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Can Anarcho-Capitalism Work?
Submitted by Llewellyn Rockwell via The Ludwig von Mises Institute,
This talk was delivered at the Costa Mesa Mises Circle on Society Without the State, November 8, 2014.
The term “anarcho-capitalism” has, we might say, rather an arresting quality. But while the term itself may jolt the newcomer, the ideas it embodies are compelling and attractive, and represent the culmination of a long development of thought.
If I had to boil it down to a handful of insights, they would be these:
(1) each human being, to use John Locke’s formulation, “has a property in his own person”;
(2) there ought to be a single moral code binding all people, whether they are employed by the State or not; and
(3) society can run itself without central direction.
From the original property one enjoys in his own person we can derive individual rights, including property rights. When taken to its proper Rothbardian conclusion, this insight actually invalidates the State, since the State functions and survives on the basis of systematic violation of individual rights. Were it not to do so, it would cease to be the State.
In violating individual rights, the State tries to claim exemption from the moral laws we take for granted in all other areas of life. What would be called theft if carried out by a private individual is taxation for the State. What would be called kidnapping is the military draft for the State. What would be called mass murder for anyone else is war for the State. In each case, the State gets away with moral enormities because the public has been conditioned to believe that the State is a law unto itself, and can’t be held to the same moral standards we apply to ourselves.
But it’s the third of these ideas I’d like to develop at greater length. In those passages of their moral treatises dealing with economics, the Late Scholastics, particularly in the sixteenth and seventeenth centuries, had been groping toward the idea of laws that govern the social order. They discovered necessary cause-and-effect relationships. There was a clear connection, for example, between the flow of precious metals entering Spain from the New World on the one hand, and the phenomenon of price inflation on the other. They began to understand that these social regularities were brute facts that could not be defied by the political authority.
This insight developed into fuller maturity with the classical liberals of the eighteenth century, and the gradual emergence of economics as a full-fledged, independent discipline. This, said Ludwig von Mises, is why dictators hate the economists. True economists tell the ruler that there are limits to what he can accomplish by his sheer force of will, and that he cannot override economic law.
In the nineteenth century, Frédéric Bastiat placed great emphasis on this insight. If these laws exist, then we must study them and understand them, but certainly not be so foolish as to defy them. Conversely, he said, if there are no such laws, then men are merely inert matter upon which the State will be all too glad to impose its imprint. He wrote:
For if there are general laws that act independently of written laws, and whose action needs merely to be regularized by the latter, we must study these general laws; they can be the object of scientific investigation, and therefore there is such a thing as the science of political economy. If, on the contrary, society is a human invention, if men are only inert matter to which a great genius, as Rousseau says, must impart feeling and will, movement and life, then there is no such science as political economy: there is only an indefinite number of possible and contingent arrangements, and the fate of nations depends on the founding father to whom chance has entrusted their destiny.
The next step in the development of what would later become anarcho-capitalism was the radical one taken by Gustave de Molinari, in his essay “The Private Production of Security.” Molinari asked if the production of defense services, which even the classical liberals took for granted had to be carried out by the State, might be accomplished by private firms under market competition. Molinari made express reference to the insight we have been developing thus far, that society operates according to fixed, intelligible laws. If this is so, he said, then the provision of this service ought to be subject to the same laws of free competition that govern the production of all other goods. Wouldn’t the problems of monopoly exist with any monopoly, even the State’s that we have been conditioned to believe is unavoidable and benign?
It offends reason to believe that a well-established natural law can admit of exceptions. A natural law must hold everywhere and always, or be invalid. I cannot believe, for example, that the universal law of gravitation, which governs the physical world, is ever suspended in any instance or at any point of the universe. Now I consider economic laws comparable to natural laws, and I have just as much faith in the principle of the division of labor as I have in the universal law of gravitation. I believe that while these principles can be disturbed, they admit of no exceptions.
But, if this is the case, the production of security should not be removed from the jurisdiction of free competition; and if it is removed, society as a whole suffers a loss.
It was Murray N. Rothbard who developed the coherent, consistent, and rigorous system of thought — out of classical liberalism, American individualist anarchism, and Austrian economics — that he called anarcho-capitalism. In a career of dozens of books and thousands of articles, Rothbard subjected the State to an incisive, withering analysis, unlike anything seen before. I dedicated Against the State to this great pioneer, and dear friend.
But can it work? It is all very well to raise moral and philosophical objections to the State, but we are going to need a plausible scenario by which society regulates itself in the absence of the State, even in the areas of law and defense. These are serious and difficult questions, and glib answers will naturally be inadequate, but I want to propose at least a few suggestive ideas.
The conventional wisdom, of course, is that without a monopoly provider of these services, we will revert to the Hobbesian state of nature, in which everyone is at war with everyone else and life is “solitary, poor, nasty, brutish, and short.” A ceaseless series of assaults of one person against another ensues, and society sinks ever deeper into barbarism.
For one thing, it’s not even clear that the logic behind Thomas Hobbes’s fears really makes any sense. As Michael Huemer points out, Hobbes posits a rough equality among human beings in that none of us is totally invulnerable. We are all potential murder victims at the hands of anyone else, he says. He likewise insists that human beings are motivated by, and indeed altogether obsessed with, self-interest.
Now suppose that were true: all we care about is our own self-interest, our own well-being, our own security. Would it make sense for us to rush out and attack other people, if we have a 50 percent chance of being killed ourselves? Even if we happen to be skilled in battle, there is still a significant chance that any attack we launch will end in our death. How does this advance our self-interest?
Hobbes likewise speaks of pre-emptive attacks, that people will attack others out of a fear that those others may first attack them. If this is true, then it’s even more irrational for people to go around attacking others: if their fellows are inclined to preemptively attack people they fear, whom would they fear more than people who go around indiscriminately attacking people? In other words, the more you attack people, the more you open yourself up to preemptive attacks by others. So here we see another reason that it makes no sense, from the point of view of the very self-interest Hobbes insists everyone is motivated by, for people to behave the way he insists they must.
As for law, history affords an abundance of examples of what we might call trickle-up law, in which legal norms develop through the course of normal human interaction and the accumulation of a body of general principles. We are inclined to think of law as by nature a top-down institution, because we confuse law with the modern phenomenon of legislation. Every year the world’s legislative bodies pour forth a staggering number of new rules, regulations, and prohibitions. We have come to accept this as normal, when in fact it is, historically speaking, an anomaly.
It was once common to conceive of law as something discovered rather than made. In other words, the principles that constitute justice and by which people live harmoniously together are derived from a combination of reflection on eternal principles and the practical application of those principles to particular cases. The idea that a legislative body could overturn the laws of contract and declare that, say, a landlord had to limit rents to amounts deemed acceptable by the State, would have seemed incredible.
The English common law, for example, was a bottom-up system. In the Middle Ages, merchant law developed without the State at all. And in the US today, private arbitration services have exploded as people and firms seek out alternatives to a government court system, staffed in many cases by political appointees, that everyone knows to be inefficient, time-consuming, and frequently unjust.
PayPal is an excellent example of how the private, entrepreneurial sector devises creative ways around the State’s incompetence in guaranteeing the inviolability of property and contract. For a long time, PayPal had to deal with anonymous perpetrators of fraud all over the world. The company would track down the wrongdoers and report them to the FBI. And nothing ever happened.
Despairing of any government solution, PayPal came up with an ingenious approach: it devised a system for preemptively determining whether a given transaction was likely to be fraudulent. This way, there would be no bad guys to be tracked down, since their criminal activity would be prevented before it could do any harm.
Small miracles like this take place all the time in the free sector of society, not that we’re encouraged to learn much about them. Recall that as the Centers for Disease Control issued false statements and inadequate protocols for dealing with Ebola, it was a Firestone company town in Liberia that did more than any public authority in Africa to provide safety and health for the local population.
There is a great deal more to be said about law and defense provision in a free society, and I discuss some of this literature at the end of Against the State. But the reason we focus on these issues in the first place is that we realize the State cannot be reformed. The State is a monopolist of aggressive violence and a massive wealth-transfer mechanism, and it is doing precisely what is in its nature to do. The utopian dream of “limited government” cannot be realized, since government has no interest in remaining limited. A smaller version of what we have now, while preferable, cannot be a stable, long-term solution. So we need to conceive of how we could live without the State or its parasitism at all.
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Utopia was envisioned as a compulsory, centrally planned society. Galt's Gulch was envisioned as a freely associating group of like minded individuals. They are completely opposite concepts.
It's funny that you use Utopia as a pejorative while suggesting that you favor a centrally planned society over one based on individual liberty. If you really think that Utopian strivings are foolish then you'd better turn anarcho-capitalist right away.
Utopian strivings are not always foolish, but Galt's gulch failed immediately.
Galt's Gulch was a fictional place. How did it fail?
Can't remember anything to add. Relationships between government & citizens seems the Focus.
Anarcho-capitalism, The first person to use the term, however, was Murray Rothbard,
- Rothbard was influenced by nineteenth-century American individualist anarchists, like Lysander Spooner and Benjamin Tucker, and the Belgian economist Gustave de Molinari who wrote about how such a system could work
- Rothbard began to consider himself a private property anarchist in 1950
- In Man, Economy, and State, Rothbard divides the various kinds of state intervention in three categories: "autistic intervention", which is interference with private non-economic activities; "binary intervention", which is forced exchange between individuals and the state; and "triangular intervention", which is state-mandated exchange between individuals. According to Sanford Ikeda, Rothbard's typology "eliminates the gaps and inconsistencies that appear in Mises's original formulation.
https://en.wikipedia.org/wiki/Murray_Rothbard#Anarcho-capitalism
Are humans too stupid to make decisions so we need a central to make the decisions for us ?
Well I can repost Memes that are untrue... Propaganda is what it is technically called:
US Bank Memes
Started way back, but just going back to like 1880:
- Silver Certificates are no good, say the bankers
- Gold Certificates are no good, say the bankers
- US needs Central bank to keep the government from spending too much, moral hazard
- 1913 Federal Reserve Central Bank Created
- Stock Market is good, US Industry can rise forever
- After Crash and Depression, banks say the economy is not good, can't invest
- Public Banking is bad, Private Banking is the way out of Depression
- Government should stay out of banking
- Only Private Bankers have the skill to rate businesses
- Only Private Banks have the Skills needed to determine money policy for the people
- US needs a Fiat Currency
Haha. We know how that all worked out in 2008 Financial Crisis. Boom & Bust. But the damage is no longer even transparent with non-standard accounting & non-standard financial instruments... and financial ratings firms are not reliable.
Private Bankers & Central Bankers were schemers from the 1900s. Today people are smart enough that many people can judge how to assess their own taxes and look at their own business accounting data.
Solution: Shift 2 million people out of Private Banks into Public Banks. This will help create downward pressure on private banking executive salaries... through downsizing their functions, their processes, and their purpose on Wall Street & London. Then break them down with Glass-Steagal Act and Anti-Trust Law. Then End the Fed.
Anarcho-kapitalism (not to confuse with anarcho-syndicalism) definitely works in RAT COMMUNITIES worldwide. See the video describing development of competition and leadership formation processes. Fascinating study and instructive conclusions, especially for those who need to loose weight. Applicable to humans as well. Enjoy.
http://www.youtube.com/watch?v=SwnUzo2252s
can freedom work?
Anarcho Capitalism is perfect in theory, but impossible in practice.
You've got guys that are good at talking. Good at selling ideas. They convince enough people that they can get more than they pay for, and it's all over.
This gets the ball rolling. Soon everybody agrees that a 1% tax is "fair" in case "they" need some help someday. All it takes is good talkers convincing people they'll get more back than they give.
Rothbard called this "psychic revenue." Everybody "feels better" that somebody is going to watch their back and take care of them should some asteroid crash into the Earth. 1% sounds like a fair deal.
1% turns into 2%, protection from asteroids turns into protection against rival countries, and here we are.
No matter what people's individual I.Q or whatever is, collectively we are idiots, and more tribal than rational.
Just like eating lean protein and healthy fats is ideal for health, anarcho capitalism is ideal for society.
However, we've got as much chance as keeping anarcho capitalism going as we've got every fat fuck in America suddenly stepping up and eating 2K calories a day and getting themselves a six pack.
The ONLY time in history (which guys like Lew Rockwell like to hold up as examples) where anything close to Anarcho Capitalism worked is becuase rulers who wanted to rule and rulee's who wanted to be told what to do were too far apart due to unique combinations of technology, wealth distribution, and geography.
Random emergences of Anarcho Captalism are like Nature's aribritrage opportunities.
They don't last long, cause fuckers jump in and take advantage and disappear them.
Well said, good sir.
You don't know what you're talking about. Here are two examples, the first of which lasted for more than 100 years. Moresnet (in what is now Aachen and the germanic part of Belgium) and Pennsylvania (1681 - 1690). Do your homework next time before uttering BS!
And now they're gone. Just like he said they would.
"Anarcho-capitalism, however, actually borrows the concept of anarchy and uses it misleading. Thus, although anarcho-capitalism requires the state absence, does not mean that will be free from a global power core controlled by the big capital, which, in a seemingly fully deregulated market will continue to determine the rules of the game to its advantage, free from any 'embarrassing' state intervention and therefore more powerful than ever. Thus, the concept of anarcho-capitalism is actually spurious because gives the illusion of complete freedom of individual activity, which however, only serves the interests of a global economic elite."
http://failedevolution.blogspot.gr/2013/09/self-management-societies-vs-...
Independence and liberty freaks out the slaves and the masters. Self reliance scares the sheeple into submission soon enough. Too lazy to act independently? Solar panels and home grown food...Too much work!
Amongst other things, price of land too high. Jamie Dimon don't understand why others don't copy him either. You made it work? Good for you. If I figure it out, I'll join ya. Don't hold ya breath.
Much respect for Lew and the Austrian school.
"Society can run itself without central direction." This is true, but central direction cannot be avoided. If it is not present, it inevitably arises. Fantasizing about how to have a society without central direction is a waste of time. A more productive endeavor is engineering the best central direction so that a less desirable form of central direction does not arise.
"PayPal came up with an ingenious approach: it devised a system for preemptively determining whether a given transaction was likely to be fraudulent. This way, there would be no bad guys to be tracked down, since their criminal activity would be prevented before it could do any harm."
Paypal "preemptively" closed my account for life because of their internal valuesystem that does not follow local laws. Support crew admitted it was crazy. This is what happens when multinationals determine the rules, you end up being just a despensable number. We do NOT need anarcho capitalism. We need to bring back power to the region with the people in control.
Power to the region, huh? Then you are forced to move because the holy-rollers vote dry, no gambling, prostitution, and have your shit confiscated to subsidize some religion and suffer high costs due to zoning and licensing, which is cronyism. Regions confiscate property as badly as the big nanny.
Fuck a bunch of regions. Fuck any form of leaching government. Every level is rotten to the core with parasites. Power to a well armed individual. Hey Virginia, why doesn't Costa Rica have a bloated military, why haven't those poor vulnerable blokes been invaded lately?
To kick start my plan, bring back duelling for all politicians.
Didja move there then?
Fuck Government!
All you need to do is look at the history of Moresnet (in what is now Aachen and the germanic part of Belgium) and Pennsylvania (1681 - 1690) to know that Anarcho Capitalism can work.
Anarcho capitalism is an oxymoron. Anarchists are anti capitalist. The word your looking for is feudalism.
I don't think Anarcho-Capitalism is a large leap over the present mess. Capitalism is the drag, too many varieties, Crony, Welfare, State, Laissez-Faire, and all sorts of hybrids with socialism and communism mixed in.
I looked up Capitalism a few decades ago and there is a phrase that negates the utility of the system for me, i.e., it defines the typical meaning of the concept with the caveat of, "with MOSTLY free markets". Well, who decides the exceptions under the MOSTLY umbrella? Obviously, history reveals them to be the psychotic control freaks, operating with the force of unjust law.
Therefore, I strongly prefer "Free Market Anarchy" with a reduction of laws and ordinances from over 3 million to the 9 Commandments (fuck adultery, most of that is justified anyway). Administration of justice will be by the offenders' neighbors. I also believe in local vigilantism. True errors will occur but it won't be by an unemotional political climbing DA within a rotten system.
The statists portray the Wild West as unbridled vigilantism and whips the populace into a fever to bring in nanny to bring about justice. The opposite is the real truth. The state is the bane of all men that yearn to be free.
"What would be called mass murder for anyone else is war for the State. In each case, the State gets away with moral enormities because the public has been conditioned to believe that the State is a law unto itself, and can’t be held to the same moral standards we apply to ourselves." ..
And to think we'v all chuckled at the credulity of ancient peoples, in their credulous belief that their politicians were actual Gods...
But we owe the Egyptians, Romans, Maya, Persians, and the rest an apology. The only difference between the ancients and ourselves is that we invest the supposed divinity in the conceptual collective "Government" rather than the physical "God-King".
God-verment.
No, it can't, and it would suck anyways. It's a pipe dream of those who lack the qualities necessary to obtain real power.
There won't be an "ah-ha" moment, a light switching to AC, nor an embrace of a common moral code. At best we'll increment away from gubmint for the people as it fails before the slowly opening eyes of sheople. The shift in the nature of the state will be like changing the course of an aircraft carrier - you move the rudder and it takes a long time before the damn thing starts to turn. And the state will never completely disappear except perhaps intermittently between one apocalypse or another. An awakening away from a belief that the government does things for us to a recognition that it does things to us is a pre-req. Going to take a very long time given public schooling that indoctrinates gubmint as a force for good, and a tag team effort by both to feed the growth of the other. It will be interesting to observe how people fend for themselves when they've not had to/don't know how once the state machinery fails. Would be nice to think something like "Life, Liberty and..." from Nock's "Snoring as a Fine Art" was as widely read as Facebook or Twitter, which would help propagate the belief that the founders were on to something with no-shit limited gubmint of and by and not for the people. Sadly, that has as much chance of seeing the light of day in a state funded school as Morpheus handing out red pills in the lunch line.
http://mises.org/library/snoring-fine-art-and-twelve-other-essays