Sean Parr
Anarcho-Capitalism: serfs favor it, tyrants fear it, and the ignorant, well... they don't know a whole lot about it
By Sean Parr
December 16, 2015

Some time ago, Renew America contributor Donald Hank authored an article entitled "Anarcho-Capitalism: The Road Less Traveled to Serfdom." It is the intention of this current effort to address some of the deficiencies in Mr. Hank's article as well as to correct some of its misrepresentations of anarcho-capitalism (which, in my opinion, is just a political philosophy-and-a-half. It really is quite swell).

Hank opens his article by correctly identifying anarcho-capitalism (sometimes referred to as libertarian anarchy or Rothbardianism) as a form of libertarianism. It is, in fact, the correct and purest construction of libertarianism. It will benefit the reader now to define some terms.

Briefly, libertarianism is a branch of law the basis of which is the non-aggression principle (NAP). The NAP "states, simply, that it is illicit for anyone, at any time, ever, to initiate (or even threaten) violence or invasion, against anyone else or his legitimately held property." By using a reasoning employed by Walter Block libertarianism can be broken down into a hierarchy of four separate categories, the lower the classification of which the less significance is placed on the NAP.
  1. Anarcho-Capitalism – the state is illegitimate and all functions of government ought to be privatized.

  2. Minarchism – the function of the state is to protect persons and property via police, armies, and courts.

  3. Classical Liberalism – the functions of the state are broadened to include such things as public goods, infrastructure, and, perhaps, "highways... post offices, mints, etc."

  4. Weak Market Supporters – the functions of the state are broadened to include, well... these folk aren't libertarian at all really.
Now that that is out of the way, I may continue to investigate and criticize the claims made and arguments proffered by Hank in his hit-piece against my preferred political philosophy.

Hank states that American libertarians, whose philosophy he finds unacceptable, "are generally indoctrinated by the von Mises wing of the Austrian School" whereas, on his interpretation, "European libertarians... lean toward Hayek." I don't know where Hank gets his stats vis-à-vis the predispositions of various American versus European libertarians, but there seems to be some other, more pressing confusion in Hank's assessment here.

There is a severe, a crucial, an even hallowed distinction between economics and political philosophy.

The Austrian School is a brand of economics, originating with the insights of Carl Menger, differentiated from other so-called free market approaches in many, many ways (most notably in its methodology). Both Mises and Hayek were Austrian economists (also referred to as praxeologists), and Hayek was actually a disciple of Mises. I believe Hank would be hard-pressed to demonstrate where Hayek praxeologically departs from Mises, at least in any manner relevant to the case that he is trying make. The best that Hank can muster is to aver that "while Hayek believed in law and order, despite his libertarian approach to economics, the more radical of the von Mises wing (not necessarily Von Mises himself) believe in something called Anarcho-Capitalism." Not only does this statement of Hank's incorrectly imply that anarcho-capitalism is a system devoid of law and order (more on that later), it seems to conflate, absolutely, the Austrianism of Hayek and Mises with their political philosophies (the former a weak market supporter, the latter a minarchist). There is and can be no such thing as "a libertarian approach to economics." The Austrian School of Economics is a value free, positive science. It is not normative like libertarianism. And while it may be the case that a great number of praxeologists happen also to be libertarian, [1] this is not, and cannot be, a necessary result of there being Austrian economists.

The first of Hank's sallies against anarcho-capitalism is one that is rather weak; namely, that it "teaches an ideology that has never been tried on a national scale and... is not based on anything tried and true, merely on philosophical conjectures." This is a somewhat ironic, and flatly incorrect, criticism for Hank to make.

It is ironic because, from one side of his mouth, Hank lauds libertarianism for its "rejection of socialism," and, from the other, he assails it using the very same logic and arguments that the nineteenth century socialists used against Bastiat, Cobden, and the European Classical Liberals (the intellectual and moral predecessors of the libertarian doctrine). [2] Socialism certainly is "tried and true." Perhaps Hank feels more at home with the Marxists.

Further, it is incorrect because there are, in fact, some fine historical examples of societies whose legal orders approximate that of a libertarian anarchist system. The Eskimos, the Somalis, and the early Irish come to mind (for more on this, read here). Now, by offering these examples I am trying to show, simply, that there have been societies that functioned without a state apparatus, not that these societies were particularly magnificent. Just that they have existed is enough to beat Hank's objection. It is surprising that Hank did not discover any of this in his "years of investigation and thought" on the subject.

Hank goes on to indict anarcho-capitalism on the basis of six incorrect or, at least, wild claims. I will now list those assertions of Hanks's with my own response to them in italics.
  1. The focus is... on private vs public security, where the depositing of security functions in the private sphere would supposedly be superior in functionality and quality and would somehow be more fair (sic). However, since the State is not involved, there would be no law or rules to use as guidelines.

    "The depositing of security functions in the private sphere" would not just "supposedly be superior in functionality and quality," it would certainly be so. There is such a thing as natural laws; those that govern physical objects and those that govern the realm of morality. There is also such a thing as economic laws. Among these, for example, (1) the greater the demand for a thing (all things being equal), the higher the price; (2) minimum wage laws, in time, yield higher unemployment; and, relevant to the current case, (3) monopolies result in goods or services of a higher price and a lower quality. Security functions, like anything scarce, are not exempt from economic laws.

    Anarchism is the theory that argues for the desirability of a condition in which the members of society are not subject to the power of a state. It means "no rulers," not "no rules." It is therefore erroneous (not to mention question-begging) to aver that without the state there would be "no law or rules to use as guidelines." There would be laws, they just wouldn't be imposed by a state.

  2. Only the rich could own the latest security systems.

    This criticisms misfires on two fronts. First, it misconstrues what happens to goods and services in a fully competitive marketplace; namely, prices fall (the iPhone 6 may be a luxury to be enjoyed only by those with a certain amount of disposable income, but Apple's competitors, in time, work to drive prices down by creating comparable products. Also (and more to the point), the iPhone 4 does the job just fine.

    And second, security systems purchased at Walmart or garnered from Wackenhut are not likely to dominate the economic landscape. More likely, "enforcement procedures will develop... by means of the specialization of existing risk-distribution firms such as insurance companies." I'm no millionaire and my group life insurance policy is pretty friggin' good!

  3. There would be no mechanism for keeping the security system from being corrupted.

    A security firm that acted so as to harm its customers would not fare quite so well as one that avoided such calamitous behavior. The former firm would be punished by consumers while the latter would be rewarded by them. Hence, the marketplace would provide the mechanism for checking the corruption that Hank so fears.

    More importantly, though, Hank's concern is no charge against libertarian anarchy. I would ask him: (1) What keeps our legislators, judges, executives, and administrators in the government from being corrupted and jeopardizing our security? And, (2) the government having a monopoly on the security system, what recourse do citizens currently have in the face of such corruption? The answer to both questions: Nothing. Unless he is willing to state that those in the government are "composed of different materials from the rest of mankind," Hank has successfully indicted the human race on this count, not anarcho-capitalism.

  4. Without a centrally defined concept of law and order, there would quite simply be none.

    Once again Hank devolves into a vicious circularity (namely, there would be no law and order without the state; the very thing he ought to be attempting to demonstrate). But, more importantly, Hank believes that law and order cannot derive from a stateless society, and this simply is not true. Gerard Casey points to customary law to answer this objection of Hank's. Customary law is "a particular and local concentration of natural law, having regard to local conditions and circumstances." It naturally arises from the processes of dispute resolution and adjudication. That is, there need be no government to construct laws and impose them on society. Customary laws emerge "as a kind of endogenous growth" and in them "we find law's three essential elements: an adjudicative procedure, a body of rules, and a means of enforcement."

  5. Soon the nation would be divided into fiefdoms and most of us would become serfs.


  6. Capitalism itself, without a moral underpinning, will soon become corrupt and the same bankers who now rule over our inflated currency with an iron fist and rob us blind will soon rise to the top of an anarchic system as well, simply by adapting their methods to it. After all, they are already tacitly given carte blanche to rob us. In an anarchic system, the tacit carte blanche would give way to an explicit carte blanche.

    Who says that capitalism without the state would have no moral underpinning?! It would have the moral underpinning of private (customary) law, which is simply a subset of ethics. To state that it wouldn't, I think, owes to ignorance; the obfuscation of anarchy with chaos or, at least, the association of laws solely with the dictates of the government.

    I'm not sure of the reasoning behind Hank's contention that corrupt bankers will rise to the top of anarchic system, but if it were conceded that that would be the outcome, we'd be left in the same state as our current situation – just without the government robbing us and calling it taxes and kidnapping and enslaving us and calling it conscription, among other atrocities.

Hank ends his article by reiterating his previous contention that society ought to abandon libertarian anarchy and "look at economic and social models that WORK;" that we "stop arguing over untested theories."

That anarcho-capitalism is a model that doesn't work, an untested theory, is a bare and false assumption of Hank's.

As Casey states
    A little reflection will demonstrate that most of our relations with other people come into being and are maintained outside the ambit of state-generated law and these relations would, for reasons of mutual benefit if for no more elevated reasons, continue in existence and operation even if there were no state to enforce its laws.
Although it is derived from our ordinary experience, Hank chooses to ignore that the state simply is not needed. He chooses instead to assail us cute, cuddly little anarcho-capitalists on the grounds that our theory is not practical.

Not practical?

"Our theory is so little opposed to practice that it is nothing else but practice explained."


[2]  For their opposition to taxes, tariffs, and all forms of government intervention in the economy, the Classical Liberals were referred to by the socialists as "theorists, metaphysicians, idealists, Utopian dreamers, doctrinarians," etc.

© Sean Parr


The views expressed by RenewAmerica columnists are their own and do not necessarily reflect the position of RenewAmerica or its affiliates.
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