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«CONTRA ANARCHO-CAPITALISM JORDAN SCHNEIDER MIXING ECONOMICS AND GOVERNMENT is a dangerous idea, nearly as dangerous as mixing church and government. ...»

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L VOLUME 1 (SPRING 2007): 101–110




MIXING ECONOMICS AND GOVERNMENT is a dangerous idea, nearly as

dangerous as mixing church and government. With the latter, you

get a theocracy, and with the former, the unwieldy behemoth of the American political-economic system—both very undesirable. After the trauma of the Great Depression and the wide-scale introduction of paternalistic government by Franklin Roosevelt, Americans have acquired an unhealthy mistrust of capitalism. Economist writer Clive Crook points to a popular conception of the market as “a regrettable necessity, a useful monster that needs to be bound, drugged, and muzzled if it is not to go on the rampage.”1 Generally, anyone with even a rudimentary sense of the benefits of the free market will recognize that laws or restraints will make it less “free,” but often they do not recognize that such interference is detrimental. Mainstream economics, in fact, has made a science of regulating the economy, tinkering with interest rates and squeezing the money supply to get a satisfactory reading of “utils.” Economists from the anarcho-libertarian camp, however, fiercely advocate complete laissez-faire capitalism and abhor the notion of interference, especially by government, which in their view only retards society.

They consign all activities of government to the free market, holding that unrestrained, anarchistic capitalism will govern with greater efficiency and with more moral justification than the state.

In an ideal society, where every man is guaranteed to use his faculties of rationality, then such a system might work. As long as the libertarian principles of nonaggression and property rights are JORDAN SCHNEIDER is a junior in the undergraduate program at Loyola University, New Orleans. She is studying print journalism and has a minor concentration in economics.

1In his survey on corporate social responsibility (CSR) in The Economist, Crook takes a libertarian stance in opposing legally mandated CSR and exposing it as an unnecessary nuisance that, if left unchecked, could begin to seriously injure the market.

102 — JOURNAL OF LIBERTARIAN STUDIES 21, NO 1 (SPRING 2007) upheld, society will run smoothly under anarcho-capitalism.

However, given man as he actually is, conflicts inevitably arise for which the market cannot provide just, objective resolution. Given this more realistic assumption, anarchism and capitalism must go their separate ways; the latter is justified, but not the former.

Capitalism is the system that allows the greatest sphere of freedom for the exercise of one’s natural rights. “It is a system where men can deal with one another, not as victims and executioners, nor as masters and slaves, but as traders, by free, voluntary exchange to mutual benefit” (Rand 1989, p. 4). Production and capitalism function to eliminate scarcity and elevate man above living as a beast. As an article in The Economist points out, “In the West today the poor live better lives than all but the nobility enjoyed throughout the course of modern history before capitalism” (Crook 2005, p. 10). The same article points out that direct foreign investment in the third world is “one of the best spurs to economic development.”2 Anarcho-capitalists base their unflagging faith in the market’s ability to solve problems on such findings and on the belief that the state is inherently evil. Famously, these anarchists cry out, “Show me my signature on the social contract!” They hold that the only system that will not violate rights is one that is completely voluntary, manifested in the completely free market. On the libertarian web forum LewRockwell.com, anarcho-capitalist Roderick T. Long offers a laundry list of libertarian objections to the state, including abuse of power issues, efficiency, and coercion.3 In order to discuss justice and the socio-economic system most conducive to it, the market or the state, we first have to talk about rights; which ones you have, where they come from, and how they can be violated. Then we must look at how those rights fare when the market is their guarantor in the absence of government.

The primary human right is the right to life, and it stems from the fact that humans live differently from animals. Philosopher Ayn Rand asserts that since man lives, his life is his moral standard, 2See also Hitting the Wall: Nike and International Labor Practices (Spar 2002, p.

10) reports that an Indonesian family of six “had used one daughter’s minimum wage from a Nike factory to purchase luxury items such as leather couches and a king sized bed.” 3LewRockwell.com. In his article, “Libertarian Anarchism: Responses to Ten Objections,” Long asserts that the government is an inefficient, coercive monopoly that answers to the rich and creates black markets and organized crime. He also claims that it is morally unjustified and lawless, since it never submits to a third party (Long 2004, p. 8).

CONTRA ANARCHO-CAPITALISM — 103 “which leads to the right to act by the guidance of this standard, i.e., the right to life” (Peikoff 1991, p. 354). Rand is in agreement with the founding fathers when she recognizes that the rights to liberty, property, and the pursuit of happiness are all logically derived from man’s primary, objective right to life. The tools man uses to survive— reason and rationality—entitle him to whatever rights are necessary for him to freely use these tools (liberty) and to keep what comes from their use (property). Rand has presented us with an objectively defined set of natural rights set within a “primacy of existence” philosophy: “If life on earth is his purpose, man has a right to live as a rational being” (ibid., p. 361). According to Randian philosophy, the ideal system in which individuals can pursue their self-interests and put their lives as their own ends is capitalism.

When considered in a social context, these natural rights as defined by Rand give rise to a concept of negative liberty. This liberty translates to rights of noninterference, or freedom of action, which means “freedom from physical compulsion, coercion, or interference by other men” (ibid., p. 355). Seventeenth century philosopher

Thomas Hobbes offers a picture of a world without negative liberty:

In such condition, there is no place for industry, because the fruit thereof is uncertain; and consequently no culture of the earth; no navigation nor use of the commodities that may be imported by sea... no knowledge of the face of the earth; no account of time; no arts; no letters; no society and, which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short. (Hobbes 2000)4 The rights derived from negative liberty can impose no obligation on others: “A right is not a claim to assistance or a guarantee of success” (Peikoff 1991, p. 355). Any sort of positive right will inevitably lead to the infringement of negative rights. The poor, for example, may have a natural right to life, but any positive right they have to money as a form of welfare is an infringement upon the negative rights of taxpayers to not have their property taken away. Rand, in fact, holds that welfare is actually a form of direst cruelty. For her, productiveness and egoism are cardinal virtues for man, and the highest moral purpose in his life self-betterment: “There is a particular type of life which is most rational, most free, and most valuable in itself. This is 4Hobbes argued that government takes away theoretical, absolute freedom, and replaces it with practical freedom. Without traffic laws, for instance, no one would have the practical freedom to go wherever they wanted to, but everyone would have the theoretical freedom to drive however he pleased.

104 — JOURNAL OF LIBERTARIAN STUDIES 21, NO 1 (SPRING 2007) the life of being ‘true to oneself’... by following one’s vision, taking control of, and full responsibility for, one’s life” (Wolff 1991, p. 31).

Welfare, she insists, undercuts this ability of poor people to live meaningful lives.

If all men are to be free to exercise their maximum levels of autonomy without interference, then anarchy would indeed seem to be the best social system. But anarchism as a social system is only acceptable if it maintains a semblance of order. Economist James M.

Buchanan asks:

What happens when mutual agreement on the boundaries of property does not exist? What if one person is disturbed by long-hairs while others choose to allow their hair to grow? Even for such an example, the anarchist utopia is threatened.... If there is even one person who thinks it appropriate to constrain others’ freedom to their own life-styles, no anarchistic order can survive in the strict sense of the term. (Buchanan 1975, p. 3) Any equilibrium attainable under anarchy is fragile, and history has yet to show that it works on a large scale. Even Long admits that his conception of order maintained under anarchy may “not [be] enough for a complex economy” (Long 2004, p. 5), rendering his examples involving wandering cows and bickering neighbors useless.

Anarchy places human society directly back into the state of nature. Loyola professor of economics Dr. William Barnett points to the lions of the Savannah to illustrate this point.

In a pride, young males invade and kill off the older, weaker, adult males. They mate with the lionesses and chase off the male cubs when they are old enough to wander on their own. The cubs wander until they are strong enough to return and take over the pride in the same, violent way.

Young males anywhere are rambunctious, and they are perfect grunts for someone who wants to make use of them to impose his will by force. Who is responsible for most of the violence in the Middle East and Africa? Who rules the inner city areas in the nearabsence of government? Young males.5 Such a rise of militarism in the absence or near-absence of government can be compared to the rise of Fascism from weak governments in Europe. Hitler was able to brush away the Weimar Republic with little opposition and Italian King Victor Emmanuel was powerless against the forces of Benito Mussolini when he marched on 5Allquotations by Dr. William Barnett are from an informal discussion on March 16, 2005.

CONTRA ANARCHO-CAPITALISM — 105 Rome. “Existentially, the chaos and destruction that anarchism encourages [or that reigns where government is weak] will make people turn to someone who promises order and security,” says Objectivist critic Peter Schwartz (1989, p. 325). Such an argument explains why Latin American countries, after being so loosely governed until the late nineteenth century, developed a tendency to welcome strong authoritarian government.

If there is to be peaceful coexistence among men, negative rights must be respected, and the guarantor of order must be some objectively defined enforcing agency; otherwise, societies would be physically and ethically incapable of opposing subjective philosophies imposed on them by strongmen or groups. Hobbes says, “Where there is no common [objective] power, there is no law: where no law, no injustice” (2000, p. 366). Without law based on objectively defined natural rights, no society can oppose the will to power of rogue tyrants, because one subjective ideology is no more meritorious than another. In the same way, no verdict issued from a private, businessinterested court can have more weight than any other. Only disinterested, objective law removed from the realm of whim—the market— can provide an adequate mechanism of justice. Under the anarchocapitalist system, this is impossible.

Libertarian philosophy is self-admittedly baseless: it has no ethics (which does not make it objective).

Values themselves, libertarian anarchists declare, are oppressive and hinder the natural right to “do your own thing.” Therefore they adhere only to two principles:

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