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 ("ancaps" for short) 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 an open 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-capitalists are distinguished from anarchists and minarchists. The latter advocate a night-watchman state limited to protecting individuals from aggression and enforcing private property. On the other hand, anarchists support personal property (defined in terms of possession and use, i.e. mutualist usufruct) and oppose capital concentration, interest, monopoly, private ownership of productive property such as the means of production (capital, land and the means of labor), profit, rent, usury and wage slavery which are viewed as inherent to capitalism and not rejected by anarcho-capitalists. Anarchism's emphasis on anti-capitalism, egalitarianism and for the extension of community and individuality sets it apart from anarcho-capitalism and other types of economic libertarianism. Anarcho-capitalists are seen as fraudulent and an oxymoron by most anarchist schools of thought which reject the notion of capitalism, hierarchies and private property. The anti-capitalism of classical anarchism has remained prominent within contemporary anarchism, including individualist anarchism.
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The two principal moral approaches to anarcho-capitalism differ in regard to whether anarcho-capitalist society is justified on deontological or consequentialist ethics, or both. Natural-law anarcho-capitalism as advocated by Murray Rothbard holds that a universal system of rights can be derived from natural law (not to be confused with law of the jungle). Other anarcho-capitalists do not rely upon the idea of natural rights and present economic justifications for a free-market capitalist society. This latter approach has been offered by David D. Friedman in The Machinery of Freedom. Unlike other anarcho-capitalists, most notably Rothbard, Friedman has never tried to deny the theoretical cogency of the neoclassical literature on "market failure", but he openly applies the theory to both market and government institutions to compare the net result, nor has he been inclined to attack economic efficiency as a normative benchmark.
John Kosanke sees such a debate as irrelevant. Kosanke believes that in the absence of statutory law the non-aggression principle is "naturally" enforced because individuals are automatically held accountable for their actions via tort and contract law. Kosanke also argues that communities of sovereign individuals naturally expel aggressors in the same way that ethical business practices are allegedly naturally required among competing businesses that are subject to what he describes as the "discipline of the marketplace". For Kosanke, the only thing that needs to be debated is the nature of the contractual mechanism that abolishes the state, or prevents it from coming into existence where new communities form.
According to Patrik Schumacher, the political ideology and programme of Anarcho-capitalism envisages the radicalisation of the neoliberal "roll back 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".
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.: Many anarcho-capitalists also argue that private defense and court agencies would have to have a good reputation in order to stay in business. 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.
David D. Friedman says that he is not an absolutist rights theorist, but he is also "not a utilitarian". However, Friedman believes that "utilitarian arguments are usually the best way to defend libertarian views". Peter Leeson argues that "the case for anarchy derives its strength from empirical evidence, not theory"[clarification needed]. Hans-Hermann Hoppe uses "argumentation ethics" for his foundation of "private property anarchism" which is closer to Rothbard's natural law approach. Rothbard wrote:
I define anarchist society as one where there is no legal possibility for coercive aggression against the person or property of any individual. Anarchists oppose the State because it has its very being in such aggression, namely, the expropriation of private property through taxation, the coercive exclusion of other providers of defense service from its territory, and all of the other depredations and coercions that are built upon these twin foci of invasions of individual rights.
Rothbard used the term anarcho-capitalism to distinguish his philosophy from anarchism that opposes private property as well as to distinguish it from other forms of individualist anarchism. Other terms sometimes used for this philosophy, though not necessarily outside anarcho-capitalist circles, include:
Although anarcho-capitalists are against centralized states, most,not all, hold that all people would naturally share and agree to a specific moral theory. 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. 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).: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 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".
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 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 if 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".:170
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 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 expropriation of nominally "private property" if it is the result of state-initiated force such as businesses who 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 in their opinion.
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 the 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 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 consider 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.
The society envisioned by anarcho-capitalists has been called the "contractual society" which Rothbard described as "a society based purely on voluntary action, entirely unhampered by violence or threats of violence":84 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".:1144 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".:1144
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 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".
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 [clarification needed] 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 unlibertarian 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 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.:223 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.
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.
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 an 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.
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". Unlike the liberalism of John Locke which saw the state as evolving from society, the anti-state liberals saw a fundamental conflict between the voluntary interactions of people, i.e. society; and the institutions of force, i.e. the state. This society vs. state idea was expressed in various ways such as 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. 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 literatures of anarcho-capitalism draw 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.
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 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. 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 "Are Libertarians 'Anarchists'?", 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 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 unsuistainable 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 support wage labour is inconsistent anarchism. It can easily be made consistent anarchism by applying its own principles consistenly. 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'".
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.
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 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".
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 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. 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".
In his work For a New Liberty, Murray Rothbard has claimed ancient Gaelic Ireland as an example of nearly anarcho-capitalist society.[page needed] 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".[page needed] 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,[page needed] 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 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.[page needed]
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.:1051
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.
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".
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 which, 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.
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.
The following is a partial list of notable nonfiction works discussing anarcho-capitalism.
To the original 'anarchocapitalist' (Rothbard coined the term) [...].
The last problem is especially vexing, since anarcho-capitalists seem to be caught up in a contradiction here. On one hand they are proponents of a specific moral theory (based on non-aggression principle), on the other hand they do not allow for any central, monopolistic agency to impose that moral theory on society.
In addition, Professor Huerta de Soto has become one of the most prominent and resolute defenders of the Anarchocapitalism, that is, the full and complete privatisation of all goods and services.
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Notably, in light of latter-day anarchocapitalism, Tucker had also advocated the privatisation of the policing and security functions of the state to protect people and property and accepted the use of violence as means of enforcing contracts.
(From abstract): There are two main varieties of anarchism: the socialist variety (aka "social anarchism" or "anarcho-socialism") and the capitalist variety ("anarcho-capitalism")
While society without a state is necessary for full-fledged anarchy, it is nevertheless insufficient.
The philosophy of 'anarcho-capitalism' dreamed up by the 'libertarian' New Right, has nothing to do with Anarchism as known by the Anarchist movement proper.
Whom to include under the rubric of the New Right remains puzzling. It is usually seen as an amalgam of traditional liberal conservatism, Austrian liberal economic theory Ludwing von Mises and Hayek), extreme libertarianism (anarcho-capitalism) and crude populism.
But if we define anarchy as places without governments, and we define governments as the agencies with a legal right to impose violence on their subjects, then whatever else occurred in Haiti, Sudan, and Somalia, it wasn't anarchy. For there were well-organized gangs (e.g., governments) in each of these places, demanding tribute, and fighting others who made similar impositions. Absence of government means absence of government, whether well established ones, or fly-by-nights.
Anarchism is a socio-political theory which opposes all systems of domination and oppression such as racism, ableism, sexism, anti-LGBTTQIA, ageism, sizeism, government, competition, capitalism, colonialism, imperialism and punitive justice, and promotes direct democracy, collaboration, interdependence, mutual aid, diversity, peace, transformative justice and equity.
Thus, as David Miller puts it, capitalism is regarded by anarchists as 'both coercive [though this word may be too strong] [sic] and exploitative - it places workers in the power of their bosses, and fails to give them a just return for their contribution to production.'