As for what I have understood, libertarians (or the "most liberal" stand-point, whatever the correct term is) wants a free market, press, liberty for all, etc. and a small government. That means, as I´ve understood, that everybody, in all circumstances are free to act as they want within the boundaries of the law which is supervised by the as small government as possible. To me this seem to introduce a paradox since as once a company become very large it will begin to act as a "government" and will effect our lives but on the other hand they should be able to act as they want. What is the libertarians view upon this?

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    You are going to need to explain what you mean by, "begin to act as a 'government'" In general, most libertarians would agree with the non-aggression principle (although there are many flavors)which essentially means that no one has the right to initiate force against another. There biggest issue is that the state has a monopoly on aggression, and are the only one that can initiate violence legally. I don't see how size of a company would give a corporation the same power as the state to initiate aggression.
    – user1873
    May 6, 2014 at 12:46
  • @user1873 - I think that the assumption here(because i have heard it parroted by others on the left) is you end up with one large company that owns everything. Then point to haliburton as proof... May 6, 2014 at 20:05
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    @user1873 If a single corporate entity is larger than the state, and the state has no monopoly on aggression, what stops the corporate entity from initiating force if it is in their best interests?
    – anick
    May 8, 2014 at 14:17
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    "and the state has no monopoly on aggression," that is the operative word there. In libertarianism, no one has the right to initiate aggression. Depending upon the particular flavor of libertarianism, corporations would answer to the courts (or perhaps wouldn't exist since the protections granted to them might go away, limited liability and such)
    – user1873
    May 8, 2014 at 14:46
  • Why do you think they would have a problem with large companies?
    – liftarn
    Dec 4, 2018 at 7:41

5 Answers 5


The following is a synopsis and explanation of common beliefs the Libertarian free market philosophy. It is important to understand that Libertarianism is made up of individual philosophies so while I believe this synopsizes the majority's opinion there are certainly discrepancies among individual beliefs, and I am sure some individual Libertarians that disagree with most of this. Libertarianism is primarily about individual freedom, and for many that is far more important than a working economic model.

Large companies with near monopolies are actually enabled through regulations and protections provided by the government. Regulations on how things must be built to meet standards set by the government make entry into the marketplace cost prohibitive to many entrepreneurs. This allows big businesses to simply acquire the very few that decide to enter the market. If you remove this regulation and protectionism, as the libertarian position espouses, the cost of entry is reduced significantly. You get more entries into the marketplace, to many for any few companies to acquire, especially since the majority will fail. This gives more chances for real innovation and competition that allows a small company to grow and become a real competitor in the marketplace.

Another barrier to competition is patents. In a true free market the only protection a company would get to its innovation would be the time from when it is conceived to the time where its competitors find out and adapt their products to take advantage of the innovation. A company could catch up in the market in just the amount of time it takes to reverse engineer and implement it in their own product. This would have the effect that there would be a more diverse selection of products and lowered profit margins which would prevent companies from growing as large as they can today with these protections.

The fact that the artificial controls are removed would make it much harder for a company to grow large and stay successful. This dynamic actually tends to benefit the small specialized company over the large conglomerate.

There are certainly downsides to this market. Quality among a diverse and unregulated group of producers will vary greatly. In this market products that are unsafe are likely to find their way into consumer hands and cause harm at a greater rate than today. Without the regulation there would likely be a greater incidence of misrepresentation of products as well. Testing of medicines and procedures is going to be less costly in terms of money, but the efficacy and safety of these products are going to be less certain, and likely unknown to the average person.

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    I'm still not convinced that large companies won't exist without the interference of some (external) government. There are other barriers to entry than just regulation. May 7, 2014 at 1:03
  • You´re right @user1873, bad choice of words from me. What I was trying to ask was that Chad says. If no regulation at all, a possible scenario would be one large company that owns everything and so would have an effect of peoples lives in just how they live it, not necessarily has to do with violence or anything. Which kind of contradicts the purpose from the beginning. But, as Chad says above, a maybe more likely scenario would be that no one from the beginning (if e.g. patents are taken out of the question) gets this advantage and no one will ever get as big with lowered entry costs. May 7, 2014 at 13:01
  • Thanks @Chad, just wanted a good argument for that matter so I know how to respond to it in the future :) May 7, 2014 at 13:10
  • @SamIam - They can and likely would exist. It is just that smaller companies would do better without the regulation. In an unregulated environment you do not have a GE(multinational conglomerate with ultradiverse product line) because it becomes too top heavy to support itself and react to the market demands. But you could certainly have a Walmart, or Intel. I am also not saying this is true just that it is the Libertarian belief on how it would work. May 7, 2014 at 13:44
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    I'd say that the reputation of intellectual property law is steadily diminishing in the eyes of libertarians, particularly as the ranks of Millenials fill in. The fact that they call it "property" was little more than good marketing. It doesn't help that some of the biggest faces of IP tend to be lawyers sending demand letters to people who are actually engaging in commerce or the arts. Cato has made a number of low-IP statements and Reason has put out a number of low-IP articles. There's generally a libertarian consensus today that IP needs to be looser.
    – NL7
    May 8, 2014 at 15:52

Large corporations do not "act as governments" in the Weberian sense of enforcing a monopoly on the legitimate use of violence.

Governments assert full authority within their jurisdiction, so aside from a few exceptions like customary diplomatic immunity, everybody in the jurisdiction will be subject to governmental authority. It's generally unlikely that a corporation will push into the realm of using a police force or court system to enforce rules against non-customers and non-employees.

One may choose to interact with a company or not (though in some cases there may be a limited range of alternatives). That relationship is generally not present with governments, who generally reserve to themselves the power to decide when to enforce rules and decrees upon residents. That's the most fundamental distinction between governments and non-governments, and that's why it's unlikely for a corporation to simply cross over into controlling the behavior of all residents of a geographic area, without their consent.


Even the largest corporations (e.g., Walmart) are subject to competition, which is a key component of the libertarian philosophy. It is competition which guarantees that corporations do not take advantage of any situation. In the case of Walmart, it has customers to account to; if they do not behave in a competitive manner, they will suffer from declining profits.

There is competition even for Walmart (and anyone who is looking can see that Amazon.com is a huge threat to Walmart if it doesn't learn to compete against them).

Libertarians generally believe that markets are the most efficient allocator of resources in almost all circumstances (there are a few exceptions). The question is one of arms-length transactions in which no one is forced to engage in a given transaction.

Corporations exist at the prerogative of government, and thus cannot behave in a a manner that is contrary to the law. Since government creates its own law, government always operates at an advantage, so there is a fundamental difference between a corporation and a government that can never be eliminated.


At the moment your question does not show any understanding of libertarian theory. In particular, there are two notions that are very vague in your question:

  • The notion that a big company somehow starts to "act as a government"; and
  • The notion that libertarians let people "act as they want".

The latter is completely false - libertarianism clearly precludes a wide range of behaviours (e.g., murder, aggression, etc.) even if a person wants to engage in these behaviours. The former is also false - to the extent that libertarianism allows any government prerogatives (which depends on the particular branch of libertarianism) these are still powers exclusively for the government. It is unclear how you envision a big company starting to act like a government.

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    I would say the way Amazon acts as of late (HQ2 debacle etc) would be consistent with a big company starting to act like an authoritarian body similar to OP's presupposition.
    – Leon
    Dec 4, 2018 at 8:44

everybody, in all circumstances are free to act as they want within the boundaries of the law which is supervised by the as small government as possible.


To me this seem to introduce a paradox since as once a company become very large it will begin to act as a "government" and will effect our lives but on the other hand they should be able to act as they want.

What is there in the laws of a reasonable society that prevents people from providing services to others at whatever scale they are able? Nothing.

Very simply, libertarianism requires us to respect property rights and all other rights. Any property obtained legitimately (through the free market, not theft) is protected under the law. There is no dollar amount or company headcount threshold beyond which the a person's right to own private property or to associate or enter into contracts as he chooses is suddenly (or even gradually) abrogated. The size of a person's contact book, service base, or influence is not a crime. It never will be in civilized society.

If other people feel threatened by him, they of course can implement checks and balances on others' power by becoming more serviceable, more intelligent, and more usefully powerful themselves. In a laissez-faire economy, which is upheld as the only acceptable economic standard by libertarians, everyone is perfectly free and has equal opportunity to do this. Outcomes will be unequal, but there is nothing truly worrisome in any of this unless someone actually violates the law.

So the only recourse if people don't trust their peers with the power and means they have justly accumulated is to start their own businesses and provide service in the free market economy. The check against criminality on everyone's part is to enforce the law against all criminals, regardless of status. However, the moment the people use the government to curb or throttle or divide a business, they are violating the principle of laissez-faire. They become statists, not libertarians. A logical consequence of libertarianism is the conclusion that productivity is not a threat, it is a blessing. If others are so diligent and industrious and virtuous that they are affecting your life for good from halfway across the country, that's a good thing. If you do the same, that's even better.

Businesses are not the government. They never will become the government and will never control the government so long as the law is enforced fairly and equitably, and no one, rich or poor, is targeted. Individual rights are the ultimate separation of powers, and any necessary checks and balances are a function of individual initiative enabled by those rights, not a function of weaponizing governmental targeting and coercion.

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