Home > Corporations, Privatize > The Thin Line Between Libertarianism and Anarchy

The Thin Line Between Libertarianism and Anarchy

Before 2007, most Americans probably did not know what a libertarian was, or where one fit along the familiar political spectrum. Vague notions of liberty, radicalism, and Montana may have come to mind. During the 2008 presidential campaign, however, Representative Ron Paul, a Texas Republican, brought libertarian ideals to the fore of American consciousness. It was Paul, not Senator Hilary Clinton, Governor Mitt Romney, or Senator Barack Obama who set the campaign’s fundraising records with his $6 million Money Bomb. Paul attracted further attention when he disagreed with other Republican candidates about the War in Iraq. Listening to his rhetoric, laced with allusions to the Constitution and references to “small government” and “non-interventionist foreign policy,” people began to gain a substantive understanding of libertarianism, and many found themselves agreeing with a line of political thinking that fits neatly neither on the Left nor Right.

Although people, particularly academics, tend to haggle over what exactly it means to be a libertarian, the concept of a “small government” is a necessary element. A small government, in this sense, is one that does little in the way of taxation, spending, and regulation. Advocates of small government often frame their position in terms of a government of enumerated, and therefore limited, powers. The idea comes from the early defenders of the Constitution during the state ratification debates, and it was their reason for opposing a bill of rights. Excepting the amendments, the Constitution contains mostly grants of power. The idea was and is that government could exercise those specifically enumerated powers and no others. The short story of American history is that government practice has not supported this view.

The constitutional basis does not seem to be the only reason libertarians want small government: they tend to think it’s good policy, too. Libertarians value a private sphere, within which government has no place. The expanse of this private sphere is directly proportional to the magnitude of freedom and liberty in one’s life. Liberties are not safe, and freedom cannot exist where government regulates.

If personal liberty is prized above all else, is government the only enemy of freedom or merely the most visible?

Libertarians often call for privatization. They believe that the private sector can provide more efficiently many or all of the services the public sector endeavors to provide. In the quest for liberty, though, is the public-private distinction the most worthwhile one to draw?

Those Duke boys undoubtedly had an appetite for destruction, but it would be hard to call Luke and Bo (and Daisy) anarchists.

I am not an expert on anarchy, but I understand it to be less concerned with this public-private distinction than libertarianism. Libertarians worry about domestic surveillance and national identification programs that put personal information in the government’s hands, but do not appear to have any problem with surrendering this information to private entities. Anarchists, it seems, do not make such a distinction. In theory, they would be just as likely to resist a federal identification program as they would giving similar information to a private corporation, like Google. Google offers a wide set of services free of financial cost, but with high information costs. Users give to Google the full contents of their emails, chats, and internet searches. Those who use Google’s web browser, Chrome, offer up the entirety of their online activity. It seems likely that even non-libertarians would think twice before granting the FBI full access to this information, but many Americans– perhaps a majority of internet users– use some of Google’s services every day without second thought.

Google isn’t the only example of private (non-governmental) gathering of personal information, of course. Private schools, financial institutions, athletic clubs, and grocery stores collect identifying information all the time and almost certainly without significant resistance. Even video stores ask for a substantial amount of personal information before issuing a membership card.

The question for libertarians is whether there is any basis for opposing perceived privacy invasions by government but not by corporations and other private entities. Indeed, one might think that there is more reason to be concerned with the information we give to Google and Visa than with that the Department of Homeland Security or the Internal Revenue Service collects; after all, libertarians do believe in democracy.

The libertarian response might have something to do with the voluntary nature of private engagement and the perceived involuntary nature of public information-gathering. For example, individuals can choose to rent movies from Blockbuster or not. If they don’t want to give the weird amount of information the store requests before customers can rent a video, they don’t have to patronize that store. On the other side, people perceive less participatory choice when it comes to governmental solicitation of information.

I am not sure that voluntariness is enough for libertarians to justify their public-private distinction. If there are reasons they don’t want to give personal information to the government, wouldn’t many of those reasons apply with equal force to private entities (or even counsel, as suggested above, a preference for public institutions over private ones)? Is there any solid foothold that allows libertarians to preserve this distinction and avoid pushing their views to their logical conclusion and down the slippery slope to anarchy?

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  1. January 6, 2010 at 12:54 pm

    This post provides some phenomenal insight into Libertarian ideals (and dilemmas). I no doubt fall into the ‘lack of knowledge’ category mentioned above. Honestly, it was your championing of Ron Paul that originally led me to research Libertarianism in the first place.

    I’m most impressed with your mention of Google et al after weighing in on the value/necessity of small government. Before I finished reading, I was thinking to myself, couldn’t there be even MORE harm done by Goliaths like Google? Obviously, you acknowledge the risks of sharing information with companies like Google and Visa – and today, online privacy policies are receiving more publicity thanks to social media sites like Facebook.

    I don’t have an answer. But it makes me wonder:

    Big Government and Big Companies both have the potential to infringe on our basic freedoms. But shouldn’t we be more scared of monopolistic private organizations than big government?

    1) Likelihood of malicious practices without consequence

    a. (Most) Government officials are elected, their decisions/votes published and available, and their actions impeachable.
    b. CEO’s and Executive Boards answer only casually to shareholders (except, ironically, when dealing with big government on matters of regulation regarding monopolies, trade, advertising etc.)

    Big Government and Big Businesses rely on each other to stay robust. But interestingly, I think that Government (big or otherwise) is more likely to have our best interests in mind (or at least public opinion) especially during an election year. There are no election years at Google. And without a strong central government to casually oversee such Goliaths, aren’t we risking our personal liberties on private institutions – which, arguably, could have more ability to run rampant without consequence?

    Of course, Adam Smith would bitch slap me with his invisible hand for suggesting that the market can’t regulate itself. But still, Aren’t Big Government and Big Companies just a consequence of each other? And without both sides influencing, regulating, (and buying) each other, isn’t there a potential for either side to get too powerful?

    Love the new blog format. Keep it up.

  2. Mitch
    January 6, 2010 at 2:36 pm

    Matt- You say there are no election years at Google. I think I’ve voted hundreds of times for Google today – I’m using Google Chrome, Alec sent me the link to this blog post via Gmail, and I’ve performed a bunch of web searches on Google today. I could have voted for Internet Explorer, Yahoo, and Firefox today, but I didn’t.

    I believe that big business is more likely to have my best interests at heart. It’s a hell of a lot easier for me to install Firefox than it is for me to apply for Canadian citizenship.

    • January 6, 2010 at 6:00 pm

      Supporting the product/service of an institution (i.e.; using google chrome) is much different than having control over the decision-makers and those decisions made on our behalf. Google executives, those creating the key strategies, maybe have to generally satisfy the market (see Adam Smith), but they certainly don’t have to defend their jobs to shareholders every election year like politicians – because, as I mentioned, there’s (basically) no active system for shareholders to simply remove executives from their posts. Instead, removal is the job of other, more powerful executives within the company. Which is precisely the point – Google’s job is to earn profit by satisfying our every whim on the internet. The liberties they take with our information in the process, however, is fare less transparent than what’s generally expected in government. I’m willing to be that Google could blackmail me much easier than the federal government could. and that’s scary.

  3. Benji
    January 6, 2010 at 2:51 pm


    You said: “a. (Most) Government officials are elected, their decisions/votes published and available, and their actions impeachable.
    b. CEO’s and Executive Boards answer only casually to shareholders (except, ironically, when dealing with big government on matters of regulation regarding monopolies, trade, advertising etc.)

    CEOs, Executive Boards, and Boards of Directors have both fiduciary duties and obligations to shareholders, owners, the company as a whole (most often a corporation), and to each other. While insurance limits the financial exposure to liability stemming from a breach of these duties to some extent, equittable remedies are always available. Moreover, if state law or corporate charters and by-laws do not mandate certain forms of transparency, then the prudent investor will. In practice, all successfull corporations publish all relevant information. While the general public may not use that information and while it may not be readily available, it is not that hard to find and even easier to use.

  4. January 6, 2010 at 6:12 pm

    Benji, I mention shareholders in both my post and the reply to mitch. I understand that quarterly/annual reports are published for share/stakeholders. These are just past financial numbers, outlooks/projections, and road-map stuff. But the fact is, the important stuff (e.g.; competitive analysis, branding/positioning, data mining/sales, and product development etc) are all proprietary aspects of the business that no one except the top executives have access to. granted the federal government has plenty of proprietary information. But still, it doesn’t change the fact that the government is, at its core, democratic – while private companies only give the illusion of such. I don’t pretend to know (or care) about which governmental bodies regulate which aspects of different types of companies. The point of my post was basically that, you can’t be against Big Government without realizing that Big Capitalism is inherently just as dangerous.


    Alec, thoughts?

  5. AD
    January 6, 2010 at 6:47 pm

    Matt, I think we have our first anarchist convert, and JJM hasn’t even weighed in yet.

    This discussion has been helpful. I think it’s missing the larger point, though. Even if Mitch and Benji are right that individuals can control corporations as well as they can the government, that doesn’t necessarily explain libertarianism’s public-private distinction.

    The imagination of those in power may be beyond prediction; that is, it’s probably difficult to guess just how the corrupt will abuse their power. The game of private sphere protection seems to be in limiting exposure, and not in comparative control or comparative abuse. Benji suggested elsewhere that there is a difference between power and authority, and that this is a difference of kind. The outcome– the practical reality that matters to individuals– seems to be only a matter of degree. The powerful can and do influence the authoritative, and repeatedly succeed in bending the actions of the authority to match their (the powerful’s) will. (This is no surprise– it’s how democracy works on a large scale.) Understood this way, control and punishment look like thin reeds for libertarians to lean on when justifying their public-private distinction.

    There is value in the abstract idea of protecting information for the sake of protecting information. I’ve mentioned the unpredictability of future abuses. Further, people look down on the simple act of having to produce information (e.g., travel documents and an explanation of where you’re going and why you’re going there) as itself an invasion. It doesn’t matter whether you’re followed and later arrested, or whether you’re able to vote the checkpoint commissioner out of office. Surveillance more generally is a good example too. When the government listens in on people’s telephone calls (especially when they don’t have a warrant), libertarians don’t care if they’re heard discussing violent plots or the score of the baseball game– that they were heard is enough. If that’s the case, does it make sense that the same concern evaporates when the information-gatherer is a private entity?

    • January 7, 2010 at 8:58 am


      It seems that, on the most fundamental level, we’re (essentially) on the same page about the public-private distinction. So does this mean your questioning of libertarian principals was less about a rhetorical blog posting and more about you shifting your ideals to something that aligns more closely with your love of strict ‘constitutionalism’ (is that a word?). If so, has it been past discussions with JJM that have moved you in one direction or another? Or is my assumption completely off-point?

      • AD
        January 7, 2010 at 10:10 am

        I am trying to ask a real question, Matt, even if the title of the post was a bit provocative. I really am trying to figure out whether the libertarian dichotomy we’ve been working out is tenable. Does it make sense that one fears personal invasion when it comes from the government but not when it comes from a private entity?

        As you know, it’s impossible to be around JJM and not be affected by the gravitational force of his deep thinking.

  6. January 9, 2010 at 1:21 pm

    Great idea, thanks for this tip!

  7. jjm
    January 11, 2010 at 9:13 am

    Anarachism opposes all forms of hierarchy and domination, promoting self-government and mutual-aid as alternatives. Anarchism is committed to developing the full capacities of humans as social animals. Anarchism is the radical root of democracy, when democracy is understood as praxis rather than misapplied and reified in a reactionary adherence existing institutions and structures of power.

    AD, the footholds that allow libertarians (and all freedom lovers committed to democracy) to avoid the “slippery slope” to anarchism are the popular misconceptions about anarchism, which has been vilified, characterized as violent and committed to chaos.

    I think there is an interesting thing going on here in terms of progressive vs. conservative as well. I want to say that libertarianism tends conservative. Libertarians admit that we need some government, they want it to be as small as possible, and they’re willing to stick with a good thing once they’ve got it. Anarchism, however, tends progressive: because power is so hard to eliminate from our institutionalization of social relations, we need to constantly revise those institutions.

    Matt, you’re generally right. Libertarians (freedom-lovers) ought be opposed to big business, and when we think about it in terms of hierarchy and domination, to all forms of business that aren’t worker-owned and controlled. Also, there is an issue of scale, small being better than big.

    Benji — corporations’ fiduciary obligations to their shareholders are precisely the problem, unless those shareholders are the workers and members of the local community.

    Mitch, Big business doesn’t have your best interests at heart, except as a byproduct of the profit motive. However, what is compelling about capitalism is the possibility that those two things can be aligned.

    Part of what is at stake here is how we define freedom, and for whom. Freedom as consumer choice? Freedom as health care? Freedom as literacy? Freedom as human rights?

  8. jjm
    January 11, 2010 at 9:18 am

    The first word of my last post should read: “Anarchism”

    The last sentence of my third paragraph should read: “because hierarchy and domination are so hard to eliminate…” Power is not the problem; the shapes that power takes are the problems.

  9. Guy
    June 17, 2011 at 2:30 pm

    “Is there any solid foothold that allows libertarians to preserve this distinction and avoid pushing their views to their logical conclusion and down the slippery slope to anarchism?”


    Don’t sound so worried. I know that most people have a very closed minded view about anarchism and other left wing points of view, but we aren’t all that frightening. If I understand you article correctly, you seem to realise that corporations and big business can wield just as much power as the state- and as the last sentence implies, you realise that, if libertarians are against totalitarian power (i use that not in the emotive sense, but in the sense of a small group of people holding large amounts of power), they would also be against companies, who are often just as brutal as the state in wielding that power- and arguably (especially in america (i’m english- although it isn’t looking all that nice over here, with the tories’ attempt to privatise healthcare)) hold more power than the state.

    I speak as an anarchist, so am not exactly neutral in this argument, but from my point of view (I’d be interested to see a refutation- although i guess it’s probably gonna be to do with adam smith, and the invisible hand and all that) this is why libertarianism (and the tea party movement) seems baffling (at least to me). That said, i wouldn’t be so afraid of anarchism just because it’s a dirty word. Also, isn’t it important to question whether economic freedom is real freedom- especially as it constrains so many other people’s freedoms.

    (that said, I do think ron paul would be better than any of the pricks you’ve got currently)

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