Ludwig von Mises, Friedrich Hayek, and Milton Friedman, perhaps the best-known twentieth-century academic defenders of liberty, envisioned a role for limited government in protecting liberty. (1) Friedman's (1962) defense of freedom includes proposals for a negative income tax and school vouchers; Hayek (1960) advocates limited government to enforce the rule of law despite his concern about excessive government; (2) and Ludwig von Mises, who also warns of the dangers of big government, (3) states, "the task of the state consists solely and exclusively in guaranteeing the protection of life, health, liberty, and private property against violent attacks" (1979, 52). In contrast, by the end of the twentieth century, many libertarians, guided by the work of Murray Rothbard and others, viewed orderly anarchy as a desirable and potentially achievable state of affairs and--some would argue--the only state of affairs consistent with a libertarian philosophy. (4) My purpose in this article is to examine that proposition critically and to defend and extend the classical liberal idea of limited government. My conclusions align more with those theorists, such as Hayek and Mises, who see a need for limited government than with those who see the libertarian ideal as an orderly anarchy.

The debate over limited government versus orderly anarchy typically turns on the effectiveness of government versus private means to achieve certain ends. Government's defenders argue that markets cannot provide certain goods and services as efficiently as government can--in some cases, markets may be completely unable to provide certain desired goods--whereas the advocates of orderly anarchy argue that private contractual arrangements can provide every good and service more effectively and can do so without the coercion inherent in government activity. I maintain, however, that the effectiveness of government versus that of private arrangements to produce goods and services is irrelevant to the issue of the desirability of government in a libertarian society. Governments are not created to produce goods and services for citizens. Rather, they are created and imposed on people by force, most often for the purpose of transferring resources from the control of those outside government to the control of those within it.

Without government--or even with a weak government--predatory groups will impose themselves on people by force and create a government to extract income and wealth from these subjects. If people create their own government preemptively, they can design a government that may be less predatory than the one that outside aggressors otherwise would impose on them. (5)

Anarchy as an Alternative to Government

One strand of the libertarian anarchist argument is the claim that everything the government does, the market can do better, and therefore the government should be eliminated completely. (6) A second strand is the proposition that government is unethical because of its use of force. (7) Murray Rothbard has been the leading proponent of both arguments, and his 1973 book For a New Liberty is his most direct defense of orderly anarchy. Rothbard illustrates how the private sector can undertake more effectively all government activities, including...