Yes, every four or five years, a single government is elected that does every single one of the thousands of government functions. Voters don’t perform a careful analysis of how efficiently these thousands of fuctions were performed compared to the previous ruling party. Since these governments also have the power to make various laws with sweeping societal effects, here’s what actually happens:

Thus the incentive for the branch performing each function to do so efficiently is extremely small. A highly specialized and efficient agent is hindered by having to join, obey, and share in the outcomes of, this inefficient behemoth. In a libertarian system, the sole function and power of the government would be the enforcement of the NAP. This is best done at the local level.

The best government for each region can be elected, as opposed to the best one averaged across all regions. Any subjective laws passed will be based on local opinion, eg., laws protecting those incapable of consenting (children, the mentally disabled, etc.), laws against endangering others' safety, etc. Most importantly, people gain the freedom to choose – they can more easily move to the state/city with their preferred laws and government, than to countries. This is why libertarians want powers transferred from the federal to the local government.

Democracy allows the majority to forcibly impose their will on the minority. Libertarians propose limiting the powers of the state to counter this, but the unfortunate truth is that a system not supported by the majority cannot sustain itself without tyranny. People will eventually get rid of the current government and laws, even amend the constitution, if needed, to get their way. Thus it is impossible to maintain libertarianism by restricting voters or their power.

To achieve a libertarian country, either the majority of people in an existing country must be convinced of its merits, or libertarians must come together to form a new nation. And if the majority is libertarian, they will vote as such, maintaining a minarchy.

The current system is dominated by government action, so fixing problems often requires even more government action. For instance, as long as companies benefit from government aid and intellectual property, they should also be subject to antitrust legislation. This does not say anything as to the feasibility of a fully libertarian system. Moreover, private entities take time to develop, so immediately dismantling entire government institutions may not be the best move, which is why suddenly cutting subsidies/welfare would hurt a lot of people.

Anarcho-capitalists advocate for private (self/community/corporate) enforcement of the NAP, thus eliminating the government entirely. Doubts as to whether this will leave more people unprotected than a government, keep many from supporting it, but this minarchist FAQ can be extended into an ancap one if/when sufficiently convincing arguments are collected.

If you’re literally penniless and need immediate funds, see the section on welfare. Only join companies that allow employees to unionize. If enough people join the union that there aren’t enough non-unionized empoyees left, the employers will have no choice but to yield. Of course, if there are more people trying for jobs in a profession than are needed, there will not be enough jobs for everyone, regardless of unionization, and wages will be low, as people are forced to compete against each other for the jobs. In this case, some people just need to pursue different jobs (if you have no other skills, invest in education) and libertarianism is simply preventing wasted human effort. On the other hand, if there are enough jobs and most people still don’t unionize, the conditions must not be so bad after all.

There are several ways to make a profit, life would be pretty boring otherwise. Examples include:

• brand prestige, goodwill, loyalty

• the network effect

• walled gardens

• switching costs

But none of these factors are so powerful that a company in a free market can extract exorbitant profits from a customer unwillingly paying with no better choice. Note that intellectual property would not exist in a libertarian system. Of course, people sometimes buy products/services without doing their due diligence or simply not caring enough about vendor lock-in, ease of repair, user freedom, etc., and later face difficulties, but that is simply the consequence of their own decisions.

Libertarianism is not an all-or-nothing philosophy. Different libertarians advocate for different levels of government intervention. An actual emergency, eg., an invasion, civil war, major calamity, etc. may or may not require significant government action. Either way, this FAQ aims to show that barring such extremely rare situations, which can be handled then as necessary, libertarianism works, and therefore they are no reason to forgo libertarianism altogether.

To show this, we go through situations where it seems like the free market would be unfair, and explain why these won’t be an issue.

If you believe unverified information, you will lose money.

Insider trading can discourage investment, and cause CEOs to hide information from employees. While there have been arguments that insider trading makes share prices more quickly go to their proper value, the true solution is that if investors dislike insider trading, companies can legally declare that they will only work with those that legally agree not to trade its shares or facilitate insider trading. If someone unaffiliated with the company simply overhears or comes across insider information, this won’t stop them, but even if it were illegal, it would be nearly impossible to prove such a case.

As mentioned in the section on unions, the inability to negotiate higher wages is due to excess workers competing.

[…] if there are more people trying for jobs in a profession than are needed, there will not be enough jobs for everyone, regardless of unionization, and wages will be low, as people are forced to compete against each other for the jobs. In this case, some people just need to pursue different jobs (if you have no other skills, invest in education) and libertarianism is simply preventing wasted human effort.

Of course, wages won’t go beyond the profit each worker can generate, but that shouldn’t be the limiting factor for the vast majority of jobs. If it is, and not enough people are willing to work for those wages, the companies will have to come up with some way of improving worker productivity.

Yes, most of the very rich have acquired their wealth through unfair means, be it through unfair government action like intellectual property, subsidies, bailouts, low-interest loans, etc., or violence, historic or current. Regarding pure socialism/communism, there are several concerns as to its actual outcomes – this FAQ does not currently try to cover these, opting instead to argue for the general superiority of libertarianism. Moreover, a war to fully redistribute the riches of the wealthy will likely never happen, and will cause great devastation if it does. But in a libertarian system, there are also reasons to oppose any significant amount of wealth redistribution.

In a libertarian society, even if everyone started out equally wealthy, some would end up richer than others, as people of differening competency and diligence should. But libertarianism makes things fair even if some are very wealthy.

One who owns a lot of resources can rent or loan it to others without much additional cost to themselves, and make a percentage return. But by making them compete with other rich people, assuming resources are plenty, the ones that offer it for the lowest price, ie., makes the closest to zero profit, will get all the customers.

As for why even partial wealth redistribution isn’t preferred in a libertarian society, note that the company that provides the customer with the most value for their money wins. The riches of a wealthy person are assets to be used to finance their business, even if turned into houses or jewelery, as they can be liquidated when needed. Taking these away proportionally to one’s income, punishes the best company, which is counter-productive. If a lot of income is turned into stuff like parties and luxury vacations, they aren’t being very efficient, and will likely be replaced quickly in a free market. If not, that means people who can afford it are willingly transferring their money by overpaying due to their affinity for the entity, in which case, libertarians would argue they have every right to spend that fairly earned money.

Besides the libertarian argument that one has the right to transfer their property to anyone they want, including their family, note that children have been raised and molded by the parent from birth, knowing that they will inherit the family business. As weird as it might seem, simply consider them a continuation of the dead parent; they will now continue administering the business. Then the same arguments as above for respecting private property apply.

By the Kickstarter model – if a large enough number of people agree to pay your desired price, you take all their money and give them all the product. Otherwise no one’s money is taken and the product is never released. This latter condition is needed so people don’t just wait for cheaper copycats.

The latter situation isn’t a novel scenario, the company miscalculated the demand, spent resources developing a failed product, and will have to eat the losses, something that happens all the time, regardless.

Let’s say company X spends $14M to discover an amazing new production method, and starts using it to sell cheaper/better goods in the market. Big company Y decides to spend tens of millions to discover it themselves, and at great speed, hiring many scientists, and conducting lots of trials simultaneously. It looks like it’ll take Y only 60 weeks to make the discovery, and 20 weeks to bring it to production.

Within that time, X realizes they won’t be able to make $14M profit. So they decide to sell the discovery to Y for $12–14M on the condition that Y waits 40 weeks before launching the product. Y agrees, because they save time and money. During those 40 weeks, X makes $6M profit, bringing their total to $18–20M. The $4–6M is a more than excellent return for the time X spent discovering it.

Now that both X and Y have the discovery, they can either compete against each other, in which case all is good, or they can act as one and fix prices. In the latter case, big company Z decides to spend tens of millions to discover it themselves and beat XY’s pricing, in which case the story repeats.

The use of exact numbers makes it seem like this example is attempting to fool you somehow, but the only essential part is another company having the capability to rediscover the method. They won’t even have to try, Y can just offer to buy it, with the implication that they will go all out trying to rediscover it unless X agrees to sell. The possibility of an employee using anonymity technology and leaking trade secrets, with no way of catching them or recouping costs even if you do, further motivates companies to sell.

Thus no human effort is actually wasted discovering the same thing multiple times. Now things might not work out this way all the time, but in a free market, it will the vast majority of the time, and the overall outcome is what we should care about. Remember, the alternative we’re trying to prevent is one company being able to charge whatever price they want for a potentially must-have discovery, for decades.