"What would you replace it with?" or "Well then how would you handle [thus and so]?"
This is by far the most common criticism I hear from those who are not anarcho-libertarians, and it is a suprisingly hard question to deal with because it shifts the argument immediately to a statist mentality.
Instead of us asking, "Is a state needed?" it is immediately shifted to a question of "How should it be centrally managed?"
And more importantly, the conversation gets roadblocked, because if you refuse to answer it, it looks like you're being ignorant of the effects of your economic theory, or if you do answer it, it inevitably gets construed in the other persons mind that a centralized authority is both possible and legitimate.
So how would you answer this question to avoid as much misunderstanding as possible? Or would you simply not answer it for the aforementioned reason?
What would you replace arranged marriages with?
How Could A Voluntary Society Function?
The best response I have heard was by Thomas Sowell. When asked what he would replace the Fed with, he asked, when you remove a cancer what do you replace it with?
I think the underlying notion is that social order is impossible without the State, or at least "modern, sophisticated, civilized" social order is impossible. The implication is that if we abandon the State order, we end up with Somali warlords.
There are a couple points that are in order.
First, the question reflects a failure to comprehend the true nature of the State as it is. The State is Somali warlords. Maybe in the West it's done with a smile and a "thank you, ma'am" but the fundamental transaction is no different: your money or your life. So, before going on the defensive, remind yourself that you're not arguing against social order, you are arguing against legitimized, organized crime.
Second, the essence of the State is privilege, that is, dual morality - one set of rules for all of you, another set of rules for me and my buddies. This is the root of monopoly privilege. "Only the Santinis may buy and sell guns" or "only judges appointed by the King may hear cases." Monopoly privilege in law and security, in particular, have become such an ingrained part of Western and other cultures - it has a history stretching back thousands of years - that most people are unable to wrap their head around what a "free market in law" or "free market in security" even means. To them, "free market in security" means that Blackwater polices the streets. "Free market in law" means no law at all. So, you have to be a little less ambitious and see if you can find ways to help them understand that the State's monopoly privileges in law, security and other industries are not the basis of social order. Far from it, they are the key to the State's systematic disruption of social order.
I myself have given up on trying to convince people that a free market order could work: it’s a very complex argument that requires a lot of economic understanding (and even most economists lack that), and frankly even most of us do not fully grasp it. It would be no different from an engineer trying to convince me that this bridge cannot stand a once-per-millennia earthquake: I’m clueless about engineering and it will never work. People will have to be shown a functioning free market order to believe it, and I do not blame them for their skepticism.
Also, trying to convince folks that the state is immoral makes no dent: I’ve never seen a guy disagreeing, in a face-to-face discussion with the fact that taxation is force. What he answers me is just: “Yes, but do we have an alternative? No, so does it matter that the state is immoral?”. So people will agree that the state is immoral by private standards, but absent an alternative they’ll gladly take the lesser evil. Again, I cant say I blame them.
So, when it comes to discussions, I just go for making a case for unlimited secession of small territorial entities, which is both practical, believable, historically done and even unifies leftists with rightists. Of course, I do not shy form stating that I believe I a full free market order, but I do not try to convince folks anymore.
Seraiah:So how would you answer this question to avoid as much misunderstanding as possible? Or would you simply not answer it for the aforementioned reason?
First off, I personally just wouldn't recommend going to that far with people who aren't yet close enough to follow you. You'd need to be conversing with a really active mind to be able to actually get anywhere (not to mention you would have to be quite well versed in economics and social and political theory, as well as history, to be able to support yourself). I think it's much more effective to make sure you never have to deal with that roadblock...as in, make sure that isn't the question they ask when you pose that scenario (i.e. make sure whomever you're talking to isn't of the mind that is completely accepting of central authority).
And of course the way to do that is to have them go on at least somewhat of a similar journey you did to get where you are. Think about how you came to your own ideology and conclusions. What did you have to go through before you were comfortable with the idea of a stateless existence? For most people, the road is through the recognition of all the innate flaws and failings of government...and to a minarchist postition. Once you are there, it is much easier to take those next steps. (Much like what is discussed here.)
So as I was just talking about a few minutes ago on the subject of Ron Paul, you're much better off (i.e. you'll be much more effective) if you have them go through at least some of the linear progression away from large government before expecting to have any sort of success in a discussion of anarchy.
That being said, as a previous poster mentioned, the first easy answer of the kind you were looking for that came to my mind was Sowell's brilliant "when you cut out a cancer, what do you replace it with?" However, that's just a start, of course. Someone would certainly require more. So if you must go there, Kinsella wrote an excellent piece on this very subject which I highly recommend. It's a bit combative, which you will have to curb if you wish to truly reach most people, but the argument is there, and it makes perfect sense...