Privatize National Defense

Any reader will likely be very skeptical of the idea that the private sector could provide something as large and as important as national defense. How could it be financed? Who would set up its infrastructure? Wouldn't private defense agencies cut corners to increase profit? These are all valid questions that we will address specifically regarding their application to defense. But these doubts also beg the question as to how ANY quality service is set-up and financed on the free-market? Certainly food is a vital commodity, but theory and history have shown us that government-run food production is a sloppy, inefficient, and typically corrupt service. On the free-market, food growers and merchants must be willing to provide quality food at a reasonable price; if they do not, they will lose their customers to competing merchants. This is the essence of the free-market: delivering a high-quality and demanded product or service at a competitive price. This principle fits as aptly for national defense as it does for food production. If the government ceased to provide defense services, entrepreneurs would step in to meet demand. Open competition among the private protection agencies would ensure that they remain plentiful, efficient, and affordable. These defense agencies may range from neighborhood watches to large insurance firms coordinating with each other over a region. Each individual would pay for or volunteer in the protection he desired. A farmer in Kansas may be content with just having a personal rifle handy. A factory owner in Texas may hire round-the-clock guards to patrol his property. Pacifists would not pay for any protection(nor be forced to pay for it through taxation). At this point a skeptic may say "Okay, I can see this panning out at a local level, but how on earth would individuals provide vital military hardware like tanks, jets, mortars, etc.?" This is a valid argument worth exploring. It is true that several hundred neighborhood militias would be quickly overrun by an invading army, but to limit private defense to "neighborhood militias" would be to grossly underestimate the financial and infrastructure capabilities of a free-market. In the absence of government armies, the most likely candidates for the coordinating of large-scale regional defense are insurance companies. Individuals would be able to pay monthly premiums for "War Insurance" for themselves and their property. For every dollar of damage done by a foreign invader, the insurance company would be obligated to repay to the victim. It is immediately plain that, wanting to protect profits, insurance companies would have a huge vested interest in preventing a foreign invasion. They can dramatically reduce the probability of having to pay war damages via maintaining an investment in a defensive readiness of tanks, jets, troops, etc. And since it would be in their interests, it can be expected that the different insurance providers would combine their efforts to ensure repelling the foreign army. This full-time readiness force combined with an armed populace, would be a nightmare for any invader. This system would encourage moderation and efficiency, a stark contrast from government defense. Rather than losing money because of an attack, government armies receive MORE money, which presents a very dangerous incentive for them to allow or even to intentionally incite foreign attacks. On top of this incentive, government armies also have no profit-and-loss mechanism to measure their actions by. How big should the army be? How big should the navy be? What weapons should be used? Where should the troops be deployed? How can governments answer these questions in any way that is not arbitrary guessing? Any waste by an insurance company would immediately affect profits and quickly be corrected, government can not do this and can bumble along wastefully without realizing it for long periods of time.