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Anarcho-capitalism (also known by other names, such as free market anarchism) is an individualist political philosophy that advocates the provision of all goods and services—including law enforcement, courts, and national defence—by competitors in a free market. Anarcho-capitalists argue for a society based in voluntary trade of private property and services in order to maximize individual liberty and prosperity, but also recognize charity and communal arrangements as part of the same voluntary ethic. Though anarcho-capitalists are known for asserting a right to private property, common property can also exist in an anarcho-capitalist society. For them, what is important is how property was acquired and transferred; they believe the only just way to acquire property is through voluntary trade, gift, or labor-based original appropriation, rather than through aggression or fraud.

Anarcho-capitalism rejects the state, based on the belief that states are aggressive entities which steal property (through taxation and expropriation), initiate physical force, use their coercive powers to benefit some businesses and individuals at the expense of others, create monopolies, and restrict trade. This embrace of unfettered capitalism leads to considerable tension between anarcho-capitalists and those anarchists who believe that capitalism is inherently authoritarian and hence incompatible with anarchism.

The first well-known version of anarcho-capitalism was developed by Austrian School economist and libertarian Murray Rothbard in the mid-20th century, synthesizing elements from the Austrian School of economics, classical liberalism, and 19th century American individualist anarchism. He defines free-market capitalism as "peaceful voluntary exchange," in contrast to state capitalism which he says is "violent expropriation." Central to Rothbard's theory of anarcho-capitalism is the sovereignty of the individual and the principle of non-aggression. However, various theorists have differing, though similar, philosophies which they label anarcho-capitalism. While Rothbard bases his philosophy on rationalist natural law, others, such as David Friedman, take a pragmatic consequentialist (utilitarianist) approach by appealing to what satisfies the greatest number of people rather than addressing moral concerns. In Rothbard's form, a legal code is implemented that forbids aggressive coercion. However, in Friedman's anarcho-capitalism, market forces determine the content of the law. Hans-Hermann Hoppe, meanwhile, uses " argumentation ethics" for his foundation of "private property anarchism," and is closer to Rothbard's natural law approach.


The nonaggression axiom

The term anarcho-capitalism was most likely coined in the mid-1950s by the economist Murray Rothbard. Other terms sometimes used for this philosophy, though not necessarily outside of anarcho-capitalist circles, include:

  • anti-state capitalism
  • anti-state marketism
  • anarcho-liberalism
  • capitalist anarchism
  • free market anarchism
  • private-property anarchy
  • radical capitalism
  • right-anarchism
  • stateless capitalism
  • stateless liberalism
  • the private-law society
  • individualist anarchism

Anarcho-capitalism, as formulated by Rothbard and others, holds strongly to the central libertarian nonaggression axiom:

[...] The basic axiom of libertarian political theory holds that every man is a self owner, having absolute jurisdiction over his own body. In effect, this means that no one else may justly invade, or aggress against, another's person. It follows then that each person justly owns whatever previously unowned resources he appropriates or "mixes his labor with." From these twin axioms — self-ownership and " homesteading" — stem the justification for the entire system of property rights titles in a free-market society. This system establishes the right of every man to his own person, the right of donation, of bequest (and, concomitantly, the right to receive the bequest or inheritance), and the right of contractual exchange of property titles.

Rothbard's defense of the self-ownership principle stems from his falsification of all other alternatives, namely that either a group of people can own another group of people, or the other alternative, that no single person has full ownership over one's self. Rothbard dismisses these two cases on the basis that they cannot result in an universal ethic, i.e., a just natural law that can govern all people, independent of place and time. The only alternative that remains to Rothbard is self-ownership, which he believes is both axiomatic and universal.

In general, the nonaggression axiom can be said to be a prohibition against the initiation of force, or the threat of force, against persons (i.e., direct violence, assault, murder) or property (i.e., fraud, burglary, theft, taxation). The initiation of force is usually referred to as aggression or coercion. The difference between anarcho-capitalists and other libertarians is largely one of the degree to which they take this axiom. Minarchist libertarians, such as most people involved in Libertarian political parties, would retain the state in some smaller and less invasive form, retaining at the very least public police, courts and military; others, however, might give further allowance for other government programs. In contrast, anarcho-capitalists reject any level of state intervention, defining the state as a coercive monopoly and, as the only entity in human society that derives its income from legal aggression, an entity that inherently violates the central axiom of libertarianism.

Some anarcho-capitalists, such as Rothbard, accept the nonaggression axiom on an intrinsic moral or natural law basis. It is in terms of the non-aggression principle that Rothbard defined anarchism; he defined "anarchism as a system which provides no legal sanction for such aggression ['against person and property']" and said that "what anarchism proposes to do, then, is to abolish the State, i.e. to abolish the regularized institution of aggressive coercion." In an interview with New Banner, Rothbard said that "capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism." Alternatively, others, such as Friedman, take a consequentialist or egoist approach; rather than maintaining that aggression is intrinsically immoral, they maintain that a law against aggression can only come about by contract between self-interested parties who agree to refrain from initiating coercion against each other.


Private property

Central to anarcho-capitalism are the concepts of self-ownership and original appropriation:

Everyone is the proper owner of his own physical body as well as of all places and nature-given goods that he occupies and puts to use by means of his body, provided only that no one else has already occupied or used the same places and goods before him. This ownership of "originally appropriated" places and goods by a person implies his right to use and transform these places and goods in any way he sees fit, provided only that he does not change thereby uninvitedly the physical integrity of places and goods originally appropriated by another person. In particular, once a place or good has been first appropriated by, in John Locke's phrase, 'mixing one's labor' with it, ownership in such places and goods can be acquired only by means of a voluntary — contractual — transfer of its property title from a previous to a later owner.

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

  • Anarchism: any philosophy that opposes all forms of initiatory coercion (includes opposition to the State)
  • Contract: a voluntary binding agreement between persons
  • Coercion: physical force or threat of such against persons or property
  • Capitalism: economic system where the means of production are privately owned, and where investments, production, distribution, income, and prices are determined through the operation of a free market rather than by government
  • Free market: a market where all decisions regarding transfer of money, goods (including capital goods), and services are voluntary
  • Fraud: inducing one to part with something of value through the use of dishonesty
  • State: an organization that taxes and engages in regularized and institutionalized aggressive coercion
  • Voluntary: any action not influenced by coercion or fraud perpetrated by any human agency

This is the root of anarcho-capitalist property rights, and where they differ from collectivist forms of anarchism such as anarcho-communism where the product of labor is collectivized in a pool of goods and distributed "according to need." Anarcho-capitalists advocate individual ownership of the product of labor regardless of what the individual "needs" or does not need. As Rothbard says, "if every man has the right to own his own body and if he must use and transform material natural objects in order to survive, then he has the right to own the product that he has made." After property is created through labor it may then only exchange hands legitimately by trade or gift; forced transfers are considered illegitimate. Original appropriation allows an individual to claim any "unused" property, including land, and by improving or otherwise using it, own it with the same "absolute right" as his own body. According to Rothbard, property can only come about through labor, therefore original appropriation of land is not legitimate by merely claiming it or building a fence around it; it is only by using land — by mixing one's labor with it — that original appropriation is legitimized: "Any attempt to claim a new resource that someone does not use would have to be considered invasive of the property right of whoever the first user will turn out to be." As a practical matter, in terms of the ownership of land, anarcho-capitalists recognize that there are few (if any) parcels of land left on Earth whose ownership was not at some point in time obtained in violation of the homestead principle, through seizure by the state or put in private hands with the assistance of the state. Rothbard says in "Justice and Property Right" that "any identifiable owner (the original victim of theft or his heir) must be accorded his property." In the case of slavery, Rothbard says that in many cases "the old plantations and the heirs and descendants of the former slaves can be identified, and the reparations can become highly specific indeed." He believes slaves rightfully own any land they were forced to work on under the " homestead principle." If property is held by the state, Rothbard advocates its confiscation and return to the private sector: "any property in the hands of the State is in the hands of thieves, and should be liberated as quickly as possible." For example, he proposes that State universities be seized by the students and faculty under the homestead principle. Rothbard also supports expropriation of nominally "private property" if it is the result of state-initiated force, such as businesses who receive grants and subsidies. He proposes that businesses who receive at least 50% of their funding be confiscated by the workers. He says, "What we libertarians object to, then, is not government per se but crime, what we object to is unjust or criminal property titles; what we are for is not "private" property per se but just, innocent, non-criminal private property." Likewise, Karl Hess says, "libertarianism wants to advance principles of property but that it in no way wishes to defend, willy nilly, all property which now is called private...Much of that property is stolen. Much is of dubious title. All of it is deeply intertwined with an immoral, coercive state system." By accepting an axiomatic definition of private property and property rights, anarcho-capitalists deny the legitimacy of a state on principle:

"For, apart from ruling out as unjustified all activities such as murder, homicide, rape, trespass, robbery, burglary, theft, and fraud, the ethics of private property is also incompatible with the existence of a state defined as an agency that possesses a compulsory territorial monopoly of ultimate decision-making (jurisdiction) and/or the right to tax."

Common property

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

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

Similarly, an established ocean route would be common property unavailable for private appropriation because it is in regular common use. Nevertheless, since property which is owned collectively tends to lose the level of accountibility found in individual ownership - or make such accountibility proportionately more complex, anarcho-capitalists generally distrust and seek to avoid such arrangements unless they arise unintentionally or are unavoidable as in the preceeding examples.

The contractual society

A postage stamp celebrating the thousandth anniversary of the Icelandic parliament. According to a theory associated with the economist David Friedman, medieval Icelandic society had some features of anarcho-capitalism. Chieftaincies could be bought and sold, and were not geographical monopolies; individuals could voluntarily choose membership in any chieftain's clan.
A postage stamp celebrating the thousandth anniversary of the Icelandic parliament. According to a theory associated with the economist David Friedman, medieval Icelandic society had some features of anarcho-capitalism. Chieftaincies could be bought and sold, and were not geographical monopolies; individuals could voluntarily choose membership in any chieftain's clan.

The society envisioned by anarcho-capitalists has been called the Contractual Society — "... a society based purely on voluntary action, entirely un­hampered by violence or threats of violence." — in which anarcho-capitalists claim the system relies on voluntary agreements ( contracts) between individuals as the legal framework. It is difficult to predict precisely what the particulars of this society will look like because of the details and complexities of contracts.

One particular ramification is that transfer of property and services must be considered voluntary on the part of both parties. No external entities can force an individual to accept or deny a particular transaction. An employer might offer insurance and death benefits to same-sex couples; another might refuse to recognize any union outside his or her own faith. Individuals are free to enter into or reject contractual agreements as they see fit.

One social structure that is not permissible under anarcho-capitalism is one that attempts to claim greater sovereignty than the individuals that form it. The state is a prime example, but another is the current incarnation of the corporation — defined as a legal entity that exists under a different legal code than individuals as a means to shelter the individuals who own and run the corporation from possible legal consequences of acts by the corporation. It is worth noting that Rothbard allows a narrower definition of a corporation: "Corporations are not at all monopolistic privileges; they are free associations of individuals pooling their capital. On the purely free market, such men would simply announce to their creditors that their liability is limited to the capital specifically invested in the corporation ...." However, this is a very narrow definition that only shelters owners from debt by creditors that specifically agree to the arrangement; it also does not shelter other liability, such as from malfeasance or other wrongdoing.

There are limits to the right to contract under some interpretations of anarcho-capitalism. Rothbard himself asserts that the right to contract is based in inalienable human rights and therefore any contract that implicitly violates those rights can be voided at will, which would, for instance, prevent a person from permanently selling himself or herself into unindentured slavery. Other interpretations conclude that banning such contracts would in itself be an unacceptably invasive interference in the right to contract.

Law and order and the use of violence

Different anarcho-capitalists propose different forms of anarcho-capitalism, and one area of disagreement is in the area of law. Morris and Linda Tannehill, in The Market for Liberty, object to any statutory law whatsoever. They assert that all one has to do is ask if one is aggressing against another (see tort and contract law) in order to decide if an act is right or wrong. However, Murray Rothbard, while also supporting a natural prohibition on force and fraud, supports a centralized libertarian legal code.

Unlike both the Tannehills and Rothbard who see an ideological commonality of ethics and morality as a requirement, David Friedman proposes that "the systems of law will 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." Friedman says whether this would lead to a libertarian society "remains to be proven." He says it is a possibility that very unlibertarian laws may result, such as laws against drugs. But, he thinks this would be rare. He reasons that "if the value of a law to it supporters is less than its cost to its victims, that law...will not survive in an anarcho-capitalist society."

Anarcho-capitalists only accept collective defense of individual liberty (i.e., courts, military or police forces) insofar as such groups are formed and paid for on an explicitly voluntary basis. According to Molinari, "Under a regime of liberty, the natural organization of the security industry would not be different from that of other industries." Proponents point out that private systems of justice and defense already exist, naturally forming where the market is allowed to compensate for the failure of the state: private arbitration, security guards, neighbourhood watch groups, and so on. These private courts and police are sometimes referred to generically as Private Defense Agencies (PDAs.)

The defense of those unable to pay for such protection might be financed by charitable organizations relying on voluntary donation rather than by state institutions relying on coercive taxation, or by cooperative self-help by groups of individuals.

Many anarcho-capitalists admire the American Revolution and believe it is the only U.S. war that can be justified.
Many anarcho-capitalists admire the American Revolution and believe it is the only U.S. war that can be justified.

Like classical liberalism, and unlike pacifism, anarcho-capitalism permits the use of force, as long as it is in the defense of persons or property. The permissible extent of this defensive use of force is an arguable point among anarcho-capitalists. Retributive justice, meaning retaliatory force, is often a component of the contracts imagined for an anarcho-capitalist society. Some believe prisons or indentured servitude would be justifiable institutions to deal with those who violate anarcho-capitalist property relations, while others believe exile or forced restitution are sufficient.

One difficult application of defensive aggression is the act of revolutionary violence against tyrannical regimes. Many anarcho-capitalists admire the American Revolution as the legitimate act of individuals working together to fight against tyrannical restrictions of their liberties. In fact, according to Murray Rothbard, the American Revolutionary War was the only war involving the United States that could be justified;. Anarcho-capitalists, i.e. Samuel Edward Konkin III also feel that violent revolution is counter-productive and prefer voluntary forms of economic secession to the extent possible.

History and influences

Classical liberalism

Gustave de Molinari (1819–1912).
Gustave de Molinari (1819–1912).

Classical liberalism is the primary influence with the longest history on anarcho-capitalist theory. Classical liberals have had two main themes since John Locke first expounded the philosophy: the liberty of man, and limitations of state power. The liberty of man was expressed in terms of natural rights, while limiting the state was based (for Locke) on a consent theory.

In the 19th century, classical liberals led the attack against statism. One notable was Frederic Bastiat (The Law), who wrote, "The state is the great fiction by which everybody seeks to live at the expense of everybody else." Henry David Thoreau wrote, "I heartily accept the motto, 'That government is best which governs least'; and I should like to see it acted up to more rapidly and systematically. Carried out, it finally amounts to this, which also I believe, 'That government is best which governs not at all'; and when men are prepared for it, that will be the kind of government which they will have."

The early liberals believed that the state should confine its role to protecting individual liberty and property, and opposed all but the most minimal economic regulations. The "normative core" of classical liberalism is the idea that in an environment of laissez-faire, a spontaneous order of cooperation in exchanging goods and services emerges that satisfies human wants. Some individualists came to realize that the liberal state itself takes property forcefully through taxation in order to fund its protection services, and therefore they it seemed logically inconsistent to oppose theft while also supporting a tax-funded protector. So, they advocated what may be seen as classical liberalism taken to the extreme by only supporting voluntarily funded defense by competing private providers. One of the first liberals to discuss the possibility of privatizing protection of individual liberty and property was France's Jakob Mauvillon in the 18th century. Later, in the 1840s, Julius Faucher and Gustave de Molinari advocated the same. Molinari, in his essay The Production of Security, argued, "No government should have the right to prevent another government from going into competition with it, or to require consumers of security to come exclusively to it for this commodity." Molinari and this new type of anti-state liberal grounded their reasoning on liberal ideals and classical economics. Historian and libertarian Ralph Raico asserts what that these liberal philosophers "had come up with was a form of individualist anarchism, or, as it would be called today, anarcho-capitalism or market anarchism." Unlike the liberalism of Locke, which saw the state as evolving from society, the anti-state liberals saw a fundamental conflict between the voluntary interactions of people — society — and the institutions of force — the State. This society versus state idea was expressed in various ways: natural society vs. artificial society, liberty vs. authority, society of contract vs. society of authority, and industrial society vs. militant society, just to name a few. The anti-state liberal tradition in Europe and the United States continued after Molinari in the early writings of Herbert Spencer, as well as in thinkers such as Paul Émile de Puydt and Auberon Herbert.

Ulrike Heider, in discussing the "anarcho-capitalists family tree," notes Max Stirner as the "founder of individualist anarchism" and "ancestor of laissez-faire liberalism." According to Heider, Stirner wants to "abolish not only the state but also society as an institution responsible for its members" and "derives his identity solely from property" with the question of property to be resolved by a 'war of all against all'." Stirner argued against the existence of the state in a fundamentally anti-collectivist way, to be replaced by a "Union of Egoists" but was not more explicit than that in his book The Ego and Its Own published in 1844.

Later, in the early 20th century, the mantle of anti-state liberalism was taken by the " Old Right". These were minarchist, antiwar, anti-imperialist, and (later) anti- New Dealers. Some of the most notable members of the Old Right were Albert Jay Nock, Rose Wilder Lane, Isabel Paterson, Frank Chodorov, Garet Garrett, and H. L. Mencken. In the 1950s, the new "fusion conservatism", also called "cold war conservatism", took hold of the right wing in the U.S., stressing anti-communism. This induced the libertarian Old Right to split off from the right, and seek alliances with the (now left-wing) antiwar movement, and to start specifically libertarian organizations such as the (U.S.) Libertarian Party.

Nineteenth century individualist anarchism in the United States

Lysander Spooner (1808–87).
Lysander Spooner (1808–87).

Rothbard was influenced by the work of the 19th-century American individualist anarchists (who were also influenced by classical liberalism), and anarcho-capitalism is regarded as a form of individualist anarchism by many scholars. *. Rothbard said in 1965: "Lysander Spooner and Benjamin T. Tucker were unsurpassed as political philosophers and nothing is more needed today than a revival and development of the largely forgotten legacy they left to political philosophy." However, he thought they had a faulty understanding of economics. The 19th century individualists had a labor theory of value, as influenced by the classical economists, but Rothbard was a student of neoclassical economics which does not agree with the labor theory of value. So, Rothbard sought to meld 19th century individualists' advocacy of free markets and private defense with the principles of Austrian economics: "There is, in the body of thought known as 'Austrian economics', a scientific explanation of the workings of the free market (and of the consequences of government intervention in that market) which individualist anarchists could easily incorporate into their political and social Weltanschauung". Rothbard held that the economic consequences of their political system they advocate would not result in an economy with people being paid in proportion to labor amounts, nor would profit and interest disappear as they expected. Tucker thought that unregulated banking and money issuance would cause increases in the money supply so that interest rates would drop to zero or near to it. Rothbard, disagreed with this, as he explains in The Spooner-Tucker Doctrine: An Economist's View. He says that first of all Tucker was wrong to think that that would cause the money supply to increase, because he says that the money supply in a free market would be self-regulating. If it were not, then inflation would occur, so it is not necessarily desirable to increase the money supply in the first place. Secondly, he says that Tucker is wrong to think that interest would disappear regardless, because people in general do not wish to lend their money to others without compensation so there is no reason why this would change just because banking was unregulated. Also, Tucker held a labor theory of value. As a result, he thought that in a free market that people would be paid in proportion to how much labor they exerted and that if they were not then exploitation or "usury" was taking place. As he explains in State Socialism and Anarchism, his theory was that unregulated banking would cause more money to be available and that this would allow proliferation of new businesses, which would in turn raise demand for labor. This led him to believe that the labor theory of value would be vindicated, and equal amounts of labor would receive equal pay. Again, as a neoclassical economist, Rothbard did not agree with the labor theory. He believed that prices of goods and services are proportional to marginal utility rather than to labor amounts in free market. And he did not think that there was anything exploitative about people receiving an income according to how much others subjectiely value their labor or what that labor produces, even if it means people laboring the same amount receive different incomes.

Benjamin Tucker opposed vast concentrations of wealth, which he believed were made possible by government intervention and state protected monopolies. He believed the most dangerous state intervention was the requirement that individuals obtain charters in order to operate banks and what he believed to be the illegality of issuing private money, which he believed caused capital to concentrate in the hands of a privileged few which he called the "banking monopoly." He believed anyone should be able to engage in banking that wished, without requiring state permission, and issue private money. Though he was supporter of laissez-faire, late in life he said that State intervention had allowed some extreme concentrations of resources to such a degree that even if laissez-faire were instituted, it would be too late for competition to be able to release those resources (he gave Standard Oil as an example).. Anarcho-capitalists also oppose governmental restrictions on banking. They, like all Austrian economists, believe that monopoly can only come about through government intervention. Individualists anarchists have long argued that monopoly on credit and land interferes with the functioning of a free market economy. Although anarcho-capitalists disagree on the critical topics of profit, social egalitarianism, and the proper scope of private property, both schools of thought agree on other issues. Of particular importance to anarcho-capitalists and the individualists are the ideas of "sovereignty of the individual", a market economy, and the opposition to collectivism. A defining point that they agree on is that defense of liberty and property should be provided in the free market rather than by the State. Tucker said, "[D]efense is a service like any other service; that it is labor both useful and desired, and therefore an economic commodity subject to the law of supply and demand; that in a free market this commodity would be furnished at the cost of production; that, competition prevailing, patronage would go to those who furnished the best article at the lowest price; that the production and sale of this commodity are now monopolized by the State; and that the State, like almost all monopolists, charges exorbitant prices." But, again, since anarcho-capitalists disagree with Tucker's labor theory of value, they disagree that free market competition would cause protection (or anything else) to be provided "at cost." Like the individualists, anarcho-capitalists believe that land may be originally appropriated by, and only by, occupation or use; however, most individualists believe it must continually be in use to retain title. Lysander Spooner was an exception from those who believed in the "occupation and use" theory, and believed in full private property rights in land, like Rothbard.

The Austrian School

The Austrian School of economics was founded with the publication of Carl Menger's 1871 book Principles of Economics. Members of this school approach economics as an a priori system like logic or mathematics, rather than as an empirical science like geology. It attempts to discover axioms of human action (called " praxeology" in the Austrian tradition) and make deductions therefrom. Some of these praxeological axioms are:

  • humans act purposefully;
  • humans prefer more of a good to less;
  • humans prefer to receive a good sooner rather than later; and
  • each party to a trade benefits ex ante.

Even in the early days, Austrian economics was used as a theoretical weapon against socialism and statist socialist policy. Eugen von Böhm-Bawerk, a colleague of Menger, wrote one of the first critiques of socialism ever written in his treatise The Exploitation Theory of Socialism-Communism. Later, Friedrich Hayek wrote The Road to Serfdom, asserting that a command economy destroys the information function of prices, and that authority over the economy leads to totalitarianism. Another very influential Austrian economist was Ludwig von Mises, author of the praxeological work Human Action.

Murray Rothbard, a student of Mises, is the man who attempted to meld Austrian economics with classical liberalism and individualist anarchism, and is credited with coining the term "anarcho-capitalism". He wrote his first paper advocating "private property anarchism" in 1949, and later came up with the alternative name "anarcho-capitalism." He was probably the first to use "libertarian" in its current (U.S.) pro-capitalist sense. He was a trained economist, but also knowledgeable in history and political philosophy. When young, he considered himself part of the Old Right, an anti-statist and anti- interventionist branch of the U.S. Republican party. When interventionist cold warriors of the National Review, such as William Buckley, gained influence in the Republican party in the 1950s, Rothbard quit that group and formed an alliance with left-wing antiwar groups, noting an antiwar tradition among a number of self-styled left-wingers and to a degree closer to the Old Right conservatives. He believed that the cold warriors were more indebted in theory to the left and imperialist progressives, especially in regards to Trotskyist theory.". Later, Rothbard was a founder of the U.S. Libertarian Party. In the late 1950s, Rothbard was briefly involved with Ayn Rand's Objectivism, but later had a falling out. Rothbard's books, such as Man, Economy, and State, Power and Market, The Ethics of Liberty, and For a New Liberty, are considered by some to be classics of natural law libertarian thought.

Real world examples similar to anarcho-capitalism

19th century interpretation of the Althing in the Icelandic Commonwealth, which authors such as David Friedman and Roderick Long believe to have some features of anarcho-capitalist society.
19th century interpretation of the Althing in the Icelandic Commonwealth, which authors such as David Friedman and Roderick Long believe to have some features of anarcho-capitalist society.

To the extent that anarcho-capitalism is thought of as a theory or ideology - rather than a civilizing process - critics say that it is unlikely ever to be more than a utopian ideal. Some, however, point to actual situations where protection of individual liberty and property has been voluntarily-funded rather than being provided by a state through taxation.

Medieval Iceland

According to David Friedman, " Medieval Icelandic institutions have several peculiar and interesting characteristics; they might almost have been invented by a mad economist to test the lengths to which market systems could supplant government in its most fundamental functions." While not directly labeling it anarcho-capitalist, he argues that the Icelandic Commonwealth between 930 and 1262 had "some features" of an anarcho-capitalist society — while there was a single legal system, enforcement of law was entirely private and highly capitalist; and so provides some evidence of how such a society would function. "Even where the Icelandic legal system recognized an essentially "public" offense, it dealt with it by giving some individual (in some cases chosen by lot from those affected) the right to pursue the case and collect the resulting fine, thus fitting it into an essentially private system."

The American Old West

According to the research of Terry L. Anderson and P. J. Hill, the Old West in the United States in the period of 1830 to 1900 was similar to anarcho-capitalism in that "private agencies provided the necessary basis for an orderly society in which property was protected and conflicts were resolved," and that the common popular perception that the Old West was chaotic with little respect for property rights is incorrect.

Conflicts within anarcho-capitalist theory

The only significant dispute within the anarcho-capitalist movement concerns whether an anarcho-capitalist society is based on deontological or consequentialist grounds. Natural-law anarcho-capitalism (such as that advocated by Rothbard) holds that a universal system of rights can be determined through natural law. Consequentialists such as Friedman disagree, maintaining that rights are merely human constructs that rational humans create through contracts and individual relationships, resulting in the system that leads to the best consequences for all parties.

In The Machinery of Freedom, Friedman describes an economic approach to anarcho-capitalist legal systems. His description differs with Rothbard's because it does not use moral arguments — i.e., it does not appeal to a theory of natural rights to justify itself. In Friedman's work, the economic argument is sufficient to derive the principles of anarcho-capitalism. Private defense or protection agencies and courts not only defend legal rights but supply the actual content of these rights and all claims on the market. People will have the law system they pay for, and because of economic efficiency considerations resulting from individuals' utility functions, such law will tend to be libertarian in nature but will differ from place to place and from agency to agency depending on the tastes of the people who buy the law. Also unlike other anarcho-capitalists, most notably Rothbard, Friedman has never tried to deny the theoretical cogency of the neoclassical literature on "market failure," nor has he been inclined to attack economic efficiency as a normative benchmark.

Criticisms of anarcho-capitalism

Criticisms of anarcho-capitalism fall into several categories: practical criticisms which claim that anarcho-capitalism is unworkable in practice; critiques that claim that capitalism requires a coercive state to exist and that a society can be anarchist or capitalist, but not both; general critiques of the morality of capitalism and liberalism, which also apply to anarcho-capitalism; and a utilitarian critique, which claims that anarcho-capitalism would not maximize utility.

Objectivists argue that, in the absence of a state, an anarcho-capitalist society would degenerate into a "war of all against all". Other critics argue that the free rider problem makes the provision of protection services in an anarcho-capitalist society impractical.

That anarcho-capitalism is not a legitimate form of anarchism

These arguments are also discussed in the Anarchism and anarcho-capitalism article.

Although several scholars see anarcho-capitalism as a form of anarchism, many anarchists strongly argue that anarcho-capitalism is not a form of anarchism, since they believe capitalism to be inherently authoritarian. In particular, many anarchists and socialists argue that certain capitalist transactions are not voluntary, and that maintaining the capitalist character of a society requires coercion, which is incompatible with an anarchist society. Moreover, capitalistic market activity is essentially dependent on the imposititon of private ownership and a particular form of exchange of goods where selling and buying is usually mandatory (due to the division of ownership of the capital, and consequently, value).

According to The Anarchist International, for example, capitalism is an economic plutocracy that includes its own hierarchy. They place anarcho-capitalism outside of the anarchist movement and into the classical liberal tradition: " Plutarchy without statism = liberalism." American individualist anarchism is sometimes regarded as a form of "liberal-anarchism."

Anarcho-capitalist literature


The following is a partial list of notable nonfiction works discussing anarcho-capitalism.

  • Murray Rothbard Father of modern anarcho-capitalism:
    • Man, Economy, and State The ultimate Austrian economics book,
    • Power and Market Classification of State economic interventions,
    • The Ethics of Liberty Moral justification of a free society
  • Frederic Bastiat, The Law Radical classical liberalism
  • Davidson & Rees-Mogg, The Sovereign Individual Historians look at technology & implications
  • David D. Friedman, The Machinery of Freedom Classic consequentialist defense of anarchism
  • Auberon Herbert, The Right and Wrong of Compulsion by the State
  • Albert Jay Nock, Our Enemy the State Oppenheimer's thesis applied to early US history
  • Juan Lutero Madrigal, anarcho-capitalism: principles of civilization
  • Franz Oppenheimer, The State Analysis of State; political means vs. economic means
  • Robert Nozick, Anarchy, State, and Utopia Academic philosopher on libertarianism
  • Herbert Spencer, Social Statics Includes the essay "The Right to Ignore the State"
  • Morris & Linda Tannahill, The Market for Liberty Classic on PDAs (private defense agencies)


Anarcho-capitalism has been examined in certain works of literature, particularly science fiction. an example being Robert A. Heinlein's 1966 novel The Moon Is a Harsh Mistress, where he explores what he terms "rational anarchism". It is particularly influential in the work of cyberpunk and post-cyberpunk authors. Several stories of Vernor Vinge, including Marooned in Realtime, are set in an effectively anarcho-capitalist future, as are Neal Stephenson's Snow Crash, Max Barry's Jennifer Government, and Cory Doctorow's Down and Out in the Magic Kingdom. It should be noted that many of these works are highly critical of anarcho-capitalism. Authors such as Neal Stephenson and Max Barry use the literary genre of Science Fiction to critique the ideology arguing that anarcho-capitalism leads to a greater degree of tyranny, not a decrease.

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