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Anarcho-capitalism is a political/economic theory which originated in the 1960s in the USA. It is significant influenced by the Austrian school of economics. Anarcho-capitalism is a political philosophy and theory which aims to privatize the functions of states. In contrast to many other forms of anarchism, it allows for economical and social hierarchy.


Anarcho-capitalism aims to be a liberal form of capitalism, embracing the free market, where the state would no longer exist, with its functions replaced by private organizations (private tribunals, private police, private army...).

It emerged in the 1950s out of the tradition of classical liberalism, and generally sets itself in contrast to individualist anarchists theory. Murray Rothbard, an Austrian economist influenced by work of individualist anarchists like Benjamin Tucker and Lysander Spooner, rejecting from them the critics of wage labor, is thought as the founder of anarcho-capitalism.

Varying Views on Intellectual Property Edit

While some Anarcho-capitalists support intellectual property, many oppose it, saying that intellectual property infringes on physical property. Jeremy Spazmania, founder writes, "Is there nothing more preposterous than equating intellectual property, whatever the hell that is, with real, personal property?"[1].

Wage Labor Edit

Anarcho-capitalists state that an employer-employee relationship is an elaborate and mutually profitable form of voluntary association. They resent government as a parasite which corrupts, biases, impedes and distorts what would otherwise be peaceful fair and free associations.

Anarcho-capitalists consider that in consenting to a contract, that each party was free to refuse, the contract is voluntary and therefore legitimate and beneficial, claiming any external power that attempts to prevent such relationship is itself an oppression to be fought.

Anarcho-capitalists argue that, no matter what social organization may or may not exist, social organizations will never eliminate the basic human requirement to work in order to support themselves. Therefore an objection based on a constraint that cannot be overcome is useless to argue about and not a rational objection at all. Robert Nozick (a libertarian, but not an anarcho-capitalist) argues that for any "pattern" theory, defined as any theory following the form "To each according to his X", an invasive government would be needed to enforce the pattern, such that even gift giving would necessarily be criminal.

Additionally, they argue that while someone may not be able to refuse to work in general, one has the largest diversity on the free market with regard to their employers or beginning their own business operation. What matters is that no given employer/employee contract be coercive. Thus, anarcho-capitalists believe that an individual may choose to work in any manner they wish, be it for a wage or for some other means of payment, so long as there is no coercion involved.

Criticism of Anarcho-capitalism Edit

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Freedom without Socialism is privilege and injustice and Socialism without freedom is slavery and brutality.” ~ Mihail Bakunin
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Anarcho-capitalism is a view that departs from some other anarchist theories in that it takes "anarchy" in its strict definition, that is, "lack of government", rather than the "lack of hierarchy" used in some anarchist theories. Some anarchists, confused by the meaning of "anarchy", regard "anarcho-capitalism" as an oxymoron.

Another criticism is over the precise definition of "freedom"; in anarcho-capitalist theory, it is used roughly to mean "opportunity".

An editor of anarchopedia writes: "There is no form of capitalism that does not rely on the concentration of wealth and the existence of private property, and the need for defense of this property through a public or private state. James Donald and Bryan Caplan have attempted (in the 1990s) to frame their arguments in language and documents that appear to be legitimate because they use certain key phrases and structure and some author's attempts to have some connection to scholarly circles with anarchist legitimacy. None of the big names and figures mentioned in anarcho-capitalist philosophy include actual anarchists (they mention Benjamin Tucker or Fred Woodworth only to grab an occasional condemnation of socialism or seeming advocacy of "anarchist private property", yet once this is established these people quickly disappear to be replaced by more "pure" capitalist individuals such as Bastiat and Rothbard)."

Anarcho-Capitalist Criticism of Social Anarchism Edit

From the Anarcho-capitalist FAQ:

"What are the myths of socialism?

The just price doctrine and cost-price theories of value. The medieval notion of just price permeates socialist thought. It holds that there is a God-given or intrinsic price of a good, regardless of people's wants, needs, and desires, or supply and demand. In the industrial-era form of this doctrine, the value of a good is deemed to be equal to the cost of production, usually in terms of labor time expended (see labor theory of value below). This cost-price notion was refuted in the 1800s by the marginalist revolution in economics, but nevertheless many socialists remain mired in this creationism of the left. The marginalist economists, notably the Austrian School, consider value to be subjective. It depends on each person and his or her particular situation and values. In the desert, one may prefer a cup of water to a diamond.

The labor theory of value. The labor theory of value (LTV) is the cost-price doctrine which holds that all value springs from labor. In other words, it purports that land, capital, and entrepreneurship are all non-productive, and can impute no value to a good (except insofar as they represent past labor.) The general invalidity of all just price doctrines has already noted. The modern (marginalist) thought is that value is not determined by cost at all, but by the subjective preferences of the buyers interacting with the available quantity of the good in question. This is known as the subjective theory of value. Even on it's own intrinsic price terms, the LTV fails to account for factors of production other than labor. Standard counter-examples abound, e.g. No matter how much time you spend producing mud-pies, they are still worthless; A fresh bottle of wine gains value simply by aging; and so on. It is possible to formulate a purely descriptive LTV, which uses labor time as the measure of the productivity of land and capital, as Kevin Carson does in part 1 of his book Studies in Mutualist Political Economy, however the usefulness of this is dubious, and the temptation to slide into the prescriptive interpretation is enormous, as Carson does without justification in part 2 of the same book.

The exploitation theory. An exploitation theory is any theory which purports to justify the claim that one "class" exploits another. In socialist theory, the claim is that a capitalist class exploits a proletarian class. Most exploitation theories are based on the antiquated LTV notion described above. Other socialists realize the weakness of this argument, and base their exploitation theory on unequal negotiating positions. While this latter approach may explain outcomes of bargaining, it evades the relevant issue - whether the trade was voluntary. Thus this approach also fails to support the claim that (so-called) "exploitation" is undesirable or unethical.

Note that even stipulating the "creationist" LTV, the socialist argument is insufficient for proving exploitation. It lacks an explanation of why workers voluntarily exchanging labor time for wages is exploitative. Bohm-Bawerk of the Austrian school of economics showed long ago (1884 in "Exploitation Theories") that profit from wages could be explained by interest on advanced pay, i.e. workers getting paid prior to their produce being sold.

Denial of scarcity (property, money). This is a favorite of utopian socialists. The purpose of property is to solve the scarcity problem - that man's desires exceed available goods. This myth simply assumes away scarcity, as if this human condition was merely an effect of a particular property system rather than a fact of reality and human nature. The socialist denial of the validity of property involves an internal contradiction and much resulting "double-think." E.g. Proudhon writes that he's against contract property, but for possession property; yet he refuses to acknowledge that his "possession" is a type of property.

Another naive denial of scarcity is the claim of some socialists that a modern society can get along without money. Hayek made a living by refuting that view: in short, an economy needs the informational function of money to balance supply and demand. Without the amalgamation of the desires and preferences of the producers and consumers into price, chaos results. Shortages and surpluses abound when the communication of preferences is prevented or co-opted by rulers. Money is simply and ultimately the most liquid commodity in a market. There will always be a most liquid commodity in any market; ergo, there will be something used as money."

Criticism of Anarcho-Capitalist Criticism Edit

Price and LTVEdit

While these values might be subjective the simple fact remains that there is a difference between the exchange value of a commodity or service and it's use value or its production cost. Socialists do not all reject supply and demand as an appropriate price setting mechanism. Indeed many market socialists actually reject LTV in favor of neoclassicalist explanations of value. The just price is the price that reaches democratic agreement between the workers that create the commodity or service and those that buy it.


Socialism is about seeking out the most democratic way to resolve the conflict between the parties in an exchange. This is something that is not addressed by pure free markets. The idea behind socialism recognizing there exist structural elements to coercion that are not circumvented by the cheap loophole of calling transactions voluntary.


The concept that "mans desires exceed available goods" is taken for granted without asking why this should be. It is true that in the current state of things this is true. But there is no reason it has to be true. It is merely a product of social conditioning. That said, scarcity itself is mostly artificial. There are some hard limits to scarcity, but there are allso other goods that are non-scarce, like computer software. A good case can be made that the majority of scarcity is merely imposed by the structure of the capitalist system.

Nonetheless, in the interim to a moneyless society, some method of managing scarcity would have to be imposed, therefore some form of currency would be necessary.

Moneyless SocietyEdit

Here there is the assumption that money is the only thing that can act as an informational function. Secondly this position takes for granted a product of social conditioning. A moneyless society necessitates a higher state of awareness that breaks free of the commodity accumulation mindset. This higer state of awareness transcends the need of simplistic tit-for-tat accounting principles. This hypothetical society would have had to have moved past greed and ruthless ambition. The very problem with having a capitalist system is that it never weans us from having to be good neighboors.

Quotations Edit

"capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism." - Murray Rothbard

"Without property there is no free personal life. Without property there is no power to act. The man who treads on strange ground, touches strange property at every movement he makes is not a free man. And the word 'property' must be taken literally as ownership, or, as we say to-day, private property. Without private property there is no freedom." - Emil Brunner

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