Hayekian Anarchism
Cautious Transition to a Stateless Society
In Stateless Social Democracy, I argued that the communalist (social-anarchist) and market-anarchist approaches to security are not mutually exclusive and, when combined, offer a more robust and feasible solution to the problem of law and order in a stateless society.
Communalists envision face-to-face democratic municipalities with rotating civic guards. They might also establish jury-based courts. Through federation, these communities can cooperate on policing and justice matters. Market-anarchists, by contrast, advocate for competing private “police” in the form of insurance-based protection services. These services would focus on restitution rather than punishment, being incentivized to resolve crimes to recover costs paid out to insured victims. Arbitration services would function similarly to private courts, with voluntary, reputation-driven adjudication. Legal norms would emerge organically through case precedent and interoperability agreements among agencies, forming a decentralized, bottom-up legal order.
Rather than take sides in this debate, we propose a synthesis: communal institutions can provide baseline, universal access to justice and protection, while market-based services can offer enhanced, customer-specific support. The adoption of the philosophy of voluntaryism by libertarian municipalities would ensure that no entity holds a monopoly on governance, allowing both community and market systems to coexist, compete, and cooperate in securing liberty and justice.
In this essay, I want to look at the question of how we might get there from here. How can we attain such a society? Do we go the route of revolution or the route of reform?
One of the great contributions of F. A. Hayek to political theory was the manner in which he distilled and communicated the best insights of traditional conservatism without falling for the regressive and authoritarian tendencies that usually come with it. He incorporated the essential insight of Edmund Burke and Burkean conservatism into a broadly libertarian framework. The traditional conservative realizes that existing institutions evolved through a long process of trial-and-error and natural selection. Therefore, institutions sometimes have a “reason,” even if no one really formally designed them with that intention in mind. Institutions that work survive and those that don’t fall apart. The reason that we have a market system, for instance, is simply because that is what evolved and proved itself most conducive to human flourishing — other types of arrangements didn’t allow for growth and prosperity or else broke down under the pressure of their own internal contradictions. (I won’t go into too much detail here, since I have covered this topic in my book Libertarian Social Democracy.)
Since institutions are the product of social evolution, it is generally unwise to overturn them without first determining the “reason” or “purpose” of their existence. There are certain organs that are prone to getting cancer — e.g. breasts, lungs, testicles, kidneys, etc. We don’t preemptively remove these organs to prevent cancer because we know that they serve a “purpose” in the overall system. A doctor who removed random organs for preventative purposes would wreak havoc on the bodily system. At the same time, a wise dentist may preemptively remove a patient’s wisdom teeth. We know that wisdom teeth historically served a purpose when human diets were quite different and, as a result, humans (or their ancestors) had larger jaws that could fit all their teeth. It is a principle of traditional conservatism that before we go changing things we ought to know why things are the way they are — we need to determine the “purpose” or “function” of the institution within the system before we go about reforming it. Now, traditional conservatives are so wary of change that they usually oppose even good reforms. As a progressive libertarian, Hayek realizes that modifications to the existing system may be desirable. While evolution gives us institutions that serve some purpose, this does not guarantee that those institutions are necessarily just. That biological evolution tends to give us organs that serve some “purpose” doesn’t guarantee that it won’t preserve some organ (like the appendix) that no longer seems to serve a purpose and, instead, tends to burst for no reason.
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F. A. Hayek (The Fatal Conceit)
The Hayekian anarchist would like to avoid the pitfalls of constructivist rationalism and the fallacious view that one can simply build a better world from scratch. Rather than design a whole new system from scratch, we should seek to “build the structure of the new society within the shell of the old” and try to gradually reform and replace existing institutions. Some radicals on the left advocate insurrectionary and revolutionary violence in order to tear down the existing system so that they can erect a new system in its place. The communist wants to tear down the market system and build a moneyless system in its place, but Hayek cautions that this revolutionary, under the influence of constructivist rationalism, is likely to end up destroying necessary institutions without being able to adequately build replacements for them. The allocation of resources without the pricing system is notoriously problematic. No one has been able to design a scalable alternative to markets.
The Hayekian anarchist, on the other hand, takes a far more gradual and evolutionary approach. Instead of replacing the state overnight, we will want to gradually build up alternative institutions that can serve some of the same essential purposes. We don’t want to abolish police and courts so that we can replace them with market-anarchist alternatives. Instead, we want to gradually open up the market to competition and allow more and more problems to be solved by private police and private arbitration rather than government police and government courts. We want to replace the existing banking system with a free-banking system. However, we don’t want to tear down the Federal Reserve overnight and replace it. Instead, we want to start letting private banks issue their own private currencies. We want to slowly but surely allow more and more free competition against the government in the provision of goods and services over which it currently has a monopoly. Instead of abolishing the state, we will wait for it to wither away in the face of ever-expanding competition from the private sector. And, to clarify, we do not want to “privatize” government services! Instead, we want to allow private companies to freely compete in the provision of those services. This is a very different approach from the conservative proposals to privatize things.
We also propose the libertarian municipalist concept of dual power. Libertarian municipalism proposes the organization of communities into directly democratic face-to-face assemblies. These assemblies, emerging from the bottom-up from a protest and resistance movement, become a dual power alongside the state. Murray Bookchin writes:
“The issue of dual power should also be clarified…. The word dvoevlasty (“dual power”) was used by Russian revolutionaries of all kinds as early as February 1917, simply to describe the dual arrangement in which the Petrograd Soviet and the Provisional Government tried to govern Russia — an arrangement that had come to an end by the October Revolution.
“As a ‘theory,’ however, ‘dual power’ was more popular in Germany and Austria immediately after the First World War, in 1918–19, when the Raete or councils were in vogue among theorists such as Rudolf Hilferding, Karl Kautsky, and Victor Adler. These Austro-German Marxists thought of dual power as a permanent condition consisting of permanent councils, through which workers could express their interests, together with parliamentary state, through which the bourgeoisie could express its interests. These Social Democrats divested ‘dual power’ of its revolutionary tension, and the term became a synonym for a two-part government that could conceivably have existed indefinitely.
“In libertarian municipalism, dual power is meant to be a strategy for creating precisely those libertarian institutions of directly democratic assemblies that would oppose and replace the State. It intends to create a situation in which the two powers — the municipal confederations and the nation-state — cannot coexist, and one must sooner or later displace the other.” — Murray Bookchin (Thoughts on Libertarian Municipalism)
From both the libertarian municipalist and the market-anarchist perspective, we propose a gradualist and reformist approach. The abolition of the state is not something that will happen overnight. Instead, libertarian institutions will gradually evolve and expand to take over more and more governmental functions until the state ultimately withers away. All the necessary functions that the state once did will now be done by non-state institutions. Yet “the government” won’t have faded away entirely. The institution that we currently call the state might still exist in an obsolescent form, but the statist characteristics will have dropped away — what remains will be just another voluntary association in a broader free society.
The goal is to transition to a free (anarchist) society without any abrupt or chaotic disruptions. Rather than advocating violent revolution or sudden abolition of state institutions, we suggest a cautious, evolutionary path that respects the organic development of existing institutions while gradually opening space for voluntary, decentralized alternatives. Drawing from Hayek’s emphasis on spontaneous order and Burkean caution, our approach calls for building up private courts, insurance-based policing, and democratic community assemblies as parallel structures that eventually outcompete the state, rendering it obsolete. This strategy involves fostering dual power through libertarian municipalism while expanding market competition until the state no longer holds coercive monopolies of any kind, thus allowing it to wither away into irrelevance without social upheaval.
