Panarchy: A Libertarian Alternative to One-Size-Fits-All Government

De Puydt and Molinari showed how competing governments and private agencies could replace political monopoly with individual choice.

Christopher Cook
Christopher Cook
PUBLISHED IN The Freedom Scale - Sep 02, 2026
Panarchy: A Libertarian Alternative to One-Size-Fits-All Government

Paul Émile de Puydt proposed “panarchy” in 1860: competing governments serving voluntary members within the same territory.

Gaining Consent, Part 3
(Part 1 | Part 2)

Libertarians want smaller government. Minarchists want a government so small, “it barely escapes being no government at all.” And for anarchists, even that much is too much.

We debate and squabble a fair amount in the libertarian camp, even though we generally share the same core principles and presuppositions. Sometimes the argument is about the precise pathway we used to arrive at those principles, or the degree to which we are willing to see them carried to their logical conclusions. Sometimes, it is about doctrinaire details that no one outside of the movement would recognize as anything other than a distinction without a difference!

As I have made clear in the past, I am generally opposed to internecine, Peoples Front of Judea-type squabbling. And yet, I am about to introduce a critique that could end up giving us something else to squabble about.

Oh well. It must be done.

The Single-System Fallacy, Libertarian-Style

As libertarians, our complaint about government goes something like this:

Government initiates coercive force against peaceful people. It violates individual consent (which is, and ought to be, the fundamental unit of moral concern in society). It instantiates violence in human relations, and retards our flourishing in the process.

Ideas differ as to a solution:

  • Some want to work within the system, using its democratic mechanisms to bring about desirable reforms.

  • Some envision a future in which we can go beyond mere reform—winning over enough people to impose the libertarian blueprint via that same democratic process.

  • Some imagine that we can somehow restore an earlier, purer state of the existing system. (The Founders’ “original vision,” here in America.)

  • Some, taking a page from those earlier days, think in terms of revolutions—of overthrowing the existing system.

Reform, reclaim, restore, or revolt against the system.

Instantiate a new system.

A system. THE system.

This is our version of the single-system fallacy: the presumption that for any given group of people in a given area, there can and must be just the one system.

Why Libertarians Keep Recreating the System They Oppose
(Becoming What We Hate)

Look closely. Do you see how this contradicts our principles? That it has us doing the very thing we’re complaining about?

Reforming the existing system doesn’t get rid of the fundamental problem—it merely rearranges the deck chairs on a moral Titanic. We win a few more votes. We get a few more policies to swing our way. It’s a finger in the dike, perhaps, but all it really means is that we have won a few victories within a consent-violative system.

And if we win enough victories to be actually in charge and calling (most of) the shots? How is that any better? Now we are the majority imposing things on the minority. We’ve just become a more effective version of the thing we hate.

Even if there were ever an “original vision” to which we could try to return, how would we ever get back there? How would we stay there once we got there? All the people who oppose such a move would fight us the whole way. And our only hope would be to overcome their resistance using the same consent-violating, force-initiating mechanisms of the system. Mechanisms we supposedly oppose, because they violate our principles.

And revolution? Just stop and think for a moment what that would look like. Not the way the American Revolution looks in gauzy hindsight, but the reality: brother on brother, neighbor on neighbor. A bloody mess. It’s easy to imagine a single people united against the elites, but it never works out that way. And if we—whoever “we” are—actually win, what then? We replace THE old system with THE new system? What does that make us?

I recognize that for some, this is a pragmatic choice: the system is a reality, and we have to work with what we’ve got. There may be some value in doing that, while we work toward the evolution of a new way.

I also know that some are not thinking at all. They are just doing what humans have done for a long, long time: assuming that everyone in a given area must be under a single system. That nothing else is possible.

But what if it is?

What Is Panarchy?

In 1860, Belgian economist Paul Émile de Puydt posed that very question. In his seminal monograph “Panarchie,” de Puydt proposed a system of “governmental competition” in which each person may freely choose, and change, the government to which he or she belongs, without having to move. In this way, multiple governments would coexist over the same territory and govern only their voluntary members.

He called it panarchy.

De Puydt was expressly rejecting the single-system fallacy. Just as businesses compete for customers, or churches for parishioners, providers of governance can compete for citizens. His question, in essence, was this:

Why must everyone within a given territory be forced to live under a single monopoly government?

Market Anarchism and Competitive Governance

A decade earlier, Gustave de Molinari had asked a related—and, for its time, quite radical—question: Why must security be monopolized by the state at all? Why can’t policing be offered by private firms competing in a free and open market?

In the century and a half since, philosophers, scholars, and economists have expanded on Molinari’s original idea, describing what has come to be known as market anarchism or anarchocapitalism. The idea is simple:

Instead of a single monopoly government imposing its version of security, justice, and infrastructure on captive citizens, competing private agencies can offer such services to willing customers.

Such societies have already existed, albeit in partial and ancient form:

Private-law systems thrived in the Hanseatic League for 500 years and Brehon Ireland for close to 1,000—far longer than any modern democracy. Cospaia, on the Italian peninsula, survived as a private polity for four centuries, and medieval Iceland, while admittedly a rough-and-tumble place, had a successful private-law system for over 300 years. Most empires do not make it that far.

Today, the footprint of private security and arbitration continues to grow. Privately owned and managed roads are increasing in number, and with the advent of transponder technology, this trend can be extended from limited-access roads to any thoroughfare. Driven by market forces, rather than the perverse incentives of government, private agencies are able to deliver better outcomes with greater efficiency and at lower cost.

The vast majority presume that government alone can provide such services, but that is an assertion without evidence. Usually, this is nothing more than the argument from incredulity, in which someone claims an alternative cannot exist simply because they personally find it hard to imagine or understand. (People once believed that only a government post office could or would deliver to rural areas, but FedEx, UPS, and Amazon have proved that wrong.)

How Would Competing Legal Systems Resolve Disputes?

De Puydt challenged the belief that governance must be territorial. Molinari, and the market anarchists who followed, challenged the belief that governance can only be carried out by governments.

They were all correct. There is no reason why people cannot choose from among jurisdictionally coterminous providers of security and justice services in the same way that they choose from competing providers of anything else.

The only time an issue arises is when customers of two different providers have a dispute. This, however, is easily resolved. Today, most businesses never set foot in a government court. They have prearranged agreements for private arbitration, including courts of final appeal. They abide by those courts’ decisions even though no one is forcing them, because it is in their interest to do so. Similarly, insurance companies with different procedures are able to resolve inter-agency claims, even across national boundaries.

As Hans-Hermann Hoppe notes in Chapter 12 of Democracy: The God That Failed, the ongoing process of dispute resolution between separate agencies would

contribute to the development of intergroup law, i.e., law applicable in cases of disagreement among competing insurers and law codes. And because the intergroup law provisions that an insurer offered to its clients could appear credible to them, and hence a good, only if and insofar as the same provisions were also accepted by other insurers (and the more of them, the better), competition would promote the development and refinement of a body of law that incorporated the widest—intergroup, cross-cultural, etc.—legal-moral consensus and agreement and thus represented the greatest common denominator among various competing law codes.

In other words, a body of common law and procedures would arise organically as agencies worked together to resolve disputes. Rather than being imposed from on high, this common law would bubble up from the accumulation of human wisdom and experience, in an overall context of consensual arrangements.

Panarchy, Consent, and the Freedom to Choose

So far, so good. But if we are going to build a world of consent, we must go even further.

Competitive governance—market anarchism and de Puydt’s conception of panarchy—covers anyone who wishes to choose from among competing providers of security, justice, and related services. But what if someone wishes to create his own experiment in governance on his own property? And what if others wish to join in that experiment, of their own free will?

If we are truly to respect consent, we must allow for this as well.

This is true even for experiments that we might not like. I don’t want to live under the strictures of an ascetic religious community, but others must be free to choose such a lifestyle if they wish. We should neither stop them from doing so nor interfere in their internal affairs.

And what if someone wishes to continue living as they have done, as a citizen-subject of a modern state? That too ought to be their choice, as we will discuss in a future installment on the difference between revolution and secession.

A person may even prefer to remain entirely ungoverned on his or her own property—neither a subject of any government nor a customer of any agency. It might be deemed unwise not to have some form of bonding or aggression insurance, but that decision must also be up to the individual. Just as individuals are rightly free to make consensual choices, so too are they responsible for the consequences of those choices.

Others will have multiple affiliations, associations, and allegiances, satisfying different needs and wants in different ways. In a condition of true freedom, no one need be constrained to a single pathway.

In the end, our world of the future—a world in which consent is truly respected—will be complicated and hard to predict. And that is a good thing, as we will discuss in our next installment.


Sources

Paul Émile de Puydt, “Panarchie,” 1860.
Gustave de Molinari, The Production of Security, 1849.
Hans-Hermann Hoppe, Democracy: The God That Failed, ch. 12.
Primary and historical sources on Hanseatic law, Brehon Ireland, Cospaia, and medieval Iceland.

Share this article

Recommended Reading

Stop Being Part of the Problem
The Freedom Scale

Stop Being Part of the Problem

‘Madmen might rule us, so we should preemptively surrender and let madmen rule us.’

17 min read

The End of Ideology: Life Without Labels
Philosophy

The End of Ideology: Life Without Labels

A way to end political arguments once and for all?

7 min read

The Free Market in Trash Pickup
The Freedom Scale

The Free Market in Trash Pickup

Choosing a trash company may seem mundane, but it reveals an important economic truth. When consumers can switch providers, competition rewards better service, encourages innovation, and gives people options that government monopolies rarely offer.

8 min read