Punishing criminals in the absence of a state

Justice without authority - smarter, fairer and more efficient

May 23, 2024

One of the greatest objections against statelessness (organised society without the perceived authority of a centralised government) is the question “who will punish criminals.” It’s an understandable question, especially when the average person erroneously assumes that anarchic statelessness equals a chaotic free-for-all akin to Mad Max and The Purge. I don’t blame them for thinking this way - miseducation is the state’s forte after all.

In a stateless society (see Rothbard, Hoppe, Murphy and many more), there are two ways in which self-regulation can punish a "criminal” - a criminal is defined as someone who’s behaviour causes undeniable injury to someone, especially if that someone has already insured his position against that specific type of injury in a free market. The two ways are:

Free-market punishment
Mob justice or vigilantism

I will explain each of them in detail later in this essay.

Under a state, we rely on the government’s arbitrary attribution of justice, not to mention its focus on victimless crimes. If government fails to dispense justice, it forbids you, under threat of violence, to seek your own justice. if it does give you “justice,” it simply punishes the criminal without providing you any or enough compensation. The punished criminal will spend hellish time in prison cultivating resentments. He will have very little to lose when he gets out so prison doesn’t become the deterrent we wish it were. And we, as coerced reluctant taxpayers, are forced to pay for the sustenance of the criminals who injured us in the first place. How is that justice?

At least prison time for criminals gives us some satisfaction if we are the injured party, and it may even discourage aspiring from committing injuries in the future.

Surely, prison time may grant some satisfaction to the victim, but is it any restitution? Not only is it not restitution, but the victim is forced through his tax money to provide for the criminal, who then becomes a parasite to society. Also, prisoners deprive the economy of the wealth of their potential labour had they not wasted their productive years in prison. You might say that the concept of prison creates prison-related jobs. But these jobs are not organic - they were never demanded voluntarily in a free market, so they are worthless to society, just like politicians, government administrators etc.

“But the point of prison is to keep criminals out of society.”

Is it? Most of them get out eventually with all the pent up resentment and prison-life criminal intent imprinted in them. They make better criminal connections and affiliations, and the exit prison not reformed but revamped.

Wouldn’t it be a better alternative to incentivise them to work to provide proper restitution to the victim? Not only does the injured party gets some compensation, but the criminal also gets rehabilitated through honest labour and the satisfaction of making amends - much better than being locked up like an animal that does wonders for a person’s psychological stability (sarcasm). Yes, sometimes, whatever the criminal could provide are restitution could never bring back a murdered victim. But, should he choose to provide restitution, be could have the opportunity to provide an amount equal to that of his victim’s life insurance, plus costs and injuries as defined by the free market. Insurance companies would have the incentive to keep such additional costs reasonable (not too low, and not too outrageous either), otherwise the criminals won’t be able to provide any restitution at all, and they will therefore choose not to compensate their victims.

So the question is: Would you rather have your attacker rot in a prison that you are forced to pay for, which all the while makes him more unstable and resentful towards you and society as a whole? Or would you prefer that systems in place can incentivise him to make amends to you?

“What are you saying? How could we possibly incentivise criminals to work to compensate their victims?”

Easy.

Without state monopoly on judicial services through violence, laws without government become possible through incentive. I won’t go through this again, but the bibliography on stateless decentralised self-governance is vast and undeniable (please read before producing objections from ignorance).

People understand that, if they want their safety to be respected, then they also need to respect the safety of others through systems of private insurance. Healthcare, environmentalism and every service that the state miserably fails to deliver can be provided more efficiently and morally through decentralised, competing and free systems of self-governance. The basis of such systems are voluntary and competing insurance providers.

Remember that, in the absence of a state, criminals can be “punished” through an opportunity for compensation or through mob justice.

If the victim insured his bodily integrity, and got brutally beaten by an attacker, then the victim will seek compensation from his insurance company. The insurance company will have every incentive to provide said compensation to the victim, otherwise it will lose all its business. The insurance company is also incentivised to seek out the perpetrator in case he is also insured with a similar insurance company, which - very likely - he will be. If the insurance company cannot find the criminal, then fine; it will have to pay up. But if it uses its private investigators (better than government monopolistic investigators without incentive to produce results), it may have a chance to find him. The victim’s insurance company communicates with the criminal’s insurance company - just like car insurance companies today work together to resolve insurance disputes in case of a car accident.

Because insurance companies will want to keep their costs low, they will have to include a clause in their insurance contracts: if you want to be insured against X (let’s say being brutally beaten), then you must commit to never brutally beat anyone, otherwise you lose your coverage, and all insurance companies will raise your premium or blacklist you to deny you future coverage altogether. This is extremely important to understand: Your incentive to want to keep yourself safe, combined with your insurance provider’s incentive to keep his costs low, create an environment where the vast majority of people are incentivised to NOT aggress against each other. If you want to stay safe, then you should first keep others safe from you. This is “do unto others as you would have them do unto you” put in economic terms.

So, the insurance company of the insured seeks out compensation from the insurance company of the criminal. The insurance company of the criminal will give its customer the choice: pay up or lose coverage, and thus be subject to mod justice and market boycotts. This is not a threat because nobody owes anyone insurance coverage. Denying you it is not taking away you right, but rather, your privilege. If the criminal pays, then the matter is peacefully resolved. It’s better satisfaction for the victim, it’s a better lesson for the criminal. It’s also better for the economy as a whole for being spared the abomination and economic drain of prisons, and the lack of value production they represent (imagine the wasted work hours of prisoners all wasting away doing nothing).

If the criminal denies his involvement in the crime, then a trail is in order. Insurance companies will have an incentive to be as fair as possible, lest they lose their clientele. They both need to punish a criminal but also not to prosecute someone unjustly. This is because they are subject to free-market competition, something the monopoly of government isn’t bound by - no wonder government engages in arbitrary corruption without answering to anyone.

If the accused is found not guilty due to lack of evidence or even false involvement, then the alleged victim has no claim and the matter is closed. The victim could try mob justice, but then he risks losing his insurance coverage as a criminal. If the accused is found guilty, then he will have every incentive to work to pay up the amount that the victim was insured for, because he’ll probably want to keep his insurance coverage, especially now that he has motivated someone to seek revenge against him. Work is a blessing and a teacher.

If the criminal refuses to pay, then he loses his coverage. This means that the victim can engage in mob justice against the criminal without facing any repercussions from his own insurance company. Remember: for an insurance company to insure you against a specific injury, it will demand that you won’t commit that injury against anyone else, so that the company will reduce its risk of paying up. But here’s the catch: the insurance company won’t care if you injure someone without coverage. Insurance companies won’t feel the free-market pressure to compensate anyone who is uninsured, so they won’t care if their customers harm an uninsured person. If you’re concerned about the ethics of this, I address it a little bit further.

If the uninsured injure someone who is insured, then they can be identified by the insurance companies who will wish to ask him to provide compensation, especially when the insurance company can give their details to the injured party. This is motivation for the uninsured to finally get insurance, but only if they agree to compensate the injured party first.

But, you might say that, a person without insurance coverage would not be afraid of mob justice - that’s why he’s uninsured. Fair enough. This is where boycotting comes into play. Without a government, it makes sense that people would trust you more if you are insured. This means that getting a job or even access to markets would be much easier for you if you prove your intent to insure your safety, and with it, accept the insurance clause that you must guarantee the safety of others too - otherwise you agree to blacklist yourself. And this is proving goodwill, just like a company voluntarily complies to safety standards not dictated by the state, but they do it anyway to foster trust.

Think about it. Would you hire someone for your business if he wasn’t insured against murder or rape, which means less disincentive to murder or rape? If you own a mall, you might well deny access to people who aren’t insured against kidnapping, and therefore aren’t bound by a clause to not kidnap. If you make this policy public, then customers will feel safer doing business with you. Businesses will have every incentive to deny access to people without insurance, or at least people who have been identified as criminals without remorse or the intent to compensate. Private initiatives could make it their business to make lists and broadcast names and identification of such anti-social individuals. Then imagine being denied services and association because you harmed someone and refused to compensate them. It would be worse than prison. Even if the victim decides not to engage in reciprocal vengeful mob justice against the unrepentant criminal, then social boycott is the ultimate punishment, because others would like to know who harms people and doesn’t pay up. You only need to see what a twitter mob can do to an oligopolistic mega corporation to see how effective this can be to a faceless mega-corporation let alone an individual.

“So you’re saying that, if you’re not insured, then anyone can kill you and get away with it? We are forced to pay insurance to protect our right to bodily integrity??

You are already forced to pay handsomely to the state to supposedly protect your bodily integrity and your “rights.” Without submitting to taxes, you have no rights. If you deny the state’s authority over you, you will be murdered by the state (first a fine, if you deny it you get arrested, if you resist you are killed).

You only need to give me one example of “being protected” by government that does not involve you paying in taxes, inflation and lost income opportunities through state interventionism (if you factor in direct and indirect taxes, 80-90% of your labour foes to taxes). In a stateless world, purchasing power and available income are much greater without the economic suppression of taxation and state interventionism designed to create lobbying monopolies.

The good thing about statelessness is that, if you decide to take the risk of not insuring yourself, you can do so. And since no one will know if you’re insured or not (assuming you don’t harm anyone), and if you don’t provoke people to give them incentive to harm you, you’ll be as safe or safer than you are today. You’ll be safer without wars, terrorists and drug gangs that only the state can create.

“But there will always be criminals who will evade justice, and who will find ways to elude boycotts.”

Yes, you will never be able to get them all. Statelessness never promises utopian perfection, unlike statism. You only have to produce a single instance of a state where criminality was reduced to zero. In many cases, crime is a direct product of government.

And since the state is the alternative to the default (non-state), then the burden of proof lies with the proponents of statism to prove that criminality is better handled by the criminal state than by stateless systems of organic self-governance. On top of that, consider the blatant creation of crime by the state in the form of senseless prohibitions, which create drug cartels, and all the atrocities they bring. The easiest way to fight drug gangs would be to starve them through a complete lifting if any and all bans/restrictions on any and all drugs. The free market would then produce high quality affordable recreational drugs for anyone who freely chooses to use them at their own risk. Age restricitons would easily be placed on any drug, as long as there is public demand for age restrictions enough to pressure competitive sellers to adopt them, so as to keep their customers happy. Even today, under a state, companies feel the need to virtue-signal with arbitrary nonsense - imagine how they would need to advertise their moral position in the absence of state-enforced restrictions - they would need to in order to stay competitive. And without a state to lobby to create oligopolies/monopolies, businesses would feel even more the relentless competition.

If public demand for child protection is powerful enough to pressure a monopolistic government to place age restrictions - a state monopoly with little incentive to provide quality to remain competitive - then imagine the relentless free-market pressures on competing sellers. There can even be private standard initiatives to certify such age restricitons, and to even include them as insurance clauses, if the demand is great enough for people to put their money where their mouth is - if age restricitons are as important to them as they claim. So, anyone not abiding by such age restrictions on drug sales would be isolated and left without insurance coverage, leaving him to the mercy of mob justice. I fail to see how street dealers selling bad drugs to kids - our government-created reality - is a better option.

Addendum: The option of vigilantism or street justice is vital to keep as a last resort. It is important for both the victim as well as the villain to know that vigilantism is on the table if justice dispensing systems fail. If the villain refuses to comply with insurance courts, for example because he doesn’t mind being ostracized by society, then there is nothing stopping the victim from seeking his own justice, without being punished for it on top of that. Imagine how many times the state’s monopolistic justice system has failed to deliver true justice due to its centralized and corruptible nature. Imagine those victims denied justice and being prohibited from taking things into their own hands. Without a government, there is no one threatening to punish you for seeking the vengeance that you are entitled to.

Useful reading

‘Democracy: The God That Failed’ by Hans-Hermann Hoppe (Free audiobook: Spotify, Apple Podcasts)

‘No Treason: he Constitution of No Authority’ by Lysander Spooner (Free ebook & audiobook)

‘Chaos Theory: Two essays on market anarchy’ by Robert P. Murphy (Free ebook & audiobook)

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Punishing criminals in the absence of a state

Justice without authority - smarter, fairer and more efficient

Useful reading

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