The Simplified Case for Anarcho Capitalism
By Jacob Oveson
Anarcho Capitalism
To establish support for a complex social concept, it must first be explained.Definition
Anarcho Capitalism, also referred to as 'Market Anarchy,' is a political philosophy that advocates the removal of government. It distinguishes itself from the typical concept of 'Anarchism' by predicting a different outcome than that of most traditional Anarchists. Anarcho Capitalists (AnCaps) believe laws are necessary for the safety and well-being of the citizenry, and also that these laws need proper enforcement, but they dispute the commonly-held notion that only government has the ability to create and maintain a just legal system.
Thus, Anarcho Capitalists, as the name would suggest, favor both Anarchy and Capitalism.
Myths regarding Anarcho Capitalism
The most important myth to dispel is that Anarcho Capitalism supports lawlessness (and/or chaos). Just like (probably) you, AnCaps recognize that if Bill punches Joe, Bill should be punished in order to satisfy justice and deter him from doing so again (or in the first place).
A second myth that deserves speedy death is that AnCaps tend to be violent, or otherwise dangerous members of society that seek widespread rebellion against "the man" and "the system." Most AnCaps favor some form of the non-agression principle, which quite simply reasons that non-retaliatory physical aggression in any form is immoral and unjustifiable. Being capitalists, they also see no problem with people creating institutions and businesses for profit. "The rich" are not inherently evil in the eyes of AnCaps, as they sometimes are for traditional Anarchists-- on the contrary, those who make large sums of money in the marketplace are seen as forces of great good, undeserving of punishment for their success.
Many people, particularly those of some right-wing political affiliation, agree the government is an evil, but they claim it is a "necessary" evil. Anarcho Capitalism simply disputes that the government is necessary.
Problems with Government
The Ethical Case Against Government
On a moral level, the government violates a principle backed by most AnCaps: the non-agression principle (NAP). Unlike business, which gains its money through voluntary transaction, government can only obtain funding through coercive means. If you- as a customer- choose not to buy an iPhone, Apple will leave you alone. If you- as a United States citizen- choose not to pay your taxes, the government will forcefully detain you and lock you in a cage.
Oftentimes the argument is made that you can simply choose to leave the country if you wish to avoid taxes, but this is merely an extension of the problem. If you *don't* pay taxes, the government will restrict your next choice to: leave the country, pay your taxes, or be sent- involuntarily- to jail. You were born - or otherwise moved and purchased property - in some part of North America. The government has no right to insist payment or ask you to leave, and by doing so it immorally violates the NAP.
Furthermore, governments often impose forceful restrictions on fully innocent people. To list some examples, people that choose to smoke marijuana or hire prostitutes are detained or fined, whether or not they harmed another person in the process-- and businesses that offer labor at a wage below ~$7 are told to cease doing so, even though all they've done is make an offer.
To dispel another myth- these positions do not imply that all AnCaps are prostitute-hiring weed-smokers. AnCaps are no different from the rest of the population in their variance regarding victimless and non-aggressive actions they choose to make, but they support the rights of others to make those choices for themselves. For example, as an AnCap, I choose to refrain from drug use, but I also choose not to impose that lifestyle on others-- either directly, by force, or by supporting the force of government. Similarly, much as I disagree with socialist and communist ideologies, I strongly oppose any notion of jailing people for preaching any ideology they so choose.
Annexed- 5/10/13
The validity of this claim (the NAP) is dependent on the partisan's acceptance of ethical norms. According to- as Anarcho Capitalist Murray Rothbard once labeled them- "natural rightsers" (himself a natural rightser), it is unethical to violate certain rights- framed in the context of property rights- with which all human beings are naturally endowed. According to the theory- mostly derived from a Lockean interpretation of ethics- people have ownership over themselves, and things that they homestead, i.e., unowned land that they work, or unowned resources that they use- given selective definitions of "work" and "use" upon which we will not elaborate here. By this standard, members of government cannot claim to ethically own a country whose economic elements they themselves did not make productive, and, as no government has ever done so, it is therefore unethical for government to tax (or likewise support itself and exist).
Those who do not ascribe to this theory- that is, the non-natural rightsers- tend to be ethical consequentialists of some form, usually egoist or utilitarian. In either case, these partisans are concerned only with the ultimate effect of a given action on the welfare of people. So, if government "steals", we cannot claim- by these ethics- that it does so in an inherently unethical manner, as it is only unethical if the result, on net, hurts people. Thus, the Anarcho Capitalist consequentialist maintains that government should be disposed of because its actions have a net-negative effect on human welfare. Consequentialists may still maintain a rule-of-thumb closely resembling the NAP, i.e., they may conclude that actions which violate the NAP tend to be unethical. That said, the economic argument against government adequately describes- in and of itself- the entirety of the consequentialist position.
The Economic Case Against Government
Regarding the question "what's best for everyone?" AnCaps tend to look at this from an economic point of view. That's not to say they have a 'cold' or 'calculated' opinion of the human experience-- it just means that as a political philosophy, Anarcho Capitalism is concerned with the way capitalism affects people.
To start, AnCaps are far from alone in their support of capitalist economics. The vast majority of economists and social science theorists generally favor capitalism in one form or another, as opposed to socialism or communism. This is primarily as result of the failures of socialist and communist economies throughout history- particularly in the former-half of the 20th century- and also the astounding success of largely-capitalist economies, such as that of the United States and those of Europe.
The argument between most economists in present times regards what type of capitalism best favors society. Some favor "mixed-capitalism," which supports government involvement in the marketplace, while others-- including AnCaps-- favor "laissez-faire ('hands off') capitalism," which advocates the government stepping out of the picture.
First of all, we need to recognize what the "price" of government intervention really is.
It should be plainly obvious that if the government taxes working people (or 'the private sector') money that would have gone to the production of various goods and services that the private sector provides instead go to politicians and other government agents for the provision and enforcement of regulation. Thus, the cost of an $100 tax is at least $100.
As it turns out, it's actually more than this, as taxation also reduces production. To see why, consider a hypothetical Home Depot employee making a cost-benefit analysis of his situation. For each hour he works- taxation aside- he earns $10. Going home and staying with his wife for the day is worth $5/hour, so he works during the day. When his boss asks him to work overtime, the worker will now make $12/hour if he accepts. Going home to his wife, now that it's late and she isn't busy, jumps up to a value of $11/hour. The Home Depot worker will continue to produce, working overtime. If, however, the worker is taxed at 20% of his income, he will only make $8/hour throughout the day and $10.60/hour during overtime. Now he will produce during the day, but go home- instead of produce- if his boss asks him to keep working.
This is a simple example, but it applies to all businesses and all workers in all aspects of the private sector. Net production goes down as taxation goes up, and therefore, a tax of $100 costs $100 + loss in production. How great the loss is depends on a large number of factors, such as the elasticity of supply and demand for particularly relevant goods and services, which are too complicated to explore for a "simplified" case. All the same, it should be realized that taxation results in a net loss.
Furthermore, when a task is managed by the government, there's little reason for it to be managed well. Governments monopolize whatever industry they choose to operate, because no private sector institution can compete with a product the entire country is forced to pay for. As the government has no competition, they also have very little incentive to innovate, or otherwise make their service better and cheaper. Additionally, government salaries, at all levels and for various reasons, tend not to be based on the success of their operation-- thereby further reducing incentives to do the job well. Government workers are almost never fired.
Exploring the Private Sector Alternative
The Current Role of Government in Society
If the cost of funding government agencies results in a net loss to the economy, and the service they provide is of lower quality, it follows that whatever job the private sector can do, it should do. As social scientists have come to realize this, the government's role in the economy has taken a massive step backward over the years, and the vast majority of goods produced are produced by the private sector.
As government retains a few select, albeit very important, functions, the question rises- could the private sector manage these instead? AnCaps arrive to the conclusion that yes, it can. To see why, let's examine all roles that governments does play, specifically in the United States.
Summed up:
1. Law Creation (Congress and the President)
2. Law Enforcement (Policeman)
3. Protection of the Nation's Borders (National Guard)
4. An outgoing military (to make war with other countries, or otherwise become involved in the international scene)
5. Road Construction/Maintenance
6. Schooling (partially, though not completely)
7. Welfare For Those in Need (Medicare, Medicaid, Social Security, etc.)
8. Pigouvian taxation (Pollution tax)
9. Tariffs
10. Firefighting, Mail Delivery (FedEx), Transportation (various bussing operations)
11. Corporate Regulation (FDA, HOA, FCC, etc.)
12. Corporate Subsidies (Money grants to agriculture/elsewhere)
13. Environmental Protection (Wildlife preservation, National Parks)
I've listed these in the functions that, generally speaking, more people agree the government should manage-- with the most support at #1 and the least at #13. In particular, numbers 1 through 3 are supported as government functions even by most minimalists and libertarians, though many in these camps believe most (if not all) of the others should be abolished as government functions. Left-leaning economists may support as many as most or all of these functions, and some support a few more on top-- such as healthcare provision, carbon tax and plastic tax (though debatably the latter two can be grouped under 'environmental protection.').
As each and every one requires funding through taxation, and is therefore a violation of the NAP, AnCaps support zero.
Before we examine how the private sector might "take over" these roles, I will first separate the different roles into two categories: desirable roles, and undesirable roles - as according to my own opinion, and that of many other right-wing political theorists.
Should exist
1. Law Creation
2. Law Enforcement
3. Protection of the Nation's Borders
5. Road Construction/Maintenance
6. Schooling
7. Welfare For Those in Need
10. Firefighting, Mail Delivery, Transportation
13. Environmental Protection
Shouldn't exist
4. An outgoing military
8. Pigouvian Taxation
9. Tariffs
11. Corporate Regulation
12. Corporate Subsidies
Why roles that shouldn't exist shouldn't exist
In explaining why some roles the government performs shouldn't exist in society in any fashion or form, I'll begin my analysis from the bottom up (that way we're likely to see eye-to-eye a little better at the start).
Corporate Subsidies
If your goal is to swiftly eliminate as much competition as possible within an industry to create giant, inefficient monopolies- look no further than subsidies. Interestingly, it seems the most convincing way to expose the harmful (or at the very least useless) nature of corporate subsidies is not to examine the economic implications of their implimentation, but to show how they come into being.
The US steel industry has been the product of enormous government subsidy since Carnagie, but each time the government writes a check to steel giants, no one who's fully aware imagines thoughtful politicians sitting down and carefully analyzing the needs of the country. As the record will always show, the steel industry pandered to the government and got money as a result. When doing so comes at a slight harm to each of 300 million people, the widely-distributed citizenry has no ability to rally together and lobby to stop it. More importantly, they can't target politicians who engage in this malicious behavior, because the vast majority of citizens either don't know it's happening, or don't understand the implications. Instead, people think: 'steel... I like products that come from steel...' and that's the end of it.
This is not to say people are "stupid" (a rather ridiculous claim, since they would be stupid compared to what, exactly?), it's to point out a problem with democratic government, being that it favors concentrated sources of wealth at the expense of that which is more spread out. Any given individual, as a voter, has virtually no incentive to understand issues so minor as how steel subsidies affect him or her personally. If s/he takes the time and effort to become informed, it would serve virtually no purpose-- that individual's one vote has approximately a zero percent chance to determine the outcome of any election, even on a relatively small scale. So, rationally, the vast majority of people shouldn't- and don't- waste their time with such research.
Thus, 300 million people are robbed- and they don't even know it.
As we then examine the results of such a subsidy, the subsidized industry is sure (obviously) to benefit. It's competitors, however, will quickly falter-- even if they provide better goods at a lower price.
To illustrate- first know that $20 billion dollars annually funds direct subsidies to the United States agricultural industry, most of which goes to the subsidization of corn. Ever looked on the back of your soda can and checked for sugar in the ingredients? Odds are pretty good you found corn syrup first. Countries like Brazil produce sugar at a substantially lower cost than the US produces corn syrup, and are therefore sensible to use, but we take the latter ingredient in abundance because farmers make too much of it. All to collect sweet government subsidies.
CONCLUSION OF PART 1.
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