I've been reading George MacDonald Fraser's "Steel Bonnets", the history of the Anglo Scottish Border reivers. Yes, I do know it's nearly 40 years old, it just takes me some time, OK? I also came across this new paper:
Suppose that you took a freely available resource, but that now anyone can contest your ownership of that resource. Depending on the consequences, you may not want to extract in the first place. It thus matters in which way the state is weak. If it is weak in that it gives away rights to natural resources, then there will be over-exploitation. If it is weak in that it cannot enforce property rights in general, and in particular when it comes to bring product to the market, then it is the Wild West and under-exploitation may ensue. Theft is a powerful mechanism to kill markets.
The underlying economic problem in the Borders was exactly that the State was too weak. It could not provide the rule of law nor punishment of the thieves. Thus there was no or little incentive to invest in the land, thus little way of making a living other than stealing what someone else had.
I think that it's this sort of issue that distinguishes the classical liberla from either the anarchist or the libertarian (OK, certain extreme forms of libertarianism). There are certain things that have to be done and some of those certain things have to be done by the state. Criminal law being one of them (we can think up ways in which it's not the current form of the state which enforces such but I'd claim that whoever imposes criminal law is in fact the state).
We can all have lovely fights about which those things are which both must be done and must be done by the state: certainly I'd agree that the proper list is a lot shorter than the number of things that the state currently tries to do.
On the same point, there's a Thomas Sowell quote out there about how the caveman had access to exactly the same natural resources we do. Our vastly greater wealth comes from the knowledge of how to exploit them rather than anything else. And one of those things we know is that the incentives to exploit such wealth, to create wealth by exploitation, comes from a legal system which enable us to enjoy the fruits of that exploitation.
Which is indeed one of the things that the state has to provide us with.