Thursday, January 19, 2006

The relationship between anarchy and capitalism

It is a widely accepted myth that anarchy is incompatible with capitalism. Even an encyclopedia like Wikipedia states :

There is significant variance between the philosophies of different individualist anarchists. Almost all, following Proudhon, support individual ownership of the particular form of private property he referred to as "possession". (...) However, what these philosophers all have in common is a rejection of both capitalist economics and collectivist notions of society and a pronounced focus on individuality.

Ever since I deconverted to anarchism, I have noticed the widespread existence of this myth. I hope this entry will help dispel it.

First of all, anarchy and capitalism do not pertain to the same thing at all.
Capitalism is a positive ideology - it states what economic system should exist. Strictly defined, capitalism is a system where resources are owned by individuals instead of the government, and where these resources circulate in free markets. Capitalism is based on voluntary action, instead of government coercion or individual force.

Anarchy, on the other hand, is a negative position - no-government. It merely states that government should not exist. This does not indicate what system will indeed exist in an anarchic society, which is why many anarchists label themselves further (such as anarcho-syndicalist or anarcho-capitalist). In an anarchy, people can assemble in any economic system they desire - socialism, capitalism, syndicalism, whatever they desire. But they will also have to face the relative degrees of success of each, something that statist believers definitely do not want.

One property that both capitalism and anarchy share is tolerence for the variety of value systems that exists in any society. In a capitalist system, people are free to express their values, through consumer preference, in any way they want. Anarchy is simply an extension of this principle, because government is the single organization that restricts value-expression the most, by imposing a single value system on the population of an entire territory by force. In an anarchy, the individual not only has consumer preferences, but political preferences as well.

Another related property of both is that they are about individual choice. Government does not enforce values on you (statism/socialism), other people cannot enforce their values on you (democracy/syndicalism), you are truly free to make choices for your own life.

One objection that is raised against this analysis, is that capitalism depends on government to exist. This is usually based on the perennial confusion between corporatism (state capitalism) and capitalism, which are very different concepts. Corporatism - the statist belief that leaders of corporations should exploit political power for their own gain - is definitely incompatible with anarchy. However capitalism, which is based on voluntary action, is not harmonious with government, which is based on coercion, but rather with anarchy, which is based on voluntary action. And we observe in practice that strong governments, with very few exceptions, seek to control more and more of any given economy, eventually completely consuming it.

Certainly it would be difficult for a capitalist system to exist without some form of organizational contractual enforcment (although of course personal enforcment is inherent). Black markets, which are trade systems that evade enforcment (at least of the government kind), are extremely costly and unsafe. However, anarchy is perfectly compatible with private forms of contractual enforcment, so markets in an anarchy would be far safer and have less overhead than black markets.

So it appears that there is in fact no contradiction between anarchy and capitalism. And since capitalism is the natural state of man (insofar as most people are peaceful and desire to cooperate in order to raise their standard of living), an anarchic economy is most likely to evolve into some form of capitalism. Collectivists, who believe that man is too selfish and degraded for freedom, would complain just as loudly as they do today about progress and the expression of individual values, but we would still point and laugh at them. Because there are always people who are just plain stupid.


A. B. Dada said...

As a blogger who covers an anarchocapitalist perspective, I have to believe that anarchy and capitalism work hand in hand.

The US is not a capitalist economy -- it is what I call "cartel mercantilism" -- basically a state-run economy. Regulations, tariffs, taxes, embargoes and subsidies are very quick to destroy any benefits that capitalism would bring.

Anarchy is "no government by force" although I do believe we might see some form of governing body by contract (mutual agreement). If 100 people want to band together to contract rules between themselves, that's fine, but no force should enforce that contract (in fact, the worst that might happen is a negative moderation like a negative feedback on eBay).

I live as close to an anarchocapitalist life as I can live and not go to jail. There are many ways to build your life around freedom. I gave up the banking system and live on a 100% personal gold and silver standard. I relinquished my bubble-hell house for a much smaller home that hasn't been affected by the bubble, and I will never get a mortgage or a loan again until I can do so privately with 100% reserve banking.

Aaron Kinney said...

This is a good post for clearing up confusion over the mixing of anarchism and capitalism.

Why does anarchism have such a stereotype of spiky haired punk rockers? People like Franc and Stefan certainly dont fit that stereotype.

I bet that there are tons of anarchists who dont dress like punk rockers nor listen to Sid Vicious. Its funny that the anarchist stereotype is so strong, at least in America. I think anarchist brings with it a more stereotypical preconceived image with it than atheist does!

Anarchist said...

Wow! Franc you left Objevtivism? Do you have a formal statement why you left Objectivism? I mean if you are anti-state you are no longer an Objectivist. Please link it for my pleasure.

I am an communist-anarchist, and I disagree with your discussion. Capitalism requires law, which places it outside the anarchist family. We may note that free trade in and of itself is not capitalism. For instance, two communes can trade value for value. However, the market economy needs (property) laws to function properly as Mises and others pointed out. The thing is that law is a from of archy (i.e., rule) and, thus, the anti-thesis of anarchism (no rule).

Francois Tremblay said...

"Wow! Franc you left Objevtivism?"


"Do you have a formal statement why you left Objectivism?"

What the fuck ? I'm not a politician, a judge, or royalty, so no, I don't write "formal statements" when I change my mind about something.

"I am an communist-anarchist, and I disagree with your discussion. Capitalism requires law, which places it outside the anarchist family."

Read my entry again. Capitalism does not require "law", which I don't even believe exists. Only voluntary action.

Anarchist said...

Certainly it would be difficult for a capitalist system to exist without some form of organizational contractual enforcment (although of course personal enforcment is inherent). Black markets, which are trade systems that evade enforcment (at least of the government kind), are extremely costly and unsafe. However, anarchy is perfectly compatible with private forms of contractual enforcment, so markets in an anarchy would be far safer and have less overhead than black markets.


In the above you sought to distract us from ascertaining what you meant by "organized contractual enforcement." I venture to say that the "contractual enforcement" is nothing more than a euphenism for law, courts and police. It is already noted that the individual himself could hold a contract breaker accountable. In this case there is really no discernable law system to talk about. Consequently, the simple act of trading value for value, or agreeing to do so is perfectly in congruence with the spirit of anarchy. However, you have moved beyond personal enforcement to seemingly suggest that laws and courts are needed to be in place for capitalism to exist as a pervasive system. In fact, you are an "anarcho-"capitalist, which confirms your advocation of law- makers, courts and police. In that regard, an evaluation of your ideas show that they are advocating archy, which is the anti-thesis of anarchy. To say that you are an anarchist simply because you are against the monopoly of the state is an example of confused thinking. You want all the functions of the state to be in the hand of private companies with the exclusion of taxation. That is to say, you want a government that your libertarian ethic would deem just. The society you envision would not only have contractual enforcement agencies; it would also have law enforcement agencies that rule non-clients. The spirit of anarchism that motivates to me against all forms of rule is not in you. How could it be? You are not an anarchist.

Since you have been so public with your advocacy of Objectivism. I would think that you would have sought to pen the reasons why you no longer subscribe to Ayn Rand's philosophy. Perhaps, you do this day by day in your writings. Anyway, I support your arguments against the state (as is); I do not endorse your solutions.

Anonymous said...

I recently listened to an audio book entitled Basic Economics: a citizen's guide by Thomas Sowel. In the later chapters of this book the author described how unreliable protection of property rights will restrict flow of capital in an economy. Simply put, an investor is less likely to invest in an area where his investment can be taken from him. This is usually done by governments with socialist/communist policies, for example african dictatorships that can nationalize property or enforce high taxes. Any government that excersizes such policies cannot benifit from free markets and large capital investments. Eliminating this threat to capitalism through a philosophy of anarchism seems only natural to me. However this doesn't eliminate all threats. Thugs, gangs, strong-arming competition and other criminals can diminish property rights as well and so there must be some kind of protection. In this though capitalism needs law and order to thrive. I think the best way to accomplish this is through an impartial court of reason with the authority to uphold rulings. If you take away the impartiality, through privatisation, or its authority to enforce rulings then it cannot operate in a capacity to protect property rights. I suppose the anarchist would have to ask him/herself whether or not such a court would constitute as government. When I think of government I think of legislatures that use force and coercion to press there values on an individual. It was legislation that enforced segregation on blacks and it was the court that allowed a black individual, in brown vs. board of education, to stand up against all the power, wealth and popularity of that legislation to be free of it. I do not believe that a court in which an individual can argue a dispute on equal footing with another individual, corporation or collective no matter how powerful and succeed based on the merit of their arguments and evidence presented can be contrary to the anarchist ideal. In fact isn't this its very essence? If there is going to be a society in which the weak can challenge strong without inequity then there must be a stage to lend them that authority. However we can forego tyrannical legislatures, oppressive sovereigns, corrupt politicians and the rob peter to pay paul rhetoric of contemporary government to do this.

Mr. Wilson said...

I like this article alot dont get me wrong it was a very well written article and alot of it was very true.
but i do have to say you contradicted yourself alot. first you say anrchism is not compatible with capitalism but than you say all the ways they are similar and actually work together.
Personally though i believe anarchism and capitalism are alot alike and definately can work together they both are based off self ownership and self wealth and the persuit of your own happiness. both are voluntary and peacefull philosophies that could fix our cruel world but both have been lied about as evil and corrupt. thats the problem