The dumbest objections against statelessness #6
"Who will enforce contracts in the absence of government?"
The wild assumption that agreements between people would never be honoured without a central monopoly of violence to enforce them reveals a concerning scarcity of understanding of reality, if not a crippling over-dependence on imagined parent figures.
When you argue for statelessness without knowing you argue for statelessness…
“But who will enforce contracts?” he said with a smug check-mate case-closed demeanor.
This objection to statelessness is one of the most common… It assumes that without government, we’d somehow have no way to enforce contractual agreements when a party decides not to fulfill their contractual obligations. While there can be many ways to further incentivize parties to fulfill contractual obligations, the main motivation is always there: self-interest. If you break your promises in your professional and personal life, you will suffer more than those to whom you break your promises. You will become unwanted, no one will want to do business with you, and you will be ostracized as undesirable. Only centralized government acts as the undesirables’ cushion of safety with blind welfare across the board, thus enabling and encouraging people to become undesirables without having to face the consequences.
When faced with the “contracts enforcement” objection, I ask a question to enable the objector to arrive at the obvious conclusion themselves. Here is a recent comment under my post ‘Why you want government,’ where the objector saved me the trouble of answering his vapid question. Within just a couple of comments, he answered his question on his own - he arrived at the conclusion that there is no need for government to enforce contracts at all:
I simply asked who enforces agreements taking place outside the government’s supervision, such as corrupt government dealings or “illegal” employment. The objector to statelessness (voluntaryism) went from “who is the ultimate enforcer?” to “the world would very quickly get around and nobody would word for the said employer.” He answered the question himself. He quickly figured out that the ultimate enforcer is the relentless free market.
What contracts?
The vast majority of your daily interactions involve no contract whatsoever, and definitely not any violent enforcement by any third party. Your verbal obligations create expectations in others to whom you become accountable; you have the incentive to fulfill your agreed-upon obligations, otherwise, you run the risk of motivating others to ostracize you and smear you, let alone deprive you of future transactions. The bulk of your interactions are not enforceable by any government, court, or false god. Regardless, they are still fulfilled, almost always, because most humans can be reasonable most of the time; as long as they are driven by incentives, not threats.
Your daily interactions and transactions, whether personal or economic, are “enforceable” by self-interest and incentive, rather than the threat of force. So we do accept that agreements (whether contractual or not) can be fulfilled without the necessity for the threat of monopolized violence from government.
Did you think the government enforced contracts? Think again.
The government picks and chooses which clauses of a contract are valid or void. So, don’t expect your employment contract to be enforced by government when your employer declares bankruptcy, no matter how much money he’s got stashed away in his personal accounts. This is a grand example of not only how government does not enforce contracts, but how it deliberately acts to indemnify those who fail to fulfill their obligations.
Any billionaire can declare bankruptcy for one of his legal entities (companies) despite his massive wealth, and government steps in to protect him from disgruntled creditors, suppliers, and employees whose contracts were di
Your hopelessly presumptuous faith in government is tragically misplaced.
Government doesn’t do what you think it does
All your economic transactions below a certain amount are not enforceable by any government through its police or judicial circuses. Government brutalizers (cops) blatantly admit this: they won’t do anything about theft or a breach of contract involving “small” amounts that aren’t worth their useless services. And even if the amount is high enough, they often do nothing other than pass the buck to the courts. They force you to try your luck in the courts where the legal sector’s state-enforced oligopoly constitutes useless legalese services so expensive that you stand to lose even more than what you lost in the first place.
If you buy something from a brick-and-mortar shop, and when you get home, you find that the box is empty, you can turn to any government department you want; no one will help you. There was no “contract” there, and there was no interest by any level of coercive centralized government to enforce the honouring of the transaction. You can’t even prove that there was nothing in the box, or that a falsely advertised item you bought failed to meet expectations. And even if you did sign some form of contract with the shopkeeper, the government gets to decide which contracts are valid and which are void. And the government gets to pick and choose which individual clauses are valid or void too.
So what happens in case of a dispute?
In the vast majority of cases where you are not sold what you were promised, you can (more likely than not) reason with the other party because there is a force much more powerful than centralized government out there: competition. This is why intelligent business people take returns, employ costly customer support, and try hard to keep you satisfied, according to your initial expectation - without having to be forced by government to do so. Online reviews, word of mouth, positioning, and overall reputation are priceless assets for a brand and business in general… no contracts are needed.
You can rate businesses on Google, Facebook, Glassdoor, Amazon, eBay, and every other way imaginable. You can write good or bad testimonials on Twitter, and you can get customer support on Discord, Whatsapp, or any other messaging app. You can use real-life word of mouth to praise or bury a business. You can even stage boycotts and protests against a business using mobs of highly motivated and similarly displeased people. See how Twitter mobs can make multi-billion oligopolistic corporations cave to unreasonable demands like pretentious woke posturing. If only people used this power to influence corporations to make meaningful concessions.
The fact that businesses spend vast resources to try to keep you satisfied means they submit to free-market forces of competition. Did you think that the only reason a business has to keep you satisfied is fear of government? If so - if you have an authority-based mindset - then you likely don’t understand the dynamics of incentive, and you won’t get ahead in life, especially in your personal relationships.
Businesses have an incentive to be as fair as they can with you, to meet you in the optimal middle ground where they keep you satisfied enough without compromising their sustainability or opportunities for future sales. If a business is unfair, then it will be punished by the free market, assuming that there is indeed a free competitive market without government interventionism. In reality, most industries are severely oligopolistic exactly BECAUSE of government and its corrupt lawmaking that provide favorable regulations to the highest-bidding lobbyists - thus crushing competition.
How is the government that sells itself to the highest bidder motivated to help you? Do you think that your one meaningless vote is somehow more powerful than lobbyists’ bribes?
So no, resting complacent and imagining that your contracts are somehow going to be enforced by government in favor of the little guy is deluded at best.
And what about those few business people who don’t take measures to satisfy you when they fail to deliver on their promise? Well, we live under government, and they still exist, so I fail to see how government is the solution here. Not only that, but government protects them by forbidding you to take action against them. See ‘Punishing criminals in the absence of a state’ for context.
Unethical businesses exist even under today’s highly regulated unfree markets. This is because government interventionism hinders competition, thus deliberately creating oligopolies and even monopolies for bribing lobbyists. So, do you think the government will come after its lobbyists over you? Do you imagine yourself that important?
You’ll find that the only markets where you’ll get your agreements fulfilled are the ones where there’s much competition, and competition is more than enough to “enforce” contracts.
Reversal: The true objection
Every single objection against statelessness applies to the government too - even more so. Let’s reverse this objection:
Who gets to enforce the tacit social “contract” you have with government? What happens when the centralized government - which has no competition in its territories no less - fails to meet its obligations and fulfill its professed to the people it is supposed to serve?
No one. There is absolutely nothing forcing government to deliver on its promises or announced “duties.” It can only make excuses, point fingers, kick the can by making even more promises, and there is absolutely nothing you can do about it. Try calling government for customer support. Good luck!
“What if there is a contractual dispute?”
Granted, some deals take years to be fulfilled, and along the way, the interpretation of obligations might prove to be asymmetrical between the parties involved. Contracts are indeed useful for clearly outlining responsibilities, but disputes may still emerge due to misinterpretation, or even malice. What happens when a dispute emerges between parties?
There is absolutely nothing that the “courts of law” do that private business can’t. If anything, laws without government and private courts would be much fairer due to competition. (Read the literature on the subject before objecting to the concept of laws without government).
The only difference between threat-based laws and incentive-based laws is enforcement. In the latter case, when a decision is made over a dispute, then compliance with that decision cannot be violently enforced. A party’s failure to comply will mean its loss of good standing with the private court, as well as future potential partners, including insurance companies that can protect the said party. It will mean economic and social ostracism.
Let’s see how this goes. Let’s say we live in a truly stateless world. A land owner hires a construction company to develop his land. They agree to hire a contracting company, a private court company, or any equivalent that would take over the judicial monopoly of the state. In the absence of centralized monopolistic government, such businesses would have to emerge to fill the market gap in resolving disputes. Not only is this an economic opportunity, but it is also a drive towards judicial efficiency: unfair, corrupt, or ineffective courts would quickly be displaced by better court businesses, all thanks to forces of free-market competition. Yes, all businesses are potentially corruptible, but none more so than centralized monopolistic government, which has no fear of competition, and therefore, can easily be paid off without any consequences.
It’s easier to bribe one than to bribe everyone.
Now, let’s say the contractor misses the delivery date, and the landowner is displeased. The contractor claims it was out of his hands, and the delay was due to an unexpected global supply chain issue. Fair enough, right? Yet, if it wasn’t up to him, then he should not have committed to it. These are fair questions to be resolved in a civilized way where both parties get to dispassionately present their cases to third parties, and then follow pure logic to find some sort of middle-ground win-win resolution. In such a case, the contractual parties, as well as the private court involved, have every incentive to be as fair as possible. Who will decide what is fair? The greatest and final judge of all: public opinion, which directs the free market.
Whatever the decision of the court, it has to be as ‘fair’ as possible, and as satisfactory to all as possible, otherwise the court loses its reputation and its ranking compared to other competitive courts. Also, whatever the decision, the parties involved are incentivized to comply with it, otherwise they damage their risk rating, and then, no court and no partner for that matter would want to work with them in the future. Such risk ratings are already used by banks and insurance companies today, not to mention employers and even private schools. Hell, even employees can leverage employer ratings on Glassdoor. This already works today, demonstrably: people and businesses work hard to maintain and improve their good standing in society.
Do we really need contracts?
In most cases, disputes are resolved without third-party arbiters. The few that don’t aren’t enough to merit the empowerment of a monopoly of arbitrary violence: the government.
Don’t believe me?
The mere existence of government proves that government is unnecessary.
All international agreements between sovereign nations occur without an overlying world government enforcing those agreements. Various government decision-makers have every incentive to honour their agreements, otherwise, they lose face with other governments and thus lose future potential trade opportunities. This is why when governments engage in war with one another, they must first have some sort of legal pretext or some appeal to an older agreement conveniently made once upon a time, and is irrelevant in the present. They need to save face in front of the international community, and they need to appear as though they honour agreements even in war. They need to appear this way, even in the most atrocious of things: war. This is why humanity has conceived the greatest hypocrisy possible: the supposed “war crime,” was if war wasn’t the gravest of crimes already.
And this need to appear as though we honour agreements is why we have the incentive to resolve disputes and to find a middle ground in disputes. This need is driven by competition and the fear of loss of potential opportunity. If warring parties can understand this, then why can’t we?
So, again, government proves that there is absolutely no need for government. Not only does government prove it is unnecessary through its international transactions, but it also does this through its own corruption.
Corruption is an inalienable, inevitable, and undeniable characteristic of government. Whenever there is a monopoly of anything, it will be corrupted because there is no element of competition, no incentive to outcompete anyone, and no humility in knowing it can be replaced unless it offers value.
So, do you think corrupt government dealings involve contracts enforced by law? Do you think that under-the-table bribes, and even over-the-table lobbying “donations” involve a clear contract with clauses enforceable by government “legal” violence?
No. Not at all.
Corrupt politicians and bureaucrats take bribes and are incentivized to keep their part of the deal, otherwise they will damage their reputations. They make verbal agreements in lobbies and at parties, and what is expected from both parties is tacitly implied.
Yes, you might say there is implied blackmail involved with bribing, but is it always the case? Is murdering politicians for failing to honour an agreement a viable strategy, considering that such threats disincentivize other politicians from taking bribes? If anything, such threats would push most politicians to steer away from corrupt dealings. Yet every single one of them takes bribes, even admittedly, since they baptize bribes as “donations” or “lobbying.” Even corrupt government understands that incentives work better than threats.
Corrupt politicians have every incentive to honour their corrupt agreements because they need to maintain their good reputation with their lobbyists. If they dishonor their agreements, they will be punished by isolation; not only by the lobbyists, but also by every other potential “donor.” Reputation is everything, which is why public figures, as well as small and big businesses, invest heavily in PR and branding.
Government keeps proving that we don’t need government.
There are other examples of such contract-less agreements that seem to work like a breeze. Criminal organizations regularly conduct dealings that are not “enforced” by government. Yet they are sustainable, and they work.
You might say that organized crime ensures its agreements are honoured because of the implied threat of violence. True, but do you hear yourself? Isn’t this EXACTLY how the government enforced everything? At least with organized crime, each criminal organization stands a fighting chance against the other, so there is often no power disparity between them as there is between the government and you. At least criminal organizations can respect each other’s ability to harm one another, so, disputes are more likely to be handled without violence. I fail to see how the state - with its brutalizers (cops) violently arresting you for the most trivial and unnecessary laws, throwing you into a hellish prison, or forcing you to go to war - is a better alternative. Are we serious here?
On a lower level, “illegal” transactions occur all the time without any government enforcing anything. Drug deals and even “illegal” employment occur daily without any government having to enforce any contracts. The drug dealer has to honour his commitments to his customers, otherwise, he quickly goes out of business. The employer of “illegal” workers has every incentive to pay the workers what they are willing to work for, otherwise they won’t work for him. And the fact that they are willing to take so little is their “illegal” status granted by no other than government. So again, more arguments against government.
Government is not even close to perfect
Yes, a free market is never perfect, but a free market never made such promises, unlike government that presents itself as the utopian solution to all - when in fact, government is the problem to almost all issues humanity faces right now.
In a free free stateless market, there is no need for a monopoly of government to enforce contracts, and admittedly, there will always be unresolved disputes. Statelessness does not promise a utopia - that’s what government promises and fails miserably to deliver.
But does the state always guarantee contract enforcement or fair dispute resolution?
Countries make deals all the time, and they are not enforceable by any overlying government at all. Similarly, we live under government, and we still get unresolved disputes, or even worse, unfairly resolved disputes, whose resolution is then enforced by the violence of the state. Now what?
Do you want to compare failed agreements under government and in free markets? Let’s assume that international dealings are stateless because there is no world government enforcing them (thankfully). And even this is not an ideal example, because governments are not free entities, since those making decisions reap all the benefits while others pay the price - unwillingly.
So, when agreements fail between countries in the “stateless” international market,” countries and their leaderships at least pay the price in reputation, ill will, sanctions, loss in trade, and any other punishment by that little free market we have left. This is more than I can say about when government deliberately fails to enforce contracts or justice. Arbitrary exonerations, the FTX scandal, Wall Street and bank bailouts, and blatant government embezzlements and money laundering are but a few examples of how government exploits its monopoly of violence to not only fail to enforce contracts but to deliberately fail them. With government, there is no recourse, nothing you can do about an injustice other than be served a PR spin that “people are being punished” when they are not - not really.
And when unresolvable disputes occur between governments, it’s much more likely to end in violence, since those making decisions are far removed from the consequences of the conflicts they cause or fail to avoid. You are far less likely to resort to violence when you are called to pay the price of failure to find a middle ground. Even as a gang leader, you are still less likely to go to war than when you are head of state where mandatory conscription and decades of schooling indoctrination create thousands of useful idiots willing to kill and die for you for nothing, while you enjoy the safety of your luxury bunker.
“But not always!” he exclaimed self-assuredly.
Does the government always guarantee that a contract will be enforced? If anything, because the apparatus of government is for rent to the highest bidder (lobbyist), it means that anyone can buy lawmakers to make laws preferential to him and him alone, all at the expense of his competitors, his partners, his customers, and his employees. Any contract can be made void by a silly arbitrary law that happens to pop up nicely when needed. And there’s nothing you can do about it. You can’t even blame the other contracting party that fucked you over with a dishonored contract; you will blame a certain politician, or a certain administration, instead of the root cause: the existence of the apparatus of government.
What about your contract with the government?
Do you assume that every “good” thing the government does is out of benevolence? What do you think the motivation of government is to enforce good things? You’ll answer: “the vote.” So you admit that, even though the government has absolute power and monopoly of violence over you, it still needs public approval, which is more or less represented by the vote.
The vote is just a generic public approval, nothing more. Your vote has no power at all. You vote for candidates (instead of individual policies), and the candidates always break their promises. Then nothing happens because you gave your blind approval by your act of voting. The vote has no legal power over anyone, otherwise, a broken campaign promise would have had legal ramifications for every politician.
If votes had any power, each politician’s campaign promises would have been legally binding and punishable by… by whom? The government apparatus that is beyond the voters’ control? Still, though, the government needs some vague approval from the general public. If even a monopoly of violence still needs public approval, then imagine a business in a free competitive market. This need for approval by an enforced monopoly proves that without government, people and businesses need that approval even more because they compete with one another.
Why doesn’t government enforce the “contract” of a campaign promise?
What contracts do you expect to be enforced by government when government fails you every single time - when it fails to deliver on promises, yet does absolutely nothing to enforce said promises?
Why are we so resistant to logic as to fail to acknowledge this blindingly obvious fact?
Personal contracts
You assume that the all your relationships are enforced by government?
The moment government started interfering more and more in personal relationships with family law, divorce rates skyrocketed. You don’t need government in your bed.
What enforced contracts?
Most of your transactions don’t require a contract. Your personal relationships don’t require a contract. Most purchases you make don’t require contracts. We already have product reviews, credit ratings, insurance risk scores, and even employer ratings where employees get to review and rate employers. Without government enforcing its monopoly of accreditation, compliance, and regulation, there would be a whole new market of private standards and businesses whose only job would be to rate and/or guarantee even that your contract with one of their approved individuals would be honoured, otherwise, they pay up. And isn’t this what insurance is? Nobody expects some higher force to enforce contracts for them.
Civilized individuals understand there is risk in every transaction without expecting the utopia of the “omnipotent” government to “enforce” contracts, which it rarely does. Are all contracts really enforced? Check to see if your prenuptial agreement is valid, and see how many people were fucked because the government decided one day to void them all.
The government does not enforce contracts. It only enforces whatever it wants, whenever it wants. Are you sure you want to live under such circumstances?
And what about the implied social “contract?” What about the government’s own legal system that it almost always fails to honour? The government takes your money, spends it on “aid” abroad without asking you, decides in which wars to meddle without asking you (thus exposing you to military aggression and terrorism), and you imagine that the government somehow “enforces contracts?” What contracts does the government enforce?
You can point to silly contracts that were resolved in courts, but again, this is nothing that stateless free-market courts can’t do better, faster, and cheaper than government-run courts.
Then you’ll say “But what about those people who don’t honor contracts?”
I don’t care. They don’t get to decide how we organize society. Their inevitability will not determine how we choose to conduct business, and they will not terrify us to the point of relinquishing our self-ownership to an arbitrary authority structure like a coercive centralized government and its monopoly of violence, thus exposing us to more harm than what we sought to avoid in the first place.
Since you ask the question, ask what about those contracts that the government no less does not honour. And when the government does not honour contracts, people die en masse. Every single objection against statelessness applies to centralized government even more. Ask away.
The bottom line
Government corruption itself shows that contracts are enforceable without requiring any government enforcement. Hell, even the existence of black markets shows that contracts are enforceable without government intervention. Employers employ “illegals” without contracts all the time. Druggies buy drugs all the time. Most people pay when they buy a coffee or anything from shops, not because they can’t get away with it for not paying - The countless online videos of people brazenly shoplifting attest to this. People tend to honour their transactional obligations because it’s the decent thing to do, plus they safeguard future opportunities, their reputation, and their moral identity.
Even organized crime syndicates agree to carve out territories and areas of operation. If you’ve worked in an establishment under the protection mafia, you’d see how even the mafia works in a much more efficient and civilized way than the government. There are no government-enforced contracts involved in black markets, yet black markets work like a breeze. People even engage in barter and the use of cryptocurrencies as a store of value, without the need for government to dictate what is valuable and how much.
Sure, sometimes these contracts resort to violence, and as I mentioned above, shoplifters still shoplift. But doesn’t shoplifting show that government enforcement doesn’t work? And we all know that government “justice” is always bought and paid for.
But the reason unresolved disputes still exist in black markets is the government itself. Why? Because black market transactions are secretive and untransparent, due to fear of government. They aren’t public, thus there is much less risk for someone to dishonour an agreement. Without government, there would be transparency in free markets, thus anyone tempted to dishonour a commitment would be subject to reputation damage, and most importantly, scrutiny from insurance companies.
Laws without government occur when people insure their bodily integrity and property. If someone is deemed to be a higher risk for an insurance company, he’d have to pay a greater premium, or even, be denied coverage altogether. This would leave them exposed to reciprocity from his victims - yes, vigilantism should be a viable option as a last resort/retort in a civilized society, otherwise, when systems fail to provide justice, government ends up protecting criminals.
Lastly, let us not forget how modern insurance came to be. Sailors of the colonization era, when sailing, were not covered by any king’s jurisdiction. So they turned to bookies to safeguard their interests. Yes, your insurance premium is a bet against yourself with your bookie - your insurance company. Let’s say car insurance: you bet that within the year you’ll have a car accident involving damage within the amount insured for. If you lose the bet (no accident occurred), the bookie keeps the premium. But the interesting thing is that a new product emerges: the value of feeling secure.
The sailors who created this new product of insurance bet against themselves that they would die during a voyage. If they didn’t, then they lost their bet, but at least they bought peace of mind that their families would be compensated if they won the bet. But if they won the bet and died, then the bookies would have to pay up to the families. Who enforced this contract, especially when one party was dead no less - and especially when these agreements occurred outside of the jurisdiction of kings?
Competition enforces contracts.
Any business that fails to honour a contract will soon be out of business. If insurance companies became profitable and sustainable such a long time ago, then it means they had every incentive to honour their obligations. And in today’s hyper-digitalized world where news travels faster, there has never been greater free-market pressure - as long as the market is allowed to be free.
The short answer
Without government, no one will enforce contracts. However, it will be in everyone’s best interest to honour a contract. No one forces a shop to take back bad defective goods, or an online shop to return your money for a lost purchase (assuming they compete against other shops in free-market competition). Yet they still do it without any government forcing them to. If you truly understand why, then you will no longer need to “Why would enforce contracts?” No one, because there is no need for enforcement. In the unlikely scenario that someone will not honour it (which should be less likely than the scenario of the state and its corrupt legislative class dishonouring their commitments to you), then you can seek other measures against those who break contracts with you. There is no government stopping you.
Thank you for reading. I appreciate your time. All my work here is free.
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Recommended reading
‘Chaos Theory: Two Essays on Market Anarchy’ by Robert P. Murphy
‘No Treason: The Constitution of No Authority’ by Lysander Spooner
‘For a New Liberty: The Libertarian Manifesto’ by Murray N. Rothbard
‘Power and Market: Government and the Economy’ by Murray N. Rothbard
‘Man, Economy, and State with Power and Market’ by Murray N. Rothbard
‘The Enterprise Of Law: Justice Without The State’ by Bruce L. Benson
‘The Machinery of Freedom: A Guide to Radical Capitalism’ by David Friedman
The tiresome arguments regarding ‘the need for government’ is SO very unecessary, or should be, if only humanity were not so very retarded. However, your arguments are extremely well articulated and exhaustively explored from all angles. I have to say that I am very appreciative that you took the time to organize these thoughts so succinctly. If I ever get into a discussion with a human and they indicate belief in authority of any kind, I simply avoid expalining my views. I have tried many times, but the superstitious beliefs, the mesmerism related to many human constructs are so deeply ingrained that it is always pointless to discuss anything of any real importance with people, unless they have been sufficiently cracked open as it were, or whatever it takes to see through beloved illusions. From now on, if a discussion along these lines occurs, I will send a link to these articles. Thank you!