> The issue is that the state has to have a monopoly on violence
A monopoly on violence in what context? The planet? That doesn't seem to be necessary for most countries. Within the country itself? That's the job of local law enforcement.
"Monopoly on violence" is a term with a lot of history. I'm using it in the same sense as Max Weber, where the state is defined as the "human community that (successfully) claims the monopoly of the legitimate use of violence within a given territory."
All the critiques on this thread about competing authorities such as local law enforcement, the second amendment, and so on, none of them invalidate the idea of legitimate use of force defining the state. Weber accounts for all those points.
The closest thing we have to an actual marketplace among authorities wielding violence is the competition between jurisdictions (one municipal police department against the one the next town over, the state police in one US state vs another US state) -- but that's not the same as a commercial marketplace.
The only critique I think is relevant is the idea of mercenaries, a.k.a. private military contractors. But there again, those mercenaries are part of the military-industrial complex, which is an extremely stunted marketplace as it's largely a government monopsony.
We don't use economic competition to determine who holds authority on the legitimate use of violence. As a consequence, we don't get the full benefit of marketplace competition in maximizing the efficiency of our armed forces -- but we also don't have perpetual civil war.
A monopoly on violence in what context? The planet? That doesn't seem to be necessary for most countries. Within the country itself? That's the job of local law enforcement.