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Anarcho-capitalism, also called market anarchy, is a specific form of libertarianism which has two simple preconditions:

1. The absence of formal government.

2. The free trade of resources.

There is really no need for both preconditions to be stated, as they necessarily follow from each other. If there is an absence of formal government, then there is considerably less barrier to trade, and if there is free trade of resources, then there is free trade in the areas of law, justice, military force, police force, and therefore there cannot be a government, as a government is a monopoly of force.

Stating both is, rather, an unfortunate necessity given the number of so-called anarchists who preach socialism or syndicalism. Since free trade is the natural state of man, such economic systems can only come about by state intervention.

Moral Standing of the State

Anarcho-capitalists contend that the state differs from other criminal organization in only two areas: the extent of its power, and the extent of its legitimacy. The state is a fundamentally immoral structure, not only because of its constant crimes and threats to the social order, but also because the control of the democratic state over society is such that the nature of its crimes stays unrecognized.

We use a whole range of words to cloak the immoral nature of the state, starting with "country", which is based on an arbitrary border established by states to separate their parasitic victims. Upon this fallacy of the nation hangs words such as "national interests", "national defense", "democracy", "border", "war", "draft" and "immigration". Specific words, such as "police", "taxation", "justice" and "welfare" also hide the nature of the actions committed.

From the anarcho-capitalist perspective, the state is the natural result of a monopoly acting without fear of competition. Like all such monopolies, the state, as a system, is only concerned with extending its power and control over society. The result is less prosperity, less freedom and less order.

Anarcho-capitalists also sometimes contend that small government is just as untenable a position as big government, and that both have the same basic incentive structure that engenders growth and aggression.

The Incentives of Anarcho-Capitalist Systems

Anarcho-capitalism can be seen as a system where there is competition in all areas, as opposed to the monopoly of the state. From this perspective, most objections to anarcho-capitalism are made irrelevant fairly easily. For example, arguing that "anarcho-capitalism would lead to one big organization taking power over everyone else" makes no sense when we see that the state is already such an organization.

Anarcho-capitalism can also be seen as a system where there is no state with a virtually unlimited power of taxation and control, but rather independent social agents which are responsible for their own actions. From this perspective, arguing that "anarcho-capitalism would lead to war between agencies" makes no sense, because unlike a state, social agents in anarcho-capitalism would have to expand their own resources and persuade people to join their case. A state can simply use the fruits of its theft (taxation) to finance wars, and enslave (draft) its population to provide the manpower.

Real-Life Examples

  • In our daily lives: relationships, the Internet, science, states themselves. People engage in untaxed, unregulated and illegal peaceful and consensual human actions every day.
  • Medieval Iceland
  • Somalia 1991-2006
  • American Old West
  • Medieval Ireland
  • Pennsylvania 1681-1690


This article originates from or includes content from the public domain Libertarianwiki.