I think this discussion regarding democracy vs. anarchy is misguided. It may be more important recognizing where the control of democratic government is lodged. The following excerpts, from the Soverign Individual, make an excellent case that democracy is not in and of itself the primary cause of many of our objections, but rather the means of democracy. -------- WHO CONTROLS GOVERNMENT? The question of who controls the government has almost always been asked as a political question. It has had many answers, but almost uniformly these involved identifying the political party, group, or faction that dominated the control of a particular state at a particular moment. You probably have not heard much about a government controlled by its customers. Thinking about government as an economic unit leads on to analyze the control of government in economic rather than political terms. In this view, there are three basic alternatives in the control of government, each of which entails a fundamentally different set of incentives: proprietors, employees, and customers. Proprietors In rare cases governments are sometimes controlled by a proprietor, usually a hereditary leader who for all intents and purposes owns the country. For example, the Sultan of Brunei treats the government of Brunei somewhat like a proprietorship. Governments controlled by proprietors have strong incentives to reduce the costs of providing protection or monopolizing violence in a given area. But so long as their rule is secure, they have little incentive to reduce the price (tax) they charge their customers below the rate that optimizes revenues. The higher the price a monopolist can charge, and the lower his actual costs, the greater the profit he will make. Employees It is easy to characterize the incentives that prevail for governments controlled by their employees. They would be similar incentives in other employee-controlled organizations. First and foremost, employee-run organizations tend to favor any policy that increases employment and oppose measures which reduce jobs. A government controlled by its employees would seldom have incentives to either reduce the costs of government or the price charged to their customers. However, where conditions impose strong price resistance, in the form of opposition to higher taxes, governments controlled by employees would be more likely to let their revenues fall below their outlays than to cut their outlays. In other words, their incentives imply that they may be inclined toward chronic deficits, as governments controlled by proprietors would not be. Customers The medieval merchant republics, like Venice, examples of governments controlled by their customers. There a group of wholesale merchants who required protection effectively controlled the government for centuries. They were genuinely customers for the protection service government provided, not proprietors. They paid for the service. They did not seek to profit from their control of government's monopoly of violence. If some did, they were prevented from doing so by the other customers for long periods of time. Other examples of governments controlled by their customers include democracies and republics with limited franchise, such as the ancient democracies, or the American republic in its founding period. At that time, only those who paid for the government, about 10 percent of the population, were allowed to vote. Governments controlled by their customers, like those of proprietors, have incentives to reduce their operating costs as far as possible. But unlike governments controlled by either proprietors or employees, governments actually controlled by their customers have incentives to hold down the prices they charge. Where customers rule, governments are lean and generally unobtrusive, with low operating costs, minimal employment, and low taxes. A government controlled by its customers sets tax rates not to optimize the amount the government can collect but rather to optimize the amount that the customers can retain. Like typical enterprises in competitive markets, even a monopoly controlled by its customers would be compelled to move toward efficiency. It would not be able to charge a price, in the form of taxes, that exceeded costs by more than a bare margin. --------