Anarcho-Capitalism

The most radical libertarians are the "anarcho-capitalists": i.e., those who believe in privatizing all government, not just extraneous and illegitimate functions of government, such as the welfare state. The whole political realm is to be subsumed within the economic realm. It is the equal and opposite extreme to totalitarianism, which subsumes the economic realm within the political realm: to paraphrase Mussolini, it signifies "everything for the market; nothing against the market; nothing outside the market."

The foremost proponent of anarcho-capitalism was Murray Rothbard (1926-95). He is arguably the most representative figure of the libertarian Left. For one thing, he explicitly claimed (at one point, anyway) to be a man of the Left, complaining that the socialists stole the title from the classical liberals (Left and Right, the Prospects for Liberty [San Francisco: Cato Institute, 1979]) -- just as contemporary "classical liberals" complain about the change in meaning of the term "liberalism." For another, he and his views are impossible to caricature, because the truth is already so extreme: he, more than almost anyone else this investigator has come across, articulates the inarticulate and defends the indefensible.

What I propose to demonstrate is that the anarchists are actually correct when they argue that the minimal-state or "minarchist" libertarians are being inconsistent; but so, more profoundly, are the anarchists. The premises of all libertarian arguments are contrary to human nature, and their logical consequences are self-contradictory.

The fundamental concepts that form the libertarian worldview are never more succinctly and explicitly stated than in the title of Rothbard's Power & Market: Government and the Economy (Menlo Park, California: Institute for Humane Studies, Inc., 1970). On the one hand he posits "the free society" and "the free economy" (which, for him, are practically synonymous terms); on the other, the "intervener" -- usually government -- "who intervenes violently in free social or market relations" (ibid., p. 9). Although he does occasionally recognize the existence of non-market relations and non-state interventions, he always prefers to ignore them. Rothbard's basic moral principle is that the society (= economy) should be free from any and all intervention (= government).

All libertarians agree on the principle that the "initiation of aggression" is wrong; the minimal-statists argue that the state is necessary to retaliate against such initiation. But Rothbard catches them in a contradiction: the state, for its very existence, must "initiate aggression" -- e.g. through taxation.

Most ordinary libertarians treat the "non-aggression" principle as if it were an axiom, i.e. as if it were self-evidently true, because the opposite statement would be self-contradictory. But it is neither self-evident nor an irreducible primary: it depends on a long chain of reasoning from assumptions that are usually taken for granted.

Rothbard makes this prior reasoning unusually explicit. Like Ayn Rand, he claims to be an Aristotelian in philosophy, but again like Ayn Rand, his conception of human nature is actually Hobbesian. Unlike Ayn Rand, however, he never bothers to argue that people should be utility-maximizing social atoms; he just takes it for granted that they are. Likewise, he refuses to offer any explicit statement concerning personal ethics, i.e. how people should live their lives within the limits set by the rights of liberty and property; he just takes it for granted that they will be utility-maximizing social atoms.

Rothbard begins his chain of reasoning with Robinson Crusoe on his island, which he takes as the paradigm of the human condition.

One of the most commonly derided constructions of classical economic theory is "Crusoe Economics", the analysis of an isolated man face-to-face with nature .... It serves to isolate man as against nature, thus gaining clarity by abstracting at the beginning from inter-personal relations .... If Crusoe economics can and does supply the indispensable groundwork for the entire structure of economics and praxeology -- the broad, formal analysis of human action -- a similar procedure should be able to do the same thing for social philosophy .... (The Ethics of Liberty [Atlantic Highlands, N.J.: Humanities Press Inc., 1982], p. 29.)

It is an odd social philosophy that begins by abstracting man from society. "Crusoe economics" is simply a restatement of the Hobbesian myth of the "state of nature": the idea is to show how society could be reconstituted as an aggregate of isolated individuals, joined together only by freely-entered contractual relations.

On the basis of this groundwork, Rothbard builds yet another commonly-derided construction: Homo oeconomicus -- man abstracted from everything but his economic activity. Crusoe must work in order to live; by "mixing his labor" with nature (in John Locke's phrase), he makes it his property; and when Friday arrives, he enters into commercial relations and the division of labor. Rothbard's assumption is that all human action is reducible to the production and consumption of wealth, and that all human relations are reducible to the exchange of goods and services.

Rothbard's basic moral axiom is the right of self-ownership, as enunciated by John Locke. We own ourselves, our labor, and the products of our labor -- each of us individually. "The regime of pure liberty -- the libertarian society -- may be described as a society where no ownership titles are 'distributed', where, in short, no man's property in his person or in tangibles is molested, violated, or interfered with by anyone else" (TEOL, p. 41; cf. pp. 113-119). Just as Ayn Rand provides an ethical theory reducing the human good to comfortable self-preservation, Rothbard provides a political theory reducing justice to property rights.

Rothbard seems actually to pride himself on reaching the logically absurd conclusions of individualism, and sticking to them in defiance of all reason and human experience. His endorsement of "Crusoe economics" is typical, and goes to show that the very foundation of individualism is already absurd: for the plain truth is that people are not born alone on desert islands, and any process of reasoning from this unsound premise is a house of cards that will collapse at a glance.

If (as Rothbard argues) the state (i.e. the political community) cannot be founded on individualist principles, neither can society as such. Men existing outside of society are not in a "state of nature" but a denatured state, because man is a "political animal" (the Aristotelian phrase implies man's social nature as well as his participation in the political community, which is a specific realization of his social nature). If you assume that society is or ought to be some kind of contract between individuals, you have to assume that man exists by nature outside of society; but if man exists by nature outside of society, you cannot get him into society, any more than you can get pigs to fly.

One must belabor the point, which would seem to be obvious, because libertarians are in fact oblivious to it. Human maturity (including the capacity to enter into contracts) presupposes socialization. If a baby were abandoned on a desert island, and somehow managed to survive, it would never become human; this is attested by actual, rare and horrible cases of feral children.

Individualists simply assume the existence of mature, autonomous "consenting adults" without ever asking how they come into being. They have to assume that somehow people pop into existence out of thin air, fully-formed, ready to pursue their material interests. And indeed, Rothbard says as much.

Suppose that we were all starting completely from scratch, and that millions of us has been dropped down upon the earth, fully grown and developed, from some other planet. (For a New Liberty: The Libertarian Manifesto [New York: Macmillan, 1978], p. 68.)

In a way, we do not need to suppose this hypothetically: we can look at our own history, because that is in effect what happened when the first boatloads of Englishmen arrived in Virginia and at Plymouth Rock. But of course they were not "starting completely from scratch," i.e. out of thin air: they were Englishmen, bringing with them all their inherited customs and institutions; and in truth there is never any "starting from scratch" in human affairs.

The existence of children, who are potentially but not actually capable and responsible agents, is an enormous stumbling-block for the ideology. Libertarianism has room for only two categories: persons and property. It follows that children must somehow be squeezed into one category or the other. Both horns of the dilemma are absurd, and have evil consequences; each is as valid as the other, given the false premise.

Rothbard tries to have it both ways. First he argues that children must be treated as non-persons, chattels with no rights at all: "parents ... as the creators of the baby become its owners. A new-born baby cannot be an existent self-owner in any sense" (TEOL, p. 99). Rothbard makes a rare concession to human decency, without offering any real justification for it, by admitting that it would be "grotesque" to follow his own logic to its end. But his reasoning, as far as it does go, is grotesque enough.

Applying our theory to parents and children, this means that a parent does not have the right to aggress against his children, but also that the parent should not have a legal obligation to feed, clothe, or educate his children, since such obligations would entail positive acts coerced upon the parent .... The law, therefore, may not properly compel the parent to feed a child or keep it alive. (TEOL, p. 100.)

Only a libertarian could be so deranged by ideology that he can claim that there is a profound difference between strangling a helpless baby and starving it to death.

Now, if a baby is only property, then it does at least have monetary value; so, instead of killing an unwanted child, its parents would be more likely to sell it: perhaps to a childless couple, or some kind of baby-brokerage, or a child-molester. Who knows? And if we're all good libertarians, who cares? (TEOL, p. 102.)

Next, Rothbard turns around and argues that children must be treated as full persons, with exactly the same rights as adults, ignoring the awkward fact that they do not have the capacity to exercise those rights. (Similar considerations apply to mentally incompetent adults. Libertarian psychiatrist Thomas Szasz, for instance, argues that psychotics should not be incarcerated against their will. -- What "will"?)

The rights of children, even more than those of parents, have been systematically invaded by the state. Compulsory school attendance laws ... force children either into public schools or into private schools officially approved by the state. Supposedly "humanitarian" child labor laws have systematically forcibly prevented children from entering the labor force, thereby privileging their adult competitors. (TEOL, p. 105.)

So: in Rothbard's mind, a six-year-old is oppressed by having the government decide what school he must go to, instead of letting him choose for himself -- or else it thwarts his ambition to work in the coal mines and take the job of some overpaid adult competitor.

The antisocial assumptions and consequences of libertarianism are rarely more obvious than when libertarians protest that they are not intentionally antisocial.

[N]o libertarians have ever held individuals to be isolated atoms; on the contrary, all libertarians have recognized the necessity and enormous advantages of living in society, and of participating in the social division of labor .... "Society" is a convenient label for the voluntary interrelations of individuals, in peaceful exchange and on the market. (TEOL, pp. 186-187.)

So this is all that social relations mean to libertarians: the division of labor and commercial exchange. What could be more false and dehumanizing?

Since man is by nature a social animal, society is not something that needs to be justified by individual self-interest. Since man is not merely an economic agent, politics cannot be limited to, nor is it primarily for, the protection of property and commercial exchange: it is primarily for the arrangement of community life as such.

The libertarian project is to reconstitute society according to the principle that no one may initiate the use of physical force against anyone else. This principle assumes that society is merely an aggregate of individuals and that no obligation is binding on them unless it is a freely-entered contract. In the libertarian scheme of things, then, the status of the political community is problematic at best: it is a collective entity, whose existence is premised on unchosen obligations, ultimately backed up by force.

Accordingly, Rothbard argues that government is inherently illegitimate. It is supported by taxation, an involuntary levy that is contrasted with voluntary gifts and exchange; and it seeks to establish and preserve, by force, a monopoly on the provision of law, justice and protection-services within its domain (FANL, pp. 47-48; TEOL, pp. 161-73).

If the only basis of legitimacy is consent, then obviously no state can ever be legitimate. This amounts to saying that the state is evil because it is sovereign -- i.e., because it is the state. This sort of circular reasoning only proves the absurdity of trying to derive legitimacy from consent (that is, if the "consent of the governed" is that of isolated individuals, as opposed to the consent of a people, as our Founding Fathers understood it).

Now, coercion is essential to the state: this much is true. But there can be no law without coercion to enforce it, and society cannot exist without law of some kind. If the state's existence is legitimate (because it is the indispensable means to a necessary purpose), then it also has legitimate claims on individuals. A man in a state, who receives the benefits of its law and protection, has an obligation to help support the government. This obligation is not established by any contract, but by the fact of his membership in the political community.

Rothbard never hesitates to invoke the concept of law, when it suits him. His utopia is founded on a simple and uniform "libertarian law code" -- whose supposition is purely an act of faith.

The code would have to be established [how? by whom?] on the basis of acknowledged [again, how and by whom?] libertarian principle, of nonaggression [defined by whom?] against the person or property of others; in short, on the basis of reason [whose "reason"?] rather than on mere tradition [i.e., the extant common law] .... Since we have [how?] a body of common law principles to draw on, however, the task of correcting and amending [how and by whom?] the common law would be far easier than trying to construct a body of systematic legal principles de novo out of the thin air. (FANL, pp. 230-1. )

And supposing that we do miraculously arrive at this law code (presumably drawn up by Platonic philosopher-kings operating out of economics faculties), how is it to be enforced, and by whom?

The jurist of anarchy is faced with a dilemma: either there is no state to enforce his law code, or the state does exist, thereby violating his law itself. Without a single sovereign power to enforce the single code of law, there might as well be no law at all. If people are free to obey or ignore the laws as they please, what will stop them from violating one another's rights? If we should be bound only by laws we want to be bound by, then obviously criminals need not be bound by any laws at all. The very concepts of "law" and "criminal" become meaningless.

The anarcho-capitalist dreamworld is as nice, tidy, and systematic as any utopian dreamworld ever imagined. Best of all, it is supposed to emerge spontaneously, by the automatic working of the free market. Private companies, we are told, will simply compete to offer services of protection and arbitration; Rothbard's favorite analogy is to insurance companies.

Consider, however, the fact that the market (as libertarians exultantly affirm) will meet any demand, moral or immoral, legal or illegal. In Rothbard's mind, for example, pimps and pushers are so many more "entrepreneurs," who must be deregulated in order to raise the quality and quantity of their goods and services (FANL, pp. 106, 111). But what about demands that would be illegal even under a maximally permissive "libertarian law code"? One can well imagine private protection services being matched by private aggression services: industrial espionage and assassination come most readily to mind. What authority and what law would forbid them? Privatized protection might compensate for the increased dangers; but the resulting "war of all against all" is only one example, perhaps the most dramatic, of the unravelling of the social fabric.

We may admit that some police services can be provided by the free market, since they already are: bodyguards, home and corporate security services, private detectives. We may even grant that, in some cases, private arbitration is feasible, and more efficient than litigation -- given enough common ground between the disputants. But what if the competing courts do not adjudicate by the same law? And what if the competing police forces do not enforce the same law?

Some anarcho-capitalists explicitly recognize that their utopia must have competing legal codes as well as competing courts and police.

In such an anarchist society ... systems of law would 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. (David Friedman, The Machinery of Freedom [Open Court: La Salle, Illinois, 1989], pp. 116-117.)

Once again, we can see the libertarians' complete obliviousness to the social nature of society.

When I buy a book or a car, it is for my own individual use (I may lend it to another person, but that is just one way of using my property as I wish). When I buy an insurance policy, that is a service rendered to me as an individual person. But a code of law is not and cannot be solely for the use of an individual person: its whole reason for being is to provide rules for interaction between persons.

Such rules are necessary, not only because human beings naturally belong to communities, but for the entirely self-centered reason that they make one's circumstances orderly, predictable, consistent. People cannot live side-by-side under different laws and powers: the whole purpose of law is defeated if a host of clashing rule-systems coexist, just as it is if a single law-code exists but is unenforced. This is why a government must have a monopoly of power and authority within a given area: i.e., it must have sovereignty.

Competition between governments only makes sense if people have to move from one jurisdiction to another. People may opt out of existing communities, but only if they can find other communities to take them in (or if they can find some uninhabited territory to homestead). As Rothbard chortles, the alternative is the dissolution of society as such: "Once admit any right of secession whatever, and there is no logical stopping-point short of the right of individual secession, which logically entails anarchism, since then individuals may secede and patronize their own defense agencies, and the State has crumbled" (TEOL, p. 181).

There is one exception, however. The only legitimate secession, and the only one which does logically stop short of anarchy, is that of a people -- not a mere aggregate of persons -- compactly settled in a contiguous territory. For instance, the Quebecois may rightfully secede from Canada, for two reasons: (1) They possess a common ethnicity that unites them together, and sets them apart from the larger society; and (2) Quebec is already a long-established, well-defined political entity, so that independence would only change its status.

Conversely, sovereignty implies the right of exclusion. Libertarians recognize the right of individuals and private associations to exclude, but they deny the right of the political community to do so. If any foreigner whatsoever wants to come to this country, and if some American wants to do business with him, who are we to deny them those liberties? This is premised on the assumption that the community as such has no rights and powers because it does not exist, which in turn (as we have seen) is premised on the assumption that society is nothing but a set of contracts among autonomous, unsocialized figments of the libertarian imagination.

The autonomy of the individual may not take precedence over the preservation of the community, because the existence of the community is prior to that of the individual. Just as one does not choose what nation one is born in, being part of that nation imposes obligations that are also unchosen. At the same time, it bestows rights: not the merely "natural" rights (in the sense of the imaginary, presocial "state of nature") that are the same for everyone everywhere, but national rights appropriate to civil society. The rights and duties of the citizen are, in sum, the power and responsibility to participate in the political community. These are what separate the native-born citizen from the foreigner. No foreigner has any right to live in this country or become a citizen: if these benefits are granted to the foreign-born, it is only as a matter of special privilege.

Now, if (as anarchists suppose) the state is so contrary to man's nature, why is it that every civilized society has had some form of government? This question is precisely parallel to that raised by socialism: if property and class-distinctions are so contrary to man's nature, why is it that every civilized society has had both? Anarcho-capitalism is strikingly similar to Marxism, in that "the State" replaces "capitalism" as the system of oppression, and "capitalism" replaces "socialism" as the ideology of liberation.

For libertarians regard the State as the supreme, the eternal, the best organized aggressor against the persons and property of the mass of the public. All States everywhere, whether democratic, dictatorial or monarchical .... In fact, if you wish to know how libertarians regard the State and any of its acts, simply think of the State as a criminal band, and all of the libertarian attitudes will logically fall into place. (FANL, p. 46.)

The basis of class-distinction and class-exploitation, in this view, is not "the means of production," but the power of taxation, which divides society into tax-payers and tax-consumers (FANL, p. 8-12, 49-53). Hence government itself is the ruling class, not the tool of the ruling class. There is, however, no difference at all between the Rothbardian and Marxist views of culture (religion, tradition, nationality, etc.). Both crudely reduce it to a tool of oppression: a tissue of lies, produced to order by hired intellectuals, to legitimate and glorify the ruling class (FANL, pp. 25, 54-69).

Since the state is regarded as an exploitive, parasitic power extraneous to society, it is presumed to have originated in conquest (FANL, pp. 63-64). This theory of the origin of the state has numerous flaws, starting with the fact that Rothbard equivocates between the origin of government as such, and the replacement of one regime by another (e.g. the Germanic invasions of the Roman Empire). The anarcho-capitalists never give any examples of states as such originating in conquest, for the simple reason that there are none. This is in fact a myth, as ahistorical as the Hobbesian-Lockean "social contract." The historical record shows that the first states evolved by degrees out of primitive tribal structures, in tandem with the evolution of civilized society itself.

But of course, the anarcho-capitalists will have nothing to do with history. With breezy contempt, Rothbard and his kind brush aside the whole weight of the past. Legislators for all mankind, they propose to remake the world according to the "axioms" of their ideology.

In the anarcho-capitalist dreamworld, there are of course no international relations, no distinction between foreign and domestic. "Libertarians favor the abolition of all States everywhere .... In a purely libertarian world, therefore, there would be no 'foreign policy' because there would be no States ..." (FANL, p. 264). But of course we live in the real world, not the libertarian dreamworld, and it is unlikely that all governments everywhere could be destroyed overnight. The anarchist revolution must start somewhere, and spread unevenly; many of us would be determined to strangle it in its cradle. What, then, do the anarcho-capitalists have to say about national or quasi-national defense?

Because all states are based on coercion, they are all equally evil -- "whether democratic, dictatorial or monarchical" -- and none is to be preferred to any other. "War is an attack by one robber band against another ... the quarrel in modern large-scale wars is not actually between the subject-people, but between their states. The interest of the subjects is always in peace." The subjects should respond to invasion voluntarily, as individuals, and seek a negotiated settlement as quickly as possible -- if they respond at all: after all, they are threatened by the "domestic enemy" quite as much as by the "foreign enemy." ("Aubrey Herbert" (pseudonym for Murray Rothbard), in Faith and Freedom, v. V no. 8 (April 1954), pp. 22-27.)

This may sound plausible when speaking in terms of hypothetical countries like "Walldavia" and "Belgravia," as Rothbard likes to do. The monstrous evil of this doctrine is seen by considering what its results would have been, if the Finns had followed it when invaded by Soviet Russia; and what its results actually were when the French did follow it, in effect, when invaded by Nazi Germany.

During the Cold War, Rothbard and many other libertarians favored the USSR against the USA: their skepticism of every state's good will and peaceful intentions somehow failed to extend past the borders of their own country. Rothbard himself, in an almost unparalleled display of doublethink, argued that we should disarm our own government because all states are inherently aggressive, and anyway we don't really need armaments because other states (e.g., Soviet Russia) only arm themselves in defense against the United States (FANL, pp. 237-238; cf. pp. 263-294, passim -- most of which is simply an hysterical attack on America and apologia for Soviet Russia that could have been written by any pro-Communist peacenik). The real motive for these ideological contortions is let slip rarely, and in passing: it is "the overriding importance of preventing a nuclear holocaust." "Better Red than dead" -- and so much for liberty!

Thus it is clear that no libertarian society could possibly survive: one need only threaten to bomb them, and libertarians will submit meekly to the most oppressive of regimes. (Even minimal-statists, theoretically accepting the need for state-directed national defense, are usually loath to recognize the necessity in practice.) They like the idea of guerrilla warfare (imagining it as a spontaneous, anarchical, and revolutionary alternative to inter-state warfare), and have a wildly unrealistic estimate of its feasibility (FANL, pp. 240-241. The truth is that no guerrilla war has ever been won unless it had some outside, regular support. The Vietnam War, for instance, was not won by the Viet Cong, but by the NVA and a fifth column within America); but if they are so terrified of dying in a nuclear war, they are hardly likely to stand up to tanks and machine guns. Courage and patriotism will never be found in utility-maximizing social atoms.

Anarcho-capitalists also like to argue that an anarchy cannot be conquered, because there is no state machinery to surrender and be taken over by a conqueror. Of course, this flagrantly contradicts the conquest theory of the origin of the state: if there never was a state to capture, the state could never have arisen. But even if we suppose that anarchists inhabiting a certain territory cannot be conquered as such, they can still be exterminated or driven out. Their disunion would prevent them from resisting effectively, even if they had the will to do so. This was precisely how England ultimately conquered Ireland, whose primitive tribal society is cited as an example of functioning anarchy.

This brings us back to the main political argument against libertarianism: the need for sovereignty. Defense is necessarily of a territory, not of individual persons: exceptions cannot be made. Should we have allowed the Soviets to invade and occupy just Murray Rothbard's house? Everyone living within a territory must share the burden of its defense -- or get out.

Because he believes that all states everywhere are equally evil, Rothbard derides the ideal of limited, laissez-faire government; and in a way he is right. Once individual freedom is set up as the goal of politics, it is logically impossible to stop short of anarchism. If "that government governs best which governs least," isn't the very best government that which does not govern at all?

It cannot be said too often that political principles cannot be severed from logically prior moral principles. The anarcho-capitalist rejection of the state is only the ultimate consequence of individualism, which also rejects the very concepts of "society," "community," and the "common good." The "liberated" individual has no connections to any other individual except those he contractually enters into; his relation to the state is not as an active citizen of a republic, but as a passive consumer of government services, otherwise demanding to be left alone; why should he accept government services on a non-contractual basis?

Libertarians all agree that the state, if it exists, should be nothing more than an abstract legal framework setting ground-rules within which autonomous individuals may pursue their divergent "values" and material interests. But such a system is neither feasible nor desirable, because it has exactly nothing to support it. There can be no legal order without roots in a deeper, moral and cultural order.

Unity, not liberty, is the basis of any political entity. It is self-evident that human social life requires "community" in the most literal sense, i.e. commonality. Without a common identity and loyalty, there is nothing to bind people together and give the state legitimacy. Laws, in particular, are only the most explicit and forceful expression of a basic, common understanding of how people should conduct themselves and interact with each other. If this commonality is dissolved by the acid of individualism and materialism, pseudo-rationalism will never be sufficient to create a new order.

2003 by Karl Jahn

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