It is common to hear people on the internet complain about the power of the state. It is regularly denounced for forcing people to obey its laws and pay taxes. Libertarians criticise this use of coercion and regularly compare it to a gang of thieves or the mafia. Many advocate that we either abolish or minimise the size of the state and replace it with a world where everything is based on voluntary co-operation and you are free to do what you want so long as it does not harm anyone (known as the Non-Aggression Principle). It seems like a simple choice between peaceful liberty or violent oppression. It is a handy debating trick as it allows libertarians to paint themselves as defenders of freedom while opponents look like tyrants. As nice as it sounds, it suffers from the fatal flaw that the market is just as reliant on the coercion as the state is.
For starters there has never been a truly free market in history, nor will there ever been one. When most libertarians or free marketers criticise taxes or regulations, what they are usually criticising are the taxes and regulations they dislike. The vast majority of libertarians want some degree of taxes, just not as many as we currently have. They want some level of regulation, such as those preventing child labour, prohibiting the release of toxic gas or controlling access to plutonium. When someone says the state shouldn’t tell you how to run your life, they usually don’t mean you should be free to dump toxic waste anywhere. Or when they say the state has no right to use force against people, they probably have no objection to a shop selling poison being forced to close. Most people see the unprotected and unregulated workplaces of the 19th century as a horrible place in the past rather than a glorious future we can aspire to.
However, there are a minority known as Anarcho-Capitalists who do. These people think literally every problem from building roads, to running schools and to fighting crime can and should be done by the market. Instead of the state, society will be based around private property and voluntary contracts that will supposedly spell out every right and rule of this new society. There are numerous problems with this idea. The most obvious is that private property and contracts too are based on force. If someone violates them you have to use force or violence against them in order to maintain your rights.
A simple example will do. Imagine a stranger walks into your house and sits down on your couch. In other words, they are trespassing on your private property. The only way to get rid of them (that is to say, enforce your property rights) is to either expel them with force or get the police to do this. If you were forbidden from using force you would have literally no way of removing this unwanted stranger. In other words, private property cannot exist without the use or threat of force. After all, property is at its core a claim to forcibly prevent other people from entering or using it. When someone says a house is their property, they mean it is excluded to everyone but themselves (and those they grant permission to). Without the threat of violence there would be no such thing as property.
This is true not only for individuals but businesses. All businesses rely on the threat of violence to prevent themselves from getting robbed. Libertarians often decry the state for getting compliance at the point of a gun, claiming the state could not exist without the threat of violence. This is true, but neither could capitalism. Capitalism relies on coercion, not only to enforce property rights, but also to enforce contracts. If I tell my landlord that I won’t pay him rent, he will either use the threat of violence to force me to pay and/or force to evict me. If a business refuses to supply goods that were ordered or refuses to pay for goods received, then the other party will use the threat of violence to force them to comply. If a consumer signs a twelve month subscription for a product, then the threat of force is usually enough to get them to pay even if they no longer want to. In this sense, all trade is based to an extent on force. Free trade does not exist as there are rules and the threat of force if these rules are broken. This is usually done by the police on their behalf, but it has to be done by someone.
There are numerous other areas of capitalism that rely on force. Were I to copy someone else’s invention, I would be coerced into stopping. When a patent is registered this is in effect a person claiming a monopoly over an idea and threatening force against anyone who copies it. A most unfree and coercive action, but would we have anywhere near as many inventions and discoveries without it? How could an economy function without threats of coercion against fraud? If people can freely cheat, lie and deceive without punishment, then no market economy could ever function. What else can you do about a fraud if you cannot use force? Discontinue business with them while they are free to scam others? There must be a threat of force against frauds if people are ever going to trust each other enough to trade.
Can you imagine how capitalism could possibly function without coercion and the threat of violence? There would be nothing to stop theft and pillage of businesses, no claim to ownership over goods, no implementation of contracts, no enforcement of patents or protection against fraud. There would no incentive to innovate, to invest, to trade or to do any form of business. Without some degree of coercion we would truly be in a Hobbesian world where nothing was secure. There simply would be no such thing as capitalism without the security supplied by coercion.
But, an ancap would argue, we voluntarily enter into contracts, unlike any agreement we have with the state. It’s not coercion if we have agreed to it. But this is patently untrue of private property. No one (apart from the state and the previous owners) agreed to my parents ownership of their property (I’m a man of no property myself, so I’ll have to use them as an example). No contract was signed with their neighbours and no consent was given by anyone else in society. In fact no one ever agreed that property should be privately owned. Who ever said that land could belong to any one person? To many ancient civilisations (such as the Celts and Native Americans) this notion was as strange as any one person claiming they owned the air or the sky.
Private property was only created when one tribe violently conquered another and gave the land to their soldiers as a prize. This is true the world over with the only difference being that in some countries it happened thousands of years ago (such as Europe), in others merely a hundred years ago (Africa for example). In most countries around the world, a coloniser invaded and violently stole most of the land. They and their descendants kept the land until they either sold it (to people who sold it to people who sold it and so on until the current owners) or the state (voluntarily or not) broke up the aristocrats estates.
Likewise, there is nothing voluntary or peaceful about patents. When I claim an idea as my own, I do not need to receive permission from every single person. If someone copies my idea, I am entitled to use coercion against them even if they never consented to such use of force. Like all property rights, it is based on coercion.
Now there are other objections libertarians and anarchists can make, such as claiming that private police and private courts would wield their coercive powers more efficiently. I still think this idea is daft, but that’s an argument for another time. The main point is that they are still based on coercion. You can argue about who you would rather use coercion or who makes to rules as to when coercion can be used, so long as you remember that someone has to. The crucial point is that we acknowledge that coercion is inherent in all economic systems from feudalism to socialism to capitalism to anarchism.
So yes the state does rely on coercion in order to function. But so does the market. Without coercion or the threat of it, we would not have private property, protection against fraud or the enforcement of contracts and patents. Capitalism simply could not exist with coercion. I am not trying to argue that we should overthrow capitalism or private property, but rather that we accept it for what it is. We should not treat the markets as an oasis where freedom grows and the state as Mount Doom where tyranny reigns. As hard as it may sound for those who like their politics black-and-white with clear heroes and villains, both the state and the market are based on coercion.