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"Some say that the problem with libertarianism or anarchism is that it is similar to communism in that the latter says everyone should have equal wealth while the former says everyone should have equal sovereignty and both are impossible and are dangerous to attempt. However, just as capitalism makes it possible to produce goods so cheaply that anyone can buy them, innovative technologies and business models might make sovereignty so inexpensive that any person or tiny community can buy it."

The way I see it, in the libertarian world we would not all have equal sovereignty, but a diverse array of sovereign organizations and situations. If we join a private defense company or private law association, then we have transferred our sovereignty to these groups, as least temporarily. A person's sovereignty could be split among several different organizations. If you separate yourself from this sort of extra-personal legal protection, then you regain your sovereignty. The libertarian world may have these sorts of sovereign individuals, but I think most would gladly transfer this to a good business or association in return for the benefits of professional legal and physical protection. For instance, if you were your own sovereign and somebody robbed or attacked you, you'd have no one but yourself to help bring this person or persons to justice for their actions. Most people would not be capable of this.

What the libertarian world would recognize in a legal sense, however, is the equal right of respect of one another's personal bodies and personal property. The NAP would be an underlying law between and within all private law groups. Each law group could have a myriad of laws on top of the NAP which may seem 'unlibertarian' (price control laws, product prohibitions, social prohibitions, religious laws, racial discrimination, etc.), but this is perfectly fine from a libertarian perspective, because all these additional laws would have been voluntarily agreed to by each group's members personally.

So in this sense, the libertarian future may look nothing like many modern libertarians have envisioned. There could still be a lack of free trade. Porn and prostitution could be outlawed. Even fiat money is a possibility. I guess my point is that it will be hard to predict this stateless future.

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"Perhaps the only way to have small communities each managing their own affairs is for an empire to maintain peace among them and protect them from foreign threats"

Or you could have the Roman Catholic Church.

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"possibility of alternatives to a state is like the idea of blue dragons on Neptune."

More like feudal kingship, aristocratic republics, independent cities and communes, and city-leagues in Latin Christendom. All these are alternatives to the territorial state model of governance that were widespread and lasted for hundreds of years. No dragons necessary.

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"which will change to stable one, which would be a state"

There is no reason to suppose that states impose any more order on society than a more voluntary or natural authority structure. States, on the contrary, seem to create chaos like no other organization in human history.

It is useful here to differentiate power and authority in a certain way. Let's say power is synonymous with aggression employed to maintain sovereignty over a given territory or people, and authority is natural and voluntary fealty or submission freely given between the strong and the weak for their mutual advantage. Power is what you need when your authority breaks down if you want to maintain your rule, but all power structures need some level of actual authority as well. Authority is justified in using coercion and violence, but only in response to aggression, committed or credibly and imminently threatened. Authority is not impotent against invasion or subversion, but it cannot behave like a criminal either.

In this light, democracy was so popular in the 18th and 19th centuries because 1) monarchies were resorting more and more to power to maintain their rule as they fostered more and more the state model of governance, and 2) democracy was made to sound like it was a pure government of authority, with its free elections and representative officials beholden to public opinion. But democracy was just an advance of the state deeper into our cultural subconsciousness. The democratic revolutions ended up opening up the flood gates for the most power mad demagogues to ever walk the earth in the 20th century. Hitler, Stalin, Mao, and Pot et al were not the result of the march of the ancient regime into modernity, but of the democratic revolutions against it since the late 18th century. Here the state came into its purest form and proved itself not an instrument of order but of chaos on a scale that is nearly incomprehensible.

I think it is clear that states are best when they behave least like states, that is territorial monopolists of political authority and taxation. So any scheme to break up this monopoly mindset pays dividends for freedom and allows more natural authority to come forward. Federalism, subsidiarity, and sphere sovereignty are a few ideas which have been tried to do this. But these only approximate real political competition and only offer the delay of the eventual encroachment of power into the realm of authority. From this it should be clear that the best form of government is one which relies totally on authority and abstains from the use of power. And a government such as this could not forcibly prevent peaceful competitors from offering governing services to members of its community, hence, the private law society is the ideal.

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"If a state splits into smaller ones, there will be a power vacuum."

Power vacuums occur when previous power holders are toppled over and different groups then begin warring with each other for the seat of power. Power vacuums do not occur or are less likely in peaceful secession movements. Typically, a power structure is already there guiding the community to independence. And there is an argument to be made that a more decentralized region is more difficult to conquer because a peace treaty imposed on one leader by an invading superpower does not apply to the rest, whereas if the territory were controlled by a state, there is only one political center to attack and coerce into submission.

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