Begin with what I'll call a “hyper-minimal state.”
- It claims a continguous territory, but the territory for which it is responsible is very small: perhaps between 50 and 2,000 sq. km.
- There are no restrictions on emigration or immigration.
- Anyone whose property is contiguous with the border may secede at will.
- The state performs only two functions: it operates a police force and a court system, with the latter responsible only for resolving property, tort, and contract disputes.
- One of the state's courts will hear a case regarding a property, tort, or contract dispute only when the parties have already obtained a decision from a private arbitration/conciliation/mediation entity regarding the dispute and wish to appeal it.
- The only role of any of the state's courts with respect to an appeal from a private entity's decision regarding a dispute is to determine whether the parties consented to the jurisdiction of the entity, intended that it be final, and received a clear decision from the entity consistent with the substantive and procedural rules regarding which the parties agreed when entering the dispute.
- The only role of the state's police agency will be to prevent or end the use of force associated with the attempt to resist a judgment by a private arbitrator/mediator/conciliator or to protect someone's person or property against an attack not carried out under the color of law.
- There is no system of taxation. The police force and the court system are operated using a combination of user fees, donations, and volunteer work.
- There are private for-profit, not-for-profit, and volunteer security providers with whose operation the state ordinarily does not interfere.
The interesting question, I think, is, In what does this putative's state's identify as a state consist?
It's not in the limitation on the right to secede. After all, if there were nothing that qualified on other grounds as a state in operation in a given territory, it's not clear what secession would mean: there would be nothing from which to secede.
So: is this putative state a state? Would it qualify as a Randian “final arbiter”? Is it ultimately different from a protective agency and, if so, how?
I have some instincts about this, but before articulating them I'd like to know how readers react.