Political Philosophy

Anarchy Reconsidered

It may be time to reconsider Rothbard's capitalist anarchy, but we need a better name for it.

by T. Nelson

Political Philosophy

Anarchy Reconsidered

A year ago Americans got a taste of our future when the federal government shut itself down for a whole week. Big mistake. We were battered almost to the limit of our endurance by our inability to visit Mount Rushmore or ride up and down in the elevator in the Washington Monument. But somehow we survived our brush with anarchy. Since then, books about anarchy have exploded in popularity. The American people are saying: Hey, we're still here! Anarchy isn't so bad. Give us more!

But what really is anarchy? Is it possible to run a country without a government? Is anarchy a viable political system, or does anarchy invariably degenerate into ... anarchy?

Perhaps it makes more sense to ask whether anarchy invariably degenerates into government. Conventional wisdom says there must always be one entity that has supreme power, or there will be irresolvable conflict. This, it is said, is a fatal flaw in Murray Rothbard's vision of capitalist anarchy that no one has ever addressed. In this article I will address this by asking the questions: Is justice possible in an anarchy? Can an anarchy be stable?

If the worst thing one can say about anarchy is that it leads to anarchy, you might think it's not such a bad thing after all. I've been critical of capitalist anarchy in the past, partly because it seemed there was a chance America could recover from the disastrous leadership of the past decade, but also because the advocates of anarchy glossed over its problems. I try to address some of those problems here. It may seem ironic, but “good anarchy” might actually be the best way to save our constitutional republic and prevent our descent into real anarchy—the bad kind.

Rothbard's capitalist anarchy

Economists often think of voters as customers who are purchasing services from the government. If we want more space exploration, for example, we indicate our choice for the appropriate candidate on a special purchase-order form we call a ballot. Government then processes our order for exploring space, raises our taxes, sends a couple bucks to NASA, and spends the rest on junkets to Tahiti for all the congressmen, senators, spouses, and interns. Everybody is happy.

Despite the fact that we are permitted to vote every few years (provided we haven't broken any of the government's laws), the candidates are pre-selected for us and their positions are vetted by people who have a vested interest in maintaining the statist system. This creates a bias toward bigger and bigger government. If both parties decide, for example, that they would like to take your children and send them off to a war, knowing they might be killed, you have no choice in the matter. If politicians decide it would be convenient to raise your taxes in order to pay for something they want, you have to pay them.

Rothbard's vision of “capitalist anarchy” would do away with that. It's essentially a free-market version of government. Instead of having huge government programs forced upon us, paid for by money extracted by force from us by men with badges (and armored personnel carriers, tanks, bulletproof vests, grenades, and assault rifles), in Rothbard's system people just voluntarily purchase the government services they need. To the economist's mind, this is what we do already, so it's not a big change. Once you get used to the idea, you realize they're right.

The basic idea among libertarian anarchists like Murray Rothbard and Hans-Hermann Hoppe is that no government can be trusted to run the economy. So they go one last step further: they propose that we purchase services, not from an elected government, but from private companies. Instead of voting for individuals, we “vote” by selecting which company to get services from in a free market. Leave out the middle man.

Not all libertarians believe taking that last step is a good idea. But it's worth investigating, because considering alternatives opens up our minds to ways we could improve our own system. And there's a distinct possibility that we may get anarchy whether we want it or not, so it would be nice to know what we're in for.

The scariest part about Rothbard's scheme is the word “anarchy.” Calling it capitalist anarchy is like inventing a new breakfast cereal and calling it “Soggy Flakes of Crap,” which by coincidence is just what I had for breakfast this morning. “Anarchy” sounds like total chaos. So I suggest calling it instead “fluffy bunnyarchy.” Maybe someone else can come up with a better term. Maybe Peter T. Leeson's term “self-government” is even better.

If the saying about being three, or six, or nine, whatever, meals away from anarchy were true, we'd be in a Rothbardian utopia already. This expression really just demonstrates how dependent we are on government. In the real world, if there were no food we would get tyranny, not anarchy. We are, in fact, three meals away from tyranny.

The beauty of anarchy

As soon as anyone mentions anarchy, people object: how do we get there from here? Do we have to wait until the government collapses? Or maybe a civil war? Many people, having dealt with unresponsive, conniving corporations, trust them even less than government. And there are some who simply reject the idea because they actually like having the government telling them what to do, because it makes them feel safer. They identify with the government because it's the strong horse. Possible slogan of the Anarchist Party “Vote for us. We promise not to do a goddamn thing!”

The beauty of capitalist anarchy, or fluffy bunnyarchy, or whatever you want to call it is that it need not be all or none; we can ease into it gradually, keeping our elected government, and back off if something doesn't work. So there's no need to grow long frizzy beards and hurl Molotov cocktails like wild-eyed turn-of-the-century Albanians.

Even the U.S. federal government, certainly no friend of individual rights, has experimented with this idea on a limited scale. Indeed, many of the pieces of fluffybunnyarchy are already in place. We have private security forces and privately run prisons. Corporations deliver our mail, help us fight our wars, and run some of our mass transit systems. These small steps have been enormously successful.

All we have to do is gradually continue along these lines. That's it. There's nothing scary about it, and adopting it would not be an irreversible step. Best of all, there would be no need for a civil war. We don't have to wait for the U.S. federal government to collapse in an orgy of insolvency, hyperinflation, incompetence, and martial law. We would keep the Bill of Rights and the rest of the Constitution. In fact, easing toward anarchy might well be the best way to preserve these features that we all love.

Eliminate slavery

The other beauty of fluffy bunnyarchy is its inherent fairness. Currently in America, people who pay no taxes can vote to raise the taxes of those who do. The lowest-earning 50% of taxpayers pay only 2.4% of federal income taxes. The lowest 20% gets $8.13 in benefits for every $1 tax it pays. A safety net is all very nice, but when one group can force another to pay for more and more of their needs and wants it is nothing less than slavery.

We abolished slavery over 150 years ago. But it's back. Using the government to force others to give their resources to you is slavery. And it's being done by our government in the name of democracy. In an anarchy, government slavery would be eliminated because government is replaced, as Peter T. Leeson wrote, not with nothingness, but with self-government—which is what we were supposed to have from the start.

As the federal government begins to return to the size that our Founding Fathers had planned it to be, the individual states could, if they chose, change their status to become partially or completely independent. As Rothbard, Hans-Hermann Hoppe and many others have argued, secession is an inherent right of free people. If we are kept together by force, we are prisoners who have no choice in selecting how we are governed, and we forfeit the right to call ourselves a free people. Many other countries, such as the UK and Canada, already permit their citizens to choose this by a simple majority vote. If Quebec voted to leave Canada, the other provinces would not be able to keep them in by force, even if they wanted to. There is no reason why America cannot do the same.

The idea is appealing, because self-government means more freedom and more freedom means more wealth. A world full of Hong Kongs, Singapores, Switzerlands and Monacos would be more peaceful and more wealthy than the one we have now. Small countries are far more peaceful than big ones because the economic success of a small city-state is rapidly destroyed by conflict. Unlike today, where we're told to “love it or leave it”—and then effectively prevented from leaving because of the lack of viable alternatives—people could migrate to whichever region suited them best.

Instead of being run by gigantic, uncaring monopolies, countries would have to compete for citizens. If people wanted to live under cradle-to-grave socialism, they could do so. People who wanted to be free could split off from those who didn't, and live in freedom. We know from our experience with capitalism that competition breeds progress, efficiency, and wealth. So America would once again begin to evolve, and all the evils of government—oppression, inefficiency, gulags, and tyranny—would become things of the past. It would be a utopia of life in absolute liberty.

Life under anarchy

Or would it? Let's look at some challenging scenarios.

1. Corporate crime
Suppose one company decided to do murder any of its customers who complain. Or suppose the board of one company decided to massacre every board member of some other company. If you've ever been at a board meeting, you know that this scenario is not at all far-fetched. In a capitalist anarchy, isn't it true that the only way justice could be done would be for some entity to force it to turn over its records, open its doors, and submit its management staff to arrest? This entity would need supreme authority over all others.

Without such an entity, the thinking goes, the only way to penalize such a company is to boycott it. Few would consider “downturn in profit expectations next quarter” to be an adequate punishment for mass murder. Any organization powerful enough to enforce its laws and values and stand in judgement over everyone else would be, in fact, a government. So this raises the question: is justice possible under anarchy?

2. Injustice
Another problem arises concerning mistreatment of the weak. In an anarchy, where anyone has the right to refuse police services, who would stop people from abusing their children or their grandparents? Who would stop people from kidnapping each other? What about the poor? Isn't some central authority needed in cases where some individual has declined to purchase justice services?

3. The problem of the commons
Rothbard himself identified some other objections against this system. The “tragedy of the commons,” as it's called, where individuals find it expedient to strip mine the national parks and dump old couches at the side of the road, is one. Another is the problem of free-riders, who accept the benefits of other people paying for roads and police services, but never pay for them. Rothbard and his followers have addressed many of these with varying degrees of convincingness.

4. Foreign invasion
Conservatives will point out that without a strong central government we would be vulnerable to foreign invaders. Wouldn't we be unable to influence world affairs by using military deterrence and force as we do now?

5. Stability
Finally, there is the question of whether an anarchical system is stable. Wouldn't the system face constant pressure from statists trying to build a world government, military forces trying to impose a military dictatorship, religious groups trying to create a theocracy, royalists trying to appoint a king and queen, and cultists trying to appoint an alien from outer space as their supreme leader?

These objections have generally been glossed over. But they are important and what's more, they're easily addressed.

No society is more than three bouts of writer's cramp away from revolution

In an anarchy, a solution would have to form spontaneously, since there would be no central authority to impose solutions on people. Trade associations, for example, might be formed, and they could give ratings to different companies, which might affect their profitability. But they would be ineffectual, because they would lack coercive power. In the real world, the only way to get somebody to do something is to have the power to force them to do it.

The opposite is also true. The only way to prevent people from destroying the system is for the system to prevent them from doing it. We've seen throughout history, including early 20th century America, that people can be easily manipulated into throwing away their basic freedoms. In a pure anarchy, by definition no one is running things, so, it is said, it would not remain an anarchy for very long.

Murray Rothbard's scheme is, when you think about it as economists do, nothing more than a way of combining voting with paying taxes, with more granularity than we have now, and a catchy (or not-so-catchy) name added. You can read free of charge at the Ludwig von Mises Institute website in his books for details of how he thought it might work for the poor and the weak. But the other objections arise because Rothbard failed to consider the need to simplify. We could never tolerate a world where we have to purchase our wars from one vendor, our water from another, and our roads from a third. In America, we would be writing hundreds of checks each month just for the wars and war-related items alone. To screw up a perfectly good saying, no society is more than three bouts of writer's cramp from revolution.

Instead, we would get package deals, where we purchase, say, police and fire protection and we also get roads and maybe some city parks. In some ways, this would be like a government. But instead of a huge, inflexible bureaucracy that forces us to do the will of those who rule us, these package deals would change as market forces, also known as public pressure, demanded.

Part of the package, if people wanted it, would be a supervisory company that would have the right to investigate wrongdoing in its member corporations. If the reputation of one supervisory company became good enough, it might find its way into all the packages. If its reputation failed, it would be replaced.

This system is much like the parliamentary system in European democracies: they vote for people to represent them, and the representatives decide, based on a set of criteria, which of them is to be their leader. An anarchy would be stable if the people liked the system enough to keep it. And why wouldn't they, if those who love freedom are free and those who like socialism have socialism? Contentment produces stability.


Robert Nozick argued convincingly in Anarchy, State, and Utopia that a minimal state would be sufficient to prevent injustice. Today we rely heavily on a complex system of laws and courts to provide law and order. Certainly many of us would wish to retain this. But what about in an anarchy? Can you have justice without even a minimal government?

This was the question Peter T. Leeson took up in Anarchy Unbound. His thesis is that people in anarchies such as in medieval Scotland and modern-day Somalia spontaneously created criminal justice systems that effectively provided a type of frontier justice. It seems to me that this is an important insight, but it also makes an anarchy unstable, because people would clamor for a more sophisticated system and eventually create a government, which is a bad solution.

The fundamental aspect of the criminal justice system we're all used to is that it's based on territory: a police force has jurisdiction over all the territory in a given location, and any activity on that territory can be designated as legal or illegal activity.

In a libertarian minimalist system, this changes. Individuals, not territory, are paramount, so the only thing that matters is what is done to an individual and the property he or she owns. If violence is done to someone who paid for police protection, the company would have to fulfill their contractual requirements to provide justice for that person. If not, the supervisory company named in the contract takes action against the company. Weak individuals, such as children and poor people, would also be covered because the package deals would provide for them. The social bonds in the community, as well as people's innate sense of right and wrong, would ensure that this would be accepted by most people.

But what if, for whatever reason, they didn't? Then you'd have a community that had seceded from the others and developed a slightly different, possibly more brutal system. We might not want to live there, but it illustrates the cardinal virtue of libertarianism: freedom means diversity. Diversity allows society to evolve. As Frank Karsten and Karel Beckman put it in Beyond Democracy, let a thousand nations bloom.

Whether or not you find this diversity more appealing than our current system of enforced conformity, it's clear that justice is possible even in an anarchy. A minimalist state, while possibly desirable, is not necessary.

Invading hordes of barbarians pillaging our towns, raping our oxen, and stealing our women, or maybe vice-versa, and how to prevent that from happening

This article is way past the 140-character attention span of most of today's Internet audience already, so I will only discuss one more item: foreign invasion. How do we invade foreign countries under anarchy?

Er, I mean, how does an anarchy prevent foreign invasion? In a corporate anarchy, what would stop a corporation from declaring bankruptcy or selling us out at the first sign of an external invading force? Today places like Hong Kong and Luxembourg solve this problem by relying on powerful neighbors and alliances like NATO to protect them. Corporations are even better at forming multinational alliances than countries, so this is also something that would occur spontaneously. In fact, the challenge might be to keep them from forming a global alliance. The fact that being conquered could have fatal consequences to members of a corporation that, by its very nature, continued to pose a threat would be more than sufficient incentive not to surrender.

There are probably many other unknowns that I missed, and I welcome critiques of the ideas presented here. They certainly can't all be addressed in this short article. But as mentioned above, the beauty of Rothbard's scheme is we can adopt as much or as little of it as we wish. The only ones who would be denied are the would-be dictators who would assert sovereignty over us. The potential reward—real freedom—makes it worth thinking about.

See also:

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Book Reviews

Books by Murray N. Rothbard

Democracy: The God That Failed
by Hans-Hermann Hoppe

The Myth of National Defense
by Hans-Hermann Hoppe, ed.

Anarchy Unbound
by Peter T. Leeson

Against the State: an Anarcho-Capitalist Manifesto
by Lew Rockwell

Anarchy, State, and Utopia
by Robert Nozick

Libertarian Anarchy: Against the State
by Gerard Casey

Our Enemy the State
by Albert Jay Nock

sep 09, 2014

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