Are Anarcho-Capitalists, Anarchists? 5 Possible Answers

Anarcho-Capitalism is a political philosophy that was coined by Murray Rothbard somewhere around the 50’s or 60’s. It calls for the abolition of state power while still supporting things like property rights, free markets and individual liberty. Both the philosophical assumptions and the etymology of the term are under frequent scrutiny, especially by others who self identify with anarchism. Some even go as far as calling it an oxymoron. Is this objection legitimate? Are anarcho-capitalists anarchists? Here are some possible answers.

For the reader ignorant of the debate, the answer is obvious. Anarcho-capitalists are anarchists. It is literally in the name after all. However this first thought has some clear issues. Anyone could call themselves anarchists, there are folks who declare themselves “anarcho-fascists”. It would seem we need to dive deeper to understand the word.

Perhaps the next level of this position is to say that anyone who believes in abolishing the state would be an anarchist. This is likely the popular lay-man definition of anarchism and bodes well for the capitalist anarchist. However the history of anarchist thought offers some push back on such a simple definition.

Those who are a bit more familiar with anarchism would likely suggest that the term is in fact still an oxymoron even if the capitalists reject the state. The history of anarchism was generally understood to be a socialist philosophy/movement. Most, if not all, anarchist thinkers have presented their ideas as explicitly anti-capitalist. Pierre-Joseph Proudhon is usually considered the first person to refer to themselves as an “anarchist”. He used the term “capitalist” to describe property owners, which he depicted as negative. His works even laid the foundation for many anti-capitalist slogans such as “property is theft”. Other thinkers like Peter Kropotkin even used terms like “communism” to describe their anarchist ideas. For these rebels, Capitalism was just another unjust hierarchy for them to abolish.

The incompatibility of anarchism and capitalism is further suggested by considering the incentives of the property owners. Socialist anarchists suggest that the property owners have the motivation to rebuild a state to protect their claims. Even if you see true capitalism as a disconnect between property and government power, it’s undeniable that in modern capitalism we see corporate power teaming up with the state. There is legitimate fear that without abolishing private property, statelessness may see a continuation of these problems.

However within the anarchist tradition there were plenty of thinkers who were softer on the property issue. Especially in north America, individualist anarchist thinkers explored ideas that seemed to still favor free markets and some forms of property rights. Perhaps the anarcho-capitalist can find some refuge in that school of thought.

A further exploration of these words offers an interesting new take. As established, anarchist thinkers with sympathies for free markets have in fact existed. Interestingly enough though, these thinkers, prior to Rothbard, still saw their works are forms of socialism. Lysander Spooner is one of the classic examples. Most anarcho-capitalists would consider him a sort of forefather of their philosophy. However Spooner was a member of the “First International” a well known international socialist group. If capitalist anarchists find their influences in these types of thinkers, perhaps they too are not really “capitalists”. Though they favor property rights and free markets, they may fit into what some call “free market anti-capitalism”. Here of course we are playing with the definitions of terms. If capitalism is simply people trading things without government intervention, then many communists, socialists and other anti-capitalists, could be considered capitalists. However when these folks are talking about capitalism they usually mean things like domination of capital over the worker, or a partnership between property owners and state agents. Most anarcho-capitalists would prefer to see their ideas as capitalism, but the overlap of values with anti-capitalists beg comparison.

There’s also the note that many of the desired outcomes of the anti-capitalist could be fulfilled with anarcho-capitalist ideas. Even if you don’t outright reject property rights, mass accumulation of land is hard to do in a theoretical anarcho-capitalist society. In modern capitalism, the cost of defending and declaring these property claims is dispersed among the general population. The wealthy landowners benefit from taxpayers through direct bailouts and subsidizing the police force. In a state-less society, these landowners would have to face the upfront cost of their claims, making it much more difficult to gain the power and wealth associated with modern capitalism. It would seem the capitalist anarchists are in some sense anti-capitalists in their own right. A continuation of the individualist tradition.

The iceberg doesn’t stop there however. One could see anarcho-capitalists as individualist anarchism with confused and complicated definitions. However the ideas present in the philosophy are unique in important ways. One common thread in traditional anarchism was working on the assumption of the labor theory of value (LTV). A very clear example of this can be found in Benjamin Tucker’s writings

“From Smith’s principle that labor is the true measure of price — or, as Warren phrased it, that cost is the proper limit of price — these three men made the following deductions: that the natural wage of labor is its product; that this wage, or product, is the only just source of income (leaving out, of course, gift, inheritance, etc.); that all who derive income from any other source abstract it directly or indirectly from the natural and just wage of labor”

For Tucker this was a shared concept for most socialist thinkers. They used this idea to criticize wage labor as exploitative. For them, labor creates value. If a boss, who did not labor on the product but skims profit off the top, then he is “stealing” from the laborer.
Contemporary economists tend to see this idea as outdated and prefer a purely subjective understanding of value. As in, the value of a product is unique to each person involved in the process, the laborer, the capitalist and the customer each have a different subjective idea of the value. Though a mined diamond way requires more labor to produce than a glass of water, if you’re thirsty in the desert, you’ll likely value the later more than the former. There’s also the note that labor is not a necessary condition for assigning value. Rather a diamond was found or mined may have little effect on how a consumer values the object.

The advanced reader here may be concerned that this characterization of LTV has been over simplified. For example Karl Marx never used the term directly but offered a more complex conception of value to justify his exploitation theory. He made a distinction between exchange value and use value. Exchange value was related to “socially necessary labor time”, meaning that the value came from labor but was still subject to the needs and values of society. This is also a theory that is easy to rip apart. The following meme offers a theoretical exchange between Eugen von Böhm Bawerk and Karl Marx, showing that his theory is just layers of complications to ignore the truth of subjective value.

“So the value is determined by the people who want to buy it, not the labour. What you’re proposing is the subjective theory of value but with extra steps.”

Eugen von Böhm Bawerk, who wrote a very complete criticism of Marx’s work, was part of the “Marginalist Revolution”. Marginalism was an evolution in economic thought that embraced the implication of a subjective theory of value while fleshing it out more. It speaks to how we value things based on their marginal utility for each unit. Though we may see water as more useful than diamonds for survival, if we already have sufficient access to water, then each new unit of water is worth less and less to us. Marginalism and other ideas lead to the birth of Austrian Economics. Prominent Austrian thinkers such as Ludwig Von Mises ended up directly influencing the work of Murray Rothbard and therefor Anarcho-Capitalism. It would seem Anarcho-Capitalism can be understood as a natural evolution of individualist anarchist thought, that sheds off the outdated economic ideas of old school anarchist and socialist thinkers. A new free market anarchism if you will.

It’s tempting to leave the debate there. Recognizing that the use of the world “capitalism” is slippery, but the ideas in the philosophy are just a new form of free market individualist anarchism. However there is one important historical fact that inspires us to dig a bit deeper. In 1849 Gustave de Molinari wrote an article named ‘The Production of Security’. It’s noteworthy that this was published around the time Pierre-Joseph Proudhon began to publish his foundational works on anarchism. Molinari fleshes out a vision of competitive governments offering security and law as a product in the market place instead of a service from a monopolistic state. Though he likely would have not used the word anarchism, his ideas almost exactly match how anarcho-capitalists view security in their future society. In fact Rothbard himself praised the work calling it the “first presentation anywhere in human history of what is now called anarcho-capitalism”.

Molinari’s influence on anarchist thought has been largely minor and indirect but still present. For example Paul Émile de Puydt produced a 1860’s work on Panarchism, In which he advocates for people freely opting in and out of different governments. Also Benjamin Tucker frequently wrote about defense as a market service. There is strong evidence both were familiar with Molinari.

This gives us a fifth answer to the question of rather anarcho-capitalists are real anarchists, or just some sort of oxymoron of ideology. It would seem that not only do the capitalist anarchists share overlap in ideas with the traditional anarchists, but they also share a history. The ideology is a sort of growth from a seed that has always been there, waiting for it’s blossoming.

There are many possible answers the question that prompted this article. All of which with varying degrees of usefulness and appeals to historical facts. However the best note to leave this on is a quote from American anarchist Voltairine de Cleyre. Though she frequently criticized what she understood to be capitalism, her sympathies for markets and individualism lead to her critics referring to her as a capitalist. She responded tongue and cheek with:

“Capitalistic Anarchism? Oh, yes, if you choose to call it so. Names are indifferent to me; I am not afraid of bugaboos. Let it be so, then, capitalistic Anarchism.”

This might be the real answer to the questions explored in this article. It doesn’t really matter if anarcho-capitalism are real anarchists. Definitions evolve and twist over generations so any answer to the debate might be just as valid as the last. Instead we should be asking questions about the merit of the ideas. Are they good or bad? True or false? Call it as you will.

Names are indifferent to me.

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