These passages are taken from the essay" The nature of Government" included in the collection under the title The Virtue of Selfishness. In it Ayn Rand shows her lack of knowledge of some classic liberal thinkers (like Gustave de Molinari and Paul Emile de Puydt) that advocated, on the basis of very solid and convincing arguments, the idea of competing governments.
The total refusal of even analyzing the viability of this proposal, keeps Ayn Rand stuck in a contradictory position in which a political monopolist (the state) is deemed the proper entity suitable to get rid of economic monopolies and guarantee free and fair economic competition. The absurdity of this stance would be exposed by Roy A. Childs jr. in a later essay.
Anarchy, as a political concept, is a naive floating abstraction: . . . a society without an organized government would be at the mercy of the first criminal who came along and who would precipitate it into the chaos of gang warfare. But the possibility of human immorality is not the only objection to anarchy: even a society whose every member were fully rational and faultlessly moral, could not function in a state of anarchy; it is the need of objective laws and of an arbiter for honest disagreements among men that necessitates the establishment of a government.
A recent variant of anarchistic theory, which is befuddling some of the younger advocates of freedom, is a weird absurdity called “competing governments.” Accepting the basic premise of the modern statists — who see no difference between the functions of government and the functions of industry, between force and production, and who advocate government ownership of business — the proponents of “competing governments” take the other side of the same coin and declare that since competition is so beneficial to business, it should also be applied to government. Instead of a single, monopolistic government, they declare, there should be a number of different governments in the same geographical area, competing for the allegiance of individual citizens, with every citizen free to “shop” and to patronize whatever government he chooses.
Remember that forcible restraint of men is the only service a government
has to offer. Ask yourself what a competition in forcible restraint would
have to mean.
One cannot call this theory a contradiction in terms, since it is obviously devoid of any understanding of the terms “competition” and “government.” Nor can one call it a floating abstraction, since it is devoid of any contact with or reference to reality and cannot be concretized at all, not even roughly or approximately. One illustration will be sufficient: suppose Mr. Smith, a customer of Government A, suspects that his next-door neighbor, Mr. Jones, a customer of Government B, has robbed him; a squad of Police A proceeds to Mr. Jones’ house and is met at the door by a squad of Police B, who declare that they do not accept the validity of Mr. Smith’s complaint and do not recognize the authority of Government A. What happens then? You take it from there.