Lessons from the Japanese ninja: on achieving a higher trade equilibrium under anarchy and private constitutions

Abstract This paper investigates the possibility of anarchy achieving a high trade equilibrium via example ninja communities in Japan. Initially, ninjas mountainous regions Iga and Kōka were stateless, constantly feuded, had few opportunities for exchange. With advent civil war sixteenth century, ninjas’ economic conditions changed. The mercenary market significantly expanded presented great profit ninjas. However, instead creating formal government to move higher equilibrium, resorted forming voluntary confederations held together by private constitutions. I argue that this development was possible because institutional environment Sengoku period enabled framework self-governing institutions principles. able build on with very low organizational costs. As result, reap large gains while remaining stateless—a seemingly paradoxical goes against standard dichotomy “states thick markets” versus “anarchy thin markets.”