Western media painted a rosy picture of the transition away from the apartheid system in South Africa. South Africa was widely described as a country with a promising and hopeful future. Unfortunately, 35 years later, reality is telling a different story. Lackluster economic growth has led GDP per capita to lag dramatically. Having previously been almost double the average GDP per capita of other so-called “emerging markets,” South Africa now falls below their average.
As the economy stagnates, the quality of life has fallen by other metrics as well. South Africa has one of the highest violent crime rates in the world, with an average of 75 killings and 400 robberies with aggravating circumstances every day as of 2024. As the state has failed to provide security to South Africa’s productive class, it has gradually lost its monopoly over the security industry. Private companies have stepped in to fill the gaps left by failed government policing. This presents an interesting case study for libertarians all over the world, as individuals voluntarily replace state services with market alternatives, while having to ward off the dying national government as it grasps for the power it is losing.
The surge in violent crime should not be surprising. South Africa’s economy has been massively hampered by state intervention, with 45 percent of South Africans dependent upon welfare. The interventionism is worsened by its heavily racial dynamic, as the government has singled out and targeted whites through policies such as land confiscations. Such actions create conditions of regime uncertainty, driving out private investment. Along with this explicit socialism and populist promises of handouts, the ruling party has incubated a culture of victimhood. The ruling African National Congress (ANC) party still points towards whites as the source of many problems in the country, and insists racism remains a primary cause of inequality. All of this creates an incentive for a culture of parasitism and violence.
One should also note that the uniquely negative aspects of South African society only exacerbate already existing economic problems, which are inherent to state policing, namely, state police agencies, are in all circumstances, bureaucracies. As such, they are unable to perform economic calculation. Much like fully socialist economies are unable to calculate because there are no market prices for inputs, bureaucracies are unable to calculate because there is no profit-and-loss mechanism to determine market for their outputs. The state provides services coercively paid for by tax dollars, without regard for the price signals which market firms must respond to. The inevitable result is an over- or under-allocation of these services, including security. While in South Africa, this manifests in an epidemic of horrible murders, the fundamental flaws of public sector monopoly negatively affect all societies with government police.
It is within this context that South Africa’s private security industry has emerged. The active private security workforce is approximately 609,000. This is significantly larger than both the South African Police Service and the South African Defense Force combined. While this obviously has not been enough to curb the nation’s violent crime problem, private security has made a difference and has come to be clearly preferred over government police in communities that are affluent enough to make use of it. In combination with gated communities, this has been a major force for decentralization, with pockets of civilization being established in the otherwise failing country.
From a libertarian perspective, this phenomenon is quite interesting. South Africa has become a real-world example of private services being preferred to their public counterparts. It also provides a counterexample to the supposed impossibility of private governance. Contrary to the expectations of statist critics, cooperation and stability have arisen in the security industry. Organizations like the Security Association of South Africa (SASA) have formed to provide private standards and governance, while advocating for the industry. Collaboration has also emerged, with citizens and security companies communicating about crime through WhatsApp.
The situation also has interesting implications for libertarian strategy. While South Africa’s crime and poverty make it unique, it does demonstrate that state power can be threatened by private industry replacing public services, especially in the all-important security sector, which forms the basis of the state’s existence. Taking advantage of inefficiencies and gaps in government security services can provide an attack vector through which the state can be weakened, while also making communities more resistant to state oppression.
Libertarians are not alone in understanding the danger private security can pose to state power. Progressive journalists in the West, for example, have run articles decrying security companies as threats to democratic governance and drivers of inequality. More significantly, the national government has recently made attempts to crack down. The Private Security Industry Regulatory Authority (PSIRA) published draft amendments in March 2025, which would massively overregulate the industry. The proposal included vague restrictions on ammo quantity, and various other forms of gun control, including a requirement for gun-tracking technology that is not currently available. However, the proposed regulations are not currently in effect, following massive outcry from the industry.
While there will likely be further attempts to crack down in the future, the state’s position may be untenable, as the manpower and firepower of the private sector make it impossible to coerce. This resilience is perhaps the most interesting aspect of the industry. While the illusion of peace is often valuable, states have always persisted by holding violence as a trump card. The ability of the state to enforce its will is key to maintaining state control, but through the development of a robust and well-organized security sector, that option has seemingly been eliminated for the South African government.
South Africa’s security crisis demonstrates that when the state fails to deliver its most basic function, private industry fills the gap. It is proof that decentralization, innovation, and voluntary coordination can create real, functioning institutions where the state has faltered, and that these successes provide a living refutation of the myth that only government can secure order. Even more encouragingly, it is an example of a private sector victory over a state that is nervously clinging to power, and a demonstration that when voluntary institutions have superior kinetic force, they become functionally impossible to regulate. South Africa is a desperate country, and much of this development would not be possible or desirable in the first world, where demand for security is lower. Regardless, we must remain aware that in instances of state failure, there are valuable opportunities to exploit.
