Anarchy, State, and Utopia
"We have explained how, without anyone having this in mind, the self-interested and rational actions of persons in a Lockean state of nature will lead to single protective agencies dominant over geographical territories; each territory will have either one dominant agency or a number of agencies federally affiliated so as to constitute, in essence, one. And we have explained how, without claiming to possess any rights uniquely, a protective agency dominant in a territory will occupy a unique position. Though each person has a right to act correctly to prohibit others from violating rights (including the right not to be punished unless shown to deserve it), only the dominant protective association will be able, without sanction, to enforce correctness as it sees it. Its power makes it the arbiter of correctness; it determines what, for purposes of punishment, counts as a breach of correctness. Our explanation does not assume or claim that might makes right. But might does make enforced prohibitions, even if no one thinks the mighty have a special entitlement to have realized in the world their own view of which prohibitions are correctly enforced.
We have partially explained in invisible-hand fashion the existence of the ultraminimal state. What is the explanation of how a minimal state arises? The dominant protective agency association with the monopoly element is morally required to compensate for the disadvantages it imposes upon those it prohibits from self-help activities against its clients (but might chose not to do so). The agency protects those nonclients in its territory whom it prohibits from using self-help enforcement procedures on its clients, in their dealing with its clients, even if such protection must be financed (in apparent redistributive fashion) by its clients. It is morally required to do this by the principle of compensation, which requires those who act in self-protection in order to increase their own security to compensate those they prohibit from doing risky acts which might actually have turned out to be harmless for the disadvantages imposed upon them."