How Anarchy Would Work

To most people an anarchist is someone who advocates lawlessness. Anarchy is used as a synonym for chaos and disorder. This is a rather unfortunate mischaracterization as most of us who identify as anarchists (at least of the libertarian persuasion) do not, in fact, advocate lawlessness. We believe in law and order and justice as much as the next person. We just believe these things can be provided more efficiently and far more ethically with alternative legal arrangements and institutions. We believe that democracy (or representative democracy) is not the best possible way to provision a legal system and that society can indeed do much better. In this essay I’ll provide a sketch of how an anarchist legal system would work and demonstrate why I consider it to be superior to the present system.


Legislation is law or arbitrary decrees issued by some institution claiming the right to dictate the actions of its subjects. Legislators create their arbitrary decrees, in modern times usually while claiming a democratic mandate, and then send out an army of law enforcers to enforce these decrees. These enforcers are prepared to used as much force as is necessary to get you to submit to the legislation. If you resist, they will use escalating amounts of force and, in the extreme, they are prepared to use lethal force, if necessary, to secure your obedience.

In modern times legislators use their power to issue some of the most ridiculous laws imaginable. Several cities around the United States have taken to threatening fines and jail time for people who offer plastic straws to their customers. New York City flirted with jailing people for selling large fountain drinks. We’ve seen people choked to death for selling cigarettes on the sidewalk. There have been enumerable no-knock SWAT raids on people’s homes for growing plants in their house. The U.S. federal government has forced people, again under threat of imprisonment or worse, to fund research to see what happens when you put a shrimp on a treadmill and many, many other absurdities.

Some laws may be justifiable and even beneficial to society, but the present system asks us to take the bad with the good. And I think most people would agree that there is far more bad legislation than good.

Is this just a fact of life? Do we always have to accept a system which produces such a large numbers of bad laws so that we may also have some good ones? Or is it possible to have a system which only produces good laws without any bad ones? Anarchists say yes.

Dispute Resolution as a Superior Alternative

Let’s start with the basics. Why do we need a legal system anyway? Robinson Crusoe on an island by himself has no need for a legal system. He can live in complete freedom and do whatever he pleases and his actions will not offend anyone else. It’s only once we introduce more inhabitants onto his island that the possibility of interpersonal conflict arises. However, even here there is only a potential for conflict. If Crusoe and Friday get along and agree on how the island’s resources ought to be deployed they too will have no need for a legal system. Any attempt to impose a legal system on them would be unnecessary, wasteful, and actively harmful to the ability of Crusoe and Friday to live their lives as they please. Of course, the more people in a society the greater the probability that conflict may arise.

I would like to submit at this point that if we were to try to design a legal system for this island we’d want something that avoids waste and avoids interfering with Crusoe, Friday, and the rest of the inhabitants’ ability live their lives as they please when no conflict between them exists. But when conflict arises, it resolves it efficiently and expeditiously. In other words, ideally we’d like a system which pops into existence only when needed, then disappears. This is more or less how dispute resolution works.

Anarchists like myself advocate a legal system based on dispute resolution rather than legislation. The following is a list of ways in which I consider dispute resolution superior.

It Maximizes Human Liberty
As I mentioned above the system allows people to just be people and live their lives however they want without a system of arbitrary rules hanging over their head. If nobody has a complaint with the behavior of anyone else, then the dispute resolution system just sits idle. No attempt is made to intervene in the lives of peaceful people.

It’s Immune To Scope Creep
Because judges/arbitrators can only rule on the specific dispute in front them, their decisions (at least when taken individually) do not have an impact beyond the parties to the dispute. Judges do not have the ability to make arbitrary rules and send out enforcers to enforce them. This keeps the legal system focused exclusively on resolving conflict. Today in the United States, governments at all levels spend around $7.5 trillion per year. This is an absolutely staggering cost just to provision a legal system. Of course, in practice governments do far more than just provide for the legal system. Most of that $7.5 trillion represents scope creep. Much to our detriment. This isn’t possible in a system based solely on dispute resolution.

It’s Less Susceptible to Capture by Special Interests
A major failing of much of the mainstream of the economics profession is to focus exclusively on the alleged failures of the market economy while treating government as a group of omniciscent, omnipotent, and benevolent social planners who can fix the failures of the market without being susceptible to any failings on their part. This is a juvenile caricature.

Not all economists have fallen for this trap, however. Public choice theory is a vibrant subset of economics which focuses on government failure, rather than market failure. James Buchanan even won a Nobel Prize for pioneering the school of thought.

It’s from this school that we’ve learned of government failures like concentrated benefits/dispersed costs, regulatory capture, voter ignorance, voter irrationality, and so on. Even if, on paper, the government can correct for alleged market failures, it’s unlikely to be able to do so once we consider the government has its own problems with misaligned incentives. Nearly every government in existence today is empirical evidence that this is the case.

Judges and arbitrators in a dispute resolution system must sell their services to paying customers in a market place. If they are corrupt or make bad rulings, the will find few people willing to buy services from them. The ability to withdraw your consent and take your business somewhere else (exit in the Voice and Exit concept) is a missing component of legislative systems and provides a very necessary check and balance.

The near zero economies of scale in arbitration ensures there will be an enormous number of options available to people at extremely low costs.

It Has More Concern For The Victim
In 2010 a very successful computer programmer, entrepreneur, and hacktivist, Aaron Swartz, hacked into the JSTOR digital library of academic journals and downloaded large volumes of academic papers with the intent of releasing them free to the public. Most people would likely characterize Swartz’s actions as wrong as he hacked into an archive that did not belong to him, but he his intentions were clearly noble ― make information which can benefit society freely available.

For their part JSTOR was willing to settle with Swartz so long as he returned the copies he made ― which he was willing to do. Case closed right?

Not for the U.S. government. See the government doesn’t consider the actual victim of a crime (JSTOR in this instance) to be the real victim. The government considers “society” to be the victim. So even though the actual victim in this case felt that justice would be served if the papers were simply returned, the government prosecutors felt that “justice” had be done for some abstract notion society. A more absurd view of justice you cannot have.

Accordingly, government prosecutors charged Swartz with a wide range of felony counts with all charges carrying a maximum sentence of 50 years in prison.

Rather than face this amount of prison time Swartz killed himself.

This was a gross miscarriage of justice which unfortunately is not a one off incident. The perverse notion that society is the victim rather than the actual victim being the victim is what gives the government carte blanche to prosecute an enormous amount of cases that would never see the light of day in a dispute resolution based system.

Further even when the government renders its “justice”, usually in the form of incarceration, it prevents the guilty party from working to pay off the debt that they owe to actual victim.

It Produces Much Better Law
We’ve all heard the phrase “the closest thing to eternal life is a government program”. There something like 250,000 pages of laws and regulations issued by the U.S. government. This doesn’t include laws and regulations created by state and local governments. If you started today trying to read every law that you’re supposed to follow you wouldn’t finished before you die.

Not surprisingly the average person unknowingly commits three felonies per day. And, of course, government has declared that ignorance of the law is not an allowable defense for not following it. No sane person thinks this is reasonable.

By contrast, law in a dispute resolution system is the byproduct of the resolution actual disputes and years of established precedent. We’ll talk more specifically about how law develops and evolves in a dispute resolution system later in this essay, but for now I just want to point out that because judges are trying to sell their services to as large a number of people as possible, they are going to make rulings that appeal a common sense of ethics and fairness shared by the largest number of people. Thus the “law” ends up largely mirroring our moral intuitions.

Even if someone has no familiarity with the legal system at all, their own sense of moral intuition is likely enough to know how judges or arbitrators would rule in various cases.

And unlike legislation which is so inflexible and unadaptable that there are still laws on the books prohibiting women from driving a car unless an man walks in front of it waving red flags, dispute resolution is capable of rapidly adapting to changes in fact or social opinion if the change is warranted and most people agree with the new rulings.

But, But, But…

People who are new to this have likely developed a list of objections or questions relating to how this would work in practice. For just about all of these objections I hope to show there are already practices in place that today that would be expanded upon in an anarchist legal system that would handle these objections.

Q: Who’s going to pay to investigate crimes/courts/lawyers/enforcement of rulings, etc? Don’t we need a state to fund these things?

A: For one private arbitration is already widely used in today’s society and is generally preferred to government courts because it’s far more efficient and much less costly. There’s no shortage of people will to pay for it. Same with repo companies who will enforce a ruling and reposses property for a small fee.

But to answer the question more specifically. The cost of all of these things, whether investigation or court fees, is precisely the type of high cost/low probably event that is easily insurable. Whether you realize it or not, you already pay for insurance for all these things through the government. The government takes your money and if you are in need of these services, they provide them for you ― that’s insurance! Only a compulsory one which you are required to pay for under threat of imprisonment rather than paying for it consensually.

Q: What about people who can’t afford it?

A: For the most part this insurance would be dirt cheap. Many people go their entire lives without ever having a dispute. And even when the services are required the services themselves wouldn’t be expected to cost much. And they don’t cost much today to the extent they are used (lawyer fees aside but that’s a racket run by the government). For people who genuinely can’t afford it you’d have to assume there would be plenty of charity to go around. Remember we’re talking about a society with zero taxes. Everyone’s going to have plenty of extra money in their pockets.

Q: How do you expect people to agree on which court/arbitrator to use?

A: Again, this already happens today in many situations. First, it’s common practice when entering into commercial arrangements for both parties to a contract to agree on a mutually acceptable arbitrator who will arbitrate any contract disputes prior to entering into the contract. If they can’t agree on the arbitrator, they don’t do the deal.

It’s also fairly common for both parties to agree on an arbitrator even after a dispute has arisen if both parties somehow feel they are right. In their heads they say “as long as I get before a unbiased arbitrator I think they’ll side with me”. Watch an episode of Judge Judy (who is a private arbitrator not a government judge) to see this in action.

However, it is conceivable that disputes could arise where one party knows they are wrong and will lose if they go before a neutral judge so they insist on using a biased judge and hence both parties fail to select a forum for their dispute. How does this get resolved?

There are likely a variety of ways this could play out but I want to give a plausible hypothetical:

Alice comes home one day and finds Bob running out of her house with her television. Alice calls up her home security company, Ring, who like other security companies probably offers an expanded range of services in our hypothetical anarchist society, and ask them to get her television back. Ring could deploy a repo team to Bob’s house and get the TV back, but they are unlikely to just take Alice’s word it. It’s not exactly good PR to break into people’s houses just because a customer told you do it. So Ring tells Alice to get a court ruling in her favor before they repossess the TV. If by chance Alice and Bob agree on a court, Ring will just do whatever the court ruled.

If Alice and Bob can’t agree on a court, and if Bob also happens to be a customer of Ring, then Ring will likely just pick a court themselves. The court they pick would very likely be identified in the contract Alice and Bob signed when they signed up for home security services from Ring. Problem solved.

But what if Bob has some other home security company. Say SimpliSafe. Ring wants the TV back and SimpliSafe wants to prevent that from happening. Does this mean Ring and SimpliSafe will go to war with each other over Alice and Bob’s dispute? While that might make a fun reality TV show, that’s unlikely to happen. Any kind of violent conflict would be very costly and just not worth it. What will almost certainly happen instead is that Ring and SimpliSafe would just jointly pick a court and enforce the ruling. If Alice wins, then SimpliSafe will stand down and allow a repo team to enter Bob’s property and take back the TV. If Bob wins then Ring will refuse to repossess the TV.

If this sounds implausible consider companies already do this today. If Alice and Bob get in a car accident and Alice claims Bob was at fault and Bob claims Alice was at fault, and if Alice has AllState insurance and Bob has State Farm, then Allstate and State Farm will just jointly pick a neutral arbitrator to arbitrate the dispute and figure out who has to pay. So we aren’t postulating that companies will behave in ways they aren’t already behaving.

Q: What if the victim is dead? Murder case for example.

A: Then the criminal complaint can be brought by the victim’s family or estate. This is no different than today. What if they don’t have any family or estate? Does the murderer just get away it with? If this could be demonstrated it’s not hard to imagine courts allowing the complaint to be filed by someone else on behalf of the victim. Maybe a close friend, maybe a Justice For Victims not-for-profit, etc.

Q: Who’s going to pay to jail the criminal? Are you just going to make the victim pay after what they went through?

A: This is a good question. In general I think our society uses incarceration far too frequently. One problem (among several) with incarceration is that the criminal is locked up and unable to work. This means they are unlikely (absent a large amount of accumulated wealth) to be able to provide compensation to the victim. So in general I tend to think that restitution and/or punitive (monetary) damages are likely a better award for the victim than jailing the criminal.

But obviously some cases warrant it. It’s probably a good idea to physically isolate mass murderers from the rest of society, for example. But here again, this strikes me as something that could be paid for with insurance. The probability of an average person being the victim of a serious enough crime to warrant incarceration is so low that the insurance cost to cover this event would be likely be small. You might also see security companies, like Ring in the other example, willing to pick up the tab to protect their customers from crazies.

Q: But wouldn’t this just sell justice to higher bidder? Wouldn’t the rich rule?

A: This seems to be a good description of our current system of government. Given the unresolved public choice problems and the fact that people cannot exercise their right to exit, this is actually an expected result of the government monopoly over the legal system.

However, in an open marketplace for arbitration where people have a choice of firms it’s unlikely misbehaving firms would find much business. Even putting aside economic considerations most people would likely view a firm that is openly biased in favor of the rich as openly hostile to society, equivalent to a criminal enterprise. Further, such firms would likely be excluding the vast majority of society from their potential customer base so it’s hard to see how behaving in such a way would be a profit maximizing strategy.

Q: What if someone refuses arbitration?

A: Most people would probably conclude that this person is in the wrong since since he’s refusing to make a case in his defense. Hence, the arbitration would probably proceed without his presence and the ruling would be enforced.

Q: But wait a minute. Courts are supposed to interpret the law. How can they interpret the law if there is no legislation? Governments are needed to first make the law so that the courts have a basis for their rulings!

A: Ah, now we’ve finally reached the final section of this essay.

The Source of Law in a Dispute Resolution System

Whether people realize it or not, those of us who live in the United States or any former or current British Commonwealth live under a very sophisticated and detailed body of law that was not created by any legislature. This body of law defines and protects private property rights, tort law (personal injury), contract law, commercial law, and even criminal law in some instances.

I imagine some people may be a bit shocked to hear this because it’s not taught in our public schools, but I’m referring, of course, to the English Common Law. The common law has been around for more than a thousand years. Unlike legislation, the rules encompassing the common law evolved over the centuries out of the adjudication of actual disputes. Some people try to characterize the common law as a “judge made” law, as if the judges are the legislators. But this would be a gross mischaracterization. Instead the common law is as F.A. Hayek would put it “the byproduct of human action but not of human design”. It’s an evolutionary system in which judges use trial and error to figure out which rulings tend to work best and have the best outcomes. Rulings that work well are repeated by other judges establishing a precedent.

The common law is precisely the type of legal code one would expect to develop in an anarchist society. In fact, it largely did develop out of anarchism.

Around 400 AD the Roman Empire pulled out of Great Britain and parts of Germanic Europe. When they left they took their legal system with them leaving Britain in a quasi state of anarchy. It was in this environment that we start to see the beginnings of a legal system develop.

The precursor to the common law was the blood feud. Whenever a party felt that they were wronged in a serious way, they would gather their friends and relatives together and wage a mini war against the other party, who would likewise try to gather this friends and relatives to come to his defense. Then the two groups would go at each other. Hence the name blood feud.

So far, so bad. I can imagine a reader exclaiming “See this is exactly what anarchy would look like!!!” Well hold your horses.

Naturally people found this system to be very costly and disruptive and tried to find ways to avoid it. One popular solution was to hold violent self redress in abeyance while both parties tried to come to a negotiated settlement. These negotiations often took place in a public communal assembly known as the moot. The moot would operate very much like present day mediators in that they would try to get both parties to come to an agreement (which usually involved one party paying monetary damages to the other) so as to avoid the blood feud entirely. Because of how violent the blood feud was there was great pressure to try to come to a settlement. And because the negotiations took place in public, the moot would remember which accomodations worked and successfully preserved the peace, and which failed and caused the blood feud to commence.

This form of dispute resolution started out as an optional method of self-redress but over time it was transformed into a necessary prerequisite of the blood feud. If one skipped the dispute resolution process and went straight to the blood feud they would be considered an outlaw and dealt with accordingly. (See John Hasnas. Hayek, The Common Law, and Fluid Drive. NYU Journal of Law and Liberty. for a deeper exploration of this topic).

Accomodations that successfully preserved the peace would be remembered and repeated when similar cases were brought before the moot in the future. Resolutions which failed to preserve the peace would be discarded. Thus we have a trial and error process where the moot and the general public could see what types of rulings worked and which ones didn’t. After years of repeating rulings in similar circumstances, the community would start to develop expectations about how the moot would rule in various circumstances. These expectations would eventually have the same weight as law and people in the community would adjust their behavior accordingly. The dispute resolution process would end up being transformed from one dominated by bargaining to one which was primarily concerned with the application of rules.

As Prof. Hasnas puts it:

“Note the nature of the process. Human beings live together without fixed, known rules of behavior. No central authority exists with the power to establish and enforce such rules. Conflicts inevitably arise, often resulting in violence that disrupts normal life in the community and undermines cooperative activities. This creates strong social incentives to find an alternative method of resolving the conflicts. At first, the members of the community encourage disputants to voluntarily negotiate settlements and facilitate such negotiations by acting as mediators. As this process reduces social strife, publicly mediated negotiations become mandatory, and thus, more frequent. As certain types of negotiated settlements prove successful and are repeated, the members of the community come to expect that similar disputes will be resolved similarly. They begin to base their behavior on these expectations. They also take them into consideration when mediating subsequent disputes, basing their judgment of what constitutes a fair accommodation at least in part on what they believe the parties should have expected given the resolution of past disputes. This makes it more likely that subsequent disputes will be resolved in the same way as previous ones, further reinforcing the emerging expectations. Eventually, there develops a sufficient “stabilization of interactional expectancies” for the members of the community “to guide their conduct toward one another by these expectancies.” The continued iteration of the dispute settlement process then gradually transforms these interactional expectancies into recognized rules of behavior. This, in turn, allows the process itself to evolve from one of mediated bargaining into one of the enforcement of rules. And this transforms the question at issue from what constitutes a fair composition of a dispute to what constitutes the fair application of rules to a particular case.”

The body of rules that evolved out of this process became known as the customary law. It was an emergent body of law that developed endogenously from within society rather than being imposed on it from the outside like state created legislation. In the 12th century king Henry II, seeking to establish royal courts in Britain, used the customary law as the basis of his new court system. Hence the customary law, which sometimes varied from region to region, was transformed into a single common law by the king.

But make no mistake, the royal adoption of the customary law was merely a recognition of its superiority rather than a requirement for its application. The common law has lasted all the way down to this day and in the United States, as a former British colony, it forms the foundation of the U.S. legal system.

One could make a strong argument that the common law is a civilizing force in the United States while the mountains of arbitrary legislation piled on top of it is a decivilizing force driving the country towards actual chaos and causing enormous social strife.

If we had anarchy tomorrow, my recommendation would be to just adopt the common law as foundation of the new dispute resolution based legal system. While there are some parts of it that probably need updating and modernization after centuries of government stewardship, the common law is not fixed in stone the way legislation typically is. A judge or arbitrator that makes rulings in opposition to the common law without good cause would likely be fired (if he works for a firm) or will find few people willing to use his services if he works independently. However, if there is a good cause and this is recognized by a sufficiently large percentage of the population, then this may start the process of altering the precedent. This is how a good legal system should function.

How Did We Get Stuck With Government Anyway?

I think answer to this question is that our government is the decedent of a system of rule and exploitation that started a long, long time ago and that we, as a civilization, have yet to shake. All governments can trace their origins to conquest and exploitation in some form or another. Most likely some group of warlords conquered some towns and villages a long time ago and started generational cycles of exploitation.

The economics of exploitation make maintaining rule rather difficult. If the ruling class wishes to live lavishly at the expense of the ruled, the ruling class necessarily has to be a small minority of the population. But a small minority is easily overthrown by the overwhelming majority of people who don’t want to be exploited. So the ultimate trick to maintaining rule is to convince the subjects that the rule is necessary, just, and even beneficial. Thus a multi-century long propaganda campaign was launched that continues to this day. And sadly propaganda works remarkably well.

Today we don’t believe that the President of the United States is God or is anointed by God, like was said of the rulers centuries ago. As time goes by the old excuses for the continued exploitation fall out of favor and new ones have to be invented. Today we’re told that society just cannot exist and would descend into chaos and barbarism without the essential services provided through taxation and without scientific central planning by experts. Or that the rich would drive us all into poverty. Or that capitalism will destroy the environment. Years from now there will be some other excuse.

As years go by, however, we do manage to get closer to the truth. Progress is frustratingly slow, but we’re still making progress nonetheless.

I hope with this essay that I have at least made you question one of the most widely held beliefs of our time that the state is necessary to provide a system of law and order.

3 thoughts on “How Anarchy Would Work

  1. Pingback: Wrote an essay. Hopefully not too off topic here: How Anarchy Would Work |

  2. There exists only One Law:

    No Being Shall Harm another Being

    Nothing can be added to this one law.
    Nothing can be removed.

    Wherever this One Law prevails there shall be peace.

  3. Pingback: Anarcho-Capitalism and Child Rights | Escape Velocity

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