J. C. Lester and David McDonaugh: Anarcho-Capitalism for Liberty and Value

The following ideas represent our own current views on anarcho-capitalism. Other anarcho-capitalist libertarians would disagree with some of what follows, and minimal-statist libertarians would disagree with much more. Anyone interested in finding out more can write to the Libertarian Alliance at [address].

Anarcho-capitalism (or market-anarchism) is the view is that a self-regulating market is possible and desirable. We hold this to be the best method of maximising freedom and welfare. Complete freedom and perfect welfare are not possible. Freedom is understood as absence of constraints on people by people. There are bound to be some social constraints to minimise such contraints overall. Welfare is understood as the satisfaction people get by leading the sort of life they choose. There are bound to be some constraints on welfare if the overall amount of welfare is to be maximised. We hold that maximising welfare requires maximising freedom, and that maximising freedom requires the unhampered operation of the market. This position seems quite implausible to most people. In an introductory article the best way to deal with the comprehensive nature of general disbelief seems to be to sketch the general case for market-anarchy and then write briefly on some of the main areas of contention.

Economic Calculation: Individual versus Communal
The principles the market anarchist advocates, and thinks the market would provide, are: original self-ownership, ownership by creation and first use, voluntary association, and voluntary transfer of property. One of the main reasons for wanting such principles is that they enable the individual to learn from his mistakes and plan for the future. The individual can economise in the use of resources. He can invest in the knowledge that the fruits of the investment will be his. He cannot forcibly use the efforts of others for a free ride and neither can they forcibly use his efforts. This allows him to be as productive as he chooses in whatever way he chooses given the constraints of his resources. He is then able to engage in mutually beneficial trade with others. Without this guarantee people end up preying on the efforts of each other in a way that destroys overall wealth. The alternatives to such voluntary exploitation are extortion, robbery, assault, and slavery – and such involuntary exploitation is what the state practises.

It is not merely that people are insufficiently altruistic that makes common ownership uneconomic. With the best of intentions people are unable to coordinate an advanced industrial society without private property and money as a medium of exchange. This is shown by the economic-calculation argument of Ludwig von Mises. Only individuals bidding according to the strength of the desires for a product, relative to the resources that they have to offer, can give an indication of how useful any particular project is. Without this anarchistic system of coordinating diverse knowledge and demands there is no way of determining whether to go in for one project rather than another. Are we better off with more computers or with more medicine? We would like more of each but at some point there has to be a trade off, for resources are scarce. The central planner has no efficient way of guessing which will do more good. The market can give a fairly precise and up-to-the-minute answer.

Everyone Gets Richer
Marx thought capitalism would eventually result in a very few super-wealthy persons surrounded by an increasingly impoverished majority. This picture has proved the opposite of the truth. The history of industrialisation has been one of increasing wealth for all. There are more wealthy people today than there ever were and the rest of us seem to be catching up faster and faster. New luxuries take ever less time to become mere household goods. But we would all have been richer still were it not for ignorant state-meddling with the market.

The Welfare Hammock versus Charity
The idea that we have a right to cash or services from the state, which it pays for by taxing the majority, is inferior to charity in many ways. It lacks the sense of independence and gratitude that pure charity fosters, replacing it by inconsideration of who earns the money to the point of making quasi-slaves of the working people. The deserving poor are a fairly small proportion of the population; charity can easily help them, and without the same risks of abuse. With a bureaucracy like the NHS the poor actually end up subsidising the better off, as well as finding themselves in Soviet-like queues for a shoddy service.

Trade undermines Warfare
Free trade breaks down the barriers that make bellicose nationalism possible. And as Richard Cobden made clear in the 19th Century, modern war is based on taxation and it does not pay. War has to cut into profits. Norman Angell in The Great Illusion (1910) tried to hammer this lesson home, but was essentially ignored by those who felt he was simplistic. They merely dismissed him rather than answered his criticisms.

Education versus State Regimentation
The 1870 Education Act has lead to mass schooling by the members of the NUT. They ensure that most people ignore the insights of Glenn Doman. that we have three golden years, then five silver years, in which to see that our children get a good education. Instead, children are made to begin at an age at which they should be able to get on with their own studies. The market would probably replace schools with a much cheaper and more efficient system of home-based, self-guided study using a grading system, as is done in music education.

Friendly Unions
Robert Owen saw that the unions split up what he called the ‘working class.’ They were mainly organised to keep out blacklegs, compete with rival unions, and charge the consumer a higher price. Owen tried to encourage the friendly-society aspects of the unions (but with a grand union that let in all workers). Unions can do a good job for their members, as Owen saw, but it is not right for them to harm the welfare of others in coercive ways.

The Idol of Democracy
Democracy is a false idol. Not only is the individual’s vote statistically insignificant but a good case has been made by Robert Michels in Political Parties (1911) that only oligarchy is possible. The elite in the state sets out to rule us and democratic theory is only an apology for that rule. By contrast, the market lets people get what they want. Enterprisers set out to serve, and if they fail to do so they lose money.

Bogus Public Goods
The history of so-called public goods is that of once economic goods and services the state has meddled with and then eventually taken control of. The resulting service is then compulsorily financed or competition is made illegal. Real public goods (goods that cannot be charged for individually so which would be underproduced on the market) seem to be a myth on the large scale.

Private Police, Courts, and Law
There is no stopping privatisation. Whether the police service set up by Peel will be sold off, or whether it will be phased out as security is taken over by diverse firms, remains to be seen. There are still more policing jobs outside the state force than in it: store detectives, security guards, night watchman, bouncers. And these all serve and not rule. We only notice them if we deliberately look for them – or look for trouble. Monopoly is the major source of police corruption, and the market will sort that out. One possibility is for insurance firms to be the link to the public, with the laws, courts, and policing functions being all part of their policies. But there are alternatives.

The ‘Economy’
With the privatisation of money, and the ending of state management according to uneconomic theories and ideals, we can expect the market to match supply to demand thus ending unemployment, booms and slumps, butter mountains, and the rest of the malfunctions of rule. The government cannot ‘run the country’; it can only run it down by its wasteful interference.

Imports and Exports
Imports and exports worry our rulers but there is no need to monitor them anymore than there is to monitor trade between north and south within the UK The balance of payments always balances, it is just that the pattern of profitability alters geographically. One can only stop this innocent aspect of a dynamic market by interfering coercively to preserve the previous pattern. This is bound to destroy wealth for no good reason. If a state is stupid enough to put up barriers to trade then all lose (except fora few businesses thus temporarily subsidised). For another state to ‘retalitate’ with barriers is to cut off its nose to spite its face.

Immigration and Productivity
As labour is not uniform it is always going to be in short supply and immigrants are going to do more than pay their own way. An initial drop in the average wage of some of the original population would soon be compensated by the increase in products and decrease in prices. But if people do not like ‘immigrants’ (or if the immigrants do not like them) then the market would allow them to live in exclusive communities if they chose to. We don’t pretend that this solves the problem: wealth is subjective, and people who would rather have lower productivity than some immigrant group would lose out.

What Overpopulation?
Again, as labour is not uniform it is difficult to have too much. Malthus was wrong on at least two things: he counted food as though it were for a single population when it is for many populations; he felt that we would be bound to get decreasing returns from labour if capital and land remained fixed — and he felt that land was certainly fixed. In fact, all three factors are dynamic and none need be finite. (See The Ultimate Resource 1981 J. L. Simon.)

Pollution Pricing
As David Hume made clear (in what he, rightly, held to be his best book, The Principles of Morals 1751), we have developed private property as a problem-solver. The chief cause of pollution is that firms dump it cost-free in quasi-common lands, rivers and air space. If free access were removed the owners could make those firms pay their proper costs, and thus pollution would no longer be out of control. The market is polycentric control par excellence.

Increasing Resources
We can expect the free market to increase total utility. The record of the last three hundred years has been one of increasing resources thanks to the market’s greater division of labour, new discoveries, and new technology. The doom mongers who claim we are running down a finite supply cannot have given the matter much serious thought. (See The Resourceful Earth 1984. J. L. Simon, ed.)

Own an Endangered Animal
Endangered animals are neglected because no one has the interest and control that an owner would have Darwin’s theories let us see that the process of natural selection never ends, so that animal types are bound to come and go, but personal ownership, private zoos and sanctuaries, or the electronic tagging of itinerant animals like whales, can help stop their sudden demise.

Racialism and Racism
It is one thing to study racial differences or to decline to deal with others on the grounds of their race; it is quite another to organise politically, or in mobs, to harm them. The former we call ‘racialism’ with scientists including the likes of Eysenck and Jensen studying differences, and with most people discriminating to some extent. The latter we call ‘racism,’ and it includes the likes of Robert Mugabe, Ian Smith, and all those who want to impose their racial views on others by force. To be free to study racial differences and to reject according to taste is an innocent exercise of one’s own freedom; to dictate to and attack other races is a vicious assault on other’s freedom.

Free Speech and Property
Only property rights efficiently solve the problem of the circumstances in which people ought to be allowed to have their say. If the owners of the property are agreeable then free speech should be allowed whenever people voluntarily associate for the purpose. If the owners of the property object then the speech is an assault their right to use their property for the purpose they choose. If we feel hurt at what others say then that is due to our own intolerance. We are the only ones who can be held responsible for our own feelings. To coercively restrict other’s freedom of speech because we choose to take offence at mere ideas is tyrannically intolerant.

Sex, and Drugs, and Victimless Crimes
It takes all sorts to make a world, and we can’t truthfully count adults as victims if they give their consent to activities we might find repulsive or bizarre. The paternalist typically exaggerates any real damage involved in the pursuit of the activities he objects to. He also grossly underrates the careful calculation of the worth of the activity that the participants continually make. The paternalistic coercion of adults invariably restricts innocent pleasures while introducing new dangers by forcing the activity underground.

Words not Bombs
David Hume saw that we get the sort of government we deserve, for government rests on opinion: the majority must at least tolerate what the minority of rulers getup to. if we change public opinion then the political poodles are bound to follow – even if it means dismantling their empire. We need not fear opposition for the market serves one and all, and while it might be against the bureaucrats short-term interests few of them who knew the facts would be mean enough to oppose ending state coercion. So, as Richard Uobden held, progress flows mainly from education and enlightenment. Free speech is the way ahead.

George Walford: Strong Government for Anarcho-Capitalism
Let us agree at once that as an exercise in abstract logic the claim, that a market society without government is both possible and desirable, can be maintained. The authors of the article, at least, find it desirable and the idea contains no internal contradiction. A market society without government is not like a three-legged biped, it is a rational possibility.

The article, however, does not confine itself to abstract logic. It asks us to accept anarcho-capitalism as a reasonable objective to work towards and it stands partly on empirical ground, for example when observing that ‘people are unable to coordinate an advanced industrial society without private property and money.’ Unfortunately for the anarcho-capitalists, industrial societies with money and private property also exhibit the state; the suggestion that such a society can be operated in the absence of the state lacks empirical evidence to support it. Security guards and other non-state enforcement agencies are beside the point, for although they may be ‘outside the state force’ yet they are within its sphere of influence and dependent upon it; for the most part they act as unofficial extensions of the state, their job being mainly to keep watch on behalf of their clients and call the police when action is needed. Since private property, money and the state first appeared they have formed a constellation, and although having two of them without the third stands as a rational possibility this is not sufficient to establish it as a reasonable objective.

The condition upon which it would become such an objective is specified in the closing paragraph of the article: ‘if we change public opinion.’ Public opinion is the net verbal outcome of the ideologies present among the public in question, and the evidence and reasoning brought forward in the exposition of systematic ideology go to show that although these are constantly changing, and can be intentionally changed, yet all these changes occur within limits set by the structure of major ideologies, and the evidence obliges us to accept this as stable for the reasonably foreseeable future. The establishment of anarcho-capitalism would require elimination of the greater part of that structure. To say that if we could change public opinion to the extent required we could have anarcho-capitalism is equivalent to saying that if we could all grow wings we could stop road accidents.

It remains to account for the presence of the anarcho-capitalist movement; in attempting this we have to move outside the limits of the article by Lester and McDonagh, and even so any conclusion can only be tentative; we do not have the evidence for a definite answer. The opening paragraph of the article notes that minimal-statist libertarians would disagree with much of it and our impression, gained partly from the literature of the Libertarian Alliance and partly from personal discussion with some of its members or supporters, is that anarcho- capitalists.form a small minority among those who advocate freedom for the market, most of these accepting that the market needs the state to maintain its freedom. (There may even be a hint of this in the careful qualifications of the second paragraph of the article; what, if not the state, is going to impose these ‘social constraints?’).

We have known members of the Libertarian Alliance, in claiming extensive support for their movement, to name established liberalism as one expression of it, and there is an evident fellowship between the approach described in the following quotation and that of Lester and McDonagh:

In recommending the maximization of the individual’s “liberty” the spokesmen of mid-Victorian Liberalism aimed at giving him, indeed, precisely nothing – the commodity which Aristotle had identified as “absence of restraint.” They did not wish government to take positive action in order to free the individual from the trials of living in a capitalist society; nor did they intend the individual to gain from government what he could not gain for himself – unless, that is, some artificial barrier had been placed in the individual’s way. Exploitation, monopoly, unfair advantage, corruption, bigotry; these queerings of the pitch should certainly attract the attention of government in order to allow the individual the opportunity to engage in free and fair competition with his fellows. That done, however, the game goes on with the batsman “free” to score as many (or as few) runs as skill, weather and fortune allow under the scrutiny of a rather distant umpire. (Bentley M., The Climax of Liberal Politics; British Liberalism in Theory and Practice 1868-1918. London, Edward Arnold, 1987, p. 40).

By calling the named barriers artificial the passage sets up fair competition as the normal or natural condition, and this puts things the wrong way round. To continue the cricketing metaphor, a pitch with obstructions displays the normal or natural state of such areas, the condition to which they revert if not carefully maintained; it is the clear one that is an artificial construction. Exploitation, monopoly, unfair advantage, corruption and bigotry have been with us since industrial society first appeared, maintaining themselves against all attacks, and to speak as if getting rid of them were no more than a preliminary clearing of the ground reminds one of the plan for a robbery that began: ‘First, you steal a battleship… ‘ A state capable of assuring to the individual the opportunity to engage in free and fair competition with his fellows would be no distant umpire but an immediate and pervasive presence, powerful enough to overcome any combination of opponents.

By accepting the need for government the spokesmen represented in that passage associate themselves with the great majority of those the Libertarian Alliance claims as supporters (and also with Hume, Cobden, Eysenck, Jensen, Darwin, Norman Angell and Robert Owen, to whom Lester and McDonagh refer in support of their own views). The anarcho-capitalists, on the other hand, repudiate government (the article contains no indication that ‘anarcho-‘ is used in anything other than this, its usual sense) and by doing so mark themselves off as a small minority among those they would rank as libertarians.

If this be accepted, then they begin to fall into place, for the approach they use links them with another small minority already familiar: the (if the term be permitted) orthodox anarchists. They exhibit a similar intellectualism, a similar tendency to give what is rationally possible equal rank with probabilities supported by a mass of historical evidence, and a similar concern with discussing their ideas rather than practising them. Unlike most anarchists they stress the importance of competition and economic gain for the individual, but this difference dwindles when we note that they show little inclination to engage in these activities, devoting themselves instead to the promotion of theories intended to benefit the collectivity. In this connection it may be relevant that three of the more active anarcho-capitalists (and they seem to be a small enough group for this number to be significant) are ex-members of the (Anarcho-) Socialist Party of Great Britain. This conclusion can only be tentative, and at least one other possibility remains: It is in the behaviour of social groups that ideological regularities mainly appear, individuals being largely unpredictable, and it may be that anarcho-capitalism is best understood as the activity of a few individual adherents of orthodox liberalism using ‘anarcho-‘ as a gimmick to provoke attention.

Something seems to have gone adrift with the wording of the last paragraph of the article. Whatever David Hume may have said, every successful revolution shows that the majority do not have to tolerate what the minority of rulers get up to, and indeed the following sentence confirms this.

from Ideological Commentary 35, September 1988.