capabilities of all competitors. I submit that there are a few problems that arise with technology that would not come up with soldiers:

1. Some technologies are easy to track. For instance, you need certain material components to build a nuclear bomb, and if we know where uranium stores are, it is fairly straightforward to spend money on tracking the movement of this uranium. Other technologies are much more difficult. In 100 years, everything that we do on a day-to-day basis will use some form of internet connectivity. How do you assess your competitors' capabilities for cyber warfare? I assure you that it is not at all as straight-forward. There is an asymmetry with this technology in that it is much cheaper to effect $x of damage on an enemy with cyber combat than to inflict the same damage with, for instance, state of the art jet fighters and bombs. At the same time, in terms of tracking the capabilities of a cyber combat force, there is much more room for misleading, so the cost of getting an accurate assessment of your enemy is extremely high in comparison to the amount of money he needs to invest to build those capabilities.

This is dissimilar to tracking the building of a militia in that humans and armaments are much easier to track by comparison. Also, it is easy to distinguish between a car used to drive to work and a tank used to conduct military operations; it is impossible to distinguish between a computer that is used to conduct business, and one that is used to conduct warfare.

2. Some technologies are breakaway technologies. The U.S. military was fortunate in its ability to develop nuclear weapons previous to any of its competitors doing so. This development shut down military competition for several years. If the U.S. desired to do so, it could have invaded many more countries during the interim, and extended the advantage by actively disruption the research and development operations of these invaded nations.

This is dissimilar to tracking soldiers in that countries will never have sudden bursts in population that can be hidden for the requisite 10-18 years for the maturity of a would-be soldier.

-kr

Anonymous said...

Let me first start by saying that this is probably one of the best models I have seen for a stateless society. I am in complete agreement with the revamped edition of collection services and pollution/waste. They are very interesting ideas and I think they would work well. As far as the DRO's go, I'm not quite sure I can buy that one or more of them couldn't or wouldn't form a fascist group, however.

One of the things I see that is kind of glossed over is this "The second problem is the fear that a particular DRO will grow in size and stature to the point where it takes on all the features and properties of a new State.

This is a superstitious fear, because there is no historical example of a private company replacing a political State."


I guess my greatest concern is the fact that corporations already have massive amounts of power. Why should they be given any more? Look at the Business Plot

http://en.wikipedia.org/wiki/Business_Plot

Sure it didn't get off the ground, and sure it's an example of corporations swaying a military belonging to a state, but it could have and we'll probably never know how close it came to being pulled off. If such a thing were a threat in the 1930's, think about how much power corps have now. I don't think we can just brush these things off lightly. But something has to be done (hopefully some day it will) and I'm glad there are people like you that have been mulling over these ideas for a long time. I guess the difference between me and maybe most of your subscribers is you see one monster, while I see two. The state and the corporations. I still don't know if I can buy the fact that it will somehow regulate itself, because if one is bad "people will simply stop working with them". This is all experimental and theoretical, who really knows what would happen.

Here is an example of one thing that could happen->

Let's say I'm rich and I want to murder someone, so I pay someone to take him out. I have a smoking gun and the whole world knows I di it (sound familiar?). I pay a DRO to agree with me, and drop the case. The guy's family (in the contract you're allowed to get a 2nd or third opinion) takes it to another DRO, he bribes them. He ends up bribing all of the dros until the guy's family can't even afford to hire another one. Some people in the DRO find out about the corruption and leave. They go to different more "reputable" DROS. Some form their own DRO. Some stay. So now all the bad guys, that have already been in place since before the DRO's were even created say, hey, they defended him against this guy. I'm going to go with them.

Then there's these huge factions. Let's say 98% of the DROS won't deal with them, but who cares; they're filthy rich. They could hire an army and we're back to square one again.

Just think about all of the corrupt people that will have existed before these DRO's would be implemented. I just feel like you're asking me to swallow a big fish. I'm sorry, but I don't want corps running the country any more than I want the government. Maybe there's a third option because so far I would rather stick with the devil I know.

Thomas Williams said...

First, let me say that while I consider myself to be a classical liberal, not an anarchist, I do strongly sympathize with anarchist principles; my objection is that I beleive that these principles are impractical when one attempts to actually apply them to a functioning society.

That being said, the flaw in this (very well thought out) argument is that you assume throughout that each individual, or even simply "enough" individuals are taking the personal responsibility to a) actively engage in studying the policies and practices of the businesses they engage in commerce with, and b) that all citizens of this society are personally committed to a free and open society, and do not hold views which lead them to attempt to control the lives of others. It is a corollary of point "b" that if there are people who wish to control the lives of others, they may then choose to band together to combine their strengths to force said control on other members of society.

This is an excellent example of the reason which causes me to reject anarchism (of any type) as a framework for society, or rather, as a society in which the individuals of the human race as they now exist could function. As any perusal of world history (or current events) would clearly show, there are people who care nothing for freedom, for individual liberty, and as such actively attempt to put in place institutions which repress others.

Now, obviously, in a free society such as you describe, those who are meant to be oppressed would have the right and duty to resist those who attempt to oppress them, individually and collectively, by any means necessary up to and including violence if it is forced upon them. However, one cannot simply assume that the oppressors (or potential oppressors) will be the minority. Again, history shows us that quite often, the majority may band together to oppress the minority, in the process of course usually creating statist institutions which in turn oppress them, and so on and so forth.

The desire to force one's will on another could be founded on any number of things; the most obvious being religion. If a majority of society, as individuals, beleive that (as an example) homosexuality is wrong and should not be allowed (or interracial relationships, or some other such idiotic hogwash), what stops them from taking action to create an institution for oppression (such as the private armies you describe; an arms manufacturer and others, perhaps a majority of a given society, all working together to create an army would neatly skip all of the hurdles you describe). Evil need not come from a single man or a small group, hence "the tyranny of the majority" as described by Mill and so many others.

The obvious answer to "who would stop them" is, of course, that the rest of society (acting as individuals), the uninterested parties, would intervene, either by violence or economic means, in order to prevent the oppression of said persons. But how does this come about? You must admit that in our current world, utterly berift of personal responsibility and initiative (or so it seems at times) this would not happen. What is supposed to have caused this paradigm shift, this newfound personal responsbility so vital to a functioning anarchist society? How are the same people who throughout the centuries have not only allowed themselves to be enslaved and oppressed supposed to gain this love of freedom, this willingness to maintain not only their freedom, but that of others, voluntarily and of their own accord?

I'm afraid I've rambled a bit, but this article was extremely interesting to me, as it was intended to address some of the fundamental questions that prevent me from adopting anarchism, which I find so perfect in theory, as a practical philosophy.

In short, the society you describe would depend on one, vital factor in order to function; personal responsbility. Sadly, I just do not beleive that in the human race as we now know it this virtue exists in sufficient quantities to make this dream a reality, at least, not any time soon.

The sad truth is, it simply seems that people, by and large, give not a damn about liberty, individuality, or freedom, or at least, don't give enough of a damn to do anything about it. Thank for you taking the time to read this, any replies would be greatly appreciated.