Bronze-level article


From RationalWiki
(Redirected from Anarcho-capitalist)
Jump to navigation Jump to search
Anarcho-capitalist flag.
The dismal science
Icon economics.svg
Economic systems

  $  Free market
  €  Social democracy
  ☭ Socialist economy

Major concepts
The worldly philosophers
It's not anarchy, it's
Icon Anarchism.svg
Smash the state
Domestic terrorists?
I'm not a fascist, I like...
Actually fascism is cool
Capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism.
Murray Rothbard[1]

Anarcho-capitalism (with its proponents being referred to as anarcho-capitalists or ancaps), is a fringe political ideology that prioritizes the freedom of the individual from state coercion[note 1] and advocates market-based solutions to all social needs.[note 2] Anarcho-capitalists believe that compulsory taxation is a violation of individual liberty, and that law enforcement, courts, and all security services should be provided by voluntarily-funded competitors, such as private defense agencies. Anarcho-capitalism is, in effect, an oxymoron.[2]

Anarcho-capitalism is mainly furthered in the public sphere by American reactionary think tanks; its visible supporters mostly congregate online. It has never constituted a socially active movement or organized political power base. It's one of the youngest philosophies to try to place itself under the umbrella of "anarchism", having only existed as a discrete philosophy for a few decades, although antecedents date back to the nineteenth century.[3]

Ancaps are as much anarchists as Christian Scientists are scientists. Traditional anarchist movements originated on the left, and do not consider anarchy and capitalism to be compatible due to the inherent hierarchy in the latter (anarcho-capitalists see anarchy as the absence of hierarchy supported by illegitimate force), and thus consider anarcho-capitalism not to be an authentic form of anarchism. Ancaps have proven to be one of the greatest tools for anarchist unity in living memory, as more or less every single major anarchist group and tendency stands united in despising them. Needless to say, socialists, communists, social democrats, progressives, liberals, and centrists aren't exactly fans of them either and will more than often unite even with the aforementioned anarchists to beat up on the ancap. (Or, possibly, they're simply the biggest tools, period.) Even conservatives (even and especially of the neo variety) aren't above taking the occasional pot shot at them.


The term "anarcho-capitalism" is a portmanteau of anarchism and capitalism. (One guess as to which of those two concepts gets priority...) Actual anarchists oppose both state authorities and elite economic classes in that both impose authority over people. They therefore see anarchism and capitalism as incompatible, because in a capitalist system, one has no choice but to work for capitalists. Anarcho-capitalists, on the other hand, believe anarchism is incompatible with the totalitarianism they believe is required to prevent the establishment of capitalism. Anarcho-capitalists focus on the state dimensions of power but believe that in a free society, workers will, through various forms of free association, have options other than selling their labour to the bourgeoisie. Thus anarcho-capitalists do not see a contradiction between capitalism and freedom from coercion.


Non-aggression axiom[edit]

Murray Rothbard wrote:[4]

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.

The non-aggression axiom is prohibition against the initiation of force of any kind, against persons (assault, murder) or against property (burglary, taxation). Thus according to the non-aggression axiom, taxation is a kind of force or coercion equivalent to theft. But taxation isn't actually any more coercive than rent. In an anarcho-capitalist society, a tenant could claim that they are coerced for being born on someone else's private property and being forced to pay rent. But assuming that landlord acquired the land legitimately, the tenant would have no right to that land unless they performed some sort of voluntary transaction with the landlord. If the tenant doesn't come to some agreement with the landlord, then the tenant is simply trespassing on private property and violating the non-aggression principle.

Additionally, it's not clear what counts as the limits of aggression: Rothbard thought the law should not protect non-physical assaults on privacy or reputation.[4] But what about pollution (chemical, noise, light, electromagnetic, nuclear…) or other negative externalities? Homesteading theory would allow one to pollute air freely as long as it didn't belong to anybody else, but not to tamper with anybody else's air. A strict interpretation would ban all emissions from one's property; Rothbard initially held to this, suggesting that lawsuits would prevent all pollution.[5] Since this is unreasonably restrictive and unenforceable, he later moderated it, suggesting that tortious pollution would have to cause provable damage traceable to an individual (what if 100 people pollute the air?), and then only if it had not been homesteaded (if you move next to a noisy nightclub you have no right to silence). Nobody had the right to live "as if in a soundproofed room"; only "excessive noise" (excessive pollution in general) would be actionable.[4] Everybody would start with the right to homestead unclaimed air with pollution, and if you wanted true isolation you would have to pay for it. This shows that in practice there is no such thing as an absolute right, depending firstly on what is judged reasonable or excessive, and secondly on what is provable in court.

Private property[edit]

Self-ownership is a concept central to anarcho-capitalism. Hans-Hermann Hoppe writes:[6]

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 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.

Intellectual property[edit]

Anarcho-capitalists tend to be divided on the issue of copyright. Rothbard supported copyright[7] while Stephan Kinsella opposes it.[8] Samuel Edward Konkin III's position is difficult to discern; he doesn't appear to have taken one directly but published his books under copyleft.Wikipedia Andrew Joseph Galambos took his support of copyright to such extremes that he believed its term never expired, even with the death of the creator. Galambos felt that even scientific insights (such as Newton's theory of gravity) were intellectual property whose uses required permission from the owner. He was infamous for symbolically dropping a penny into a jar each time he'd used a word someone else invented (i.e. nearly all of them) and even slightly changed his name to distinguish it from that of his father, as they had the same one, which he felt his father owned and he would be infringing otherwise (apparently he didn't feel his father had given permission for him to use it simply by naming him). All anarcho-capitalists oppose patents.

Private defense agencies[edit]

Some anarcho-capitalists advocate private defense agencies (PDAs) for ensuring law and order. Some would simply leave the matter of protection up to whatever evolves in the market, with some hiring private security or rent-a-cops, and others relying on their personal marksmanship skills and arsenals of firearms. It is important to note that as anarcho-capitalists advocate abolition of the state, law and order would be completely based around defense of private property; there would be no body of "law" per se, excepting possibly some recognition of natural law residing in absolute private property rights. There would likewise be no national defense, except and unless individuals freely agree to pool their resources and hire a private mercenary army for some sort of collective defense (say, of a town or a group of properties).


Anarcho-capitalists claim descent from a body of 19th-century anarchist writers, of the individualist variety (Benjamin Tucker, Lysander Spooner), the mutualist variety (Pierre-Joseph Proudhon), and the egoist kind (Max Stirner) which is a pretty dubious claim considering how Stirner was anything but a capitalist and his ideas are directly contrary to the anarcho-capitalist idea of property and rights.[9] They stop short, however, of trying to claim any descent from collectivist and anti-capitalist anarchists such as Kropotkin and Bakunin. But Tucker and Proudhon were also anti-capitalist, and even Spooner's Jeffersonianism did not exactly view modern capitalism in a good light, though anarcho-capitalists tend to support only voluntary aspects of capitalism. Leftist and collectivist anarchists also claim descent from the same body of early anarchist writers. Although anarcho-capitalists argue against minarchism as a philosophy, they are often associated with "classical liberal" writers during the New Deal of Franklin D. Roosevelt who wrote anti-New Deal books proclaiming the state, itself, as the problem and verged on anarchist rhetoric if not sentiments. Typical of these were Our Enemy, the State (1935) by Albert Jay Nock (a former Georgist), and The Discovery of Freedom by Rose Wilder Lane (1943). However, anarcho-capitalists are generally critical of classical liberalism as they believe mostly eliminating the state is simply not enough.[10]

As the early libertarian movement was getting off the ground during the 1960s, libertarian interest in anarchism as an antecedent was sparked by James J. Martin's history of early American anarchism, Men Against the State. Meanwhile, Robert LeFevre (see below) and Andrew Joseph Galambos were both giving for-pay lectures on political theory in which they began with a set of postulates and then, taking those postulates to their logical extreme, concluded the state itself would have to be abolished in order to have a truly free market. LeFevre's lectures were influential (and involved, among other associates and guest lecturers, James J. Martin and Rose Wilder Lane); Galambos' less so due to his crank ideas on intellectual property. Many budding activists on the right moved in and out of political circles ranging from Ayn Rand's Objectivism, to the John Birch Society and Barry Goldwater's presidential campaign during that period, and discovered the LeFevre or Galambos lectures.

Another book which proved influential was The Market for Liberty (1970) by Morris and Linda Tannehill, written with all the zeal of new converts after the Tannehills had discovered, and eagerly devoured, the works of Ayn Rand and Ludwig von Mises. Somehow in the process of studying Rand and Mises, the Tannehills seized upon the idea (unlike Rand and Mises) that government itself should be abolished. It was from the Tannehills' book that the early development of such ideas as private defense agencies and marketplace systems of arbitration and restitution (to replace government courts and prisons) began to take form.

The biggest influence, however, turned out to be Murray Rothbard. Rothbard had gone from being a "Taft Republican" to an Ayn Rand follower to an independent "old right" conservative who advocated alliances with the "new left" over opposition to the draft and the Vietnam War. He, along with former Goldwater speechwriter-turned-new leftist Karl Hess, were influential in starting the modern libertarian movement. But Rothbard went further: while his activities were in the political realm and he had no qualms about voting or involvement in trying to influence public policy, his real sentiments were in favor of the abolition of the state itself. His book Power and Market (1970) was the second major work in the modern anarcho-capitalist canon, after the Tannehills', followed in 1973 with For a New Liberty, written as a manifesto for the libertarian movement as a whole. While an anarchist himself, Rothbard continued to be a major influence among most libertarians, most of whom stop well short of advocating abolishing all government.

David D. Friedman (son of Milton Friedman) is a major anarcho-capitalist figure today (Milton was a "Chicago School" market economist and a favorite of Ronald Reagan and Margaret Thatcher, his naughty son David apparently going rogue down the anarchist path, although different from most other anarcho-capitalists he too is an adherent of the Chicago School). David Friedman's 1973 book The Machinery of Freedom was the third major anarcho-capitalist book, but took the "consequentialist" view of the Chicago School rather than the "natural rights" based anarcho-capitalism of the Tannehills and Rothbard.

Much ideological back-and-forth bickering has taken place since between followers of Friedman's consequentialist versus Rothbard's natural law versions of anarcho-capitalism. One major difference between the two is that in Rothbard's model, a single body of law that had been reached by a consensus of legal scholars would be enforced by private parties, but in Friedman's model each private party could make its own law to enforce. This was an outgrowth of their opposing ethical theories.


These four are all forms of anarcho-capitalism, as they each advocate both laissez-faire capitalism and complete abolition of the state, but differ from other anarcho-capitalists in that they have a main area of emphasis (pacifism, counter-economics, mobile living, etc.) not shared by most other anarcho-capitalists:

Robert LeFevre advocated a combination of anarcho-capitalism and pacifism, which he extended to total non-coercion in all relationships between individuals. (He defined voting, for example, as a form of coercion and therefore a violation of both pacifist and libertarian principles.) He called his philosophy "autarchism" (not to be confused with autarky) to distinguish it from anarchism.

Samuel Edward Konkin III advocated a variant on anarcho-capitalism which he called "agorism". He advocated that people drop out of the regulated and taxed above-ground economy and shift all their economic and other activity to the black market or to untaxed and unregulated avenues. He called this "counter-economics" and defined it broadly to include everything from people using offshore bank accounts and tax evasion, to engaging in illegal activities like drug use or prostitution, to buying via yard sales, bartering, or shopping in another state to avoid paying sales taxes to the systematic employment of illegal immigrants precisely because of their illegality. Thus would the government become irrelevant and wither away, in both the public sense as it's deprived of any justification for its existence and in the practical one as it's systematically deprived of revenue. Agorists, however, do not generally self-identify as anarcho-capitalists, and indeed one agorist blogger, Brad Spangler, describes the "left-Rothbardian" philosophy of agorism as libertarian socialist (which term was a self-identifier frequently used by 19th-century anarchists critical of capitalism).

"Voluntaryism", apparently a combination of LeFevre's pacifism and Konkin's counter-economics, found its most notable advocates in George Smith, Wendy McElroy, and Carl Watner, and has recently been taken up as a self-descriptor by some of the more radical enthusiasts of the Free State Project and alt-currencies such as Bitcoin. Voluntaryists assert they seek non-violent, non-electoral routes to freedom: "neither ballots nor bullets". Watner also seems to have had some involvement with Neo-Tech as he is the author of one of their books, Businessmen vs. Neocheaters; McElroy is an "individualist feminist"; Smith is a well-known atheist writer.

The concept of "vonu" was also advocated by several libertarian writers (many of them associated with Eden Press or the now-defunct Loompanics), which basically means living mobile and under the radar. This concept is somewhat similar to what is now being called "Going Galt", or to The Who's song "Goin' Mobile" ("watch the police and the tax man miss me").

Criticism and response[edit]

Criticism from minarchists and left-anarchists[edit]

Anarcho-capitalism faces criticism from capitalists who support the existence of the state. On the other hand, anarcho-capitalists have accused them of not being true capitalists. Critics claim private defense agencies could create defense monopolies. Some critics claim they will be like mafia groups, and a "gang war" will arise among them. Anarcho-capitalists have dismissed this criticism by claiming that free market competition will prevent monopolies. Additionally, the other anarchist schools of thought stand united in critiquing anarcho-capitalism as not anarchism, since the rest view capitalism as inherently oppressive and hierarchical. Some have labeled anarcho-capitalism to be merely "private state capitalism." Minarchist (minimal government) libertarians may support most of the same things as anarcho-capitalists — private roads, private certification associations replacing occupational licensing — but view complete anarchism as unworkable and recognize a need for a small government remaining in place to prevent the emergence of tyranny out of a power vacuum.

Logical fallacies[edit]

Anarcho-capitalist books tend to read like Marxist books — dense and full of provocative ideas that sound good in theory, but are presented as "this is the way it would work" when it has never really been tried. The Market for Liberty makes blanket statements such as "in a laissez-faire society, only gold would be accepted as the standard of monetary value" (how do they know?); competing educational systems would "forever end squabbles over curriculum" (how?); eliminating medical licensing would "end the doctor shortage and drastically reduce the cost of medical care" because "anyone could practice medicine in any area in which he was competent, regardless of the number of years he spent in college" but we needn't worry about quacks performing botched surgeries because "reputable physicians would probably form medical organizations which would only sanction competent doctors, thereby providing consumers with a guide" (and no quack would ever falsely claim endorsement, they aren't that shady); and we needn't worry about private defense agencies becoming like warring mafia gangs because "a defense company which committed aggression… would be left with no customers, associates, or employees except for undesirables." It's not reassuring. The book brings up many objections in a straw man manner and dismisses them without serious discussion, and uses "always", "never", and "will probably" far too much.[11]

Samuel Edward Konkin's The New Libertarian Manifesto posits five hypothetical stages in which government is supplanted by a black market "counter-economy" led by a "New Libertarian Alliance". Again, this is purely hypothetical and smacks of Marxist historical determinism and Leninist vanguardism; how does he know?

Competing private courts enforcing competing polycentric bodies of law, as envisioned by David Friedman, presents an especially confusing mess. The implications of this are best left to the reader to imagine.

Assorted crankery[edit]

As with any fringe ideology, anarcho-capitalism is riddled with people stacking their own crank views on top of it, including views that conventional wisdom might hold to be incompatible with anarchism (and capitalism for that matter) to begin with. A short list could include the aforementioned Galambosian view on intellectual property; Hans-Hermann Hoppe's view that monarchy is better than democracy; Eric S. Raymond's wingnut views on the War on Terror; the Robert A. Heinlein fan club who think fascist tripe like Starship Troopers is their idea of a libertarian society; and Gary North, a dominionist Christian who runs in anarcho-capitalist circles (we don't know whether he considers himself an anarcho-capitalist, but he hangs around with them).

It also has a history of people who abandon it as soon as they find themselves in a position of power (Alan Greenspan and Dana Rohrabacher).

Genocide through NAP[edit]

See the main article on this topic: Genocide

You know that meme where the Ancap kills a kid and his entire family because he trespassed on the Ancap's lawn, thus violating the NAP? Well, there is one event that came disturbingly close to that metaphor. During the California Indian genocide, settlers would routinely exterminate entire families of Indians for stealing livestock. The White settler John Burgess testified that 10-15 Indians were killed for every head of cattle that had been killed.[12] A White farmer, John Lawson, admitted an attack killing 8 Indians, 3 by shooting and 5 by hanging, after some of his hogs were stolen. He stated that these killings were a common practice.[13] The California Indian genocide is estimated to have wiped out 80%[14] of the native population, and as much as 95%[15][16] or even 100%[17] among the most heavily targeted tribes. 9,400 to over 16,000 of these deaths were caused directly by over 370 massacres perpetrated by settlers.[18] These massacres were sometimes committed in perverse brutality, such as ripping out the hearts of young girls and throwing them into the bushes in which their sister was hiding,[19] and the perpetrators were usually private militas.[20][21][22] To be fair, the militias would often kill without justification[23] and were incentivized to kill more to receive bounty payment by the California Statehood,[24] though one may argue a particularly genocidal private company could do that as well.

These events make Ayn Rand's belief that the American Indians forfeited their right to property because they were savages,[25][26] and Stefan Molyneux's denial[27] that the American Indian Genocide even occurred even more disturbing.

Would it work?[edit]

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.
Noam Chomsky[28]

One question is whether anarcho-capitalism would work at all as envisioned by its proponents, or whether there would be so much chaos that private defense agencies, the owners of private highways, private courts with their own bodies of law, and private medical associations, among others, would soon coalesce into a new de facto state — with no clue as to what sort of state, which could be a minarchist one but possibly could be far more dictatorial than the one anarcho-capitalism replaced. Writer Paul Birch argues it would either turn into city-states before long, suffer the coalescence mentioned before, or descend into chaos.[29]

Societies with minarchist governments have existed and worked; no examples exist of capitalist societies with no government that didn't soon evolve (or devolve) into government. Anarcho-capitalists cite medieval Iceland and 17th-century Pennsylvania but both were really minarchist societies — Iceland's althing and Pennsylvania's caretaker state government during the colonial era — and more to the point, both were monolithic, agrarian, and small, isolated cultures at the time; it worked in Pennsylvania at the time because of the Quaker influence of living in peace, and even then Pennsylvania got another government soon.[30] What might happen in a multicultural, globalized world with high technology, large cities, billions of people, and weapons of mass destruction is anyone's guess.

One recent cautionary example of what could happen might be the failed state of Somalia, where warlords, gangs, and organized crime could be viewed as the competing private defense agencies envisioned by anarcho-capitalists, but again, this is hardly reassuring. Somalia is riddled with crime and piracy (actual sea piracy, with real pirates — not the kind that downloads cars), and one's safety, let alone one's ability to conduct business, frequently depends on whom one can bribe. However, the question most anarcho-capitalists ask themselves when looking at cases like this is not whether such an example of anarchy is bad; they ask themselves how much worse it would be if there was a state in this anarchist territory. It was asserted that Somalia had shown improvement in all areas except education since the collapse of its state, before the 2010-2012 famine that claimed nearly 260,000 lives.[31] Also, neither different territories controlled by warlords nor the breakaway state of Somaliland are anarchies to begin with; they are de facto states. Some anarcho-capitalists cite Somalia as an example of a society that is better off without a state.[32]

The problem is, how does one solve disputes without a government that maintains a monopoly on force to mitigate disputes under a single objectively defined framework of law? While there are very few known precedents within government-maintained economies, the consensus-based body of rules used to maintain order in the publishing industry before the advent of modern copyright law has been the subject of some attention.[33] Some have also studied the political economies of outlaws, such as pirates.[34]

Capitalism in an anarcho-capitalist society would mean a mode of production valuing individual property rights and voluntary transactions between individuals. An enforcer of property rights would be required. Anarcho-capitalists propose a voluntary means of enforcement such as private courts and private defense agencies. However, this would either not work or lead to some entity with the properties of a state. For a transaction to be voluntary, it means for that transaction to be devoid of force and fraud for all parties. A convicted party can simply refuse to obey the judgment made by a voluntary private court; the party can simply withdraw their consent to fall under the private court's jurisdiction at any time. The private court must resort to force to make the convicted party comply with the judgment. This makes the means of enforcement involuntary for the convicted party, i.e. there exists something like a state. If the private court does not use force, then the property rights of the victim are not being adequately protected, i.e. there does not exist capitalism. This cannot be solved simply by signing a contract not to withdraw consent, because force must be used to make the involved parties comply with the terms of that contract itself.

How does land come to be acquired in an anarcho-capitalist society? Anarcho-capitalists propose a system of homesteading, but that leads to problems. Since landlords would essentially be absolute rulers of their land, a landlord can devise any terms desired for other people to rent land from that landlord. A landlord can charge taxes but call it "rent", a landlord can intervene in other transactions between tenants, etc. A landlord becomes a state unto himself. In fact, how can anarcho-capitalists prove that the current states are not landlords that acquired land through "legitimate" homesteading rules in the past? Anarcho-capitalists usually claim that states acquired land "illegitimately", such as through military conquest. But then they also claim that the current upper class acquired their land legitimately and not through illegitimate means such as conquest. Anarcho-capitalists use some double standard to justify land ownership by the upper class but not by the state.

But who will pick the cotton?[edit]

Most of the criticisms of anarcho-capitalism can be reduced to the idea that without a state, some important social or economic activities would not be possible. Among these activities are often mentioned: building the roads, law enforcement, justice, universal healthcare, and universal education. Regardless of whether or not those activities need the existence of a state, those criticisms miss an understanding of the philosophical point of view of anarcho-capitalism. From the anarcho-capitalism perspective, the state is immoral because it is based on the initiation of force, hence it violates the non-aggression principle, and therefore it must be abolished. Asking an anarcho-capitalist: "But without a state, who will build the roads?" is like asking an abolitionist: "But without slavery, who will pick the cotton?", that is, both think that an institution (state or slavery, respectively) must be abolished because it is immoral, independently from the consequences; so that they could both answer: "It doesn't matter." In this regard, anarcho-capitalism is a deontological ethic; that is, it judges the morality of actions on the basis of rules, instead of consequences.

A possible rebuttal to this point is that people can voluntarily band together to build and maintain roads (but that reeks of collectivism), or that private agencies will take over the maintenance and building of roads and fund their work through tolls.

The closure of the frontier[edit]

Much land available for homesteading has already been occupied, although there is generally other land left over.[35] That occupation was the genesis of the state, founded in order to protect agricultural settlements, which developed into the first organised agrarian societies.[36] The historical circumstances for homesteading as justification for land ownership still exist at this point, where all claims are really founded in actual possession. See adverse possessionWikipedia and the concept of "time limits to civil actions".

The way that societies exist without coercion is in the natural capacity to leave that society and create a new one, often described as "voting with your feet". That may require a pristine, vast frontier such that émigrés from existing societies can sustain themselves, either as nomads or as settlers; or even simply moving down the road to occupy the vast swathes of empty land that make this large and bountiful planet. This frontier always exists, yet such frontiers are often absorbed by the exponential growth of human population and economic activity. The relationship of human-to-human and human-to-state is always in flux, with new forms evolving and others fading. Hence the entire concept of "anarcho-capitalism" is infantile nonsense, founded in a very obvious lack of real-world experience, and too much thinking.


An externality exists when a third party is affected during an exchange between two agents. For example, a mining company that dumps its waste into a river, contaminating the water. The consumers who live far from the river will benefit from this arrangement, while people who live along the river are harmed by such a productive system.

An anarchocapitalist can argue with the Coase theorem that the efficient arrangement can be arrived at through market exchanges alone. However, the condition that the theorem establishes to arrive at an efficient private arrangement is the absence of transaction costs, and this may not always occur in practice, as the Coase theorem only works when property rights are well-defined and transaction costs are low. In cases that it does not apply, a third party must establish rules that force private costs to equal social costs. This third part is the state, and the main form used to arrive at the economically efficient arrangement is called Pigouvian taxWikipedia.

Public goods and the free-rider problem[edit]

Public goods are goods that are neither rival nor excludable. These goods are goods whose usufruct by one person does not prevent another person from also using them, as well as they are goods whose possibility of excluding those who do not pay for their production or maintenance is practically nil. Goods of this type, if provided solely by the market, are under-produced, as they are susceptible to the free-rider problem.

The free-rider problem characterizes a situation in which those who do not pay for the supply of a good use it anyway, and, as a result its production is sub-optimal. The army is the most obvious example of a public good. Let's suppose that there is a nation whose funding of national defense is on an entirely voluntary basis. What will happen? The most rational action from a person's point of view is not to pay anything, because that if they do, the marginal benefit they will receive from a marginal improvement in national defense is less than the marginal cost of the outlay. But if they don't pay for it, they still enjoy the benefits of having such good. However, what happens when everyone thinks like this? Ultimately, if all people act thinking only for themselves, there is no national defense at all. Again the only way to resolve this issue is when an agent is capable of coercing everyone else to pay the necessary quota to match marginal costs to marginal benefits. (aka the state collecting taxes).

Alternatively, people can band together for a common purpose out of, say, a common interest or out of altruistic concerns. The Stanford Encyclopedia of PhilosophyWikipedia notes that the American League to Abolish Capital PunishmentWikipedia have a "personal stake in the death penalty." Likewise, the scores of people willing to die for a cause goes against rationality theory. Voluntary collectivism can be a powerful alternative to coercive measures.[37][note 3]

Historical examples[edit]

The number of years an area, in ancient times, had a state correlates with their 2005 GDP per capita at 0.23. This increases to 0.48 when adjusting for ancestry.[38]

See also[edit]

External links[edit]


  1. State coercion being, by anarcho-capitalist definitions, pretty much anything a state does - cue a reference to their somewhat mistaken WeberianWikipedia definition of a state as an entity possessing a "monopoly on violenceWikipedia" rather than old Max's specific definition, namely the monopoly of the legitimate use of physical force.
  2. Because it's not like markets would ever include any coercion, right?
  3. Of course, other motivations can be posited to join such activity. But the point still remains that voluntary collectivism, whether motivated through selfish means or otherwise, can be an alternative to purely coercive means.


  1. Exclusive Interview With Murray Rothbard The New Banner: A Fortnightly Libertarian Journal (25 February 1972)
  3. Specifically, Gustave de Molinari's essay The Production of Security outlined some of what is now called anarcho-capitalism.
  4. 4.0 4.1 4.2 Murray Rothbard. Law, Property Rights, and Air Pollution. Cato Journal, 2(1)55-99. 1982.
  5. An Anarchist FAQ, InfoShop
  6. Hans-Hermann Hoppe. Rothbardian Ethics. 2002 May 20.
  7. Murray Rothbard. Patents and Copyrights. Man, Economy, & State. 2004.
  8. N. Stephan Kinsella. Against Intellectual Property. Journal of Libertarian Studies, 15(2)1-53. 2001.
  10. Classical Liberalism versus Anarchocapitalism
  11. Quotes are from The Market for Liberty by Morris and Linda Tannehill, 1970, Cobden Press 2009 edition.
  12. California Legislature, Majority and Minority Reports of the Special Joint Committee on the Mendocino War 1860, p. 24, John Burgess deposition
  13. California Legislature, Majority and Minority Reports of the Special Joint Committee on the Mendocino War 1860, p. 68, John Lawson deposition
  14. Madley, Benjamin (2016). An American Genocide: The United States and the California Indian Catastrophe, 1846–1873.
  16. Thornton 1987, pp. 107-109.
  18. Madley, Benjamin, An American Genocide, The United States and the California Catastrophe, 1846–1873, Yale University Press, 2016, 692 pages, ISBN 978-0-300-18136-4, p.11, p.351
  20. Secrest (1988), p. 20.
  21. California Legislature, Majority and Minority Reports of the Special Joint Committee on the Mendocino War 1860, p. 49, Dryden Lacock deposition
  22. California Legislature, Majority and Minority Reports of the Special Joint Committee on the Mendocino War 1860, p. 22, William Scott deposition
  23. Lindsay 2012, p. 194
  24. Assembly Bill 65 1850.
  25. Ayn Rand Answers: The Best of Her Q & A, edited by Robert Mayhew, 2005, NAL Trade, ISBN 0451216652, pg 102-104 Burns 2009, pp. 266
  26. Mrs. Logic by Sam Anderson, New York magazine, October 18, 2009
  30. "Pennsylvania's Anarchist Experiment: 1681-1690" by Murray Rothbard describes a minarchist society with a government that did very little, not an anarchist society.
  32. Stateless in Somalia, and Loving It
  33. Without Copyrights: Piracy, Publishing and the Public Domain, by Robert Spoo. Oxford University Press, 2013. [1]
  34. "An-arrgh-chy: The Law and Economics of Pirate Organization"[2]
  38. (Spolaore and Wacziarg, 2012)