One reason to reject the concept of legitimate government is that there have been no good arguments to believe that one exists. Philosophers, in their attempts at justifying various states, have defined government in terms of what a government is entitled to do, or in terms of a set of positive attributes. To move from the first approach to claims of legitimacy is to presuppose one's intended conclusion. To move from the second approach to claims of legitimacy becomes an argument for any agency having that set of attributes to be entitled to engage in those behaviors reserved to governments, but the defenders of the state refuse to accept this conclusion.
Another is that even if there are legitimate governments, there is no way to verify that an agency claiming to be a legitimate government really is one. As an empirical issue, there is no way to determine if some group of merry tax collectors is a government because there is no such defining attribute as "government-ness." In practice, such decisions are made by assertion and backed up by force.
Another still is that whatever ethical theory underlies one's philosophy of law must be able to answer the question, "May a non-government entity become a government?" If not, then any government is illegitimate. If so, then this implies a universal right of secession rather than the universal duty of submission that every existing government claims.
Another is that the story of the social contract as told by the British empiricists cannot be distinguished emprically from the formation of a marauding gang with really great esprit de corps. Nor can one verify that the formation of a social contract ever took place. Even governments recognize this problem in their own courts, as I cannot expect to win if I sue you for a debt and simply assert the existence a social contract between you and me.
Yet another is the frequently held selective application of social contract theory regarding obligations to the state. As modern social contract theorists tell it, you enter a social contract by driving on government owned roads or partaking of other government services. Must an entity be a government prior to gaining the priviledge of forming social contracts the way that a government does? Is so, then governments could not have formed by social contract. If not, then even governments must submit to social contracts when, for example, an IRS agent drives on a privately paved road. But the statists who make the "when you drive on these roads..." arguments are never willing to accept this conclusion.
James makes numerous wonderful points, and his argument against the state as it exists now is ultimately solid. My criticism of his post is that he fails to think more deeply about the important questions that he brings up. He brings up both the failure of social contract to explain the modern state and the fact that any sort of government should be morally indistinguishable from any other sort of human institution, but he fails to take his reasoning further. He doesn't try to answer his own question, "May a non-government entity become a government?". The answer is in fact, 'yes'. If a body came together, and formed a literal contract that includes a provision for leaving the contract, a government, morally indistinguishable from a bowling league, could be formed. It is important to note that there aren't any legitimate governments today but, I tend to think that the moral harm done by modern states is relatively minor because their behaviour is in many important respects similar to what the behaviour of literal contract states would be, so I don't think this should be an important libertarian issue. I wish I could talk to James; I bet we would have some interesting discussions.
I'm writing an essay on this topic (I have been for a while), and I hope I can post a draft soon.
