What Is Anarcho-Capitalism?

Commentary by Jeffrey A. Tucker via The Epoch Times (emphasis ours),

The presidential victory of Javier Milei in Argentina puts at the head of state the first self-proclaimed “anarcho-capitalist” in modern history—or probably the first person ever to win an election at this level to identify with that term.

In the meantime, I’ve had many people ask me precisely what this is. So here is the explanation as I understand it.

Central to the idea is that society does not require an entrenched entity of legalized compulsion and coercion called the state in order to enjoy the enforcement of property rights, contracts, defense, and commercial society generally. The fusing of the terms anarchism and capitalism is not a plan for the social order but rather a prediction of what would happen in a civilized community in the absence of the state.

Myth one: it is not “right-wing,” contrary to the New York Times, the Guardian, and a thousand other venues. The “right” in Prussia was for the unity of church, state, and business. The “right” in France was for the divine right of the monarchy to rule. The “right” in America is all over the place in U.S. history but hardly consistent for liberty as a first principle of socio-political life. The notion of “anarcho-capitalism” is outside the left-right binary.

Myth two: the “anarcho” part has nothing to do with Antifa or chaos. The use of the term anarchism here means only the abolition of the state and its replacement with property relationships, voluntary action, private law, and contract enforcement as provided by free enterprise. It does not mean lawless; it means law as an extension of human volition and social evolution rather than imposition from above. Order is the daughter of liberty, not the mother, said Proudhon, and anarcho-capitalists would agree.

Myth three: not everyone who proclaims himself to be an “anarcho-capitalist” speaks for the school of thought, not by a long shot. The designation represents a broad ideal with thousands of iterative applications and a huge diversity of views within, same as any other ideological camp. I’m aware of some who favored COVID lockdowns and shot mandates, and others who keep finding ways to justify war and mass redistribution schemes, for example. Thus should Milei not be held responsible for every cockamamie thing ever said or written by a self-described adherent.

The term originates in the work of American economist (and my beloved mentor) Murray Rothbard, who was strongly influenced in his libertarianism by novelist Ayn Rand in the 1950s. (One of Milei’s dogs is named Murray.) But as Rothbard examined Rand’s work closely, he began to develop doubts about the institution Rand insisted was necessary and essential, namely the state itself. If we are to have property rights, why is the state alone permitted to violate them? If we are to have self-ownership, why is the state the only institution allowed to trample on people via conscription, segregation, and otherwise? If we seek peace, why do we want a state to wage war? And so on.

In Rothbard’s view, a consistent rule in society prohibiting aggression against person and property would have to apply also to the state itself, which has been historically the most socially damaging violator of human rights that there is. We tolerate states to defend our rights only to find out that the state is the main threat to our rights. This way of thinking also observes that no one has ever come up with a technology or system that has successfully restrained the state once it is created. (Highly recommended for deeper understanding: Rothbard’s “Anatomy of the State,” a free download.)

Many anarchists of the socialist left have made similar observations but Rothbard’s spin was one of an analytical prediction concerning what would take the place of the state in its absence. Rothbard said that a society without a state would not be a community governed by perfect sharing of resources and egalitarian sameness, much less some magical elevation beyond human nature, as the left-utopians said. Rather, it would be one of ownership, commerce, the division of labor, investment, private courts, stock markets, private ownership of capital, and all the rest. In other words, a free economy would thrive more than ever without the state, and we would see an ordered liberty brought to its highest possible level of realization.

Keep in mind that pushing forward this idea put Rothbard at odds with practically everyone from the Marxists to the Trotskyites to the Randians to the conservatives and old-style classical liberals who believed that states are necessary for courts, law, and security. It even put him at odds with another one of his mentors, Ludwig von Mises himself, whose only conception of anarchism came from European intellectual circles: they were surely among the least responsible minds on the Continent.

Rothbard’s anarchism was American to the core: more influenced by Colonial times than the Spanish Civil War. He believed that communities could manage themselves without an overlord with the power to tax, inflate the currency, conscript, and murder. He believed that markets and the creativity of peaceful human cooperation would always produce better results than institutions cobbled together by elites and enforced by compulsion. That applies even to courts, security, and law, all of which he believed to be better provided via market forces within the framework of universal norms governing ownership and human action.

In this Rothbard was revisiting a debate from 19th-century France. Frédéric Bastiat (1801–1850) was a great economist and classical liberal who wrote some of the most compelling writings for freedom of his generation or even ever. But he always held out in his mind the belief in the necessity of some state to keep the system functioning lest society descend into chaos. Opposing him in this was the lesser-known intellectual Gustav de Molinari (1819–1912) who wrote that all functions necessary for social operations under freedom can be provided via market forces. In many ways, Molinari was the actual first “anarcho-capitalist,” though he never used that term.

To be sure, high-level theory originating in Paris salons during the Belle Epoque or New York City intellectual circles in the 1950s are one thing. But putting all this into practice is another. Here is where the test for Milei really is. At this point, his theory is just that, perhaps an inspiration to give courage of conviction but it is hardly a blueprint. He faces a massive administrative state that is deeply entrenched, a collapsed currency, a corrupted court system, a hostile legislature, an enemy media, and 100 years of egregious pension liabilities.

How does one man take all this on? We don’t really know the answer to this question. No leader of a Western democratic developed nation has ever attempted a full-scale routing of a corrupted establishment on this level. Neither Reagan nor Thatcher, as far-reaching as their reforms were, ever cut the budget overall much less really abolished whole agencies. They were reformers within the framework. Milei is being called to do something never done before, in the midst of a grave crisis for the nation.

You don’t have to accept anarcho-capitalism fully to appreciate the drive and hope here. Who would you trust most to beat back the state, someone who strongly believes in some features of it or someone who opposes the whole structure root and branch? This much is clear: this ideological orientation is going to infuse any statesman with a fiery opposition to every corruption, every compulsion, every racket, every scam pushed by the administrative elite. The anarcho-capitalist orientation at least provides a guiding light that could end in more liberty for everyone.

The internal and external forces allied against his success are unthinkably vast. And he is racing against the clock. In a year, the whole of elite media is going to be yelling that “anarcho-capitalism” in Argentina has failed. Promise. That’s how absurd things have become.

Let’s say that Milei gets diverted by neoliberal globalists and pursues reforms that only follow the neo-liberal playbook of the late 20th century and following 2008. Can that be blamed on anarcho-capitalism? Absolutely not.

Anarcho-capitalism is not granting freedom to the largest corporations under oligarchic control to pillage and profit at the people’s expense. It is not “privatizing” functions of the state that should not exist in the first place. It is not selling off state resources to cronies and bandits. It is not contracting out lame public services to the highest bidder. It doesn’t mean allowing tech companies to become state partners in citizen surveillance and control. These are all corruptions of a more pure idea of capitalism. And it certainly is not complying with the dictates of the International Monetary Fund (IMF), the World Bank, the Word Economic Forum (WEF), much less the U.S. State Department.

There is every reason to be encouraged by Milei’s victory if only because it shows there is a populist demand out there for radical reform and this can in fact win elections. We should hope that GOP candidates in the United States are watching and listening. They seem to have defaulted back to canned speeches and scripted answers, which only bore a public that is fed up with the status quo and ready for someone with the vision and energy of a Milei to get serious.

This might only be round one of many more to come. He might fail. But the desperate need for fundamental and far-reaching reform and revolution in all industrialized democracies to put the people back in charge can hardly be doubted anymore. And if he fails, after a valiant effort, at least we will have had, as Rothbard once said, a temporary but “glorious holiday” from the political and administrative status quo we live with every day.

There is every reason to believe that Milei is just the beginning of a new trend that could spread all over the world. People are fed up and are ready for a radical new direction. Something has to be done to stop the relentless march of the forces of tyranny in Western nations.

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