Anarcho-capitalism

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Anarcho-capitalism is usually referred to in the United States as "libertarianism." It is the belief that government has no legitimate function beyond the preservation of capitalism. Beyond this contention, there are numerous divisions within anarcho-capitalism, such as whether it is really a form of anarchism, whether there is any room for pragmatic considerations, and so forth.

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Defining Anarcho-Capitalism

Anarcho-capitalism is a form of anarchist ideology, which maintains that social democracy is morally or pragmatically illegitimate. Some libertarians claim that they cannot be called anarchists since they approve of some state. However, the crucial point is that anarchists believe even a popular state is illegitimate; libertarians believe even popular social welfare measures, such as Social Security, are illegitimate. Both libertarians and anarcho-capitalists are in favor of just that amount of state required to preserve capitalism. Hence, anarcho-capitalism is not anarchism in the reductionist sense of no government whatsoever.


The difference between rightwing and anarcho-capitalist critiques of the political order is that the right's objection is to the peculiar partisanship of the political system, whereas the anarcho-capitalist's is with the scope of the system itself; also, the anarcho-capitalist's objections are far less varied. If, as the "libertarian" claims, there is a difference of kind rather than merely degree with the mainstream right, then this consists of the view that only radical transformation of th political order will suffice; and this transformation consists of eliminating the ability of the polity to make social democratic decisions regardless of overriding necessity.


If this distinction does not apply, then the "libertarian" disagrees with others exclusively in having a different sense of what overriding necessity happens to be. In that case, the label is wholly meaningless, since no one is in favor of needless restrictions on behavior.


There is a group of people who self-identify as both "libertarians" and as "Objectivists," i.e., followers of Ayn Rand. However, "Objectivism" is actually not a libertarian ideology in any sense; while calling for a minimal state, its militarism and coercive police state are typical of falangist regimes, and certainly not original. Rand's atheism is a wholly superficial and insignificant aspect of her belief system, even if she was fanatical about it. Objectivists usually adopt the libertarian label so that they can accuse everyone else of being "statist," but given the enthusiasm with which Objectivists embrace militarism and war, this seems like a form of camouflage.

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An Extremely Brief History of Anarcho-Capitalism

Anarcho-capitalism generally has two main origins; one, in the Americas, comes from the sectional conflicts over slavery or peonage; and the other, in Europe, from classical economic theory. These two main origins account for the vast majority of anarcho-capitalists, but there are a few recondite sources also: refugees from the Russian Revolution and other leftist upheavals; the economic elites of least-developed countries (LDC's), particularly Latin America and the Islamic world; and a few oppressed religious minorities, especially the chiliastic ones.


Anarcho-capitalism has a hostile stance towards anarchism, however, since the latter usually is anti-capitalist; the latter, accurately enough, recognizes capitalism as a very state-intensive form of economic management. As a result, many of the unusual sources named above, such as chiliastic sects, take to anarchy first, and later assimilate anarcho-capitalist notions out of expedience or association. Anarcho-capitalism has a parasitic relationship to religion; while many anarcho-capitalists espouse atheism, they usually accept political alliances with the religious right. Arguably, anarcho-capitalism would get nowhere politically without a strong, reliable base of support from the religious right.


Orthodox economic thought has, with the exception of the period 1936-1979, tended to militate in favor of anarcho-capitalism. Keynesianism accounts for the interval, but only a small number of Keynesians were social democrats. Hence, during the above-named period, orthodox economists occasionally were social democrats. However, even during this period, mainstream economic thought believed state intervention in the economy ought to be confined to maintenance of aggregate demand, simply because that was what the population demanded. It was, in other words, a capitulation to the objective reality that politicians employing economists lost elections if unemployment got too high.


The implementation of Keynesian economic theory is not directly related to social welfare policies pursued by that economy. The New Deal was conceived before Keynes' General Theory, and was supposed to have been accompanied by balanced budgets. Likewise, supply-side economics incorporates Keynesian ideas of deficit stimulus. Conceivably, a state run by libertarians could follow Keynesian fiscal policy by having a "stimulus fund" which levied taxes during economic expansion, saved those taxes in private banks, and gave hefty rebates during recessions. A moderate libertarian regime might accept this as a small price to pay to avoid populist backlash during recessions. It's cheaper than a full-blown police state.


Classical, neoclassical, and DGE economic models tend to assume that government spending is simply deleted from the economy. While this represents a stylized fact and not a true assumption, it is frequently literalized whenever economists testify about optimal public policy. In recent years, the vast majority of Nobel laureates in economics have won distinction through arguing for applying literalized theory to public policy; as, for example, Ronald Coase arguing that environmental protection requires no governmental action, provided everything is assigned is assigned an owner (and provided those property rights are never violated); Robert Fogel arguing that publicly funded R&D is never necessary; that monopolies don't violate the concept of a free market; and a host of other bromides that are immanently attractive to the privileged.


Explaining this aspect of economics is beyond the scope of this post; but it should come as no surprise that economists have taken to insisting that "free enterprise" is literally the only freedom that matters, and the liquidation of it political opponents is legitimate grounds for crushing civil liberties.


Likewise, in the early 19th century, several Western countries experienced a greatly-intensified debate on slavery. The UK began a scheme to phase out slavery in 1834; it was replaced by indentured servitude (to 1922). France outlawed slavery in its colonies in 1848. Mexico outlawed slavery in 1823, but peonage continued until the Revolution. In 1860, the USA, Brazil, and Spain were the last Western countries with slavery; other Latin American countries continued to have bitter disputes over the legitimacy of abolition. The United States required a massive Civil War to end slavery, and of course this was followed by a very long backlash. Likewise, Brazil's landowners overthrew the monarchy after the abolition of slavery there in 1889, but failed to win its restoration under the republic.


In the USA, the social base of the slavocracy was far larger than that of Brazil, Mexico, or any other country. Moreover, the legend was born that the abolition of slavery had been a disaster for the South. Among the affluent, educated classes, the idea took root that abolition had committed original sin by "social engineering" (i.e., interfering with the prevailing social order by state fiat). This horror of social engineering had a confused relationship with other Confederate dead-enders, such as the lumpen KKK. Lumpen White power politics in the South tended to be collectivist, provided the collective was exclusively White; many of the conservative Dixiecrats actually hated the KKK because it threatened to level the class structure among Whites.


After the 1954 ruling by the United States Supreme Court in Brown v. Topeka Board of Education, a battle began over how state and local governments were to respond. It is noteworthy that, at this point, there was a boom in "libertarianism." To be fair to anarcho-capitalists, there were other reasons: a boom in suburban industry, which created an overriding interest to evade responsibility for supporting decaying cities; the postwar boom in non-defense government spending, which naturally created a new backlash; the environmentalist movement, which likewise created a new backlash; Cold War propaganda; and the collapse of traditional conservative mores.


However, these other events had a distinctly subordinate role to the (racial) integration revolution. The thing that was to be integrated was the public spaces, such as public schools, public parks, public hospitals, and government offices. One effect of integration was a sharp decline in repetitions of racist mantras, and probably of racist attitudes. But another effect was that Whites shoved their racist baggage into the closet, and many fled the commons. In 1960, several state governments (e.g., Virginia) implemented policies of "massive resistance" to school integration: they literally closed the public schools. During the period 1961-1970, suburban White resistance to desegregation evolved very quickly. Almost from the beginning, White conservatives resisted the tag of "racist," often with laughable ineptitude. But by 1970, the pose of a color-blind struggle for liberty was refined and repeated with immense success.[1]


Since 1970, putatively color-blind opposition to affirmative action has merged with economic orthodoxy (which switched back to laissez-faire fundamentalism by 1979). The rise of anarcho-capitalism has been offset, however, by soi-dissant "Objectivism," or militarist/militant market fundamentalism. Objectivism has simply exploited the libertarian pretensions of anarcho-capitalism, and spawned a dangerous new totalitarian ideology. In 1980, former California governor Ronald Reagan won election on what amounted to an Objectivist platform (except for Reagan's pietism; officially Objectivists are supposed to be atheists). Among Reagan's advisers were vociferous hawks like Jeanne Kirkpatrick, fanatical anti-environmentalists like James G. Watt, and segrationist dead-ender labor-hater Bill Brock, most of whom had careers entirely devoted to lobbying.[2] Reagan's pretense that he was a small-government conservative conflicted with his record as governor of California; as President, his defense buildup and tax cuts (reversed later in his administration) caused a massive increase in the national debt. During this period, there was a boom in financial services, but the productive sector of the economy began a period of accelerating decline. The cuts in social programs, which were delivered as promised, created larger and costlier social dislocation as entire neighborhoods imploded economically.


Anarcho-capitalism benefited from its own failures, though: like any extremist ideology, it cannot be applied purely enough, and incorporates results as part of the agenda. That means that, as Reagan cuts in HUD and HHS spilled over into the states, crime rose, and "libertarians" now discovered they were Objectivists, in favor of a powerful police state, but apocalyptically hostile to social democracy. "Social spending" was now actually poverty-management, and yet it attracted more middle-class resentment than ever before; it was more expensive, too. A mere two years after New Democrat William J. Clinton won the presidential elections and vowed to "end welfare as we know it" (1992), the Objectivists had won control of the GOP agenda. The 104th Congress "Contract with America" was a roll call of anarcho-capitalist applause lines, minus one: there was no mention of ending the War on Drugs.


A rare benefit of libertarianism is its opposition to the so-called "War on Drugs"; its opposition to militarism was mostly forgotten. Now ever closer to the reins of power, the anarcho-capitalists were to become loyal hawks against legally banned drugs, for obvious reasons: their supporters were Big Pharma, who were becoming rich on the tendency of Usonians to self-medicate; and their frankly anti-poor dogma required a myth of personal irresponsibility. George W. Bush rode into office on a tide of still more anarcho-capitalist slogans. Deregulation of business, far from exposing management to the hurly burly of the market, had brought 39% of the US television media under the control of Fox News, which made little secret of its affiliation with the Republican Party. Incarcerations of drug offenders broke historic, global records; the USA was now the biggest jailer in the world, by percentage of its adult population. Constrained by objective reality (and its own corporate constituency) from actually putting its rhetoric into practice, the influence of soi-dissant "libertarian" ideology had brought the USA to a Soviet-style state-capitalism.


In 2006, perhaps stimulated by the rising odium of conservativism, US Rep. Ron Paul of Texas ran for the 2008 Republican presidential nomination. As always, he assured voters that, as a libertarian, he was necessarily against statism. He warned voters, rightly, that the USA had lost many of its pretensions to freedom through the USA PATRIOT Act plus the Military Commissions Act. Taxes would have to reach historic highs to pay off debts accrued though mismanagement and corruption. And, to his credit—nay, glory—Paul inveighed against the Drug War. The response, as of late 2007, was huge. But Paul was mixing up agenda and result. Usually ideologies fail because their policy prescriptions produce unexpected outcomes; when the outcomes are so different from the promises, then supporters turn against each other, preferring to accuse their colleagues of incompetence rather than admit their ideology was wrong. Before Paul acquired national prominence, Movement conservatives were eagerly discussing drowning government in a bathtub though deliberate fiscal meltdown. The result was not the flowering of a new liberty in America, but rather, its downfall.

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En Praxis

Anarcho-capitalism, being the identity politics of capitalism's elites, has every advantage a revolutionary nostrum could ask for. In truth, the reason it has never been implemented is that it is inherently impossible: the zealous protection of property rights and finance capitalism is very state-intensive. Using economic language, the marginal cost of more police protection is much greater than the marginal cost of social welfare programs. Likewise, nearly all of the technology employed in the world wide web (e.g., browsers, TCP/IP, HTML/XML) were developed by national governments and given away to private enterprise. Anarcho-capitalists claim to be opposed to corporate welfare, just as critics of affirmative action claim to be against racism. It's just that they're lopsided in the thing they're intent on abolishing. Racism cannot be abolished; affirmative action has been. All "libertarian" privatization schemes have been spectacular hand-outs to businessmen; social welfare programs, never generous, are under attack all the time. They would have been abolished long ago, but doing so could well bring about an end to capitalism.


The reality is, we already live under the closest feasible version of the anarcho-capitalist's desiderata. Neoconservativism is a totalitarian application of anarcho-capitalism to foreign relations: the goal is combine the Washington Consensus with more-or-less open war against those in a position to resist. Cutting taxes is pure propaganda; the average per capita time-discounted cost of the Reagan-Bush deficits, for example, far exceeds any actual reduction in taxes. Some querulous anarcho-capitalists, alarmed at the political hit their ideology may suffer, are lining up to dissociate themselves from the disaster their ideology has wrought. As before, they will probably succeed. They will insist that the results are not compatible with their ideology. This is, of course, like a Maoist disavowing the Great Leap Forward, on the grounds that Maoism produces a glorious workers' paradise and the Great Leap Forward ended in famine. At a certain point, one has to confront the fact that anarcho-capitalism was applied as faithfully as possible, given objective reality; it must own the consequences, just as Maoism must own the Great Leap Forward.


(The most common objection to the previous statement would be, "What about the War on Drugs?" The great advantage of the Drug War to anarcho-capitalism was that drug use could be used to explain endemic misery amid free enterprise; it was a method of criminalizing, and policing, those who fell through the cracks. There has not always been unanimity among economic ultraconservatives: older ones naturally favored this as an exception. Again, I shall repeat: lack of ideological purity is not a defense for anarcho-capitalism. When a "libertarian" benefits from a statist policy, it's not unusual for his opposition to it to attenuate.)


However, the most dramatic laboratory of anarcho-capitalism has always been the LDC's, where populist rhetoric is usually an empty promise for the rubes. In countries like Colombia, union organizers are killed, not merely thwarted. In 1863, after [anarcho-capitalist] liberales won a civil war, Colombia adopted the Rionegro Constitution; it was the most libertarian in history, virtually outlawing any state intervention in the economy.[3] While the constitution did not last long, Conservatives monopolized political power until the Rojas Pinilla dictatorship of the '50's.[4] Mexico under Porfirio Diaz (1876-1910) was explicitly guided by strict anarcho-capitalist principles[5]; another fairly extreme example was Egypt under the Khedives (1802-1884).[6] Perhaps the most extreme case of all time was Lebanon (1848-1976), which actually did have the advantage of attracting finance capital and of being an entrepot.[7] In all cases, the social base of the regime shrank until there was a complete collapse of the state, and with it, civil order.

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"Anarcho-Capitalism" versus "Libertarianism"

As mentioned above, anarcho-capitalism is usually referred to in the USA (and sometimes in the UK, Canada, and Australia) as "libertarianism." The problem with this name is two-fold: first, it is a usage peculiar to a small number of countries; in other countries, "libertarianism" is understood to mean civil libertarianism, or a generalized objection to authority of all kinds. Second, "libertarianism" is a judgmental term; while it's common courtesy to refer to people and organizations by the names they prefer, it's an abuse of that courtesy to insist that those names define themselves as the owner of a particular virtue. The use of the name "libertarian" to refer to one group's peculiar conception of liberty is unreasonable.


A distinction ought to be made, perhaps, between anarcho-capitalism and Ayn Rand's "Objectivism." Ayn Rand was particularly hostile to the idea of anarchy, and saw the obvious problem in expecting (as Lysander Spooner did) a free market to emerge from conditions of complete "voluntaryism."[8] She was, of course, a fugitive from a country where the government had collapsed, leading to a totalitarian regime. Rand's adherents have an odd affinity for the military and space programs.


While it is assumed a priori by Randians (again, I refuse to call them "Objectivists") that their pro-capitalist stance makes them pro-freedom, that is a spectacular category error. Capitalism is a characteristic of industrial systems; free markets refer to a condition, or status, of commerce. If we are advised that an economy is capitalist, we yet do not know if its markets are comparatively free or not. If we learn that they are indeed free, we still do not know if people in that same economy enjoy individual liberty (a condition of political systems). Insisting that an individual is entitled to freedom only in so far as it's compatible with some recondite goal, such as "free markets," is a totalitarian position to take. Hence, claiming to be in favor of "liberty" purely because one is in favor of capitalism, is insidious.


Aside from opposition to the war on drugs and (ostentatiously) the religious right, there's really nothing libertarian about Objectivists. They merely happen to be a form of extreme rightwing ideology.

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Notes

  1. ↑ While it's not an explicit theme of his book The Silent Majority (2007), Prof. Matthew D. Lassiter describes in detail the rise of anarcho-capitalist ideology in response to the 1954 school segregation ruling. The real topic of concern to Lassiter is the transition of suburbia to the Republican Party. He attacks the popular legend that GOP strategist Kevin Phillips used ostentatious race-baiting to win the South; instead, Lassiter argues, it was the struggle over desegegration and suburban annexations.
  2. ↑ Calling Brock a "segregationist dead-ender" is perhaps unfair, except that his sole electoral victory for statewide office had been the defeat of Albert Gore, Sr.'s re-election bid in the 1970 Tennessee senate race. This was also the sole victory for Nixon's "Southern Strategy," a plan of Kevin Phillips to use "libertarian" rhetoric in challenging desegregation. Whether or not Phillip's Southern Strategy actually worked is a hot controversy, but for 1970 it worked only for Brock. Brock was a one-term senator and never again won election. See J. Allen Callison, "National Politics Go South" pdficon_sm.gif; or Matthew Lassiter's 2007 book, The Silent Majority.
  3. ↑ Online reference: Library of Congress, Colombia Country Study §25; like many countries that embraced extreme economic liberalism, however, Colombia's government relied on tariffs for tax revenue. See Jorge Pablo Osterling, [Democracy in Colombia: Clientelist Politics and Guerrilla Warfare],1989. Like most publications from the West, Osterling counterpoises its flourishing, free market economy against the endemic violence (p.337). Also, please note that the liberales were mostly anarcho-capitalist until the early 20th century, when they drifted into a very moderate social democratic ideology.
  4. ↑ Online reference: Library of Congress, Colombia Country Study §32;
  5. ↑ Alan Knight, "Export led Growth in Mexico," in An Economic History of Twentieth-century Latin America, 2000
  6. ↑ Egypt experienced a cotton boom during the US Civil War; although the end of the war was a disaster for Egypt, it recovered. Under Khedive Ismail (Ismail Pasha, 1863-1882), the leader of Egypt ran up immense debts on public works programs, such as the Suez Canal, then lost control of the country's finances when his country was put into receivership by its British and French creditors (1878). From 1878 to 1953, the country was either under foreign receivership by banking administrators, direct rule by London, or control by a bourgeoisie oligarchy. For an account of the economic record, see Tarik M. Yousef, "Egypt's Growth Performance Under Economic Liberalism: A Reassessment with New GDP Estimates, 1885-1945" pdficon_sm.gif, Economic Research Forum (2002)
  7. ↑ Lebanon's Maan family (Druze converts from Maronite Christianity) were early supporters of the Ottomans (1623), and were rewarded with low taxes and autonomy. The Chebab (1697-1841) enjoyed the same privileges until they made the tragic mistake of backing Muhammad Ali's invasion of the Levant. After some prolonged international and sectarian clashes, Lebaon was put under international administration (1860-1876), with bad results. For economic policy since '42, see Boutros Labaki, "Development Policy in Lebanon"
  8. ↑ Ayn Rand, The Virtue of Selfishness: A New Concept of Egoism, New York: New American Library, 1964, p.153
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External Links (with discussion)

  • Polemics


James R MacLean (10:26, 6 September 2007 (PDT))

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