“The state,” wrote sociologist Max Weber, “is a relation of men dominating men.” I agree. Furthermore, no human being should dominate another human being. Therefore, the state should not exist.

But I’m not an anarchist. How can that be? We have to distinguish between “governments” and “states.” Anarchy is the absence of formal government, and I do not advocate the abolition of formal government.

Governments of all sorts are all around us. Companies and nonprofits have boards of directors with the authority to decide policies for their organizations.

“Very well,” the anarchist may say, “but they do not have direct coercive authority over their members, which is what I oppose.” Yet other “private governments” do have coercive authority of some kind: private security and arbitration companies.

“Very well,” the anarchist may say, “but they do not have a territorial monopoly over the legitimation of the use of coercion, which is what I oppose.” Yet any kind of supposedly private security and dispute resolution system will end up having a territorial basis. Imagine that, per David Friedman’s Machinery of Freedom, you and I are represented by different dispute resolution agencies, A and B, respectively. We end up in a dispute, and we call in our agencies. How will they resolve the dispute? By themselves settling on a third arbitrator. Therefore, any competitive private justice system will end up becoming a single, connected network, with a definite process for appeals beyond a single agency. That network is a territorial monopoly over the legitimation of the use of coercion: a formal government.

“But then what if two networks come into conflict?” the anarchist may respond. “Then you are committed to a global network, a global government, which is obviously undesirable.” Actually, a global government of this kind already exists to some extent and seems obviously desirable. Global governance includes organizations adapted to serve specific dispute resolution functions: the World Trade Organization’s Dispute Settlement Mechanism, various international investment tribunals, United Nations peacekeeping (which the evidence suggests works very well when invited by both sides in a dispute), and so on. Global governance does not constitute a world state, because it exists at the pleasure of the contracting parties: any government may secede from the WTO or the UN whenever it wishes. Yet it is a kind of highly decentralized, functionally differentiated “world government.”

“Very well,” says the anarchist, “I may concede that a loose governance network is necessary, but I still think that membership in the `primary’ dispute settlement agency should be non-territorial. You shouldn’t automatically have to deal with a particular court because of where you live.” Yet territorial exclusiveness is the way that dispute settlement has always evolved historically. There must be a reason for that. If nonterritorial coercive governance has never been stable for long periods (e.g., medieval Iceland and contemporary Somalia), then on what basis can anyone confidently predict that nonterritorial governance must be superior to territorial governance? Only a constructivist rationalist, Adam Smith’s “man of system,” who thinks he can design a new society from scratch, could be confident that some idealized legal system could efficiently replace the only one any of us have ever known. And if we are men of system, then we might as well design a centrally planned economy while we are about it. You can’t confidently claim that anarcho-capitalism will work, while sneering at the idea that socialism ever could.

So if government refers to some kind of integrated, territorially exclusive system by which security can be provided and disputes settled, I advocate government — of a particular kind. But what then is a state, and how does it differ from a government?

If government can be a service provider adapted to the needs of its customers, the state is a government that sees itself as an independent entity with its own goals and interests: a dominator, a predator. A well-designed government does what its members want of it; it is nothing more than their instrument. A state is a group of people ruling over other people, exploiting them in part and conceding only what they must. A state, in Oppenheimer‘s terms, at best sees the citizens as a beehive to be tended, so that the state can take a good harvest of honey. A good government is the servant of the people; a bad government, a state, is the master of the people.

While this distinction is clear in principle, in practice the lines between a non-state government and a state can become blurry. A government delegated powers by its members may develop its own interests and try to break free from the bonds the members have placed upon it. A state originating in conquest may become more associational over time as citizens make demands upon it. Thus, the “predatory-associational,” “state-government” distinction is, in practice, a continuum.

But classifying governments and states in terms of how they treat their citizens would confuse empirical and conceptual issues. Does a state that respects its citizens’ rights somehow lose its stateness, by definition?

For operational purposes, we should not define “government” and “state” according to the policies that they pursue, but according to the fundamental orientation of their institutions. A government is any territorial monopoly on the legitimation of the use of force. A government is more “state-like” the more it possesses institutional features such as the following: 1) large scale with centralized decision-making, so that each individual citizen has little influence; 2) little functional differentiation, so that the same bodies make decisions over a wide range of unrelated issues; 3) no right of secession, so that citizens are forced to remain subject to the government; 4) autocracy, so that citizens have little direct or indirect input in policy-making. Conversely, a state becomes more like associational government the fewer of these features it possesses. In the limit, a purely associational government would not be a state at all, because it would have no highly integrated, centralized, society-independent structure.