Anarcho-capitalism

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Flag used by the Swedish AnarkoKapitalistisk Front[1]

Anarcho-capitalism is a political philosophy that advocates the elimination of the state in favor of individual sovereignty, private property, and free markets. Anarcho-capitalists believe that, in the absence of statute (law by decree or legislation), society would improve itself through the discipline of the free market (or what its proponents describe as a "voluntary society").[2][3]

In an anarcho-capitalist society, law enforcement, courts, and all other security services would be operated by privately funded competitors rather than centrally through taxation. Money, along with all other goods and services, would be privately and competitively provided in an open market. Therefore, personal and economic activities under anarcho-capitalism would be regulated by victim-based dispute resolution organizations under tort and contract law, rather than by statute through centrally determined punishment under political monopolies.[4]

Various theorists have espoused legal philosophies similar to anarcho-capitalism. The first person to use the term, however, was Murray Rothbard, who in the mid-20th century synthesized elements from the Austrian School of economics, classical liberalism, and 19th-century American individualist anarchists Lysander Spooner and Benjamin Tucker (while rejecting their labor theory of value and the norms they derived from it).[5] A Rothbardian anarcho-capitalist society would operate under a mutually agreed-upon libertarian "legal code which would be generally accepted, and which the courts would pledge themselves to follow."[6] This pact would recognize self-ownership and the non-aggression principle (NAP), although methods of enforcement vary.

Anarcho-capitalists are distinguished from minarchists, who advocate a small night-watchman state limited to the function of individual protection, and other anarchists who may seek to prohibit or regulate the accumulation of property and the flow of capital.

Philosophy

Ethics

Anarcho-capitalists argue for a society based on the voluntary trade of private property and services (in sum, all relationships not caused by threats or violence, including exchanges of money, consumer goods, land, and capital goods) in order to minimize conflict while maximizing individual liberty and prosperity. However, they also recognize charity and communal arrangements as part of the same voluntary ethic.[7] Though anarcho-capitalists are known for asserting a right to private (individualized or joint non-public) property, some propose that non-state public or community property can also exist in an anarcho-capitalist society.[8] For them, what is important is that it is acquired and transferred without help or hindrance from the compulsory state. Anarcho-capitalist libertarians believe that the only just, and/or most economically beneficial, way to acquire property is through voluntary trade, gift, or labor-based original appropriation, rather than through aggression or fraud.[9]

Anarcho-capitalists see free-market capitalism as the basis for a free and prosperous society. Murray Rothbard said 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[10] (Rothbard is credited with coining the term "anarcho-capitalism").[11][12] "Capitalism", as anarcho-capitalists employ the term, is not to be confused with state monopoly capitalism, crony capitalism, corporatism, or contemporary mixed economies, wherein market incentives and disincentives may be altered by state action.[13] They therefore reject the state, seeing it as an entity which steals property (through taxation and expropriation), initiates aggression, has a compulsory monopoly on the use of force, uses its coercive powers to benefit some businesses and individuals at the expense of others, creates artificial monopolies, restricts trade, and restricts personal freedoms via drug laws, compulsory education, conscription, laws on food and morality, and the like.

Many anarchists view capitalism as an inherently authoritarian and hierarchical system, and seek the expropriation of private property.[14] There is disagreement between these left anarchists and laissez-faire anarcho-capitalists,[15] as the former generally rejects anarcho-capitalism as a form of anarchism and considers anarcho-capitalism an oxymoron,[16][17][18] while the latter holds that such expropriation is counterproductive to order, and would require a state.[4] On the Nolan chart, anarcho-capitalists are located at the northernmost apex of the libertarian quadrant – since they reject state involvement in both economic and personal affairs.[19]

Laissez-faire anarchists argue that the state relies on initiating force because force can be used against those who have not stolen private property, vandalized private property, assaulted anyone, or committed fraud. Many also argue that subsidized monopolies tend to be corrupt and inefficient. Anarchist theorist 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.[20] Many anarchists 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 argue that no coercive monopoly of force can arise on a truly free market and that a government's citizenry can't desert them in favor of a competent protection and defense agency.[21]

Rothbard bases his philosophy on natural law grounds and also provides economic explanations of why he thinks anarcho-capitalism is preferable on pragmatic grounds as well. David D. Friedman says he is not an absolutist rights theorist but is also "not a utilitarian", however, he does believe that "utilitarian arguments are usually the best way to defend libertarian views".[22] Peter Leeson argues that "the case for anarchy derives its strength from empirical evidence, not theory".[23] Hans-Hermann Hoppe, meanwhile, uses "argumentation ethics" for his foundation of "private property anarchism",[24] which is closer to Rothbard's natural law approach.

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 in Society and State

Rothbard used the term anarcho-capitalism to distinguish his philosophy from anarchism that opposes private property,[25] as well as to distinguish it from other forms of individualist anarchism.[26] Other terms sometimes used for this philosophy, though not necessarily outside anarcho-capitalist circles, include:

  • anti-state capitalism
  • anti-state marketism
  • capitalist anarchism
  • market anarchism
  • free market anarchism
  • individualist anarchism[27]
  • voluntaryism
  • natural order[28]
  • ordered anarchy[28]
  • polycentric law
  • the private-law society[28]
  • private-property anarchy[28]
  • pure capitalism
  • radical capitalism[28]
  • stateless capitalism
  • stateless liberalism

While the Friedmanian formulation of anarcho-capitalism is robust to the presence of violence, and in fact assumes some degree of violence will occur,[29] anarcho-capitalism as formulated by Rothbard and others holds strongly to the central libertarian nonaggression axiom:

[...] 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.[30]

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 the other alternative, 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.[31]

In general, the nonaggression axiom can be said to be a prohibition against the initiation of force, or the threat of force, against persons (i.e., direct violence, assault, murder) or property (i.e., fraud, burglary, theft, taxation).[32] 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 most people involved in libertarian political parties, would retain the state in some smaller and less invasive form, retaining at the very least public police, courts and military; others, however, might give further allowance for other government programs. In contrast, anarcho-capitalists reject 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 legal aggression, an entity that inherently violates the central axiom of libertarianism.[31]

Some anarcho-capitalists, such as Rothbard, accept the nonaggression axiom on an intrinsic moral or natural law basis. It is in terms of the non-aggression principle that Rothbard defined anarchism; he defined "anarchism as a system which provides no legal sanction for such aggression ['against person and property']" and said that "what anarchism proposes to do, then, is to abolish the State, i.e. to abolish the regularized institution of aggressive coercion".[33] In an interview published in the libertarian journal New Banner, Rothbard said that "capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism".[34]

Property

Private property

Central to Rothbardian anarcho-capitalism are the concepts of self-ownership and original appropriation that combines personal and private property

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.[35]

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

  • Anarchism: any philosophy that opposes all forms of initiatory coercion (includes opposition to the State)
  • Contract: a voluntary binding 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 rather than by statutory regulation
  • 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 that taxes and engages in regularized and institutionalized aggressive coercion
  • Voluntary: any action not influenced by coercion or fraud perpetrated by any human agency

This is the root of anarcho-capitalist property rights, and where they differ from collectivist forms of anarchism such as anarcho-communism where the means of production are controlled by the whole community and the product of labor is collectivized in a pool of goods and distributed "according to need" (which is to be determined and enforced collectively). Anarcho-capitalists advocate individual or joint (i.e. private) ownership of the means of production and the product of labor regardless of what the individual "needs" or does not "need". As Rothbard says: "if every man has the right to own his own body and if he must use and transform material natural objects in order to survive, then he has the right to own the product that he has made." After property is transformed through labor it may then only exchange hands legitimately by trade or gift; forced transfers are considered illegitimate. 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 his own body. 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 – 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 argues that the resource need not continue to be used in order for it to be the person's property, "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."[36] 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 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 says,

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.[26]

Rothbard says in "Justice and Property Right" that "any identifiable owner (the original victim of theft or his heir) must be accorded his property." In the case of slavery, Rothbard says 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." He believes slaves rightfully own any land they were forced to work on under the "homestead principle". If property is held by the state, Rothbard advocates its confiscation and return to the private sector: "any property in the hands of the State is in the hands of thieves, and should be liberated as quickly as possible." For example, he proposes that State universities be seized by the students and faculty under the homestead principle. Rothbard also supports expropriation of nominally "private property" if it is the result of state-initiated force, such as businesses who receive grants and subsidies. He proposes that businesses who receive at least 50% of their funding from the state be confiscated by the workers. He says, "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." Likewise, Karl Hess says, "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."[37] 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.[35]

Common property

Though anarcho-capitalists assert a right to private property, some anarcho-capitalists also point out that common, i.e. community, property can exist by right in an anarcho-capitalist system. Just as an individual comes to own that which was unowned by mixing his labor with it or using it regularly, a whole community or society can come to own a thing in common by mixing their labor with it collectively, meaning that no individual may appropriate it as his own. This may apply to roads, parks, rivers, and portions of oceans.[8] Anarchist theorist Roderick Long gives the following example:

Consider a village near a lake. It is common for the villagers to walk down to the lake to go fishing. In the early days of the community it's hard to get to the lake because of all the bushes and fallen branches in the way. But over time the way is cleared and a path forms – not through any coordinated efforts, but simply as a result of all the individuals walking by that way day after day. The cleared path is the product of labor – not any individual's labor, but all of them together. If one villager decided to take advantage of the now-created path by setting up a gate and charging tolls, he would be violating the collective property right that the villagers together have earned.[38]

Nevertheless, since property that is owned collectively tends to lose the level of accountability found in individual ownership to the extent of the number of owners – and make consensus regarding property use and maintenance decisions proportionately less likely, anarcho-capitalists generally distrust and seek to avoid intentional communal arrangements. Privatization, decentralization, and individualization are often anarcho-capitalist goals. But in some cases, they not only provide a challenge, but are considered next to impossible. Established ocean routes, for example, are generally seen as unavailable for private appropriation.

Anarcho-capitalists tend to concur with free-market environmentalists regarding the environmentally destructive tendencies of the state and other communal arrangements. Air, water, and land pollution, for example, are seen as the result of collectivization of ownership. Central governments generally strike down individual or class action censure of polluters in order to benefit "the many", and legal or economic subsidy of heavy industry is justified by many politicians for job creation within a political territory.[4]

Economics

The Austrian school of economics argued against the viability of socialism and centrally planned economic policy. Eugen von Böhm-Bawerk, a colleague of Austrian school founder Carl Menger, wrote one of the first critiques of socialism in his treatise The Exploitation Theory of Socialism-Communism. Later, Friedrich von Hayek wrote The Road to Serfdom (1944), which states that a command economy lacks the information function of market prices, and that central authority over the economy leads to totalitarianism. Another Austrian economist, Ludwig von Mises, wrote Human Action, an early exposition of the method he called Praxeology.

Murray Rothbard (1926–95).

Rothbard attempted to meld Austrian economics with classical liberalism and individualist anarchism. He wrote his first paper advocating "private property anarchism" in 1949, and later came up with the alternative name anarcho-capitalism. He was probably the first to use libertarian in its current (U.S.) pro-capitalist sense. His academic training was in economics, but his writings also refer to history and political philosophy. When young, he considered himself part of the Old Right, an anti-statist and anti-interventionist branch of the Republican party. In the late 1950s, he was briefly inv