anarcho-capitalism
anarcho-capitalism, political philosophy and political-economic theory that advocates the voluntary exchange of goods and services in a society broadly regulated by the market rather than by the state. Anarcho-capitalism is rooted in classical liberalism, individualist anarchism (i.e., anarchism that prioritizes individual liberty rather than freely formed associations of individuals), and the 19th-century Austrian school of economics, whose 20th-century adherents included the influential libertarian economists Ludwig von Mises and F.A. Hayek. Anarcho-capitalism challenges other forms of anarchism by supporting private property and private institutions with significant economic power.
The term anarcho-capitalism was coined by Murray Rothbard, a leading figure in the American libertarian movement from the 1950s until his death in 1995. Rothbard envisioned a “contractual society” in which the production and exchange of all goods and services, including those usually assigned to the state (such as law enforcement, education, and environmental protection) would be conducted through voluntary agreements (contracts) between individuals. Such agreements would be constrained only by a previously adopted and mutually agreed-upon legal code, which would encompass, among other principles, the libertarian axioms of self-ownership (the right of individuals to maintain complete control of their own bodies) and nonaggression (the prohibition of violence or coercion against the bodies or other property of other individuals). In Rothbard’s view, the typical powers of the state are unjustified because their exercise unnecessarily restricts individual liberty, reduces individual prosperity, and creates or exacerbates a host of economic and social problems.
In support of their views, anarcho-capitalists have cited examples of societies closely related to their theory. The American economists David Friedman and Bruce Benson, for example, argued that the commonwealth period of Icelandic history, which lasted from 930 to 1262 ce, witnessed significant social and economic progress despite the absence of a bureaucracy, an executive, or any system of criminal law. Icelandic society was led by chieftains, or goðar, but chieftainships were treated as private property that could be bought and sold, and membership in a chieftainship was purely voluntary. Similarly, Rothbard cited early Celtic Ireland as another example of a society displaying several features of anarcho-capitalism. Ancient Ireland was organized around so-called tuatha, or political units (petty kingdoms or clans) consisting of people who had united voluntarily for beneficial purposes. Each of the tuatha elected a king whose functions were limited to conducting “war or peace negotiations as an agent of the assemblies,” according to Rothbard.
Anarcho-capitalism has been challenged by social anarchists on the grounds that it would enable some individuals to use market forces to acquire economic and political power. In this context, the American linguist, philosopher, and social anarchist Noam Chomsky asserted that anarcho-capitalism “would lead to forms of tyranny and oppression that have few counterparts in human history,” adding that “the idea of ‘free contract’ between the potentate and his starving subject is a sick joke.” Friedman, for his part, pointed out that the Icelandic commonwealth managed to prevent the wealthy from physically abusing the poor by requiring perpetrators of violence to financially compensate their victims. Another objection has come from some libertarians who claim that too great a reliance on market forces can prompt differences in standards and practices of law and justice. Friedman responded to this criticism by observing that it assumes that the state is controlled by a majority with similar legal ideals. Diverse legal standards and practices would therefore be more appropriate, in his view, should the populace be more diverse.