Government vs. Governance: Libertarianism and Private Communities
Journal of Private Enterprise, 2018, Forthcoming
19 Pages Posted: 2 Jan 2018 Last revised: 29 Apr 2018
Date Written: April 7, 2018
Libertarians tend to oppose hierarchical authority, and advocate the privatization of public goods. However, not all collective action problems can be solved so easily; collective problems may require collective solutions. Fortunately, the essence of the market process is not the atomic individual, but consent. Libertarians should endorse hierarchical, bureaucratic solutions as long as membership is voluntary. We provide a general theory of the proprietary community as a solution to collective action problems: such a community embodies consent, jurisdictional competition, and residual claimancy (incentive alignment), mitigating collective action problems in a hierarchical and consensual – but nevertheless market-based – manner.
Keywords: private community, proprietary governance, homeowners association, anarchism, anarcho-capitalism
JEL Classification: B53, H11, H41, D71, A13
Suggested Citation: Suggested Citation