All quotes in this article are from His Serene Highness, Hans-Adam II, the Reigning Prince of Liechtenstein (“The State in the Third Millennium”, 2009);

“I would like to set out in this book the reasons why the traditional state as a monopoly enterprise not only is an inefficient enterprise with a poor price-performance ratio, but even more importantly, becomes more of a danger for humanity the longer it lasts.”


I am an anarcho-capitalist.

I define a “government” as an organisation which provides “governance services” (which can include any number of a variety of services, but at a minimum usually consists of justice and defence), whereas a “State” is a government that claims a territorial monopoly, i.e. prevents any other governments or ungoverned individuals from existing in a given region.

“Let’s take a glimpse into a distant future, when the states of this world have become service companies that are in peaceful competition for potential customers. There the customer is king and can choose, just as he can choose today whether he wants to buy a hamburger at McDonald’s or Burger King or fry it himself, or choose what airline he wants to fly with, or whether he prefers to travel by car or rail.”

Anarcho-Capitalism is anti-state, but it is not anti-government. If we lived in an AnCap world, I believe that social (“market”) pressures would lead to the state of being governed becoming a prerequisite for participation in society. Everyone would probably still have to live under a government.

Not hiring the services of a government would probably not be a viable action for any lone individual. There wouldn’t be any “legal” (i.e. enforced by threat of violence) restrictions to being ungoverned; these limitations would be purely practical, in terms of participating in society – any number of things could be made unavailable to you as an ungoverned individual, ranging possibly from getting a job to even entering a grocery store.

However, when it comes to contiguous groups of people (communities) who believe they can create a better society/government for themselves than the one they live under, one that perhaps is more cost-effective, or which imposes better rules, there would always be the peaceful possibility of doing so.

“It would be a major success if in the third millennium, humanity were able to transform all states into service companies that worked for the people on the basis of direct and indirect democracy and the right of self-determination at the local level.”

Not that every single community would govern themselves, many communities would still come together and unite under the same “central” government, but these central governments would have to be much more efficient and just than our current central governments, simply because they would face “potential competition” from the legal possibility for anyone to unsubscribe from their services, and the practical possibility for communities to do so.

There would therefore be a competitive market for governance. That, to me, is anarcho-capitalism.

We in the Princely House are convinced that the Liechtenstein monarchy is a partnership between the people and the Princely House, a partnership that should be voluntary and based on mutual respect.”

This should not be a controversial position. The Charter of the United Nations binds its signatories to have “respect for the principle of equal rights and self-determination of peoples“; true self-determination is the possibility for any group of people, no matter how small, to live by their own ideas and institutions, so long as the do not infringe on the rights of others.

Yet, to my knowledge, the right of self-determination is only explicitly recognised in the constitution of one single, tiny country: The Principality of Liechtenstein, where every single village (there are 11 villages, and their populations range between 400 and 6000 people) can legally seek to become independent.

“The State should treat its citizens like an enterprise treats its customers. For this to work, the State also needs competition. We therefore support the right of self-determination at the municipal level, in order to end the monopoly of the State over its territory.”

Maybe most anarcho-capitalist societies would look like the peaceful, ultraconservative, quiet little Liechtenstein. Or they might also tend to become massive, vibrant and multi-cultural havens of human progress.  There could also be no general tendency, with every AnCap society being drastically different from any other. I don’t know for sure – I’d even go as far as saying that this is unknowable at this point in time.

I also don’t know whether under such a regime of pure competitive liberty, I would end up deciding to live under some form of monarchy, democracy, meritocracy, technocracy, etc. I am also uncertain whether I’d choose to participate in a heavily regulated community with a highly paternalistic government that would interfere in every aspect of my life, or whether I would prefer to associate myself with a more deregulated kind of arrangement.

Whilst most governments remain monopolistic “States”, I would prefer for them to be as small as possible in order to maximise my element of choice. In an anarcho-capitalist society, however, where communities would effectively have complete freedom to choose which regime to live under, and where every regime would have been perfected by fierce market competition to provide the best possible quality of life, the results might surprise even the most brilliant economists.

“Naturally, an anarchist could claim that a monarch from a family that has reigned for centuries cannot possibly be in favour of abolishing the state. In response, I should like to note that the Princes of Liechtenstein are not paid for their duties as head of state by either the state or the taxpayer. The total cost of our monarchy, in contrast to almost all other monarchies, is covered by the Prince’s or the Princely House’s private funds.”

Human utility and happiness being unquantifiable, we may never know which of the aforementioned systems of governance are objectively the best; in all likelihood, different people with different values and needs would tend to prefer different ways of running society.

One thing is certain though, self-determination at this level would ensure that governments, and the individuals who run them, could never again seek to enrich or empower themselves at the cost of society. Anarcho-capitalism would signify the end of all systematic governmental abuses and tyranny.

“Only a strong direct democracy and the end of the state monopoly on its territory will turn the state in the third millennium into a service company that will serve the people. It seems to be the only way to guarantee that the state is not misused by monarchs and oligarchs to oppress and plunder the people. If indirect democracy is the democracy of illiterates, then direct democracy and the right of self-determination at the local level is the democracy of educated people.”

Although it is debatable whether it fulfils all the conditions to be considered technically anarcho-capitalist, I nevertheless believe that in practice, The Principality of Liechtenstein is a society that functions exactly as it would under anarcho-capitalism.

This champion of liberty exemplifies what kind of prosperity and happiness would await humanity if it did away with the State, and I will therefore never tire of proudly repeating its name in my fight to make the whole world a little bit more like Liechtenstein.