I don't disagree that excessive centralization stifles economic activity. I also don't disagree that it's possible for markets, at least at some level of functionality, to operate without the involvement or perhaps even the existence of government(s). Furthermore, I agree that the economy of the United States would be better off with fewer laws, regulations, and taxes than it currently has.

However, I seriously doubt that totally eliminating all governments would result in greater economic activity and higher levels of prosperity and well-being for the inhabitants of the planet. That's a pretty hard case to make and the fact the some economic activity has occurred parallel to governments isn't adequately convincing.

I haven't yet read Leeson's essays, but since they're free, hopefully I'll get to it. Maybe those essays will convince me.

It may be that everybody would be better off if they each voluntarily respected property rights, upheld their ends of bargains and didn't go around killing people to take their stuff. But, all you need is one guy to decide "I have the bigger gun. I'm going to take what I want and nobody's going to stop me," and the whole system breaks up as others follow suit.

So, what happens? Well, everybody else gets together, decides "This isn't working. We need rules. And we need to kill that guy with the gun." So, they go capture him or lock him up or something, and scare others into following the rules.

And, that — a set of rules backed by a threat of force — is a government.

Now, I'll agree that we could do away with huge portions of the US government, and markets would still work. But, you can't get rid of things like common law (both civil and criminal) and a system to enforce it, the police and the military. Or, rather, you can get rid of those, but then you need to come up with substitutes.

Am late to the discussion that you kicked off.

I am with Don 100% on this. Free markets do not need government but they do need law.

A form of government that provides law but not intrusive government is Kritarchy.

"Kritarchy is a political system based on equal justice for all and the concept of natural rights. It differs from other political systems by its application of the rules of justice. Under kritarchy even courts of law, police forces and other organisations that look after the day-to-day business of maintaining law, are denied any power, privilege or immunity that is not in conformity with natural law. Every person is entitled to offer judicial or police-services to willing others; no person can be forced to become a client of any court of law or police force against his will. In short, under kritarchy judicial and police-services are offered on a free market, which is considered to be the natural law of the human world insofar as exchanges of goods and services are concerned."

The ancient Jews lived under Kritarchy successfully for centuries, but then got stupid and clamored for a King.

After the U.S. pulled out of Somalia in the early 1990s, instead of chaos, order emerged under Kritarchy and the ability of wartorn Somalia to prosper in peace amazed observors.

However:
The U.N and individual nations simply could not stand the thought of a nation not having a central government and have been operating doggedly to install a central government and war/conflict and poverty are returning to Somalia as the U.N. meddles in the internal affairs of Somalia.

Freer trade did not result in chaos or penury in Britain, as many people predicted — predicted would be the result of letting consumers make choices more freely and, hence, with less 'control' by the state.

Ending slavery and liberating peasants to work as free laborers according to terms of contracts — contractual terms dictated neither centrally nor by tradition — did not result in a chaotic labor market in which either workers were exploited or businesses found themselves unable to hire qualified workers.

Having money supplied privately in Scotland for much of the 18th and the 19th centuries did not result in out of control inflation or other monetary problems. (By the way, George Selgin, in his wonderful new book "Good Money" explains how private entrepreneurs, not the state, supplied small-denomination coins that were vitally important to commerce in the 19th century.)

Freeing people from central control of both the state and of many superstitions resulted in the wealth explosion that we call the industrial revolution. The complexity of society grew as central control receded.

Trade in the Mediterranean, even 1,000 years ago, was quite complex — involving insurance, complex financing arrangements, and creative credit instruments. By any measure, it was complex commmerce