With the spread of the coronavirus, leaders across the United States are dipping into their governing toolboxes—treasure troves of both so-called legitimate and usurped power—in order to attempt to stop the virus’ spread. The federal government has suggested social distancing and quarantining, while states have simply imposed compulsory mandates. Some cry that it is a necessity for the state to intervene, and that the market could not accomplish these measures. This begs the question of whether these measures could occur in a stateless society. Although the measures seen in the present crisis are indeed forced by the arm of government, certain market actors could create the same quarantine conditions, although perhaps not to the same extent. To clarify, none of this is to express a value judgment on the effectiveness of quarantines, only that they could be implemented without a state.
First, let us define what is meant by a “stateless society.” In a broad sense, it is a society that lacks government with an monopoly on the means of coercion. A working stateless society would rest on contractural property rights. In the absence of the state, many individuals would opt to live in contractual communities with rules. In such an order, market actors such as private defense agencies would maintain order through the protection of property rights. The arguably useful aspects of government could easily be performed by market actors seeking profits and therefore striving to provide the best for the consumers.
If there were a lethal threat such as a pandemic, the inhabitants of these property rights–based communities would be unlikely to allow free entry if it were not already prohibited. In the case of a pandemic, the incentive to restrict entry to either individuals’ property or contractual communities would be sizable, effectively leading to self-quarantine for the community.
Though individuals would not find themselves on their own property at all times, each property would have an owner, and they would be pressured to protect those on their premises. This happens on private property today. In the current crisis, nursing homes, housing those most vulnerable to the virus, were already taking precautions and restricting entry before government took action. Some retailers in the United States are implementing precautionary measures to best protect their customers, such as experimenting with “one-way” aisles in order to minimize the risk of customers crossing paths and transmitting the illness. More extreme cases include limiting the amount of shoppers in stores. In the competitive marketplace, producers have a high incentive to attract buyers, and in a pandemic, such precautions would reassure the worried public. Obviously, not all retailers are taking voluntary steps in attempt to stop the virus’ spread, and the same retailers likely would not do so in the absence of the state; however, depending on the hysteria of the masses, those who took the precautions would appear better in the eyes of consumers. If there is a high consumer demand for protection from the illness when shopping, there will be a high profit incentive for retailers to enact the protocols.
Firms specializing in protecting individuals and their property would also take steps to stop a virus’s spread. Today, the firms whose sole purpose is to mitigate losses are insurance providers, and without government their roles would become more prominent. Not only would they pay for losses, but they would have a high incentive to prevent them in the first place. A pandemic concerns illness, and health insurance companies would be the most likely to be affected. In order to maximize their profits and minimize their losses, these firms would take as many precautionary measures as possible in order to prevent a disease’s spread. Since such companies operate under contractual agreements with their customers, they could not simply raise their rates in response to the contagion. They could, however, offer lower rates new customers willing to quarantine and higher ones to those who are not. The firms could entice existing customers with less expensive alternative plans with a self-quarantine requirement. If clients so desired, they could switch plans; the old contract would be dissolved and the quarantine would be required.
It may be objected that this kind of contract would require a state-like, coercive surveillance apparatus to enforce. However, this objection is misguided and ignores the operation of the preexisting status quo: insurance comes with conditions. Suppose someone purchases insurance for their home, and their insurance provider prohibits certain objects—trampolines, for instance—on the premises for liability reasons, as is commonly done. The provider would not incessantly fly surveillance drones over the house, but if a trampoline were spotted under normal circumstances, the property owner would be in violation of his contract and would suffer the consequences. Likewise, in the stateless society, if a buyer has agreed to a condition of quarantine and accepted the cheaper rate, and then decides to have a frivolous night on the town, if caught, he will be in breach of contract. Insurance providers could theoretically track those who break the quarantine, such as by creating a reporting system among the less essential businesses. In more extreme cases, as part of the contract, the firms could require permission to track the customer’s movements in some capacity. Certainly, the methods used by the firms could become highly invasive—if not voluntary tyranny; however, in order to attract more clients, competing firms would attempt to ensure customers’ compliance with the least invasive means possible.
The concept of the insurance firm–enforced quarantine can be applied to production as well. At present, many producers seeking to attract the best workers already pay for their employees’ health insurance. The insurance provider could use the same techniques—stipulating quarantine measures in new contracts or offering alternatives at a better rate—on firm owners, except it would apply to the operation of the firm. In order to keep costs down, precautions against the disease would be encouraged, such as having employees work remotely whose jobs could be performed at home. Production might be rearranged for more space and/or isolation to prevent transmission, and in some cases, employees might be laid off. Although the methods seem unkind to workers, the employed are not working specifically for insurance benefits but for wages, and it is the company and not the worker who secures coverage. It is also important to bear in mind that the firm’s goal is to secure the best labor, and that it will therefore seek to minimize labor cuts as much as possible.
It can be conceded these market policies would not be as forceful as those of government. Some may very well accept the risks and forgo purchasing insurance. But unlike the state, these market actors are pursuing profits by solving problems through the most efficient means possible. If quarantines an effective measure, they will be pursued, and if not, they will likely be rejected. Most importantly, on the market, they will be voluntary and their effectiveness will be judged through the market process and not through state monopoly.
To summarize, the present crisis has brought about new state-enforced regulations—stay-at-home orders, social distancing, etc. Many insist that the government swinging into action is not only a necessity, but that the state is the only organization capable of implementing these measures. In actuality, in the absence of the state, different market actors could replicate many of these protocols on a voluntary basis, and on the market, their usefulness would be judged rather than forced.
