Anarcho-capitalism (colloquially: Ancap) is a political ideology and economic theory that advocates the replacement of all government institutions with private corporations, along with the expansion of economic liberalism and a market economy through the promotion of a voluntary society.
Proponents argue that a society could function without a centralized state through voluntary exchange and private institutions that provide legal and security services relegating coercion to the collection of tort damages, and refining recoupment in the context of a free and open marketplace.Stacy, Don (2011). "Review of Kosanke's Instead of Politics – Don Stacy" They contend that essential public services, including policing, courts, and defense can be effectively replaced by competing private defense agencies, subrogation markets, and insurance providers.
This synthesis of anti-statism and private property remains deeply controversial among anarchists in general, the overwhelming majority of whom reject anarcho-capitalism. They argue that the institutions advocated by anarcho-capitalists, including private land ownership, the wage system, law and contract enforcement and workplace hierarchy, are inherently hierarchical and governmentalist, and therefore incompatible with anarchist principles.
While the earliest documented use of the term anarcho-capitalism appears in Karl Hess's essay, "The Death of Politics", published in Playboy in March 1969, the American economist Murray Rothbard largely developed and popularized the concepts of anarcho-capitalistsRoberta Modugno Crocetta, "Murray Rothbard's anarcho capitalism in the contemporary debate. A critical defense", Ludwig Von Mises Institute. Archived from the original. quote: "Murray Rothbard suggests the anarcho capitalist mode, [...]" and anarcho-capitalism in the early 1970s.Flood, Anthony (2010). Untitled preface to Rothbard's "Know Your Rights" , originally published in WIN: Peace and Freedom through Nonviolent Action, Volume 7, No. 4, 1 March 1971, 6–10. Flood's quote: "Rothbard's neologism, 'anarchocapitalism,' probably makes its first appearance in print here."
Classification
Rothbard, an American libertarian, drew on elements of the Austrian school of economics, Ayn Rand's Objectivism, classical liberalism and 19th-century American individualist anarchist thinkers Lysander Spooner and Benjamin Tucker. However, he rejected the individualist anarchist labor theory of value, opposition to non-usufruct property, lack of support for constitutional law and private courts, their economic theories (especially support for mutual credit, land banking, opposition to usury, rent and wage system), views on justice system (such as support for jury trials and jury nullification), and their opposition to absolute land ownership, including the right of landowners to set rules on their land.
Most anarchists do not view anarcho-capitalism as anarchist, since they understand anarchism as a system that is incompatible with capitalism. Anarcho-capitalism lies outside the tradition of the vast majority of anarchist schools of thought and is therefore more closely associated with right-libertarianism, voluntaryism, and classical liberalism, and is occasionally considered part of the New Right. Anarchists oppose capitalism, law and contract enforcment, hierarchies, private property, and consider "anarcho-capitalism" to be a contradiction in terms. Despite this, anarcho-capitalists and some right-libertarians consider anarcho-capitalism to be a form of anarchism, with some even considering it to be the only true form of anarchism..
According to Murray Rothbard, anarcho-capitalism comes from objectivism taken to its natural conclusion of privatizing all services, including police and courts, and that its "closest historical links are with the 'individualist anarchism' of Benjamin R. Tucker and Lysander Spooner".
In his posthumous work Are Libertarians “Anarchists”?, originally written in the mid-1950s, Rothbard concludes that he is not an anarchist on both the etymological and historical grounds. He did not believe in "establishing a tyrannical central authority that will coerce the noninvasive as well as the invasive", but he did not consider himself an archist either, proposing the new label "nonarchist". By 1972, Murray Rothbard would come to retract this view and assert that anarcho-capitalists are, in fact, anarchists.
Philosophy
An early formulation is the concept of "individual sovereignty", emphasized by the Belgian economist Gustave de Molinari. In this framework, sovereignty resides in the individual's absolute ownership of their person and property rather than in the state. Consequently, any social need – including the protection of rights – is viewed as a commodity that the individual has the sovereign right to produce personally or purchase from competing private providers in a free market.
According to author J. Michael Oliver, a philosophical movement arose during the 1960s in the United States that championed "reason, ethical egoism, and free-market capitalism." Oliver states that anarcho-capitalism is a political theory that follows Objectivism, a philosophical system developed by Ayn Rand. However, he acknowledged that his advocacy of anarcho-capitalism is "quite at odds with Rand's ardent defense of 'limited government'". Professor Lisa Duggan also said that Rand's anti-statist, pro–free market stances went on to shape the politics of anarcho-capitalism.
According to Patrik Schumacher, the political ideology and program of anarcho-capitalism envisages the radicalization of the neoliberal "rollback of the state." It also 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."
Molinari described the aim as "liberty of government", arguing that transitioning society from a forced artificial institution to a "purely natural fact" based on human sociability and needs. In this vision, authority is not abolished but transformed; it shifts from a territorial monopoly imposed by coercion to a service accepted and respected based on its utility. By replacing the "terror" of the state with voluntary associations, anarcho-capitalists argue that peace becomes the natural consequence of liberty, just as war is seen as the natural consequence of monopoly.
On the state Anarcho-capitalists seek to privatize law enforcement along with all other government services such as education, charity, and infrastructure. They see capitalism and the free market as the basis for a free and prosperous society. Murray Rothbard states 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 "relies on coercive mechanisms that interfere with market processes."Rothbard, Murray N., A Future of Peace and Capitalism ; Murray N. Rothbard, Left and Right: The Prospects for Liberty . Rothbard argues 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. published in
Rothbard used the term anarcho-capitalism to distinguish his philosophy from anarchism that opposes private property"Libertarianism" (2007). In Encyclopædia Britannica. Retrieved 30 July 2007. as well as to distinguish it from individualist anarchism.Murray Rothbard (2000). "Egalitarianism as A Revolt Against Nature And Other Essays: and other essays". Ludwig von Mises Institute, 2000. p. 207. Other terms sometimes used by proponents of the philosophy include: Individualist anarchismAvrich, Paul (1996). Anarchist Voices: An Oral History of Anarchism in America (abridged paperback ed.). Princeton: Princeton University Press. p. 282. . "Although there are many honorable exceptions who still embrace the 'socialist' label, most people who call themselves individualist anarchists today are followers of Murray Rothbard's Austrian economics and have abandoned the labor theory of value."Carson, Kevin (2006). Studies in Mutualist Political Economy. "Preface". Charleston: BookSurge Publishing. . "Murray N. Rothbard (1926–1995), American economist, historian, and individualist anarchist." Natural orderHoppe, Hans-Hermann (31 December 2001). "Anarcho-Capitalism: An Annotated Bibliography" . Lew Rockwell.com. Retrieved 5 July 2020. Ordered anarchy Private-law society Private-property anarchy Radical capitalism
Maverick Edwards of Liberty University describes anarcho-capitalism as a political, social, and economic theory that places markets as the central "governing body" and where government no longer "grants" rights to its citizenry.
Anarchist critics such as Peter Sabatini and Bob Black argue that private defense agencies would act as private states, leading to coercion.Brian Morris, "Global Anti-Capitalism", pp. 170–176, Anarchist Studies, vol. 14, no. 2, p. 175.Bob Black (1992), "The Libertarian As Conservative", The Abolition of Work and Other Essays, p. 144
The debate between minarchism, that is, advocacy for retaining a minimum "night watchman" state on the one hand, and anarcho-capitalism, which seeks to abolish the state, is a major topic of contention in modern libertarian circles. Anarcho-capitalists see minarchism as inconsistent, because it claims to oppose compulsion while advocating compulsory funding for, and centralized provision of, the very industry most likely to endanger person and property – namely the military. For anarcho-capitalists, the non-aggression principle can have no exceptions.
In Anarchy, State, and Utopia, libertarian philosopher Robert Nozick argues that anarcho-capitalism would inevitably transform into his desired minarchist state, even without violating any of its own non-aggression principles. A single locally dominant private defense and judicial agency would eventually emerge with other agencies unable to effectively compete against its advantages. Therefore, even to the extent that the anarcho-capitalist theory is correct, it may only exist for a limited period before a single, private, protective agency emerges that functions as a de facto minimalist "state".
Rothbard was so vehemently opposed to minarchism that he dedicated Chapter 29 of The Ethics of Liberty to refuting Nozick's "night watchman state" argument. Rothbard expounded on how PDAs, competing insurers, and private courts would replace the state. Private judges and arbitrators do not "make law". They simply apply the universal principals of property rights in a real world context and in real time. Without a legal monopoly a standardized body of case law and precedent aligned with NAP naturally emerges, which competing law merchants tend to consult.
Rothbard defines coercion as “the invasive use of physical violence or the threat thereof against someone else’s person or (just) property.” Hoppe in Democracy: The God That Failed defined a state as "an agency that exercises a compulsory territorial monopoly of protection and the power to tax." In The Law (1850), Frédéric Bastiat vehemently opposed state-enforced redistribution and progressive taxation, classifying them as "legal plunder" where the state utilizes its coercive power to violate private property rights under the guise of philanthropy. Bastiat argued that the state perverts its purported purpose of protecting liberty when it forcibly extracts wealth, noting that "[the law] could not organize labor, education, and religion without destroying justice" and asserting that nothing can enter the public treasury for one citizen unless others "have been forced to send it in."