Debunking “Anarcho-Capitalism”

    This is a critique of anarcho-capitalism and Libertarianism as ideologies and ways of organizing societies. How applying them would create a very dysfunctional society, and why I am strongly opposed to them. How it is inherently exploitative and appropriates people’s labour, its coercive nature, and how its proponents have a very poor, surface-level comprehension of socio-economic issues. I concede that any ideology has its flaws, however, anarcho-capitalism is simply a contradiction. A free market like that is not that great at all - and on top of that, not realistic - and would not be beneficial to the common good. Now, I acknowledge the marginally more efficient allocation of the production factors that comes with a free market as opposed to removing markets or heavily regulating them and the pseudo-sovereignty the consumers gain. However, there are many problems with that kind of economic system, which I will go over in this paper. 

NAP & Profit Motive 

    My first criticism is that the profit motive, which is a key aspect of Capitalism, incentivizes actions that violate the Non-Aggression Principle. With the NAP that most libertarians advocate for, firms would be much less incentivized to maximize their profits. It’s a contradictory thought. Then they’ll say the profit motive motivates private companies to compete against each other and provide the public better products for cheaper, and that market forces will take over, and companies will compete to improve your life and material conditions. I don't believe this joke of an ideology. If we had an anarcho-capitalist system, it would be easy to imagine a large corporation enslaving a population of workers to save money on wages, and provide cheaper products as well as undercutting the competition of goods produced more ethically by other firms. The most ruthless businesses win, and those who act more ethically will lose money and fall in the market rankings. Therefore, market forces incentivize more slavery and destruction, not less, to stay competitive. There would be immense amounts of coercion with anarcho-capitalism. It would let corporations rule over your town and use coercive means like a private militia to take over your land and establish a monopoly on everything you need. They say they're all for self-ownership, but corporations are going against that by exploiting their workers and not giving them a say in the production process. corporations would use coercion that goes against their values, so I don't find that this makes sense. It’s an inconsistent ideology. 

    The following example is a great analogy and shows how Capitalism goes against your will; how it’s not voluntary at all. It’s quite simple: suppose your plane crashed on an island that is not surrounded by any source of food. No fish, no crabs. Nothing. You and a stranger are the only survivors, but you wake up a bit after him. When you regain consciousness, he’s sitting on a huge pile of coconuts, and looking down at you. Now that this person hoarded all the coconuts on the island, you ask him if you can have some since otherwise, you’re going to starve. He tells you that in order to get some coconuts, you’re gonna have to be his slave. The choice is clear. Either you agree to be his slave, and consequently, you survive from the coconuts, or you refuse and starve to death. This is roughly what would happen with anarcho-capitalism: if you don’t take part in society, you can’t fulfill your basic needs. Now, I know what the response to this would look like: “Oh, but you can just live on your own land and farm, self-subsisting”- and I’m going to stop it right there. That would not happen. Currently, all land on Earth is owned, and it would be the same thing under anarcho-capitalism. Unless you or your family doesn’t already own a piece of land, you can't do that. This is a very dumb example, but it illustrates my point very clearly. Let’s use a more serious example. Say you're born on an island that a small group of people own. These landlords require you to pay rent to live on that land. Since they have a monopoly on employment, you don't have a choice but to work for them. Since there is no state, they do not have an obligation to allow any form of competition on their private property. No one is directly forcing you to stay on the island, but building a boat and escaping could be pretty precarious, and they might not sell you the materials needed for this journey. Anarcho-capitalist morals are persistently one-sided, in favour of the exploiters. 

"Exploitation can't exist as a worker legally agrees to work for the company. Hence they agreed to be exploited. And coercion can't exist unless there is a physical force." 

    This argument completely ignores previous points made and shows a very surface-level understanding of how Capitalism works. Workers don't consent to be exploited and have surplus value extrapolated from their labour. Under Capitalism, labour-power is viewed as a commodity, which can be bought or sold like anything else. Anarcho-capitalists argue that workers can sell that labour-power without being subject to force or coercion through a contractual agreement. However, most of the time, it's simply not the case. Even when a worker consents to exchange through a contract, there can still be many ways to exploit them, notably by the buyer reselling the commodity they produced. The agents are not receiving according to their work or needs. Let's now address how workers do not consent to be exploited. In capitalist theory, the property is a sacred extension of yourself, to be used only according to your personal preference. It pushes an idea of 'natural law,' that man is entitled to 'life, liberty and estate.' From this, we can assume that no one can take another person's life, freedom or property, and that property can only be exchanged if bought or sold consensually. First of all, it doesn't matter if this exploitation is "consensual." It remains exploitation. The effort the worker puts in is greater than the reward they get from their labour. There are many ways in which Capitalism is inherently coercive and uses coercive means to get workers to "consent" to that exploitation. 

    Let's suppose you're a low-income, single mother with a child who gets kidnapped. She doesn't have the power to do anything. Therefore she must submit to the will of the kidnapper. Or even more realistically, a bankrupt worker has to work an exploitative job to subsist to his basic needs. Is this contract illegitimate because "he doesn't like it," or somewhat because he is coerced into consenting to this exploitation? The worker "consents" to his exploitation but is at the same time coerced into doing so. Just because the coercion is not physical doesn't make it any less immoral. For your consent to have a meaning, you must be able to retract it. Agreeing to this contract also means being able to say no later on. But in a capitalist system, to retract your consent, you need to have a private property to sustain yourself. Otherwise, you won't be able to subsist to your basic needs. If you don't retract your consent, it just means the force of circumstance coerces you to agree to this contract. Capitalism's premise is this exploitative reality. Capitalists' very existence depends on the fact that most workers can't say no to a job in fear of not having the ability to feed themselves. It is essential to recognize that simply because one case of a worker being satisfied with a contract that pays them a ton of money and fulfils them, therefore consenting to exploitation, does not mean the same thing happens for other cases alone the majority of the population.In Capitalism, most relations are exploitative and unjust. It's also clear that laissez-faire capitalism creates massive amounts of inequality. For example, Hong Kong adopted the most libertarian economic policies, and at the same time, has one of the most significant income inequality. This "agreement to exploitation" is pretty much just semantics and finding ways to justify ways in which corporations manufacture consent. Why would you care about providing your employees bearable working conditions if you can convince them of using your company's car? I don't see the trend of companies indirectly forcing their workers with "advantages" being addressed by anarcho-capitalism. In short, arguing that "Anarcho-Capitalism" is not coercive because you consent to be exploited" is missing the point entirely and shows a surface-level misunderstanding of how Capitalism works. We can't just get along with "semi-consensual” contracts. 

Private Courts

For private courts to work, they must have a degree of force and a monopoly on coercion to back up their rulings. In a completely voluntary society, what if the business owner doesn't show up to court? After all, you can't force them to as doing so will violate the non-aggression principle, and wouldn't a business this controversial have a well-trained private security force to protect their boss? In other words, you can only punish an individual if they voluntarily go to court, which they won't. Also, the profit motive eradicates the idea of private courts. If I were the CEO of this huge corporation that acts immorally, would I pay more money to make the company ethical, or would I spend less money in order to bribe the largest private courts so they will always rule in my favour? It’s very clear that they will gain from letting me get away with immoral practices, it’s a win-win situation for the oppressors. Private courts would not function well at all. 

“But people won’t buy from unethical companies” 

    This is another common argument for suggesting that people will suddenly be aware of all their options, and therefore, they will pay more for a product made in ethical conditions. Not only does this not happen today, but it also won't change if the government disappears if we keep the profit motive. More impoverished people have a budget, and to keep in this budget, they will have to purchase cheap goods made in terrible working conditions. Private companies will see it as more profitable to build and maintain roads towards city centers from middle-class areas with much more purchasing power than poor people who can't buy much. This would lead to class segregation even worse than today, and today it is terrible. It’s such a terrible argument, because not only does it not make any sense, it completely ignores reality. 

Monopolies and Concentration of Capital

    First of all, natural monopolies occur even if there is no government - well they would, there has never actually been Capitalism without a State, since they are intertwined, it needs a State to uphold the status quo and protect private property. The market is also too unstable and needs many regulations to be remotely rational in the real world. - and once those monopolies arise, there is no more extended competition, and the advantages of a free market evaporate. Voluntary contracts can still be coercive, exploitative and oppressive if there is no other way to survive except to submit to them. In anarcho-capitalism, nothing is standing in the course of the "haves," effectively enslaving the "have-nots" in precisely this voluntary fashion. Private property is tyrannically oppressive to liberty, the limiting of the world to first-come, first-serve opportunists effectively eliminates freedom and opportunity for everyone who shows up late. Multi-generationally, this exacerbates capricious inequity, especially if children can inherit what they haven't earned. The same is true of wealth accumulation and its power relationship. Private ownership and its inevitable concentrations of capital ultimately consolidate power and freedom around a select few. The profit motive has been predictably corrosive to social cohesion and civil society in its amplification of individualist materialism, "rewardingopathic" egotism, and toleration-dependent consumers. It's just not a good idea to rely on the profit motive to sustain civil society. You usually end up with despots and thugs in reasonably short order. For any form of anarchism to function, the entire community - down to every outlier - must voluntarily agree to whatever basic assumptions and expectations are in play for things like commerce, transportation, communication, morality and the other nuts-and-bolts of civil society to function reliably. And frankly, we aren't there yet: the diversity of such assumptions and expectations is just too great. 

Regulation

    Regulations on wages, working conditions and pollution are necessary, so corporations don't establish a monopoly on a town, destroy the environment or underpay workers. I understand that even without regulation, corporations would usually raise their wages to stay competitive, as the supply and demand model applies to companies and workers too. However, there needs to be a wage floor that guarantees everyone can survive, pollution regulations to make sure factories aren't dumping detritus all over the place. When pursuing profit, businesses have historically damaged the environment to a great extent, abused labour, violated immigration laws, and scammed consumers out of their hard-earned money. This is why there are officials in charge of regulating this in the first place. In addition, some regulations are absolutely essential for competitive businesses to pop up. Very few legitimate firms want to participate in a sort of black market. In any scenario, we have regulations, institutions and other entities to limit the excesses of a free market. Businesses constantly complain about these rules, while also lobbying to have other rules changed in their favour in order to undermine competing firms. 

Anarchism

    Let's discuss semantics for a bit. Anarcho-capitalism is not an anarchist idea. As Proudhon proposed in the 1800s, anarchism has always meant anti-state and anti-capitalism. The appropriation of this term by libertarians comes from a fundamental misunderstanding of what anarchism is and the ideas for which it stands. Dismantling all necessary hierarchies means all, not just the state apparatus that prevents hierarchical power to oppress people. 

Cronyism 

    Finally, many libertarians argue that the system we have isn't Capitalism, rather cronyism. Leftists have warned about this kind of system for over a hundred years, but it was promptly laughed off as ‘the market could never collaborate against the worker's will and well-being’. This is being disproved by the day, with corporations legally bribing state representatives, hidden under the name of lobbying. Marx, Engels, and Lenin foresaw and dreaded the collaboration between the bourgeoisie and the state. Now, we are dealing with the consequences as capitalists defend their system by pretending as the market itself did not create it. The nature of Capitalism and the bourgeoisie state creates conditions that all of us hate, but only one group seeks to address the actual problem. The elimination of class distinctions and the repressive yet class collaborative nature of the state is the only solution to prevent the crony capitalist system we have. No free market could ever hope of doing something like this. In addition, acknowledging that the system is crony, as a capitalist, is the same thing as conceding to the Marxist theory of the state. “Cronyism” is inevitable, it’s inherent to the nature of capitalism, and a state must come into play to regulate this economy. Without state intervention in the economy, Capitalism would collapse and life would be much less enjoyable. The role of the state is not only to alleviate part of class antagonisms through social programs, but also to make sure the system doesn’t collapse, and that competition is present along with safe working conditions. The bank bailouts of the 2008 recession are a great example of why state interference is absolutely necessary for the sustenance of such a system. Even though free markets are theoretically optimal, with supply and demand guided by an invisible hand to allocate goods efficiently, they are, in reality, subject to manipulation, artificial inflation of supply or demand depending on the need for short-term profit, misinformation, asymmetries of power & knowledge, and foster extreme wealth inequality. Regulation by the state is aimed at balancing the virtues of free markets against their pitfalls. As economic historian Karl Polanyi pointed out in his well-known book The Great Transformation, neoliberalism creates huge social divides that are not sustainable in the long run. Why root for such a system when literally anything else could be better

    Arguing that state intervention in the economy is the reason for these pitfalls is simply is extremely naive, as it is the only thing refraining market forces from destroying local economies and fostering even worse inequalities. For example, in the case of housing, there is absolutely a necessary state intervention for the wellbeing of the population. People need housing, and the equilibrium price can be extremely high. Canada has understood that and set a price ceiling on housing rent. This artificially decreases supply, effectively creating a disequilibrium, which they can then fix by either building housing themselves, or offering subventions or tax breaks to landlords for offering low-cost housing. A similar thing goes for price floors, like in the case of Quebec’s dairy market. We have a quite small dairy market compared to the United States, which wants to sell us their surplus milk. Obviously, this would put thousands of jobs at risk throughout our province, as smaller producers will not be able to compete with huge American multinationals. There state intervention to set a price floor is absolutely necessary, as it protects our local economy, and while it at first creates a surplus, there are two ways in which the government can set a new equilibrium price. Either by buying this surplus from the producers and storing it to then sell to consumers during a shortage or by establishing production quotas. The same thing goes for taxi drivers, the minimum wage and the beer industry. State intervention is absolutely necessary to negate a few of Capitalism’s flaws. Another good example that completely destroys the argument of Capitalists is the fact that virtually no Capitalist country leaves agriculture to the free market, without price floors or supply gestion. The system itself is broken, and the state is the only thing keeping it from completely falling apart.

Conclusion

    In conclusion, anarcho-capitalism is obviously not a viable ideology. Let’s summarize our findings. The first contention is that unregulated capitalism trends towards monopolization of very few firms, and the death of the market. If someone wants to argue that the market regulates itself, they need to take a look at history, where the most laissez-faire periods of capitalist history quickly lead to monopolies and extreme exploitation. Next, Capitalism depends on private property, which is virtually impossible to protect without a state. The Non-Aggression principle would not prevent aggression, in the same way, murder laws do not prevent murder. Privatizing institutions like police and courts would lead to a situation where entire privatized governments exist, with some people within the same community potentially subscribing to different ones. Corruption, mismanagement, coercion and many, many more problems would arise. 

    The only reason anarcho-capitalism has some sort of following is because of its attractiveness to some people. It’s most prominent in the US, followed by Canada, Brazil and Australia. It barely exists in other countries. Its main trait is simplicity; The state is bad, and Capitalism is good. It doesn’t really dive any deeper into societal issues than making general statements that most people can agree on: ”Taxation sucks, ”Having things stolen from you sucks”, and ”You have the right to defend yourself”. Sure, there’s an anarcho-capitalist and libertarian theory that people can dive into to explain these concepts, but generally speaking, what ancaps debate remains quite surface-level, which is where it gets its appeal. 

    This contrasts a lot with anarchism, a complicated school of thought resting on centuries of theory and analysis of society. This includes Kropotkin and his amazing work "Mutual Aid: A factor in evolution", which attacks the human nature argument and debunks social-Darwinist positions, that so-called "anarcho-capitalists" push forward. Ancaps say ”taxation is theft” because the government is taking the money you earned without your consent - anarchists would agree with this statement, however for anarchists that agreement is based on the theory of property being theft, and that ownership of property does not justify extraction of wealth from workers; i.e. just because the state owns its territory it does not mean it’s justified in taxing those who use that territory; taxation is theft. If you view taxation as theft, it seems pretty contradictory not to view private property and surplus value as theft too. This simplicity really serves this ideology where it’s the most prominent, the US, as Americans tend to be quite simple in their political thought and stay at a surface level of knowledge, ignoring all of the world’s problems. The average American wants their property safe, their taxes low, and their guns protected. They also do not usually have a great knowledge of the variety of political ideas, having lived in a two-party system where both parties are, for the most part, identical compared to the vast ideological differences found in other “democracies”. They’re also not really taught what other political ideas exist in school. Notably because of the red scare, American schools teach very biased political ideas and a lot of misinformation. 

    Most ancaps seem to have arrived at anarcho-capitalism from the starting position of ”I just want to be left alone”, which is a respectable position, but it’s very simplistic. This contrasts with anarchism, the most common starting position for anarchists is ”class divisions suck”, which is quite a complicated position, and touches hierarchy, race, gender, institutions, power and exploitation. It’s a much more complicated and deep ideology. It’s just so much easier for an ancap to get their ideas across, and that is attractive to people who want a simple solution. When you dive into ancap theory you find that whilst it stops being surface-level, it remains simplistic. Whereas anarchist writers propose a revolution overthrowing the state followed by years of revolutionary restructurings of society, ancap writers like Larken Rose propose ”If we stop pretending that the government exists, it will cease to exist.” It doesn’t take much reasoning to realize how simplistic this claim is. While I am an opponent of anarcho-capitalism, I do believe its simplicity is to its credit. The complexity of anarchism is its greatest issue. It’s hard for anarchists to explain anarchism because it’s a complex idea, and ancaps don’t have this issue. It makes for an idea that’s easy to spread amongst people looking for a simple answer, and those people will hold on to that answer. That’s how people work, and it makes this ideology pretty worrying. This entire ideology is a logical fallacy. If you’re unironically an anarcho-capitalist, please reconsider your ideas, you’re not going to achieve anything and your ideas are harmful to society. 

Sources

https://www.britannica.com/topic/surplus-value

https://www.intelligenteconomist.com/free-market/

https://docs.google.com/document/d/1-MgUhzk4UeNiLQTXx9inhAcoGOTpYtnBx3yLm_OO9OU

https://mpra.ub.uni-muenchen.de/6063/1/MPRA_paper_6063.pdf

http://ricardo.ecn.wfu.edu/~cottrell/socialism_book/

https://en-academic.com/dic.nsf/enwiki/2865498

https://en.wikipedia.org/wiki/Anarcho-capitalism

http://critiques.us/index.php?title=Anarcho-capitalism

https://blog.libertasbella.com/glossary/anarcho-capitalism/

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