Is "anarcho" capitalism against the state?

by Iain MacSaorsa

"Anarcho"-capitalism implies a class division of society into 
bosses and workers, due to its support of private property. Any 
such division will require a state to maintain it. However, it 
need not be the same state as exists now. In so far as this goes, 
"anarcho" capitalism plainly states that "defence associations" 
would exist to protect property. For the "anarcho" capitalist, 
these companies are not states. According to Rothbard [Nomos 
XIX], a state must have one or both of the following 
characteristics :-

1) The ability to tax those who live within it.

2) It asserts and usually obtains a coerced monopoly of the 
provision of defence over a given area.

Instead of this, the "anarcho"-capitalist thinks that people 
should be able to select their own defense companies, which would 
provide police, courts, etc. These associations would "all... 
would have to abide by the basic law code" [op cit, p.206]. Thus 
a "general libertarian law code" would govern the actions of 
these companies. Like anything else under capitalism, this "law 
code" would reflect supply and demand, particularly if "judges... 
will prosper on the market in proportion to their reputation for 
efficiency and impartiality" [Rothbard, op cit, p. 204].

It does not take much imagination to think who's interests 
"prosperous" judges and defense companies would defend. Their 
own, as well as those who pay their wages, other members of the 
rich elite. If the system is based on $1, one vote, its easy to 
see whose values the "law" would defend. The terms of ``free 
agreements'' under such a law system would be titled in favour of 
lenders over debtors, landlords over tenants, employers over 
employees, in a way which is identical to the current system. As 
would be expected in a system based on "absolute" property rights 
and the free market. How the laws would actually be selected is 
anyone's guess, although I would imagine most "anarcho"-
capitalists support the myth of "natural law", the authoritarian 
implications of which are discussed in section X.X.X. In any 
event, it would not be based on one person, one vote and so the 
"general law" code would reflect invested interests and be very 
hard to change, and so would not develop as society develops.

In a free market, supply and demand would soon result in a legal 
system which favoured the rich over the poor. As rights would be 
like everything else, a commodity, they would soon reflect the
interest of the rich.

However, some "anarcho" capitalists claim that just as cheaper 
cars were developed to meet demand, so would defense associations 
for the poor. This forgets a few key points, the general 
"libertarian" law code would be applicable to all associations, 
so they would have to operate within a system determined by the 
power of money. Secondly, in a race between a jaguar and a mini, 
who do you think will win? And lastly, as with any business, the 
free market would soon result in a few companies dominating the 
market as capital costs increase as the result of profit making 
and competition. With obvious implications for "justice".

The "anarcho" capitalist imagines that they will be police 
agencies, "defence associations", courts and appeal courts all 
organised on a free market basis and available for hire. As David 
Wieck notes however, the major problems with such a system is not 
the corruption of "private" courts and police forces (although 
this is a problem) :-

"There is something more serious than the "Mafia danger", and 
this other problem concerns the role of such "defense" 
institutions in a given social and economic context.

"[The] context.... is one of a free-market economy with no 
restraints upon accumulation of property. Now, we had an American 
experience, roughly from the end of the Civil War to the 1930's, 
in what were in effect private courts, private police, indeed 
private governments. We had the experience of the (private) 
Pinkerton police which, by its spies, by its *agents 
provocateurs*, and by methods that included violence and 
kidnapping, was one of the lost powerful tools of large 
corporations and an instrument of oppression of working people. 
We had the experience as well of the police forces established to 
the same end, within corporations, by numerous companies... (The 
automobile companies drew upon additional covert instruments of a 
private nature, usually termed vigilante, such as the Black 
Legion). These were in effect, and as such they were sometimes 
described, private armies. The territories owned by coal 
companies, which frequently included entire towns and their 
environs, the stores the miners were obliged by economic coercion 
to patronize, the houses they lived in, were commonly policed by 
the private police of the United States Steel Corporation or 
whatever company owned the properties. The chief practical 
function of these police was, of course, to prevent labour 
organisation and preserve a certain balance of "bargaining"."

"These complexes were a law unto themselves, powerful enough to 
ignore, when they did not purchase, the governments of various 
jurisdictions of the American federal system. This industrial 
system was, at the time, often characterised as feudalism....."

Here we have one of the closest examples to the "ideal" of 
"anarcho" capitalism, limited state intervention, free reign for 
property owners, etc. What happened? The rich reduced the working 
class to a serf-like existence, capitalist production undermined 
what forms of independent producers that existed (much to the 
annoyance of individualist anarchists at the time) and basically 
produced the corporate america most "anarcho" capitalists say 
they are against.  

The rise of Corporations within America indicates exactly how a 
"general libertarian law code" would reflect the interests of the 
rich and powerful. The laws recognising corporations were *not* a 
product of "the state" but of the law system, something which 
Rothbard has no problem with. As Howard Zinn notes, "the American 
Bar Association, organised by lawyers accustomed to serving the 
wealthy, began a national campaign of education to reverse the 
[Supreme] Court decision [that companies could not be considered 
as a person]... By 1886... the Supreme Court had accepted the 
argument that corporations were "persons" and their money was 
property protected by the process clause of the Fourteenth 
Amendment... The justices of the Supreme Court were not simply 
interpreters of the Constitution. They were men of certain 
backgrounds, of certain [class] interests" [A People's History of 
the United States, p. 255].

This would be the obvious result for "when private wealth is 
uncontrolled, then a police-judicial complex enjoying a clientele 
of wealthy corporations whose motto is self-interest is hardly an 
innocuous social force controllable by the possibility of forming 
or affiliating with competing "companies" [Weick, op cit, p225]. 
Particularly if these companies are themselves Big Business, and 
so with a large impact on the laws they are enforcing.

Wieck's sums up by saying "any judicial system is going to exist 
in the context of economic institutions. If there are gross 
inequalities of power in the economic and social domains, one has 
to imagine society as strangely compartmentalised in order to 
believe that those inequalities will fail to reflect themselves 
in the judicial and legal domain, and that the economically 
powerful will be unable to manipulate the legal and judicial 
system to their advantage. To abstract from such influences of 
context, and then consider the merits of an abstract judicial 
system... is to follow a method that is not likely to take us 
far. This, by the way, is a criticism that applies ... to any 
theory that relies on a rule of law to overrider the tendencies 
inherent in a given social and economic system."[Weick, op cit]

In evaluating "anarcho" capitalism's claim to be a form of 
anarchism, Peter Marshall notes that "private protection agencies 
would merely serve the interests of their paymasters" [Demanding 
the Impossible, p. 653]. With the increase in private "defense 
associations" under "really existing capitalism" which many 
"anarcho" capitalists point to as examples of their ideas, we see 
that this is the case. There have been many documented 
experiences of protesters being badly beaten by private "security 
guards". As far as market theory goes, the companies are only 
supplying what the buyer is demanding. The rights of others is 
*not a factor* (yet more externalities, obviously) . With the 
reversion to "a general libertarian law code" enforced by private 
companies, this form of "defense" of "absolute" property rights 
can only increase, to levels which we have indicated above in 
American history.

It is clear from considering section C.1 (what is the state), 
that the "anarcho"-capitalist defense associations meet the 
criteria of state-hood. They defend property and authority 
relationships, they exercise coercion and they are hierarchical 
institutions which govern those under them for those who employ 
them both.

As far as even meeting its own definitions, "anarcho"-capitalism 
runs into trouble. Under capitalism, most people send a large 
part of their day on other people's property - namely they work 
and/or live in rented accommodation. Hence, if property owners 
select a "defense association", would this not appear as a 
"coerced monopoly of the provision of defence over a given area"?
Even considering the "common law code", could this not be 
considered a monopoly? Particularly if ordinary people have no 
real means of affecting it (either it is market driven, and so 
would be money determined, or it will be "natural" law and so 
unchangeable by mere mortals). In addition, the costs for these 
associations will be deducted from the wealth created by those 
who use, but do not own, the property. Hence workers would pay 
for the agencies that enforce their employers authority over 
them, taxation in a different form.

In effect, "anarcho"-capitalism has a *different* sort of state, 
one in which bosses can fire the policeman. As Peter Sabatini 
notes [Libertarianism: Bogus Anarchy], "Within Libertarianism, 
Rothbard represents a minority perspective that actually argues 
for the total elimination of the state. However Rothbard's claim 
as an anarchist is quickly voided when it is shown that he only 
wants an end to the public state. In its place he allows 
countless private states, with each person supplying their own 
police force, army, and law, or else purchasing these services 
from capitalist vendors.[Murray N. Rothbard, "Society Without A 
State", in Pennock and Chapman, eds., p. 192.] Rothbard has no 
problem whatsoever with the amassing of wealth, therefore those 
with more capital will inevitably have greater coercive force at 
their disposal, just as they do now."

As Peter Marshall again notes, "anarcho" capitalists "claim that 
all would benefit from a free exchange on the market, it is by no 
means certain; any unfettered market system would most likely 
sponsor a reversion to an unequal society with defense 
associations perpetuating exploitation and privilege" [Demanding 
the Impossible, p. 565].

So it appears that "anarcho" capitalism would have laws, police, 
armies and so forth. Sounds familiar, doesn't it? However, there 
is one slight difference. Property owners would be able to select 
between competing companies for their "services". Hence, 
"anarcho" capitalism does not get rid of the state, it only 
privatises it.

Far from wanting to abolish the state, "anarcho" capitalists only 
desire to privatise it. Their "companies" perform the same 
service, for the same people, in the same manner. By being 
employed by the boss, they only reinforce the totalitarian nature 
of the capitalist firm by having the police being not even 
slightly accountable to ordinary people.

Therefore, far from being anarchists, "anarcho"-capitalism are 
just capitalists who desire to see private states develop, states 
which are strictly accountable to their pay masters without even 
the sham of democracy we have today. Therefore, a far better name 
for "anarcho"-capitalism would be "private state" capitalism, at 
least that way you get a fairer idea of what they are trying to 
sell you.

