Why do libertarians oppose the free market solution to governance?

Theories of corporate governance have been around for a long time. In essence, these theories deal with the best way to run a large organization.

The free market has settled on a few basic tenets: 1) profit-motives work best; 2) sole proprietorship, partnerships and joint-stock corporations are the viable forms of governance; and 3) past a certain size, the joint-stock corporation has no remaining competitors.

You’ll notice that universal democracy is missing from the list of best ways to run a large organization. Is this an accident? I think not. (Can you imagine if Apple (for example) decided to choose it’s CEO by allowing everyone in the country to vote? The winner, undoubtedly, would be the one who promised iPhones for all. The company will find itself insolvent in days).

Given these facts, you’d expect believers in a free market to apply these principles to governance of states, after all, libertarians claim to be pro-market. The market believes that the best governance would come about if the state were run to maximize the benefits of its shareholders (this could be variously defined, but let’s start with the state’s tax-paying citizens) and organized as a joint-stock corporation.

Obviously people will disagree about how, precisely, to implement this form of governance at the state level. However, it’s equally obvious that this is the organizational form that has won in the free market.

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2 Responses to Why do libertarians oppose the free market solution to governance?

  1. tenkev says:

    “[I]t’s equally obvious that this is the organizational form that has won in the free market.”

    It is not so obvious to me that there is a free market in organizational forms. Amongst the limited types of organizations allowed by law it is obvious that joint-stock organizations are superiour; but,it may be that a form of joint-stock organization currently proscribed is the most efficient.

  2. a platonic charisma says:

    In response to this post’s title, there is a whole ‘class’ of libertarians who don’t: the seasteaders and ‘second-order libertarians’, who are more concerned with creating a free market of governance than pushing for any particular libertarian reforms of current society.

    See the following for an explanation of this mindset:
    http://distributedrepublic.net/archives/2009/04/09/secondlevel-libertarianism

    It’s a concept that isn’t far removed from Moldbug’s Patchwork vision.

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