Usually when we hear about utopia and tragedy, we get a cautionary tale about unintended consequences, about how the good intentions of idealists nevertheless (inevitably?) lead to awful consequences. But wouldn’t it be even more tragic if you won, but did not recognize your utopia when it arose, and thus became a foe of the very social order that realizes your ideals? This is the sorry lot of the anarcho-capitalist.
For the anarcho-capitalist, the state is a monster of coercion, illegitimately infringing on their liberties. However, anarcho-capitalists aren’t paying attention to their own theory here. The anarcho-capitalist alternative to the state is a free market in companies providing such services as protection of property, provision of money, a legal system, and so on. What anarcho-capitalists don’t realize is that this is precisely what we have today. The state is what happens when an unregulated market in protection services leads to consolidation into a single firm. How do we know this? Because the state is precisely an actor in an unregulated market (what, after all, regulates the state?), and, as a result of the interactions of these actors, we have the system of states as it exists today. The state arose in the early modern period when it became apparent that the complicated overlapping network of powers and obligations that made up the feudal system was inefficient, and that instead governmental and protective services could best be provided by a single entity for each territory. That is to say, the state is simply a protection company that has out-competed all its competitors.
When a large firm corners a market through out-competing its competitors, anarcho-capitalists will tell you their is nothing illegitimate about this and, following Milton Friedman will point out that, breaking up such a firm involves interference with the market, and so by definition will lower everyone’s welfare. The supposedly “sincere” anarcho-capitalist, then, who opposed the state as it exists, is in fact calling for political interference with the result of the free market; they have become, unwittingly, the very statists that they oppose. On the other hand, the imperialist libertarians such as Glenn Reynolds, who trumpet their opposition to statism while worshiping the most powerful state the worlds has ever known, are in fact the true anarcho-capitalists.