One of the main arguments that large corporations would not pose a threat in minimal-government libertarian state is that the corporation theoretically has no monopoly on force.

In other words, "A corporation can not force you to submit to its monopoly".

However, this general theoretical statement (assuming it's true) fails to account for one specific scenario (somewhat closely mirroring the issue with "you're free to emigrate from USA if you don't ilke it" situation):

  • You are raised in an area controlled by vertically integrated corporation
  • You get indebted to that corporation by your basic survival needs.
  • The indebtedness - while "voluntarily" entered in by your parents giving birth and raising you there - can not feasibly be escaped, even if you yourself aren't in debt when reaching the age of consent:
    • The wages offered by MegaCorp are too low to pay for the living - OR leaving.
    • They squeezed out all the competition from local area due to owning all the land or offering cheap services at cost so there are no other employers in the area.

So, while the corporation does not commit acts of aggression, you are essentially forced to work for them against your will, with the ONLY other feasible choice being to not pay your debt and get thrown in jail, or starve to death.

How do libertarians (classical liberals) address this case of "I sold my soul to the company store"?


  • I'll accept the answer based on any flavor of libertarianism (except left wing libertarians in the mold of Matt Zwolinski).

  • Ideally the answer should cover the approaches by all main strains, unless the answer is invariant to all of them.

  • I'm NOT interested in the the non-answer of "this flavor holds that such vertically integrated monopolist MegaCorp can not theoretically arise in a libertarian society". For one thing, it's possible if a bunch of people LIKE the idea and choose to form a commune in a form of such corporation voluntarily (ala Kapitalist Kibbutz, or Google :)

  • The answer should preferably be sourced/referenced from libertarian scholarship.

This is somewhat related to this Q but different.

  • Comments are not for extended discussion; this conversation has been moved to chat.
    – Philipp
    Sep 14, 2017 at 14:05

4 Answers 4


I know you said no answers of the form "that can't exist", but surely a direct quote from Mises himself is an exception.

It's way too long to post here, but since it's in a published book that will likely exist forever, I think a "link only" answer with a page number should be okay. See page 630 of Human Action here (actually page 654 by the PDF's numbering): https://mises.org/books/humanaction.pdf

Beginning with:

The abolition of slavery and serfdom is to be attributed neither to the teachings of theologians and moralists nor to weakness or generosity on the part of the masters. There were among the teachers of religion and ethics as many eloquent defenders of bondage as opponents. Servile labor disap- peared because it could not stand the competition of free labor; its un- profitability sealed its doom in the market economy.

In summary, the argument is: you can only coerce minimal effort to survive out of people, anything more must be bought by mutual exchange. Other firms with voluntary workers have the advantage of having workers who are incentivised to do their best, rather than the bare minimum. The use of capital requires nontrivial effort, so the voluntary workers have an advantage in using it. With the advance in capital accumulation (think of that as an efficiency multiplier or a cost divisor), eventually the cost of voluntary labor, when the cost divisor of capital is accounted for, falls below the cost of slave labor. Then the slave firms go out of business. So, it isn't necessarily true that slavery can never exist. Just that it can never continue forever; eventually capital accumulation will catch up.

  • 1
    That Mises guy needs to learn a little bit about the world. There are more slaves today that at any previous time in history.
    – User65535
    Feb 26, 2023 at 18:40
  • That article is expanding a definition for political gain. If you were to include “forced marriage” in past definitions of slavery the the per capita of past slavery would be much higher. Beyond that you can not use current courts as a means to compare past counts directly as the total population has expanded dramatically which in turn has helped lower per capita rates. Oct 5, 2023 at 8:45

Here's the short answer: contracts.

For the long answer: one of the keystones of libertarianism is the non-initiation of force. The other keystone that's relevant here is voluntary association through contracts. There are circumstances under which individuals should be considered incapable of participation in contracts. Here are a couple of scenarios:

  • Children need limited exemption from contracts. For example, a 5-year old can be considered qualified to handle small amounts of money for buying items like candy, bread, etc. but not rat poison.[1]
  • Everyone needs a limited exemption from contracts when they are drunk, drugged, groggy, etc. Otherwise, a robber may break into a self-drugged home-owner's house and ask for "permission" to take away some its contents. The owner house may "agree", but that can't be considered a voluntary association.[2]

With this in mind, let's look at the scenario you brought up:

  • You get indebted to that corporation by your basic survival needs as you grow up

No, if such a situation arises, it's the parents who become indebted. The child can't be considered capable of consenting to major life decisions.

  • The indebtedness - while "voluntarily" entered in by your parents giving birth to you there - can not feasibly be escaped.

The parents may even sign up for indentured servitude, but they can't sign their children into it.

Q. What about the situation where indebtedness can not feasibly be escaped, even if you yourself aren't in debt when reaching the age of consent

I have no literature for this, but judging by current events, when living in one country becomes insufferable for some people (as it is for some Mexicans, Cubans Burmese, etc.) people escape despite the risks of the journey. This works as long as there are relatively friendly destinations for the emigrants. So, for a teenager who is about to come of age, such an escape could be an attractive option.

There's another way out: many people in first-world countries have a strong preference for fair trade goods, even if such goods are sometimes more expensive than other options. This is a live demonstration that non-governmental agencies can do a lot to correct iniquities. Social movements have been quite effective in getting companies to be more eco-friendly. For example, Greenpeace (an agency that I agree with about half the time) has a large list of its successes. Some of those "success stories" involved making new governmental regulations, but others worked by just generating a lot of negative publicity for their targets. Naturally, the negative publicity let many customers to boycott certain companies. NGOs could play an analogous role in a laissez faire economy too, and get an ironhanded libertarian society to be more lenient.

I am not saying that these methods are fail-proof, and are guaranteed to fix all that ails a libertarian society. I am saying that these examples show that there are methods consistent with a free-market ideology that have been known to fix some such situations.

Footnotes: The paper by John Hospers, Libertarianism and Legal Paternalism, touches on some of the aspects of exceptions to consent that I explained above.

[1] When the twelve-year-old is offered some L.S.D., with the invitation "It'll give you a wonderful high," he may accept it eagerly, just as a baby might play with a stick of dynamite or a loaded gun. For this reason, contrary to what some libertarians apparently believe, all such invitations by others should be prohibited by law, for the child's protection. The child cannot give informed consent, much less "educated consentn-and those who would take advantage of the child's incapacity should be met with the full force of the criminal law. To say of the child that "after all he gave his consent" would be ludicrous if its consequences were not so tragic.

And the following describes a more outlandish situation than what I described above, but the motivation in both cases remain the same: that there are situations when people should be considered incapable of giving consent.

[2] A person may be mentally deranged; but lacking this extreme, he may be in a daze, or drugged, or in an acute state of grief or depression, or just simply confused. Ordinarily when a person is in such a state he can hardly be described as "fully informed," and so his action would fail of voluntariness by the second criterion.

  • Where in libertarian literature can those two "scenarios" be sourced? Nov 13, 2014 at 17:16
  • @Mr.Bultitude If you're looking for journal papers, I recommend looking beyond just libertarian literature. Consent is a fairly large topic in itself, and quite a lot of the literature on it (whether written by libertarians or not) is applicable here.
    – prash
    Nov 13, 2014 at 22:18
  • It's not applicable if libertarians disagree though. I'm just wondering if you can demonstrate that libertarians agree with those principles. Nov 13, 2014 at 22:53
  • @Mr.Bultitude I have added citations and extracts for some of the aspects of my point. But which principles did you mean exactly when you wrote "that libertarians agree with those principles"? Keep in mind that libertarians disagree with each other about plenty of things.
    – prash
    Nov 13, 2014 at 23:49
  • 7
    It's a very good well sourced answer, but I'm afraid it answers more of a loophole in the question setup than the spirit of the question. Let's say the child in question is NOT in debt, simply has no inheritance from parents who are in debt. The child turns the age on consent today. They have 2 choices: starve (perhaps while attempting to flee the area), or enter into a contract with MegaCorp that puts them in "sold my soul" state from the get-go.
    – user4012
    Nov 14, 2014 at 20:33

The idea of an transferable and enforceable debt is contrary to the anarcho-capitalist philosophy that is primarily cited as the backbone of libertarianism. The primary fundamental priority of liberatrianism is freedom. So the idea that there could be a debt that was inescapable and that the corporation could enforce servitude based on this is contrary to the philosophy.

The only allowable punishment for defaulting on the debt would be the refusal of service, and perhaps the confiscation of property in lieu of payment. So the corp could refuse to sell or provide service to someone who was in debt to them but they could not force them into a effective slavery situation.

That does not mean that a person has a right to their standard of living. Liberatrianism is strong on the rights of the individual to liberty but very weak on the rights on the individual to property that is not theirs. You have the right to choose to starve, but you do not have the right to steal food from someone else because you are starving, regardless of how much food, or money, that person has.

So their could exist some structure where a mega corporation owned enough property to effectively hold a monopoly on a region. A person would have the right to walk away, but they would not have any right to assistance in doing so. The mega-corp would have no obligation other than not to impede the attempts of the individual to leave.

Update from comments:

If they take away your 100% possessions and own all the land around (and thus consumable resources) how are you going to PRACTICALLY PHYSICALLY leave the area? You'll die of hunger while walking, and can't afford transportation on MegaCorp's buses (and they didn't permit any other companies to run transport on their land).

They do not own your neighbors and friends. If you failed to play the social game of life well enough that you do not have friends that will help you out, then you have failed an important part of human existence. If you are so reviled that your neighbors would rather watch you starve to death before their eyes, than help you get out of the MegaCorpopolis, then you must have truely failed in life.

The libertarian view is that people should not be forced to help others, not that they should never help others. Before it ever got to the point that someone was going to lose everything their friends should have been around to help them out. There would be charities that exist based on the voluntary gifting, just as exist today. In fact history has shown that in times of great need there is great charity. So the answer to how to deal with people falling through the cracks, is to allow charity to step in and solve that problem. And when the charity is in need, then to step up and help the charities.

  • 6
    " So the idea that there could be a debt that was inescapable and that the corporation could enforce servitude based on this is contrary to the philosophy." - that's what I meant "theoretical" vs "practical". If they take away your 100% possessions and own all the land around (and thus consumable resources) how are you going to PRACTICALLY PHYSICALLY leave the area? You'll die of hunger while walking, and can't afford transportation on MegaCorp's buses (and they didn't permit any other companies to run transport on their land).
    – user4012
    May 30, 2014 at 18:11
  • 2
    Imagine MegaCorp owns all the land around, (so that walking away is trespassing, and either leads to a shotgun or jail), affordable public transportation is non-existent, private transportation is too expensive, the only road out is a highway where walkers and hitchhikers are arrested. MC co-opts any spirit of great charity by advertising their bigger charity, which absorbs most donations, and gives loudly to a randomly select few, but spends most of the money on overhead. MC blacklists those who don't like their terms, and fires employees for fraternizing with them. A company town...
    – agc
    Sep 12, 2017 at 6:00
  • While the first part nicely describes the ideas behind Libetarianism the last two paragraphs are quite weak and rather subjective. If charity can step in in sufficient amounts under all circumstances may or may not be the case and outright claiming that one has failed if one has no friends ... may not be a generally accepted opinion. Sep 12, 2017 at 11:05
  • AGC - That is trampling on basic human rights. but yes its a potential but the reality is evil megacorp doesnt get big enough to do that in the real world because people stop spending money and evilmegacorp-mart. Dont believe me? Ask wal-mart. Sep 13, 2017 at 1:04
  • @Trilarion - I did not say they failed. I said they failed at the social game of life. Just failing one class doesn't get you kicked out. But its definately putting you behind the cum laude curve. Sep 13, 2017 at 1:08

The question implies, that it's possible for a corporation to enslave you long before you are an adult capable to leave.

I don't see how it would be allowed to a child to become indebted. You still need to be of certain age to sign such contract.

To dispossess everybody, the corporation in question would have to buy all land, private and public, so that you cannot leave the corporation in any way. Just like the state does currently.

Is it theoretically possible for one entity to capture entire land within a given country? Maybe. But will it really happen? I doubt that specifically because, if one company buys enough land, the land becomes very expensive overall.

Therefore all the landowners, such as farmers and home-owners, also get a big advantage. They are able to rent living space to others cheaper than the corporation in question, with less administrative overhead. They are able to farm food cheaply as well (because you can still buy fertilizers or machines). And as a premium, they could enjoy the good PR of being a small, local producer, unlike the powerful mega-corp.

Sure, there are advantages of scale, but there are also disadvantages of scale, and technology may also be acquired by small players.

With some training, you can go to the stock market and out-perform big hedge funds, as Wall Street Bets shown us recently.


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