On Enslaving Prisoners of War to Defend a Stateless Society

How private militaries could finance their campaigns on the back of POWs

Without doubt, one of the chief issues with anarcho-capitalism is its apparent inability to finance national defence. The basic problem is the inability of private armies to exclude nonpayers from receiving the benefits of their services results in it being rational for everyone to free ride. Most therefore free ride, and, hence, no defence services are provided, or, perhaps, they are, but at a suboptimum rate. I contend this problem of sub provision can be partially overcome by private militaries raising funds by selling bonds and taking out loans, which could then be secured against the incomes of prospectively enslaved prisoners of war. Let us now consider this proposal in more detail.

It must be assumed throughout this discussion the private militaries of the relevant anarcho-capitalist country are fighting a just war, i.e., one of self or other defence. Only by fighting these types of war can they enslave prisoners of war with the warrant of morality. Why is this the case? Well, it stands to reason if murder, rape and theft are all punishable when committed on a one-to-one basis, the mass murder, mass rape and mass theft which constitutes warfare is punishable too. It makes no sense to maintain a murderer should be punished not at all or to a lesser extent simply because they murder in a large group. Under this logic we should treat members of criminal gangs more leniently than lone criminals simply because they commit crimes with their gang. This is an absurdity, hence, analogously, soldiers should be no more exempt from punishment than criminals either. Indeed, invading soldiers simply are criminals.

Murray Rothbard’s theory of punishment consists of two elements, first, the criminal must return what has been taken from the victim, second, on top of this, what the criminal has taken must itself be taken from him. For example, if a pilot drops bombs on a weapons factories creating $10,000,000 of damage, he must be forced to restore the owner to his original condition, by paying back at least $10,000,000, and, then, be forced to pay up another $10,000,000 for the wrong he has committed. The principle may be summed up as ‘two teeth for a tooth’. This has established victims have claims against invading forces. However, I suspect many will claim the issue with this punishment theory is many soldiers, if captured, will simply not have the money to pay up. No doubt, this is true for many.

Soldiers who are captured can still be enslaved and made to pay back damages to their victims though. No victims should be forced to bear the cost of injustice when those who have perpetrated it remain alive, they should be used, as they used the victims themselves, to ensure maximum restitution is made. As Immanuel Kant writes, the criminal must be ‘reduced to the status of a slave for a certain time, or permanently’. This slavery should not be total though, e.g., it should remain impermissible to torture them. Moreover, those soldiers who murder should be subject to the death penalty, for in the word of Kant once again, ‘there is no substitute that will satisfy justice’, he who has taken life, must have his life taken too. Here ends the outline of why it is permissible to enslave prisoners of war; we can now turn to the business model of private militaries.

German POWs in Britain during the Second World War helping with the harvest

Private militaries will have two means through which to acquire claims, i.e., rights, to restitution payments. First, they will probably contract in advance with their soldiers for them to hand over any rights to restitution they may acquire in battle, e.g., by being murdered or put under attempted murder. This will permit the companies to enslave the prisoners of war instead of each soldier doing so by himself. Soldiers would give up the opportunity to become slave-owners because not giving up these rights would make the maintenance of armies very much harder, and, hence, to ensure they could even be soldiers to begin with they will probably agree to give them up. 

Second, private militaries may acquire restitution rights off members of the public, e.g., for physical injury and property damage, in exchange for protecting them from invasion. This will permit them to enslave more prisoners of war as not all invading soldiers will have violated the rights of their men. Would there be free riding on the following sort? 10 Morton Rd may be aware 9 Morton Rd have given up any restitution rights they may receive in exchange for protection, meaning they will benefit from their protection almost as much, and, thus, not exchange their own valuable potential restitution rights in advance for protection themselves. Instead, 10 Morton Rd will hope to end up with an enslaved prisoner of war themselves, therefore, as I will explain momentarily, depriving military firms of vital funds to fight the war, and, indeed, capture the prisoners of war in the first place. This would result in a seriously suboptimum provision of defence services.

This is unlikely to occur as military firms could simply announce in advance, they will refuse to help such free riders from ever acquiring and holding slaves, so, they would be no benefit of the sort the residents of 10 Morton Rd imagine. I should add here, given executing prisoners of war is not much good to companies, they will also most likely require prospective victims give them the right to enslave, as opposed to execute, those soldiers who have murdered or attempted to murder, i.e., most of them, too.

I have now established how private militaries could acquire extensive rights to enslave prisoners of war. This seriously helps overcome the public goods problem, because, instead of relying on potentially non-existent customer payments, due to free riding, prisoners of war are forced to pay for it instead. Now I suspect many may be wondering how private militaries are supposed to support their operation if it is only after the war they are able to even begin collecting payments from prisoners of war, assuming they win! I contend they should be able to sell bonds and raise loans which they secure against the future income stream of their slaves. The present discounted value of the estimated income they will receive from their prospective prisoners of war, with an appropriate profit margin deducted, would be the budget they would seek from investors and banks, multiplied by the chance of victory in the war (which is partly covariable with the extent of borrowing granted), and considering the counterfactual of how bad the occupation by the enemy would be. No doubt those staking out their capital will take into account many more factors than these, nonetheless, they are the basics. 

Now, how exactly will enslaving prisoners of war work? Private militaries will want to maximise the returns on their slaves in order to pay of their debts and then make profits fast. Setting up prisons and working them in those will not be profitable. Instead, I maintain they will allow the slaves license to live their life pretty much as they please and only require they give up the percentage of ‘their’ income which maximises their own company returns, i.e., the peak of the Laffer Curve. In essence, slaves would be in the condition of taxpayers today, but, perhaps, restricted only to well-paying jobs. Now I can understand victims not being too happy with this arrangement, but it is better to have this situation than the invaders win, which would be more likely without the scheme.  Moreover, private militaries could even encourage mass defections from invading forces by offering deserters slave arrangements with lower rates of income seizure than the country from which they have come.

German Prisoners of War during World War Two having some fun

I suspect many readers will be itching to know how much money this scheme could raise. Some very rough back-of-an envelope calculations for loans which could be generated at the prospect of enslaving 1,000 prisoners of war, each earning an average American wage of $77,463, confiscated at 40%, with a discount rate of 5.42%, the average rate of interest from 1971-2023, and no inflation, suggest $531m could be raised, for 10,000 slaves, $5.31bn, and, for 100,000 slaves, $53.10bn. Importantly, these figures are not weighted by the chances of war being won. Even this adjusted sum may still be conservative though due to the use of the average wage, which is likely suppressed by the female element, and, the fact private militaries may be able to squeeze more out of their slaves, or, force them into higher income jobs. It should be noted a conflict as small as the Falklands War created 11,314 captures for the British.

Will this method of financing private militaries cover all their costs? Probably not. However, such funds could be sufficient for the financing of a full-time officer class during war. Indeed, up to 6,912 officers could be employed on the back of 1,000 slaves at their current salaries. This group could in turn go onto command ‘a large militia of amateurs’, as David Friedman has put it, in wartime. Where would these amateurs come from? Friedman maintain stateless societies could train ordinary people on paintballing days, which they already pay for today for leisure, solving the financing issue, and, which given this new purpose, would definitely see increased uptake, ensuing a large force. And in regards to funding weaponry for the militia it is reasonable to expect a libertarian society will already be well armed, only consider the fact the US has 120.5 firm arms per 100 people today.

It is not possible to address all the problems with this partial solution in this short article, nonetheless, one critique warrants rebuttal. This is by having so many prisoners of war within your country there is the potential for them to launch a rebellion and carry on the invasion, which is reason to simply keep our status quo. Besides significant ethical concerns to keeping the state, this argument faces two problems. First, with stateless societies having no political system to capture there is no easy means through which they could take over. Second, provided the prisoners of war are spread out, any violence on their part could be quickly dealt with by private police. Moreover, with the private militaries having every incentive to maximise their return on their slaves, it stands to reason they will ensure they become happy, and, hence, fully integrated members of society. Hopefully, after having made friends, partners, and, eventually, family within the country, they will no longer want to undermine the libertarian society anyway.

Nonetheless, let us assume they still despise their slave masters in the private militaries and pose a serious threat to the order of the stateless society. I suggest it may be possible for the private militaries to transfer their slaves to other countries where their respective states could collect the payments (via their tax systems) in exchange for some small payment from the private militaries. Where the prisoners of war are so split up, they are unlikely to cause trouble, for, remember, they are only having some of their income taken from them, which is just like the income tax they will have been used to paying. I think it is unlikely no country whatsoever will be sympathetic to the libertarian society, and, thus, it is reasonable to suppose at least a few states will take up the offers of the private militaries.    

Defending a truly free society is always going to be tough, nonetheless, I believe financing private militaries by enslaving prisoners of war should make this task considerably easier. Will it finance all war expenditure? Almost certainly not, yet it remains a step in the right direction, and crucially it offers the potential for the funding of a professional class of military officials, something which may well be vital in directing any voluntary militia. At the very least, it makes anarchism just that bit more plausible.