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Anarcho-capitalism

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Anarcho-Capitalism is a philosophy which strives for private ownership of the means of production, a free market, and a community without government intervention. Anarcho-capitalists favor a completely private system of law and order with respect to individual free decision making. Anarcho-capitalism is contrasted with minarchism, a philosophy that calls for a political change to minimize the current state.

Philosophy

The term anarcho-capitalism was most likely coined in the mid-50s by the economist Murray Rothbard (Rothbard 1988). Other terms used for this philosophy include:

The Non-Aggression Axiom

Anarcho-capitalism holds strongly to the central libertarian "non-aggression axiom":

"The non-aggression axiom is the lynchpin of the philosophy of libertarianism. It states, simply, that it shall be legal for anyone to do anything he wants, provided only that he not initiate (or threaten) violence against the person or legitimately owned property of another. That is, in the free society, one has the right to manufacture, buy or sell any good or service at any mutually agreeable terms." (Block 2003)

An expansion by Murray Rothbard:

"[...] The basic axiom of libertarian political theory holds that every man is a selfowner, 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 1982,1)

In general, the non-aggression axiom can be said to be a prohibition against the initiation of force, or the threat of force, against persons (i.e. direct violence, murder, assault) or property (i.e. theft, fraud, burglary, taxation). (Rothbard 1973, pp.24-25) 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 Objectivists, would retain the state in some smaller and less invasive form, retaining public police, courts and military. In contrast, anarcho-capitalists reject even that level of state intervention, defining any state as a coercive monopoly and, as the only entity in human society that derives it income from legal aggression, an entity that inherently violates the central axiom of libertarianism. (Rothbard 1982,2 p162)

Historically, the non-aggression axiom supercedes an earlier formulation by Herbert Spencer, called the Law of Equal Freedom: "Every man is free to do that which he wills, provided he infringes not the equal freedom of any other man." This notion of equal freedom goes back to earlier liberal thought. E.g. Mary Wollstonecraft, in "Vindication of the Rights of Men" (1790), wrote, "The birthright of man ... is such a degree of liberty, civil and religious, as is compatible with the liberty of every other individual with whom he is united in a social compact, and the continued existence of that compact."[1]


Anarcho-capitalism uses the following terms in ways that may differ from common usage or other anarchist movements::

  • Anarchy - a society without a State
  • Contract – a voluntary agreement between persons
  • Coercion – physical force or threat of such against persons or property
  • Capitalism – economic system where the means of production are privately owned, and where investments, production, distribution, income, and prices are determined through the operation of a free market
  • Free market – a market where all decisions regarding transfer of money, goods (including capital goods), and services are voluntary
  • Fraud inducing one to part with something of value through the use of dishonesty
  • State – an organization claiming a monopoly on use of coercion in a given geographic area
  • Voluntary – any action not influenced by coercion or fraud perpetrated by any human agency

Anarchism and Capitalism

Main article: Anarchism and capitalism

Despite the fact that anarcho-capitalism is an anti-statist philosophy, anarchists that follow Peter Kropotkin's socialist definition of anarchy, as well as many who follow from Proudhon's mutualism and Tucker's individualism, would strongly maintain that anarcho-capitalism is not a form of anarchy. This is a terminological dispute that heavily relies on the user's definition of the word "anarchism". The traditions that object to the term anarcho-capitalism are using "anarchism" to refer specifically to a particular socialist political movement, and use a general definition that includes rejection of all hierarchical social organization, not just a state. They regard the uneven distribution of wealth among individuals in a capitalist system as inherently hierarchical. Therefore they see anarcho-capitalism as antithetical to the principles of anarchy.

According to The Anarchist International, "Capitalism is economical plutarchy, including hierarchy." They place anarcho-capitalism outside of the anarchist movement, and into the classical liberal tradition: "plutarchy without statism = liberalism." They also view anarcho-capitalism as a serious misrepresentation of the core principles of anarchism, and disagree on definitions (see sidebar) as basic as what constitutes a "voluntary" action and what constitutes a "free market." (see: Criticisms of anarcho-capitalism)

Conversely, libertarians and anarcho-capitalists most commonly use the term “anarchism” with the more limited definition of an opposition of the existence of a state, favoring a society based on voluntary relations between individuals, accepting whatever social structures that evolve under such a system. This divide has been termed as left anarchism versus right anarchism by some individuals, such as Ulrike Heider. Anarcho-capitalists such as Murray Rothbard, in "Left and Right: The Prospects for Liberty," put anarcho-capitalism on the extreme left. Most contemporary anarchists reject the standard linear model of ideologies, in favor of a 2-dimensional model with a liberty-authority dimension. The political ideology diagram shows a view of this spectrum more in line with anarcho-capitalist philosophy.

An anarcho-capitalist model of political ideologies. Liberty-Authority X Socialism-Capitalism.

Original appropriation

Central to anarcho-capitalism are the concepts of self-ownership and original appropriation:

"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." (Hoppe 2002)

This is the root of anarcho-capitalist property rights, and where they differ from collectivist forms of anarchisim. Original appropriation allows an individual to claim any "unused" property, including land, and by improving or otherwise using it, own it with the same absolute right as his own body. As a practical matter, in terms of the ownership of land, anarcho-capitalists recognize that there are few (if any) parcels of land left on Earth whose ownership was at some point in time transferred as the result of coercion, usually by seizure by some form of state. However, they do not believe that this history de-legitimizes current ownerships which are based on consensual transactions. They believe it is wrong to attempt to remedy past coercion by the use of present coercion. (i.e. seizure or eviction.)

File:Download la gold.jpg
The Libertatis Æquilibritas is a symbol of anarcho-capitalism.

By accepting an axiomatic definition of private property and property rights, anarcho-capitalists deny the legitimacy of a state on principle:

"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" (Hoppe 2002)

The Contractual Society

The society envisioned by anarcho-capitalists has been called the Contractual Society; "[...] a society based purely on voluntary action, entirely un­hampered by violence or threats of violence." (Rothbard 1962, ch2) Because this system relies on voluntary agreements (contracts) between individuals as the only legal framework, it is difficult to predict precisely what the particulars of this society would look like. Those particulars are disputed both among anarcho-capitalists and between anarcho-capitalists and their critics.

One particular ramification is that transfer of property and services must be voluntary on the part of both parties. No external entities can force an individual to accept or deny a particular transaction. An employer might offer insurance and death benefits to same-sex couples; another might refuse to recognize any union outside his or her own faith. Individuals would be free to enter into contractual agreements as they saw fit, allowing discrimination or favoritism based on race, gender, language, sexual orientation, or any other categorization. Anarcho-capitalists maintain that the social structure would be self-regulating, since any disenfranchised group can avail themselves of boycott and/or protest, and other entrepreneurs will see their own interests (i.e. profit) in servicing the group.

Another important ramification is the fact that any social structure is permissible under anarcho-capitalism as long as it is formed by a voluntary contract between individuals. Therefore, radically different "governments" and sub-economies can form, creating a panarchic society. Individuals could voluntarily live in a privately owned democracy, or republic, or even a monarchy, if they so choose.

One social structure that is not permissible under anarcho-capitalism is one that attempts to claim greater sovereignty than the individuals that form it. The state is a prime example, but another is the modern corporation— defined as a legal entity that exists under a different legal code than individuals as a means to shelter the individuals who own and run the corporation from possible legal consequences of acts by the corporation. It is worth noting that Rothbard allows a narrower definition of a corporation: "[...] Corporations are not at all monopolistic privileges; they are free associations of individuals pooling their capital. On the purely free market, such men would simply announce to their creditors that their liability is limited to the capital specifically invested in the corporation [...]" (Rothbard 1962) However, this is a very narrow definition that only shelters owners from debt by creditors that specifically agree to the arrangement. It doesn't shelter other liability, such as from malfeasance or other wrongdoing.

There are limits to the right to contract under some interpretations of anarcho-capitalisim. Rothbard himself asserts that the right to contract is based in inalienable human rights (Rothbard 1982,2) and therefore any contract that implicitly violates those rights can be voided at will, which would, for instance, prevent a person from permanently selling himself into slavery. Other interpretations conclude that "banning" such contracts would in itself be an unacceptably invasive interference in the right to contract. (Nozick 1975)

Systems of justice

Anarcho-capitalists only believe in 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. According to Molinari, "Under a regime of liberty, the natural organization of the security industry would not be different from that of other industries." (Molinari 1849) Proponents point out that private systems of justice and defense already exist, naturally forming where the market is allowed to compensate for the failure of the state; private arbitration, security guards, neighborhood watch groups and so on. (Friedman 1973, ch29) Defense of those unable to pay for such protection would be financed by charitable organizations relying on voluntary donation rather than by state institutions relying on enforced taxation.

Retributive justice, meaning retalitory force, is often a component of the contracts imagined for an anarcho-capitalist society. Some 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. (O’Keeffe 1989)

The use of force

The axiom of non-aggression is not a necessarily a pacifist doctrine, it is a prohibition against the initiation of (interpersonal) force. Like classical liberalism, anarcho-capitalism permits the use of force, as long as it is in the defense of persons or property.

However, the permissible extent of this defensive use of force is an arguable point between anarcho-capitalists. Some argue that the initiator of any aggressive act should be subject to a retributive counter-attack beyond what is solely necessary to repel the aggression. The counter-argument is that such a counterattack is only legitimate insofar as it was defined in an agreement between the parties.

Another controversial application of “defensive” aggression is the act of revolutionary violence against tyrannical regimes. Many anarcho-capitalists admire the American Revolution as the legitimate act of individuals working together to fight against tyrannical restrictions of their liberties. But, illustrating their general ambivalence toward war, these same people also sharply criticize the revolutionaries for the means used — taxes, conscription, inflationary money — and the inadequacy of the result: a government.

While some anarcho-capitalists believe forceful resistance and revolutionary violence against the state is "legitimate," most believe the use of force is a dangerous tool at best, and violent insurrection a last resort.

History and Influences

Gustave de Molinari (1819-1912)

Liberalism

Main article: Liberalism

Anarcho-capitalist philosophy has drawn from many influences. The primary influence with the longest history is classical liberalism. Classical liberals have had two main themes since John Locke first expounded the philosophy: the liberty of man, and limitations of State power. The liberty of man was expressed in terms of Natural Rights, while limiting the State was based (for Locke) on a consent theory. While Locke saw the State as evolving from society via a social contract, later more radical liberals saw a fundamental schism between society, the "natural" voluntary interactions of men, and State, the institution of brute force.

In the 18th century, liberal revolutionaries in Britain and America had opposed statism without grounding it in theory, while some French economists had theorized it without endorsing it. In the 19th century, classical liberals led the attack against statism. One notable was Frederic Bastiat ("The Law") who wrote, "The state is the great fiction by which everybody seeks to live at the expense of everybody else." Henry David Thoreau's liberalism might be considered evolutionary anarchism, as when he wrote, "I heartily acceot the motto,—"That government is best which governs least"; and I should like to see it acted up to more rapidly and systematically. Carried out, it finally amounts to this, which also I believe,—"That government is best which governs not at all"; and when men are prepared for it, that will be the kind of government which they will have."[2]

The first person to 'explicitly' argue to abolish monopoly government was Gustave de Molinari in 1849. In his essay "The Production of Security," he argued, "No 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. Following the logic of laissez faire economics leads to anarchism. Unlike the liberalism of Locke, which saw the State as evolving from society, the anti-state liberals saw a fundamental conflict between the voluntary interations of people - society - and the instutions of force - the State. This society versus State idea was expressed in various ways: natural society vs. artificial society, liberty vs. authority, society of contract vs. society of authority, and industrial society vs. militant society, just to name a few. (Molinari 1849) 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.

Later, in the early 20th century, the mantle of anti-state liberalism was taken by the "Old Right." These were minarchist or anarchist, anti-war, anti-imperialist, and (later) anti-New Dealers. Some of the most notable members of the Old Right were Albert Jay Nock, Rose Wilder Lane, Isabel Paterson, Frank Chodorov, Garet Garrett, and H. L. Mencken. In the 1950's, the new "fusion conservatism," also called cold war conservatism, took hold of the right wing in the US, stressing anti-communism, militarism, and economic interventionism. This induced the libertarian Old Right to split off from the right, and seek alliances with the (now left-wing) anti-war movement, and to start specifically libertarian organizations such as the (US) Libertarian Party.

Individualist anarchism

Main article: Individualist anarchism

Anarcho-capitalist thought has also been significantly influenced by the work of the 19th century individualist anarchists. Some of the most notable figures in this respect include Lysander Spooner and Benjamin Tucker. Of particular importance are the ideas of "sovereignty of the individual" (often called "self-ownership"), a right to own the product of one's labor and trade it in a free market, and the opposition to collectivism including collectivist conceptions of property, in favor of individual private property.

Lysander Spooner (1808-1887)

Lysander Spooner's articles, such as No Treason and the Letter to Thomas Bayard, were widely reprinted in early anarcho-capitalist journals, and his ideas -- especially his individualist critique of the state and his defense of the right to ignore or withdraw from it -- were often cited by anarcho-capitalists. Spooner was staunchly opposed to government interference in economic matter, and supported a "right to acquire property...as one of the natural, inherent, inalienable rights of men [...] one which government has no power to infringe [...]" (Spooner 1843). He also supported the freedom of individuals to charge interest for loans free of government regulation: "All legislative restraints upon the rate of interest, are arbitrary and tyrannical restraints upon a man's natural capacity amid natural right to hire capital, upon which to bestow his labor" (Spooner 1846). He was particularly vocal, however, in opposing any collusion between banks and government, and argued that the monopolistic privileges that the government granted to a few bankers were the source of many social and economic ills.

Benjamin Tucker supported private ownership of all wealth produced by an individual, and was a staunch advocate of the mutualist form of private property. He also advocated a free market economy, which he believed was obstructed by profit making. From an essay in The New Freewoman: "Anarchism is a word without meaning, unless it includes the liberty of the individual to control his product or whatever his product has brought him through exchange in a free market—that is, private property." Tucker characterized the economic demands of individualism as "Absolute Free Trade; free trade at home, as well as with foreign countries; the logical carrying out of the Manchester doctrine; laissez faire the universal rule" [3]. Although his self-identification as a socialist and sympathy for the labor movement led to hostility from some early anarcho-capitalists (such as Robert LeFevre), others (such as Murray Rothbard) embraced his critique of the State and pointed out how he defined his "socialism" not in terms of opposition to a free market or private property, but in opposition to government privileges for business.

There are several points of similarity and divergence between individual anarchism and anarcho-capitalism.

  • Both philosophies favor individual private property including capital. However, individualist anarchists opposed titles to unused land, and income from the lending of capital, since that would be income without labor.
  • Both individualist anarchists and anarcho-capitalists advocate "free banking" where any individual or group of individualists would be allowed to create and lend private currency.
  • Individualist anarchists rejected standard employment, believing that wages should equal the full sale price of the resulting product. Though the individualist anarchists viewed profiting from the labor of others as exploitative, they opposed coercively intervening in a capitalist system to thwart it; economic competition was regarded as the solution to eliminating the opportunity for profit making. Anarcho-capitalists consider all voluntary arrangements to be permissable, so have no objection whatsoever to employment. Anarcho-capitalists disagree with the traditional individualists' position that the value of a thing is equal to the labor required to produce it; in contrast they may argue that the value of a thing is how much labor one is willing to exert to purchase it, or alternatively, that value is entirely subjective.
  • Both individualist anarchists and anarcho-capitalists advocate private "defense associations" and private courts, though they disagree on some aspects of their jurisdiction.
  • The individualist anarchists tended to consider "usury" (i.e., profits from labor, rent, or interest) to be an unjust source of income made possible by government-backed monopolies. Interestingly, Tucker eventually argued that usury was possible even in the absence of the state, if vast concentrations of wealth had been accumulated due to government-backed monopolies. Anarcho-capitalists believe that profit earned through consentual interactions are permissible, and generally praiseworthy.

The Austrian School

Main article: Austrian School
File:Murray Rothbard Smile.JPG
Murray Rothbard (1926-1995)

The Austrian school of economics was founded with the publication of Carl Menger's 1871 book, Principles of Economics. The Austrians approach economics as an a priori system like logic or mathematics, rather than as an empirical science like geology. It attempts to discover axioms of human action (called "praxeology" in the Austrian tradition), and make deductions therefrom. Some of these praxeological axioms are:

  • Humans act.
  • Humans prefer more of a good to less.
  • Humans prefer to receive a good sooner rather than later.
  • Each party to a trade benefits ex ante.

These are macro-level generalizations, or heuristics, which are true for the many, but not necessarily true for any particular person.

Even in the early days, Austrian economics was used as a theoretical weapon against socialism and statist socialist policy. Eugen von Böhm-Bawerk, a colleague of Menger, wrote one of the first and most devastating critiques of socialism ever written - one that still holds up today - in his treatise, "The Exploitation Theory of Socialism-Communism." Later, Friedrich Hayek wrote such classics as "The Road to Serfdom," warning that a command economy destroys the information function of prices, and that authority over the economy leads to totalitarianism. Another very influential Austrian economist was Ludwig von Mises, author of the definitive praxeological work "Human Action."

Murray Rothbard, a student of Mises, is the man who melded Austrian economics with classical liberalism and individualist anarchism, and is credited with coining the term "anarcho-capitalism." He was probably the first to use "libertarian" in its current (US) pro-capitalist sense. He was a trained economist, but also extremely erudite in history and political philosophy. When young, he considered himself part of the Old Right, an anti-statist and anti-interventionist branch of the US Republican party. When interventionist cold warriors of the National Review, such as William Buckley, captured the Republican party in the 1950s, Rothbard quit that group and formed an alliance with left-wing anti-war groups. Later, Rothbard was a founder of the US Libertarian Party. In the sixties, Rothbard was a part of Ayn Rand's objectivist group, but later had a falling out. Rothbard's books, such as "Man Economy and State", "Power and Market", "The Ethics of Liberty", and "For a New Liberty", are considered classics of natural law libertarian thought.

Criticisms of anarcho-capitalism

Anarcho-capitalism is a radical development of liberalism. Therefore, the same general arguments for and against liberalism, laissez-faire capitalism and capitalism apply, excepting those points (such as the justice system) where anarcho-capitalism diverges from the classical liberal tradition.

Practical questions

Critics often assert that anarcho-capitalism will degenerate into plutocracy or feudalism in practice. They argue that it is a rational economic decision for organizations with the ability to exert coercion (private police, security and military forces) to exploit groups with less power. In this kind of environment, piracy, military imperialism, and slavery can be very profitable. Taken to its logical extreme, this argument assumes that allowing such “security” organizations to exert coercive power will inevitably lead to their becoming a de-facto state.

Minarchist and statist critics often argue that the free rider problem makes anarcho-capitalism (and, by extension, any anti-statist political system) fundamentally unworkable in modern societies. They typically argue that there are some vital goods or services — such as civil or military defense, management of common environmental resources, or the provision of public goods such as roads or lighthouses — that cannot be effectively delivered without the backing of a government exercising effective territorial control, and so that abolishing the state as anarcho-capitalists demand will either lead to catastrophe or to the eventual re-establishment of monopoly governments as a necessary means to solving the coordination problems that the abolition of the state created.

Moral questions

Anarcho-capitalists consider a choice or action to be "voluntary," in a moral sense, so long as that choice or action is not influenced by coercion or fraud perpetrated by another individual. Thus, so long as an employee and employer agree to terms without aggression being used, employment is regarded as voluntary. Some critics say this ignores constraints on action due to non-human factors, such as the need for food and shelter. Thus, if a person requires employment in order to feed and house himself, it is said that the employer-employee relationship cannot be voluntary, even if employment was not coerced by another individual. This is essentially a semantic argument over the term "voluntary." Anarcho-capitalists simply do not use the term in that latter sense in their philosophy, believing that sense to be morally irrelevant. Other critics argue that employment is involuntary because the unfair distributions of wealth that make it necessary are supported by private property systems. This is a deeper arguement relating to distributive justice. These critics appeal to an end-state theory of justice, while anarcho-capitalists (and propertarians in general) appeal to an entitlement theory.

Critics also point out that anarcho-capitalist ethics does not enforce any positive moral obligation to help others in need (see altruism, the ethical doctrine). Like other right libertarians, anarcho-capitalists may argue that no such moral obligation exists or argue that if a moral obligation to help others does exist that there is an overarching moral obligation to refrain from initiating coercion on individuals to enforce it. Anarcho-capitalists believe that helping others should be a matter of free personal choice. They, like all right libertarians, believe that only negative rights should be recognized as being legitimate, as opposed to positive rights. Critics often dismiss this stance as being unethical or selfish.

Property ownership rights and their extent are a source of contention among different philosophies. Most see the rights as less absolute than anarcho-capitalists do. The main issues are 1) what kinds of things are valid property, and 2) what constitutes abandonment of property. The first is contentious even among anarcho-capitalists: there is disagreement over the validity of intellectual property[4] - non-tangible goods that are not economically scarce. Some supporters of private property but critics of anarcho-capitalism may question whether unused land is valid property (Agorism,Georgism, Geolibertarianism, Individualist anarchism). The second issue, what constitutes abandonment, is a common objection among socialists who don't believe in absentee ownership. Anarcho-capitalists have strong abandonment criteria - one maintains ownership (more or less) until one agrees to trade or gift it. The critics of this view tend have weaker abandonment criteria, e.g. one loses ownership (more or less) when one stops personally using it. Also, the idea of original appropriation is anathema to most types of socialism, as well as any philosophy that takes common ownership of land and natural resources as a premise. Many philosophies view any ownership claims on land and natural resources as immoral and illegitimate.

Natural Law anarcho-capitalism is also criticized by those who have a different view on what exactly is "natural law", and by those who believe that natural laws or rights do not exist (i.e., that laws and rights are a human invention, a product of human society). This includes criticism by consequentialist anarcho-captalists.

Utilitarian critics simply argue that anarcho-capitalism does not maximize utility; contending that it would fall far short of that goal. This kind of criticism comes from a variety of different political views and ideologies, and different critics have different views on which other system does or would do a better job of bringing the greatest benefits to the greatest number of people. Anarcho-capitalists consider the non-aggression axiom to be a "side-constraint" on civilized human action (Nozick 1975), or a necessary condition for human society to be beneficial (Herbert Spencer, Ayn Rand, Murray Rothbard), and thus should not be used as a trade-off for miscellaneous utilitarian values.

References

Web Sources

Uncategorized Sources

Anarcho-capitalism websites

Opposing views

Other

See also

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