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Anarcho-capitalism is a political philosophy and economic theory that advocates the elimination of centralized states in favor of a system of private property enforced by private agencies, free markets and the right-libertarian interpretation of self-ownership, which extends the concept to include control of private property as part of the self. In the absence of statute, anarcho-capitalists (or ancaps)
hold that society tends to contractually self-regulate and civilize
through participation in the free market which they describe as a voluntary society.
In a theoretical anarcho-capitalist society, the system of private
property would still exist and be enforced by private defense agencies
and insurance companies selected by customers which would operate competitively in a market and fulfill the roles of courts and the police.
Anarcho-capitalists claim that various theorists have espoused philosophies similar to anarcho-capitalism. However, anarcho-capitalism was developed in the 20th century and the first person to use the term anarcho-capitalism was Murray Rothbard. Rothbard synthesized elements from the Austrian School, classical liberalism and 19th-century American individualist anarchists and mutualists Lysander Spooner and Benjamin Tucker while rejecting their labor theory of value and the anti-capitalist and socialist norms they derived from it.
Rothbard's anarcho-capitalist society would operate under a mutually
agreed-upon "legal code which would be generally accepted, and which the
courts would pledge themselves to follow". This legal code would recognize contracts, private property, self-ownership and tort law in keeping with the non-aggression principle.
Anarcho-capitalism is distinguished from both minarchism and anarchism. Minarchists advocate a night-watchman state limited to protecting individuals from aggression and enforcing private property.
On the other hand, anarchism is an anti-capitalist movement that
promotes libertarian socialist economic theories, holding that
capitalism is incompatible with social and economic equality. Despite its name, anarcho-capitalism lies outside the tradition of anarchism and is more closely affiliated with capitalism, right-libertarianism, and liberalism. Anarcho-capitalism is generally seen as fraudulent and an oxymoron by anarchists.
Philosophy
Author J Michael Oliver says that during the 1960s, a philosophical
movement arose in the United States that championed "reason, ethical
egoism, and free-market capitalism". According to Oliver,
anarcho-capitalism is a political theory which logically follows the
philosophical conclusions of Objectivism, a philosophical system developed by Russian-American writer Ayn Rand. Professor Lisa Duggan also says that Rand's anti-statist, pro–“free market” stances went on to shape the politics of anarcho-capitalism.
According to Patrik Schumacher, the political ideology and programme of Anarcho-capitalism envisages the radicalisation of the neoliberal
"rollback of the state", and calls for the extension of
"entrepreneurial freedom" and "competitive market rationality" to the
point where the scope for private enterprise is all-encompassing and
"leaves no space for state action whatsoever".
On the state
Anarcho-capitalists opposition to the state is reflected in their goal of keeping but privatizing all functions of the state. They see capitalism and the "free market" as the basis for a free and prosperous society. Murray Rothbard, who is credited with coining the term anarcho-capitalism, stated that the difference between free-market capitalism and state capitalism
is the difference between "peaceful, voluntary exchange" and a
"collusive partnership" between business and government that "uses
coercion to subvert the free market".
Rothbard argued that all government services, including defense, are inefficient because they lack a market-based pricing mechanism
regulated by "the voluntary decisions of consumers purchasing services
that fulfill their highest-priority needs" and by investors seeking the
most profitable enterprises to invest in.
Furthermore, Linda and Morris Tannehill believe that no coercive
monopoly of force can arise on a truly free market and that a
government's citizenry can not desert them in favor of a competent
protection and defense agency.
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Rothbard used the term anarcho-capitalism to distinguish his philosophy from anarchism that opposes private property as well as to distinguish it from individualist anarchism. Other terms sometimes used by proponents of the philosophy include:
- Individualist anarchism
- Natural order
- Ordered anarch
- Private-law society
- Private-property anarchy
- Radical capitalism
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Non-aggression principle
Writer Stanisław Wójtowicz says that although anarcho-capitalists are
against centralized states, they hold that all people would naturally
share and agree to a specific moral theory based on the non-aggression principle.
While the Friedmanian formulation of anarcho-capitalism is robust to
the presence of violence and in fact, assumes some degree of violence
will occur, anarcho-capitalism as formulated by Rothbard and others holds strongly to the central libertarian nonaggression axiom, sometimes non-aggression principle. Rothbard wrote:
The basic axiom of libertarian
political theory holds that every man is a self-owner, having absolute
jurisdiction over his own body. In effect, this means that no one else
may justly invade, or aggress against, another's person. It follows then
that each person justly owns whatever previously unowned resources he
appropriates or "mixes his labor with". From these twin axioms –
self-ownership and "homesteading" – stem the justification for the
entire system of property rights titles in a free-market society. This
system establishes the right of every man to his own person, the right
of donation, of bequest (and, concomitantly, the right to receive the
bequest or inheritance), and the right of contractual exchange of
property titles.
Rothbard's defense of the self-ownership principle stems from what he
believed to be his falsification of all other alternatives, namely that
either a group of people can own another group of people, or that no
single person has full ownership over one's self. Rothbard dismisses
these two cases on the basis that they cannot result in a universal ethic,
i.e. a just natural law that can govern all people, independent of
place and time. The only alternative that remains to Rothbard is self-ownership which he believes is both axiomatic and universal.
In general, the non-aggression axiom is described by Rothbard as a
prohibition against the initiation of force, or the threat of force,
against persons (in which he includes direct violence, assault and
murder) or property (in which he includes fraud, burglary, theft and
taxation). The initiation of force is usually referred to as aggression or coercion. The difference between anarcho-capitalists and other libertarians is largely one of the degree to which they take this axiom. Minarchist libertarians such as libertarian political parties
would retain the state in some smaller and less invasive form,
retaining at the very least public police, courts, and military.
However, others might give further allowance for other government
programs. In contrast, Rothbard rejects any level of "state intervention", defining the state as a coercive monopoly
and as the only entity in human society that derives its income from
what he refers to as "legal aggression", an entity that inherently
violates the central axiom of libertarianism.
Some anarcho-capitalists such as Rothbard accept the
non-aggression axiom on an intrinsic moral or natural law basis. It is
in terms of the non-aggression principle
that Rothbard defined his interpretation of anarchism, "a system which
provides no legal sanction for such aggression ['against person and
property']"; and wrote that "what anarchism proposes to do, then, is to
abolish the State, i.e. to abolish the regularized institution of
aggressive coercion". In an interview published in the American libertarian journal The New Banner,
Rothbard stated that "capitalism is the fullest expression of
anarchism, and anarchism is the fullest expression of capitalism".
Property
Private property
Anarcho-capitalists postulate the privatization of everything, including cities with all their infrastructures, public spaces, streets and urban management systems.
Central to Rothbardian anarcho-capitalism are the concepts of self-ownership and original appropriation that combines personal and private property. Hans-Hermann Hoppe wrote:
Everyone is the proper owner of his
own physical body as well as of all places and nature-given goods that
he occupies and puts to use by means of his body, provided only that no
one else has already occupied or used the same places and goods before
him. This ownership of "originally appropriated" places and goods by a
person implies his right to use and transform these places and goods in
any way he sees fit, provided only that he does not change thereby
uninvitedly the physical integrity of places and goods originally
appropriated by another person. In particular, once a place or good has
been first appropriated by, in John Locke's phrase, 'mixing one's labor'
with it, ownership in such places and goods can be acquired only by
means of a voluntary – contractual – transfer of its property title from
a previous to a later owner.
Rothbard however rejected the Lockean proviso,
and followed the rule of "first come, first served", without any
consideration of how much resources are left for other individuals,
which opposed John Locke's beliefs.
Anarcho-capitalists advocate private ownership of the means of
production and the allocation of the product of labor created by workers
within the context of wage labour
and the free market – that is through decisions made by property and
capital owners, regardless of what an individual needs or does not need.
Original appropriation allows an individual to claim any
never-before-used resources, including land and by improving or
otherwise using it, own it with the same "absolute right" as their own
body, and retaining those rights forever, regardless of the resource is
still being used by them. According to Rothbard, property can only come
about through labor, therefore original appropriation of land is not
legitimate by merely claiming it or building a fence around it—it is
only by using land and by mixing one's labor with it that original
appropriation is legitimized: "Any attempt to claim a new resource that
someone does not use would have to be considered invasive of the
property right of whoever the first user will turn out to be". Rothbard
argued that the resource need not continue to be used in order for it to
be the person's property as "for once his labor is mixed with the
natural resource, it remains his owned land. His labor has been
irretrievably mixed with the land, and the land is therefore his or his
assigns' in perpetuity".
As a practical matter, anarcho-capitalists say that in terms of
the ownership of land there are few, if any, parcels of land left on
Earth whose ownership was not at some point in time obtained in
violation of the homestead principle "through seizure by the state or
put in private hands with the assistance of the state". Rothbard wrote:
It is not enough to call simply for
the defense of "the rights of private property"; there must be an
adequate theory of justice in property rights, else any property that
some State once decreed to be "private" must now be defended by
libertarians, no matter how unjust the procedure or how mischievous its
consequences.
In Justice and Property Right, Rothbard wrote that "any identifiable owner (the original victim of theft or his heir) must be accorded his property".
In the case of slavery, Rothbard claimed that in many cases "the old
plantations and the heirs and descendants of the former slaves can be
identified, and the reparations can become highly specific indeed".
Rothbard believed slaves rightfully own any land they were forced to
work on under the homestead principle. If property is held by the state,
Rothbard advocated its confiscation and "return to the private sector",
writing that "any property in the hands of the State is in the hands of
thieves, and should be liberated as quickly as possible". Rothbard proposed that state universities
be seized by the students and faculty under the homestead principle.
Rothbard also supported the expropriation of nominally "private
property" if it is the result of state-initiated force such as
businesses that receive grants and subsidies.
Rothbard further proposed that businesses who receive at least 50% of
their funding from the state be confiscated by the workers, writing: "What we libertarians object to, then, is not government per se but crime, what we object to is unjust or criminal property titles; what we are for is not 'private' property per se but just, innocent, non-criminal private property".
Similarly, Karl Hess
wrote that "libertarianism wants to advance principles of property but
that it in no way wishes to defend, willy nilly, all property which now
is called private ... Much of that property is stolen. Much is of
dubious title. All of it is deeply intertwined with an immoral, coercive
state system".
By accepting an axiomatic definition of private property and
property rights, anarcho-capitalists deny the legitimacy of a state on
principle. Hans-Hermann Hoppe argues:
For, apart from ruling out as
unjustified all activities such as murder, homicide, rape, trespass,
robbery, burglary, theft, and fraud, the ethics of private property is
also incompatible with the existence of a state defined as an agency
that possesses a compulsory territorial monopoly of ultimate
decision-making (jurisdiction) and/or the right to tax.
Anarchists view capitalism as an inherently authoritarian and hierarchical system and seek the abolishment of private property. There is disagreement between anarchists and anarcho-capitalists as the former generally rejects anarcho-capitalism as a form of anarchism and considers anarcho-capitalism an oxymoron
while the latter holds that the abolishment of private property would
require expropriation which is "counterproductive to order" and would
require a state.
Common property
As opposed to anarchists, most anarcho-capitalists reject the commons. However, some of them propose that non-state public or community property can also exist in an anarcho-capitalist society.
For anarcho-capitalists, what is important is that it is "acquired" and
transferred without help or hindrance from what they call the
"compulsory state". Deontological anarcho-capitalists believe that the
only just and most economically beneficial way to acquire property is
through voluntary trade, gift, or labor-based original appropriation, rather than through aggression or fraud.
Anarcho-capitalists state that there could be cases where common property may develop in a Lockean natural rights
framework. Anarcho-capitalists make the example of a number of private
businesses which may arise in an area, each owning the land and
buildings that they use, but they argue that the paths between them
become cleared and trodden incrementally through customer and commercial
movement. These thoroughfares may become valuable to the community, but
according to them ownership cannot be attributed to any single person
and original appropriation does not apply because many contributed the labor necessary to create them. In order to prevent it from falling to the "tragedy of the commons",
anarcho-capitalists suggest transitioning from common to private
property, wherein an individual would make a homesteading claim based on
disuse, acquire title by the assent of the community consensus, form a
corporation with other involved parties, or other means.
Some vast areas, except the scarce resources
they contain, such as the air, rivers, oceans, the Moon, and orbital
paths are considered by anarcho-capitalists as largely unownable by
individuals and considered them to be property common to all. However, they see challenges stemming from this idea such as whether an individual might claim fishing rights in the area of a major shipping lane and thereby forbid passage through it.
In contrast, Hoppe's work on anarcho-capitalist theory is based on the
assumption that all property is privately held, "including all streets,
rivers, airports, and harbors" which forms the foundation of his views on immigration.
Contractual society
The
society envisioned by anarcho-capitalists has been labelled by them as a
"contractual society" which Rothbard described as "a society based
purely on voluntary action, entirely unhampered by violence or threats
of violence"
The system relies on contracts between individuals as the legal
framework which would be enforced by private police and security forces
as well as private arbitrations.
Rothbard argues that limited liability
for corporations could also exist through contract, arguing that
"[c]orporations are not at all monopolistic privileges; they are free
associations of individuals pooling their capital. On the purely free
market, those men would simply announce to their creditors that their
liability is limited to the capital specifically invested in the
corporation".
However, corporations created in this way would not be able to
replicate the limit on liabilities arising non-contractually such as
liability in tort for environmental disasters or personal injury which
corporations currently enjoy. Rothbard acknowledges that "limited
liability for torts is the illegitimate conferring of a special
privilege".
There are limits to the right to contract under some
interpretations of anarcho-capitalism. Rothbard believes that the right
to contract is based in inalienable rights
and because of this any contract that implicitly violates those rights
can be voided at will, preventing a person from permanently selling
himself or herself into unindentured slavery. However, Rothbard justifies the practice of child selling.
Other interpretations conclude that banning such contracts would in
itself be an unacceptably invasive interference in the right to
contract.
Included in the right of contract is "the right to contract
oneself out for employment by others". While anarchists criticize wage
labour describing it as wage slavery, anarcho-capitalists view it as a consensual contract. Some anarcho-capitalists prefer to see self-employment prevail over wage labor. David D. Friedman
has expressed a preference for a society where "almost everyone is
self-employed" and "instead of corporations there are large groups of
entrepreneurs related by trade, not authority. Each sells not his time,
but what his time produces".
Law and order and the use of violence
Different
anarcho-capitalists propose different forms of anarcho-capitalism and
one area of disagreement is in the area of law. In The Market for Liberty, Morris and Linda Tannehill object to any statutory
law whatsoever. They argue that all one has to do is ask if one is
aggressing against another in order to decide if an act is right or
wrong. However, while also supporting a "natural prohibition"
on force and fraud, Rothbard supports the establishment of a mutually
agreed-upon centralized libertarian legal code which private courts
would pledge to follow, as he presumes a high degree of convergence
amongst individuals about what constitutes natural justice.
Unlike both the Tannehills and Rothbard who see an ideological
commonality of ethics and morality as a requirement, David D. Friedman
proposes that "the systems of law will be produced for profit on the
open market, just as books and bras are produced today. There could be
competition among different brands of law, just as there is competition
among different brands of cars".
Friedman says whether this would lead to a libertarian society "remains
to be proven". He says it is a possibility that very un-libertarian
laws may result, such as laws against drugs, but he thinks this would be
rare. He reasons that "if the value of a law to its supporters is less
than its cost to its victims, that law ... will not survive in an
anarcho-capitalist society".
Anarcho-capitalists only accept the collective defense of
individual liberty (i.e. courts, military, or police forces) insofar as
such groups are formed and paid for on an explicitly voluntary basis.
However, their complaint is not just that the state's defensive services
are funded by taxation, but that the state assumes it is the only
legitimate practitioner of physical force—that is, they believe it
forcibly prevents the private sector from providing comprehensive
security, such as a police, judicial and prison systems to protect
individuals from aggressors. Anarcho-capitalists believe that there is
nothing morally superior about the state which would grant it, but not
private individuals, a right to use physical force to restrain
aggressors. If competition in security provision were allowed to exist,
prices would also be lower and services would be better according to
anarcho-capitalists. According to Molinari: "Under a regime of liberty,
the natural organization of the security industry would not be different
from that of other industries".
Proponents believe that private systems of justice and defense already
exist, naturally forming where the market is allowed to "compensate for
the failure of the state", namely private arbitration, security guards, neighborhood watch groups and so on These private courts and police are sometimes referred to generically
as private defense agencies (PDAs). The defense of those unable to pay
for such protection might be financed by charitable organizations
relying on voluntary donation rather than by state institutions relying
on taxation, or by cooperative self-help by groups of individuals.
Edward Stringham argues that private adjudication of disputes could
enable the market to internalize externalities and provide services that
customers desire.
In the context of revolution, Rothbard stated that the American
Revolutionary War was the only war involving the United States that
could be justified. Some anarcho-capitalists such as Rothbard feel that violent revolution is counter-productive and prefer voluntary forms of economic secession to the extent possible. Like classical liberalism and unlike anarcho-pacifism,
anarcho-capitalism permits the use of force as long as it is in the
defense of persons or property. The permissible extent of this defensive
use of force is an arguable point among anarcho-capitalists. Retributive justice,
meaning retaliatory force, is often a component of the contracts
imagined for an anarcho-capitalist society. According to Matthew
O'Keefee, some anarcho-capitalists believe prisons or indentured servitude
would be justifiable institutions to deal with those who violate
anarcho-capitalist property relations while others believe exile or
forced restitution are sufficient.
Bruce L. Benson
argues that legal codes may impose punitive damages for intentional
torts in the interest of deterring crime. Benson gives the example of a
thief who breaks into a house by picking a lock. Even if caught before
taking anything, Benson argues that the thief would still owe the victim
for violating the sanctity of his property rights. Benson opines that
despite the lack of objectively measurable losses in such cases,
"standardized rules that are generally perceived to be fair by members
of the community would, in all likelihood, be established through
precedent, allowing judgments to specify payments that are reasonably
appropriate for most criminal offenses".
Morris and Linda Tannehill raise a similar example, saying that a
bank robber who had an attack of conscience and returned the money
would still owe reparations for endangering the employees' and
customers' lives and safety, in addition to the costs of the defense
agency answering the teller's call for help. However, they believe that
the robber's loss of reputation would be even more damaging. They
suggest that specialized companies would list aggressors so that anyone
wishing to do business with a man could first check his record, provided
they trust the veracity of the companies' records. They further
theorise that the bank robber would find insurance companies listing him
as a very poor risk and other firms would be reluctant to enter into
contracts with him.
Influences
Murray Rothbard has listed different ideologies of which his interpretations, he said, have influenced anarcho-capitalism. This includes his interpretation of anarchism, and more precisely individualist anarchism; classical liberalism and the Austrian School of economic thought. Scholars additionally associate anarcho-capitalism with neo-classical liberalism, radical neoliberalism and right-libertarianism.
Anarchism
The
black and gold flag, a symbol of anarchism (black) and capitalism
(gold) which according to Murray Rothbard was first flown in 1963 in
Colorado and is also used by the Swedish AnarkoKapitalistisk Front
In both its social and individualist forms, anarchism is usually considered an anti-capitalist and radical left-wing or far-left movement that promotes libertarian socialist economic theories such as collectivism, communism, individualism, mutualism and syndicalism. Because anarchism is usually described alongside libertarian Marxism as the libertarian wing of the socialist movement and as having a historical association with anti-capitalism and socialism, anarchists believe that capitalism is incompatible with social and economic equality and therefore do not recognize anarcho-capitalism as an anarchist school of thought. In particular, anarchists argue that capitalist transactions are not
voluntary and that maintaining the class structure of a capitalist
society requires coercion which is incompatible with an anarchist
society. The usage of libertarian is also in dispute. While both anarchists and anarcho-capitalists have used it, libertarian was synonymous with anarchist until the mid-20th century, when anarcho-capitalist theory developed.
Anarcho-capitalists are distinguished from the dominant anarchist tradition by their relation to property and capital.
While both anarchism and anarcho-capitalism share general antipathy
towards power by government authority, the latter exempts power wielded
through free-market capitalism. Anarchists, including egoists such as Max Stirner, have supported the protection of an individual's freedom from powers of both government and private property owners.
In contrast, while condemning governmental encroachment on personal
liberties, anarcho-capitalists support freedoms based on private
property rights. Anarcho-capitalist theorist Murray Rothbard
argued that protesters should rent a street for protest from its
owners. The abolition of public amenities is a common theme in some
anarcho-capitalist writings.
As anarcho-capitalism puts laissez-faire
economics before economic equality, it is commonly viewed as
incompatible with the anti-capitalist and egalitarian tradition of
anarchism. Although anarcho-capitalist theory implies the abolition of
the state in favour of a fully laissez-faire economy, it lies outside the tradition of anarchism. While using the language of anarchism, anarcho-capitalism only shares anarchism's antipathy towards the state and not anarchism's antipathy towards hierarchy as theorists expect from anarcho-capitalist economic power relations. It follows a different paradigm from anarchism and has a fundamentally different approach and goals. In spite of the anarcho- in its title, anarcho-capitalism is more closely affiliated with capitalism and right-libertarianism than with anarchism. Some within this laissez-faire tradition reject the designation of anarcho-capitalism, believing that capitalism may either refer to the laissez-faire market they support or the government-regulated system that they oppose.
Rothbard claimed that anarcho-capitalism is the only true form of
anarchism—the only form of anarchism that could possibly exist in
reality as he maintained that any other form presupposes authoritarian
enforcement of political ideology such as "redistribution of private
property" which he attributed to anarchism. According to this argument, the capitalist free market
is "the natural situation" that would result from people being free
from state authority and entails the establishment of all voluntary
associations in society such as cooperatives, non-profit organizations,
businesses and so on. Moreover, anarcho-capitalists, as well as classical liberal minarchists,
argue that the application of anarchist ideals as advocated by what
they term "left-wing anarchists" would require an authoritarian body of
some sort to impose it. Based on their understanding and interpretation
of anarchism, in order to forcefully prevent people from accumulating
capital, which they believe is a goal of anarchists, there would
necessarily be a redistributive organization of some sort which would
have the authority to in essence exact a tax and re-allocate the
resulting resources to a larger group of people. They conclude that this
theoretical body would inherently have political power and would be
nothing short of a state. The difference between such an arrangement and
an anarcho-capitalist system is what anarcho-capitalists see as the
voluntary nature of organization within anarcho-capitalism contrasted
with a "centralized ideology" and a "paired enforcement mechanism" which
they believe would be necessary under what they describe as a
"coercively" egalitarian-anarchist system.
Despite their name, anarcho-capitalists are generally seen by
anarchists, who reject the notion of capitalism, hierarchies and private
property, as fraudulent and an oxymoron. Albert Meltzer
argued that anarcho-capitalism simply cannot be anarchism because
capitalism and the state are inextricably interlinked and because
capitalism exhibits domineering hierarchical structures such as that
between an employer and an employee.
Anna Morgenstern approaches this topic from the opposite perspective,
arguing that anarcho-capitalists are not really capitalists because
"mass concentration of capital is impossible" without the state. According to Jeremy Jennings,
"[i]t is hard not to conclude that these ideas", referring to
anarcho-capitalism, argued to have "roots deep in classical liberalism"
more so than in anarchism, "are described as anarchist only on the basis
of a misunderstanding of what anarchism is". For Jennings, "anarchism
does not stand for the untrammelled freedom of the individual (as the
'anarcho-capitalists' appear to believe) but, as we have already seen,
for the extension of individuality and community".
Similarly, Barbara Goodwin, Emeritus Professor of Politics at the
University of East Anglia, Norwich, argues that anarcho-capitalism's
"true place is in the group of right-wing libertarians", not in
anarchism. Nonetheless, some right-libertarian scholars like Michael Huemer, who identify with the ideology, describe anarcho-capitalism as a "variety of anarchism". British author Andrew Heywood
also believes that "individualist anarchism overlaps with
libertarianism and is usually linked to a strong belief in the market as
a self-regulating mechanism, most obviously manifest in the form of
anarcho-capitalism".
While both anarchism and anarcho-capitalism are in opposition to the state, it is a necessary but not sufficient condition because anarchists and anarcho-capitalists interpret state-rejection differently. Austrian school economist David Prychitko,
in the context of anarcho-capitalism says that "while society without a
state is necessary for full-fledged anarchy, it is nevertheless
insufficient". According to Ruth Kinna, anarcho-capitalists are anti-statists who draw more on right-wing liberal theory and the Austrian School than anarchist traditions.
Kinna writes that "[i]n order to highlight the clear distinction
between the two positions", anarchists describe anarcho-capitalists as "propertarians". Anarcho-capitalism is usually seen as part of the New Right.
Classical liberalism
In his essay The Production of Security, Gustave de Molinari
argued that "[n]o government should have the right to prevent another
government from going into competition with it, or to require consumers
of security to come exclusively to it for this commodity". Molinari and
this new type of anti-state liberal grounded their reasoning on liberal
ideals and classical economics. Historian and libertarian Ralph Raico argues that what these liberal philosophers
"had come up with was a form of individualist anarchism, or, as it
would be called today, anarcho-capitalism or market anarchism".
According to Hans-Hermann Hoppe, the anti-state liberal tradition in
Europe and the United States continued after Molinari in the early
writings of Herbert Spencer as well as in thinkers such as Paul Émile de Puydt and Auberon Herbert.
Ruth Kinna writes that anarcho-capitalism is a term coined by Murray Rothbard
to describe "a commitment to unregulated private property and
laissez-faire economics, prioritizing the liberty-rights of individuals,
unfettered by government regulation, to accumulate, consume and
determine the patterns of their lives as they see fit". According to
Kinna, anarcho-capitalists "will sometimes label themselves market
anarchists because they recognize the negative connotations of
'capitalism'. But the literature of anarcho-capitalism draws on
classical liberal theory, particularly the Austrian School – Friedrich von Hayek and Ludwig von Mises – rather than recognizable anarchist traditions. Ayn Rand's laissez-faire, anti-government, corporate philosophy – Objectivism – is sometimes associated with anarcho-capitalism". Other scholars similarly associate anarcho-capitalism with anti-state classical liberalism, neo-classical liberalism, radical neoliberalism and right-libertarianism.
Individualist anarchism
Lysander Spooner, an American individualist anarchist and anti-capitalist mutualist, who is claimed to have influenced anarcho-capitalism Murray Rothbard, a student of Ludwig von Mises, stated that he was influenced by the work of the 19th-century American individualist anarchists. In the winter of 1949, Rothbard decided to reject minimal state laissez-faire and embrace his interpretation of individualist anarchism. In 1965, Rothbard wrote that "Lysander Spooner and Benjamin R. Tucker
were unsurpassed as political philosophers and nothing is more needed
today than a revival and development of the largely forgotten legacy
they left to political philosophy". However, Rothbard thought that they had a faulty understanding of economics as the 19th-century individualist anarchists had a labor theory of value as influenced by the classical economists and was a student of Austrian School economics which does not agree with the labor theory of value. Rothbard sought to meld 19th-century American individualist anarchists' advocacy of economic individualism and free markets
with the principles of Austrian School economics, arguing that "[t]here
is, in the body of thought known as 'Austrian economics', a scientific
explanation of the workings of the free market (and of the consequences
of government intervention in that market) which individualist
anarchists could easily incorporate into their political and social
Weltanschauung".
Rothbard held that the economic consequences of the political system
they advocate would not result in an economy with people being paid in
proportion to labor amounts, nor would profit and interest disappear as
they expected. Tucker thought that unregulated banking and money
issuance would cause increases in the money supply so that interest
rates would drop to zero or near to it. Peter Marshall
states that "anarcho-capitalism overlooks the egalitarian implications
of traditional individualist anarchists like Spooner and Tucker".
In "The Spooner-Tucker Doctrine: An Economist's View", Rothbard
explained his disagreements. Rothbard disagreed with Tucker that it
would cause the money supply to increase because he believed that the
money supply in a free market would be self-regulating. If it were not,
then Rothbard argued inflation would occur so it is not necessarily
desirable to increase the money supply in the first place. Rothbard
claimed that Tucker was wrong to think that interest would disappear
regardless because he believed people, in general, do not wish to lend
their money to others without compensation, so there is no reason why
this would change just because banking was unregulated.
Tucker held a labor theory of value and thought that in a free market
people would be paid in proportion to how much labor they exerted and
that exploitation or usury was taking place if they were not. As Tucker
explained in State Socialism and Anarchism, his theory was that
unregulated banking would cause more money to be available and that this
would allow the proliferation of new businesses which would, in turn,
raise demand for labor.
This led Tucker to believe that the labor theory of value would be
vindicated and equal amounts of labor would receive equal pay. As an
Austrian School economist, Rothbard did not agree with the labor theory
and believed that prices of goods and services are proportional to marginal utility
rather than to labor amounts in the free market. As opposed to Tucker
he did not think that there was anything exploitative about people
receiving an income according to how much "buyers of their services
value their labor" or what that labor produces.
Without the labor theory of value, some argue that 19th-century individualist anarchists approximate the modern movement of anarcho-capitalism, although this has been contested or rejected. As economic theory changed, the popularity of the labor theory of classical economics was superseded by the subjective theory of value of neoclassical economics
and Rothbard combined Mises' Austrian School of economics with the
absolutist views of human rights and rejection of the state he had
absorbed from studying the individualist American anarchists of the 19th
century such as Tucker and Spooner.
In the mid-1950s, Rothbard wrote an unpublished article named "Are
Libertarians 'Anarchists'?" under the pseudonym "Aubrey Herbert",
concerned with differentiating himself from communist and socialistic
economic views of anarchists, including the individualist anarchists of
the 19th century, concluding that "we are not anarchists and that
those who call us anarchists are not on firm etymological ground and
are being completely unhistorical. On the other hand, it is clear that
we are not archists either: we do not believe in establishing a
tyrannical central authority that will coerce the noninvasive as well as
the invasive. Perhaps, then, we could call ourselves by a new name: nonarchist." Joe Peacott, an American individualist anarchist in the mutualist
tradition, criticizes anarcho-capitalists for trying to hegemonize the
individualist anarchism label and make appear as if all individualist
anarchists are in favor of capitalism.
Peacott states that "individualists, both past and present, agree with
the communist anarchists that present-day capitalism is based on
economic coercion, not on voluntary contract. Rent and interest are the
mainstays of modern capitalism and are protected and enforced by the
state. Without these two unjust institutions, capitalism could not
exist".
Anarchist activists and scholars do not consider
anarcho-capitalism as a part of the anarchist movement because anarchism
has historically been an anti-capitalist movement and see it as incompatible with capitalist forms. Although some regard anarcho-capitalism as a form of individualist anarchism, many others disagree or contest the existence of an individualist–socialist divide because individualist anarchism is largely libertarian socialist. In coming to terms that anarchism identified with socialism,
Rothbard wrote that individualist anarchism is different from
anarcho-capitalism and other capitalist theories due to the
individualist anarchists retaining the labor theory of value and
socialist doctrines. Similarly, many writers deny that anarcho-capitalism is a form of anarchism or that capitalism is compatible with anarchism.
The Palgrave Handbook of Anarchism writes that "[a]s
Benjamin Franks rightly points out, individualisms that defend or
reinforce hierarchical forms such as the economic-power relations of
anarcho-capitalism are incompatible with practices of social anarchism
based on developing immanent goods which contest such as inequalities".
Laurence Davis cautiosly asks "[I]s anarcho-capitalism really a form of
anarchism or instead a wholly different ideological paradigm whose
adherents have attempted to expropriate the language of anarchism for
their own anti-anarchist ends?" Davis cites Iain McKay,
"whom Franks cites as an authority to support his contention that
'academic analysis has followed activist currents in rejecting the view
that anarcho-capitalism has anything to do with social anarchism'", as
arguing "quite emphatically on the very pages cited by Franks that
anarcho-capitalism is by no means a type of anarchism". McKay writes
that "[i]t is important to stress that anarchist opposition to the
so-called capitalist 'anarchists' does not reflect some kind of
debate within anarchism, as many of these types like to pretend, but a
debate between anarchism and its old enemy capitalism. ... Equally,
given that anarchists and 'anarcho'-capitalists have fundamentally different analyses and goals it is hardly 'sectarian' to point this out".
Davis writes that "Franks asserts without supporting evidence
that most major forms of individualist anarchism have been largely
anarcho-capitalist in content, and concludes from this premise that most
forms of individualism are incompatible with anarchism". Davis argues
that "the conclusion is unsustainable because the premise is false,
depending as it does for any validity it might have on the further
assumption that anarcho-capitalism is indeed a form of anarchism. If we
reject this view, then we must also reject the individual anarchist
versus the communal anarchist 'chasm' style of argument that follows
from it".
Davis maintains that "the ideological core of anarchism is the belief
that society can and should be organised without hierarchy and
domination. Historically, anarchists have struggles against a wide range
of regimes of domination, from capitalism, the state system,
patriarchy, heterosexism, and the domination of nature to colonialism,
the war system, slavery, fascism, white supremacy, and certain forms of
organised religion". According to Davis, "[w]hile these visions range
from the predominantly individualistic to the predominantly
communitarian, features common to virtually all include an emphasis on
self-management and self-regulatory methods of organisation, voluntary
association, decentralised society, based on the principle of free
association, in which people will manage and govern themselves".
Finally, Davis includes a footnote stating that "[i]ndividualist
anarchism may plausibly be re regarded as a form of both socialism and
anarchism. Whether the individualist anarchists were consistent
anarchists (and socialists) is another question entirely. ... McKay
comments as follows: 'any individualist anarchism which supports wage
labour is inconsistent anarchism. It can easily be made consistent anarchism by applying its own principles consistenly [sic?].
In contrast 'anarcho'-capitalism rejects so many of the basic,
underlying, principles of anarchism ... that it cannot be made
consistent with the ideals of anarchism'".
Historical precedents
Several right-libertarians have discussed historical precedents of what they believe were examples of anarcho-capitalism.
Free cities of medieval Europe
Economist and libertarian scholar Bryan Caplan considers the free cities of medieval Europe as examples of "anarchist" or "nearly anarchistic" societies, further arguing:
One case that has inspired both
sorts of anarchists is that of the free cities of medieval Europe. The
first weak link in the chain of feudalism, these free cities became
Europe's centers of economic development, trade, art, and culture. They
provided a haven for runaway serfs, who could often legally gain their
freedom if they avoided re-capture for a year and a day. And they offer
many examples of how people can form mutual-aid associations for
protection, insurance, and community. Of course, left-anarchists and
anarcho-capitalists take a somewhat different perspective on the free
cities: the former emphasize the communitarian and egalitarian concerns
of the free cities, while the latter point to the relatively unregulated
nature of their markets and the wide range of services (often including
defense, security, and legal services) which were provided privately or
semi-privately.
Medieval Iceland
19th-century interpretation of the Althing in the Icelandic Commonwealth which authors such as David D. Friedman believe to have some features of anarcho-capitalist society According to the libertarian theorist David D. Friedman,
"[m]edieval Icelandic institutions have several peculiar and
interesting characteristics; they might almost have been invented by a
mad economist to test the lengths to which market systems could supplant
government in its most fundamental functions". While not directly labeling it anarcho-capitalist, Friedman argues that the legal system of the Icelandic Commonwealth comes close to being a real-world anarcho-capitalist legal system.
Although noting that there was a single legal system, Friedman argues
that enforcement of the law was entirely private and highly capitalist,
providing some evidence of how such a society would function. Friedman
further wrote that "[e]ven where the Icelandic legal system recognized
an essentially 'public' offense, it dealt with it by giving some
individual (in some cases chosen by lot from those affected) the right
to pursue the case and collect the resulting fine, thus fitting it into
an essentially private system".
American Old West
According to Terry L. Anderson and P. J. Hill, the Old West
in the United States in the period of 1830 to 1900 was similar to
anarcho-capitalism in that "private agencies provided the necessary
basis for an orderly society in which property was protected and
conflicts were resolved" and that the common popular perception that the
Old West was chaotic with little respect for property rights is
incorrect. Since squatters had no claim to western lands under federal law, extra-legal organizations formed to fill the void. Benson explains:
The land clubs and claim
associations each adopted their own written contract setting out the
laws that provided the means for defining and protecting property rights
in the land. They established procedures for registration of land
claims, as well as for the protection of those claims against outsiders,
and for adjudication of internal disputes that arose. The reciprocal
arrangements for protection would be maintained only if a member
complied with the association's rules and its court's rulings. Anyone
who refused would be ostracized. A boycott by a land club meant that an
individual had no protection against aggression other than what he could
provide himself.
According to Anderson, "[d]efining anarcho-capitalist to mean minimal
government with property rights developed from the bottom up, the
western frontier was anarcho-capitalistic. People on the frontier
invented institutions that fit the resource constraints they faced".
Gaelic Ireland
In his work For a New Liberty, Murray Rothbard has claimed ancient Gaelic Ireland as an example of nearly anarcho-capitalist society. In his depiction, citing the work of Professor Joseph Peden,
the basic political unit of ancient Ireland was the tuath, which is
portrayed as "a body of persons voluntarily united for socially
beneficial purposes" with its territorial claim being limited to "the
sum total of the landed properties of its members".
Civil disputes were settled by private arbiters called "brehons" and
the compensation to be paid to the wronged party was insured through
voluntary surety relationships. Commenting on the "kings" of tuaths, Rothbard stated:
The king was elected by the tuath
from within a royal kin group (the derbfine), which carried the
hereditary priestly function. Politically, however, the king had
strictly limited functions: he was the military leader of the tuath, and
he presided over the tuath assemblies. But he could only conduct war or
peace negotiations as an agent of the assemblies, and he was in no
sense sovereign and had no rights of administering justice over tuath
members. He could not legislate, and when he himself was party to a
lawsuit, he had to submit his case to an independent judicial arbiter.
Law merchant, admiralty law, and early common law
Some libertarians have cited law merchant, admiralty law and early common law as examples of anarcho-capitalism.
In his work Power and Market, Rothbard stated:
The law merchant, admiralty law,
and much of the common law began to be developed by privately
competitive judges, who were sought out by litigants for their expertise
in understanding the legal areas involved. The fairs of Champagne and
the great marts of international trade in the Middle Ages enjoyed freely
competitive courts, and people could patronize those that they deemed
most accurate and efficient.
Somalia from 1991 to 2006
Economist Alex Tabarrok
claimed that Somalia in its stateless period provided a "unique test of
the theory of anarchy", in some aspects near of that espoused by
anarcho-capitalists David D. Friedman and Murray Rothbard. Nonetheless, both anarchists and some anarcho-capitalists argue that Somalia was not an anarchist society.
Criticism
State, justice and defense
Anarchists such as Brian Morris
argue that anarcho-capitalism does not in fact get rid of the state. He
says that anarcho-capitalists "simply replaced the state with private
security firms, and can hardly be described as anarchists as the term is
normally understood". In "Libertarianism: Bogus Anarchy", anarchist Peter Sabatini notes:
Within Libertarianism, Rothbard
represents a minority perspective that actually argues for the total
elimination of the state. However, Rothbard's claim as an anarchist is
quickly voided when it is shown that he only wants an end to the public
state. In its place he allows countless private states, with each person
supplying their own police force, army, and law, or else purchasing
these services from capitalist vendors. ... Rothbard sees nothing at all
wrong with the amassing of wealth, therefore those with more capital
will inevitably have greater coercive force at their disposal, just as
they do now.
Similarly, Bob Black
argues that an anarcho-capitalist wants to "abolish the state to his
own satisfaction by calling it something else". He states that they do
not denounce what the state does, they just "object to who's doing it". It has also been argued that anarcho-capitalism dissolves into city states. Randall G. Holcombe argues that anarcho-capitalism turns justice into a commodity as private defense and court firms would favour those who pay more for their services. He argues that defense agencies could form cartels and oppress people without fear of competition. Philosopher Albert Meltzer
argued that since anarcho-capitalism promotes the idea of private
armies, it actually supports a "limited State". He contends that it "is
only possible to conceive of Anarchism which is free, communistic and
offering no economic necessity for repression of countering it".
Robert Nozick
argues that a competitive legal system would evolve toward a monopoly
government—even without violating individuals' rights in the process. In Anarchy, State, and Utopia, Nozick argues that an anarcho-capitalist society would inevitably transform into a minarchist state
through the eventual emergence of a monopolistic private defense and
judicial agency that no longer faces competition. He argues that
anarcho-capitalism results in an unstable system that would not endure
in the real world. While anarcho-capitalists such as Roy Childs and Murray Rothbard have rejected Nozick's arguments, John Jefferson actually advocates Nozick's argument and states that such events would best operate in laissez-faire.
Paul Birch argues that legal disputes involving several jurisdictions
and different legal systems will be too complex and costly, therefore
the largest private protection business in a territory will develop into
a natural monopoly. Robert Ellickson
presented a Hayekian case against anarcho-capitalism, calling it a
"pipe-dream" and stating that anarcho-capitalists "by imagining a stable
system of competing private associations, ignore both the inevitability
of territorial monopolists in governance, and the importance of
institutions to constrain those monopolists' abuses".
Rights and freedom
Negative and positive rights
are rights that oblige either action (positive rights) or inaction
(negative rights). Anarcho-capitalists believe that negative rights
should be recognized as legitimate, but positive rights should be
rejected as an intrusion. Some critics reject the distinction between
positive and negative rights. Peter Marshall also states that the anarcho-capitalist definition of freedom is entirely negative and that it cannot guarantee the positive freedom of individual autonomy and independence.
About anarcho-capitalism, Noam Chomsky says:
Anarcho-capitalism, in my opinion,
is a doctrinal system that, if ever implemented, would lead to forms of
tyranny and oppression that have few counterparts in human history.
There isn't the slightest possibility that its (in my view, horrendous)
ideas would be implemented because they would quickly destroy any
society that made this colossal error. The idea of "free contract"
between the potentate and his starving subject is a sick joke, perhaps
worth some moments in an academic seminar exploring the consequences of
(in my view, absurd) ideas, but nowhere else.
Economics and property
Anarchists
argue that certain capitalist transactions are not voluntary and that
maintaining the class structure of a capitalist society requires
coercion which violates anarchist principles. Anthropologist David Graeber noted his skepticism about anarcho-capitalism along the same lines, arguing:
To be honest, I'm pretty skeptical
about the idea of anarcho-capitalism. If a-caps imagine a world divided
into property-holding employers and property-less wage laborers, but
with no systematic coercive mechanisms[;] well, I just can't see how it
would work. You always see a-caps saying "if I want to hire someone to
pick my tomatoes, how are you going to stop me without using coercion?"
Notice how you never see anyone say "if I want to hire myself out to
pick someone else's tomatoes, how are you going to stop me?"
Historically nobody ever did wage labor like that if they had pretty
much [any] other option.
Some critics argue that the anarcho-capitalist concept of voluntary
choice ignores constraints due to both human and non-human factors such
as the need for food and shelter as well as active restriction of both
used and unused resources by those enforcing property claims.
If a person requires employment in order to feed and house himself, the
employer-employee relationship could be considered involuntary. Another
criticism is that employment is involuntary because the economic system
that makes it necessary for some individuals to serve others is
supported by the enforcement of coercive private property relations. Some philosophies view any ownership claims on land and natural resources as immoral and illegitimate. Objectivist philosopher Harry Binswanger
criticizes anarcho-capitalism by arguing that "capitalism requires
government", questioning who or what would enforce treaties and
contracts.
Julian Assange
rejects anarcho-capitalism as a "misnomer", denying the perceived
"virtues" of capitalism and the possibility of any substantive
connection between anti-statism, capitalism and emancipatory praxis.
Some right-libertarian critics of anarcho-capitalism who support the full privatization of capital such as geolibertarians argue that land and the raw materials of nature remain a distinct factor of production and cannot be justly converted to private property because they are not products of human labor. Some socialists, including market anarchists and mutualists,
adamantly oppose absentee ownership. Anarcho-capitalists have strong
abandonment criteria, namely that one maintains ownership until one
agrees to trade or gift it. Anti-state critics of this view posit
comparatively weak abandonment criteria, arguing that one loses
ownership when one stops personally occupying and using it as well as
the idea of perpetually binding original appropriation is anathema to
traditional schools of anarchism.
Literature
Nonfiction
The following is a partial list of notable nonfiction works discussing anarcho-capitalism.
- Albert Jay Nock, Our Enemy, the State, Franz Oppenheimer's thesis applied to early United States history
- Auberon Herbert, The Right and Wrong of Compulsion by the State
- Bruce L. Benson, The Enterprise of Law: Justice Without The State
- To Serve and Protect: Privatization and Community in Criminal Justice
- David D. Friedman, The Machinery of Freedom
- Edward P. Stringham, Anarchy and the Law: The Political Economy of Choice
- George H. Smith, "Justice Entrepreneurship in a Free Market"
- Gerard Casey, Libertarian Anarchy: Against the State
- Hans-Hermann Hoppe, Anarcho-Capitalism: An Annotated Bibliography
- Herbert Spencer, Social Statics
- Linda and Morris Tannehill, The Market for Liberty
- Michael Huemer, The Problem of Political Authority
- Murray Rothbard, founder of anarcho-capitalism:
