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<html>
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<head>
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<title>F.6 Is "anarcho"-capitalism against the state?
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</title>
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</head>
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<h1>F.6 Is "anarcho"-capitalism against the state?</h1>
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<p>
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No. Due to its basis in private property, "anarcho"-capitalism implies a
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class division of society into bosses and workers. Any such division
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will require a state to maintain it. However, it need not be the same
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state as exists now. Regarding this point, "anarcho"-capitalism plainly
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advocates "defence associations" to protect property. For the
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"anarcho"-capitalist these private companies are not states. For
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anarchists, they most definitely. As Bakunin put it, the
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state <i>"is authority, domination, and force, organised by the
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property-owning and so-called enlightened classes against the masses."</i>
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[<b>The Basic Bakunin</b>, p. 140] It goes without saying that
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"anarcho"-capitalism has a state in the anarchist sense.
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</p><p>
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According to Murray Rothbard [<b>Society Without A State</b>, p. 192],
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a state must have one or both of the following characteristics:
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</p><p><ol>
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1) The ability to tax those who live within it.<br>
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2) It asserts and usually obtains a coerced monopoly of the
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provision of defence over a given area.<br>
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</ol></p><p>
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He makes the same point elsewhere. [<b>The Ethics of Liberty</b>, p. 171]
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Significantly, he stresses that <i>"our definition of anarchism"</i> is a system
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which <i>"provides no legal sanction"</i> for aggression against person and property
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rather than, say, being against government or authority. [<b>Society without
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a State</b>, p. 206]
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</p><p>
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Instead of this, the "anarcho"-capitalist thinks that people should be
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able to select their own "defence companies" (which would provide the
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needed police) and courts from a free market in "defence" which would
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spring up after the state monopoly has been eliminated. These companies
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<i>"all . . . would have to abide by the basic law code,"</i> [<b>Op. Cit.</b>,
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p. 206] Thus a <i>"general libertarian law code"</i> would govern the
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actions of these companies. This "law code" would prohibit coercive
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aggression at the very least, although to do so it would have to specify
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what counted as legitimate property, how said can be owned and what
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actually constitutes aggression. Thus the law code would be quite
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extensive.
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</p><p>
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How is this law code to be actually specified? Would these laws be
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democratically decided? Would they reflect common usage (i.e. custom)?
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"Supply and demand"? "Natural law"? Given the strong dislike of
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democracy shown by "anarcho"-capitalists, we think we can safely say
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that some combination of the last two options would be used. Murray
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Rothbard argued for "Natural Law" and so the judges in his system would
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<i>"not [be] making the law but finding it on the basis of agreed-upon
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principles derived either from custom or reason."</i> [<b>Op. Cit.</b>,
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p. 206] David Friedman, on the other hand, argues that different defence
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firms would sell their own laws. [<b>The Machinery of Freedom</b>, p. 116]
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It is sometimes acknowledged that non-"libertarian" laws may be demanded
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(and supplied) in such a market although the obvious fact that the rich
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can afford to pay for more laws (either in quantity or in terms of being
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more expensive to enforce) is downplayed.
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</p><p>
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Around this system of "defence companies" is a free market in "arbitrators"
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and "appeal judges" to administer justice and the <i>"basic law code."</i> Rothbard
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believes that such a system would see <i>"arbitrators with the best reputation
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for efficiency and probity"</i> being <i>"chosen by the various parties in the
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market"</i> and <i>"will come to be given an increasing amount of business."</i>
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Judges <i>"will prosper on the market in proportion to their reputation for
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efficiency and impartiality."</i> [<b>Op. Cit.</b>, p. 199 and p. 204] Therefore,
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like any other company, arbitrators would strive for profits with the most
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successful ones would <i>"prosper"</i>, i.e. become wealthy. Such wealth would,
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of course, have no impact on the decisions of the judges, and if it did, the
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population (in theory) are free to select any other judge. Of course, the
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competing judges would <b>also</b> be striving for profits and wealth --
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which means the choice of character may be somewhat limited! -- and the laws
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which they were using to guide their judgements would be enforcing capitalist
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rights.
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</p><p>
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Whether or not this system would work as desired is discussed in the
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following sections. We think that it will not. Moreover, we will argue that
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"anarcho"-capitalist "defence companies" meet not only the criteria of
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statehood we outlined in <a href="secB2.html">section B.2</a>, but also
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Rothbard's own criteria for the state. As regards the anarchist criterion,
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it is clear that "defence companies" exist to defend private property; that
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they are hierarchical (in that they are capitalist companies which defend
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the power of those who employ them); that they are professional coercive
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bodies; and that they exercise a monopoly of force over a given area (the
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area, initially, being the property of the person or company who is
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employing the company). Not only that, as we discuss in
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<a href="secF6.html#secf64">section F.6.4</a> these "defence companies"
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also matches the right-libertarian and "anarcho"-capitalist definition of
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the state. For this (and other reasons), we should call the
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"anarcho"-capitalist defence firms "private states" -- that is what they
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are -- and "anarcho"-capitalism "private state" capitalism.
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</p>
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<a name="secf61"><h2>F.6.1 What's wrong with this "free market" justice?</h2></a>
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<p>
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It does not take much imagination to figure out whose interests prosperous
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arbitrators, judges and defence companies would defend: their own as well
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as those who pay their wages -- which is to say, other members of the rich
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elite. As the law exists to defend property, then it (by definition) exists
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to defend the power of capitalists against their workers. Rothbard argued
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that the <i>"judges"</i> would <i>"not [be] making the law but finding
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it on the basis of agreed-upon principles derived either from custom
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or reason."</i> [<b>Society without a State</b>, p. 206] However, this begs the
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question: <b>whose</b> reason? <b>whose</b> customs? Do individuals in different
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classes share the same customs? The same ideas of right and wrong? Would rich
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and poor desire the same from a <i>"basic law code"</i>? Obviously not. The
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rich would only support a code which defended their power over the poor.
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</p><p>
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Rothbard does not address this issue. He stated that "anarcho"-capitalism would
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involve <i>"taking the largely libertarian common law, and correcting it by the
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use of man's reason, before enshrining it as a permanently fixed libertarian
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law code."</i> [<i>"On Freedom and the Law"</i>, <b>New Individualist Review</b>, Winter 1962,
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p. 40] Needless to say, <i>"man"</i> does not exist -- it is an abstraction
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(and a distinctly collectivist one, we should note). There are only individual
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men and women and so individuals and <b>their</b> reason. By <i>"man's reason"</i>
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Rothbard meant, at best, the prejudices of those individuals with whom he agreed
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with or, at worse, his own value judgements. Needless to say, what is considered
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acceptable will vary from individual to individual and reflect their social position.
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Similarly, as Kropotkin stressed, "common law" does not develop in isolation of class
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struggles and so is a mishmash of customs genuinely required by social life and
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influences imposed by elites by means of state action. [<b>Anarchism</b>, pp. 204-6]
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This implies what should be <i>"corrected"</i> from the "common law" will also differ
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based on their class position and their general concepts of what is right and wrong.
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History is full of examples of lawyers, jurists and judges (not to mention states)
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<i>"correcting"</i> common law and social custom in favour of a propertarian
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perspective which, by strange co-incidence, favoured the capitalists and landlords,
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i.e. those of the same class as the politicians, lawyers, jurists and judges (see
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<a href="secF8.html">section F.8</a> for more details). We can imagine the results
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of similar "correcting" of common law by those deemed worthy by Rothbard and his
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followers of representing both "man" and "natural law."
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</p><p>
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Given these obvious points, it should come as no surprise that Rothbard solves
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this problem by explicitly excluding the general population from deciding which
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laws they will be subject to. As he put it, <i>"it would not be a very difficult
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task for Libertarian lawyers and jurists to arrive at a rational and objective
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code of libertarian legal principles and procedures . . . This code would then
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be followed and applied to specific cases by privately-competitive and free-market
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courts and judges, all of whom would be pledged to abide by the code."</i>
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[<i>"The Spooner-Tucker Doctrine: An Economist's View"</i>, pp. 5-15, <b>Journal of
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Libertarian Studies</b>, Vol. 20, No. 1, p. 7] By jurist Rothbard means a professional
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or an expert who studies, develops, applies or otherwise deals with the law, i.e. a
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lawyer or a judge. That is, law-making by privately-competitive judges and lawyers.
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And not only would the law be designed by experts, so would its interpretation:
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</p><p><blockquote>
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<i>"If legislation is replaced by such judge-made law fixity and certainty
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. . . will replace the capriciously changing edicts of statutory legislation.
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The body of judge-made law changes very slowly . . . decisions properly apply
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only to the particular case, judge-made law -- in contrast to legislation --
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permits a vast body of voluntary, freely-adapted rules, bargains, and arbitrations
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to proliferate as needed in society. The twin of the free market economy, then,
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is . . . a proliferation of voluntary rules interpreted and applied by experts
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in the law."</i> [<i>"On Freedom and the Law"</i>, <b>Op. Cit.</b> p. 38]
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</blockquote></p><p>
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In other words, as well as privatising the commons in land he also seeks to
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privatise "common law." This will be expropriated from the general population
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and turned over to wealthy judges and libertarian scholars to "correct" as they
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see fit. Within this mandatory legal regime, there would be "voluntary"
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interpretations yet it hardly taxes the imagination to see how economic
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inequality would shape any "bargains" made on it. So we have a legal system
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created and run by judges and jurists within which specific interpretations
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would be reached by "bargains" conducted between the rich and the poor. A
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fine liberation indeed!
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</p><p>
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So although only <i>"finding"</i> the law, the arbitrators and judges still exert
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an influence in the "justice" process, an influence not impartial or neutral.
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As the arbitrators themselves would be part of a profession, with specific
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companies developing within the market, it does not take a genius to realise
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that when <i>"interpreting"</i> the <i>"basic law code,"</i> such companies
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would hardly act against their own interests as companies. As we noted in
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<a href="secF3.html#secf32">section F.3.2</a>, the basic class interest of keeping the
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current property rights system going will still remain -- a situation which
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wealthy judges would be, to say the least, happy to see continue. In addition,
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if the "justice" system was based on "one dollar, one vote," the "law" would
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best defend those with the most "votes" (the question of market forces will
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be discussed in <a href="secF6.html#secf63">section F.6.3</a>). Moreover,
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even if "market forces" would ensure that "impartial" judges were dominant,
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all judges would be enforcing a <b>very</b> partial law code (namely one that
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defended <b>capitalist</b> property rights). Impartiality when enforcing partial
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laws hardly makes judgements less unfair.
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</p><p>
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Thus, due to these three pressures -- the interests of arbitrators/judges,
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the influence of money and the nature of the law -- the terms of "free
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agreements" under such a law system would be tilted in favour of lenders
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over debtors, landlords over tenants, employers over employees, and in
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general, the rich over the poor just as we have today. This is what one
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would expect in a system based on "unrestricted" property rights and a
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(capitalist) free market.
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</p><p>
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Some "anarcho"-capitalists, however, claim that just as cheaper cars were
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developed to meet demand, so cheaper defence associations and "people's
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arbitrators" would develop on the market for the working class. In this
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way impartiality will be ensured. This argument overlooks a few key points.
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</p><p>
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Firstly, the general "libertarian" law code would be applicable to <b>all</b>
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associations, so they would have to operate within a system determined
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by the power of money and of capital. The law code would reflect,
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therefore, property <b>not</b> labour and so "socialistic" law codes would
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be classed as "outlaw" ones. The options then facing working people
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is to select a firm which best enforced the <b>capitalist</b> law in their
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favour. And as noted above, the impartial enforcement of a biased law
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code will hardly ensure freedom or justice for all. This means that saying
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the possibility of competition from another judge would keep them honest
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becomes meaningless when they are all implementing the <b>same</b> capitalist
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law!
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</p><p>
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Secondly, in a race between a Jaguar and a Volkswagen Beetle, who is more
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likely to win? The rich would have "the best justice money can buy," even
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more than they do now. Members of the capitalist class would be able to select
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the firms with the best lawyers, best private cops and most resources. Those
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without the financial clout to purchase quality "justice" would simply be
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out of luck -- such is the "magic" of the marketplace.
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</p><p>
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Thirdly, because of the tendency toward concentration, centralisation,
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and oligopoly under capitalism (due to increasing capital costs for new
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firms entering the market, as discussed in <a href="secC4.html">section C.4</a>),
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a few companies would soon dominate the market -- with obvious implications for
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"justice." Different firms will have different resources and in a
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conflict between a small firm and a larger one, the smaller one is at a
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disadvantage. They may not be in a position to fight the larger company
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if it rejects arbitration and so may give in simply because, as the
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"anarcho"-capitalists so rightly point out, conflict and violence
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will push up a company's costs and so they would have to be avoided
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by smaller ones (it is ironic that the "anarcho"-capitalist implicitly
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assumes that every "defence company" is approximately of the same size, with
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the same resources behind it and in real life this would clearly <b>not</b> the
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case). Moreover, it seems likely that a Legal-Industrial complex would develop,
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with other companies buying shares in "defence" firms as well as companies
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which provide lawyers and judges (and vice versa). We would also expect
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mergers to develop as well as cross-ownership between companies, not to
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mention individual judges and security company owners and managers having
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shares in other capitalist firms. Even if the possibility that the companies
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providing security and "justice" have links with other capitalism firms is
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discounted then the fact remains that these firms would hardly be sympathetic
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to organisations and individuals seeking to change the system which makes
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them rich or, as property owners and bosses, seeking to challenge the powers
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associated with both particularly if the law is designed from a propertarian perspective.
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</p><p>
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Fourthly, it is <b>very</b> likely that many companies would make subscription to
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a specific "defence" firm or court a requirement of employment and residence. Just
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as today many (most?) workers have to sign no-union contracts (and face being
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fired if they change their minds), it does not take much imagination to see that
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the same could apply to "defence" firms and courts. This was/is the case
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in company towns (indeed, you can consider unions as a form of "defence"
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firm and these companies refused to recognise them). As the labour market
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is almost always a buyer's market, it is not enough to argue that workers
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can find a new job without this condition. They may not and so have to put
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up with this situation. And if (as seems likely) the laws and rules of the
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property-owner will take precedence in any conflict, then workers and tenants
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will be at a disadvantage no matter how "impartial" the judges.
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</p><p>
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Ironically, some "anarcho"-capitalists (like David Friedman) have pointed to
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company/union negotiations as an example of how different defence firms would
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work out their differences peacefully. Sadly for this argument, union rights
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under "actually existing capitalism" were hard fought for, often resulting
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in strikes which quickly became mini-wars as the capitalists used the full
261
might associated with their wealth to stop them getting a foothold or to
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destroy them if they had. In America the bosses usually had recourse to private
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defence firms like the Pinkertons to break unions and strikes. Since 1935 in
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America, union rights have been protected by the state in direct opposition to
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capitalist "freedom of contract." Before the law was changed (under pressure
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from below, in the face of business opposition and violence), unions were usually
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crushed by force -- the companies were better armed, had more resources and had
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the law on their side (Rothbard showed his grasp of American labour history by
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asserting that union <i>"restrictions and strikes"</i> were the <i>"result of
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government privilege, notably in the Wagner Act of 1935."</i> [<b>The Logic of
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Action II</b>, p. 194]). Since the 1980s and the advent of the free(r) market,
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we can see what happens to "peaceful negotiation" and "co-operation" between
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unions and companies when it is no longer required and when the resources of
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both sides are unequal. The market power of companies far exceeds those of the
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unions and the law, by definition, favours the companies. As an example
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of how competing "protection agencies" will work in an "anarcho"-capitalist
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society, it is far more insightful than originally intended!
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</p><p>
279
Now let us consider Rothbard's <i>"basic law code"</i> itself. For Rothbard,
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the laws in the <i>"general libertarian law code"</i> would be unchangeable,
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selected by those considered as "the voice of nature" (with obvious
282
authoritarian implications). David Friedman, in contrast, argues that as well
283
as a market in defence companies, there will also be a market in laws and
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rights. However, there will be extensive market pressure to unify these
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differing law codes into one standard one (imagine what would happen if ever
286
CD manufacturer created a unique CD player, or every computer manufacturer
287
different sized floppy-disk drivers -- little wonder, then, that over time
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companies standardise their products). Friedman himself acknowledges that this
289
process is likely (and uses the example of standard paper sizes to illustrate
290
it). Which suggests that competition would be meaningless as <b>all</b> firms
291
would be enforcing the same (capitalist) law.
292
</p><p>
293
In any event, the laws would not be decided on the basis of "one person, one
294
vote"; hence, as market forces worked their magic, the "general" law code
295
would reflect vested interests and so be very hard to change. As rights and
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laws would be a commodity like everything else in capitalism, they would soon
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reflect the interests of the rich -- particularly if those interpreting the
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law are wealthy professionals and companies with vested interests of their
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own. Little wonder that the individualist anarchists proposed "trial by jury"
300
as the only basis for real justice in a free society. For, unlike professional
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"arbitrators," juries are ad hoc, made up of ordinary people and do not
302
reflect power, authority, or the influence of wealth. And by being able
303
to judge the law as well as a conflict, they can ensure a populist revision
304
of laws as society progresses.
305
</p><p>
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Rothbard, unsurprisingly, is at pains to dismiss the individualist anarchist
307
idea of juries judging the law as well as the facts, stating it would give each
308
free-market jury <i>"totally free rein over judicial decisions"</i> and this
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<i>"could not be expected to arrive at just or even libertarian decisions."</i>
310
[<i>"The Spooner-Tucker Doctrine: An Economist's View"</i>, <b>Op. Cit.</b>, p.7]
311
However, the opposite is the case as juries made up of ordinary people will be
312
more likely to reach just decisions which place genuinely libertarian positions
313
above a law dedicated to maintaining capitalist property and power. History is
314
full of examples of juries acquitting people for so-called crimes against property
315
which are the result of dire need or simply reflect class injustice. For example,
316
during the Great Depression unemployed miners in Pennsylvania <i>"dug small mines
317
on company property, mined coal, trucked it to cities and sold it below the
318
commercial rate. By 1934, 5 million tons of this 'bootleg' coal were produced
319
by twenty thousand men using four thousand vehicles. When attempts were made to
320
prosecute, local juries would not convict, local jailers would not imprison."</i>
321
[Howard Zinn, <b>A People's History of the United States</b>, pp. 385-6] It is
322
precisely this outcome which causes Rothbard to reject that system.
323
</p><p>
324
Thus Rothbard postulated a <b>judge</b> directed system of laws in stark contrast
325
to individualist anarchism's <b>jury</b> directed system. It is understandable
326
that Rothbard would seek to replace juries with judges, it is the only way he
327
can exclude the general population from having a say in the laws they are
328
subjected to. Juries allow the general public to judge the law as well as any
329
crime and so this would allow those aspects "corrected" by right-"libertarians"
330
to seep back into the "common law" and so make private property and power
331
accountable to the general public rather than vice versa. Moreover, concepts
332
of right and wrong evolve over time and in line with changes in socio-economic
333
conditions. To have a "common law" which is unchanging means that social evolution
334
is considered to have stopped when Murray Rothbard decided to call his ideology
335
"anarcho"-capitalism.
336
</p><p>
337
In a genuinely libertarian system, social customs (common law) would evolve
338
based on what the general population thought was right and wrong based on
339
changing social institutions and relationships between individuals. That is
340
why ruling classes have always sought to replace it with state determined
341
and enforced laws. Changing social norms and institutions can be seen from
342
property. As Proudhon noted, property <i>"changed its nature"</i> over time.
343
Originally, <i>"the word <b>property</b> was synonymous with . . .
344
<b>individual possession</b>"</i> but it became more <i>"complex"</i> and
345
turned into <b>private property</b> -- <i>"the right to use it by his
346
neighbour's labour."</i> [<b>What is Property?</b>, p. 395] The changing
347
nature of property created relations of domination and exploitation between
348
people absent before. For the capitalist, however, both the tools of the
349
self-employed artisan and the capital of a transnational corporation are
350
both forms of "property" and so basically identical. Changing social
351
relations impact on society and the individuals who make it up. This
352
would be reflected in any genuinely libertarian society, something
353
right-"libertarians" are aware of. They, therefore, seek to freeze the
354
rights framework and legal system to protect institutions, like property,
355
no matter how they evolve and come to replace whatever freedom enhancing
356
features they had with oppression. Hence we find Rothbard's mentor, Ludwig
357
von Mises asserting that <i>"[t]here may possibly be a difference of opinion
358
about whether a particular institution is socially beneficial or harmful.
359
But once it has been judged [by whom?] beneficial, one can no longer
360
contend that, for some inexplicable reason, it must be condemned as
361
immoral."</i> [<b>Liberalism</b>, p. 34] Rothbard's system is designed to
362
ensure that the general population cannot judge whether a particular
363
institution has changed is social impact. Thus a system of "defence" on
364
the capitalist market will continue to reflect the influence and power of
365
property owners and wealth and not be subject to popular control beyond
366
choosing between companies to enforce the capitalist laws.
367
</p><p>
368
Ultimately, such an "anarcho"-capitalist system would be based on simple
369
absolute principles decided in advance by a small group of ideological
370
leaders. We are then expected to live with the consequences as best we
371
can. If people end up in a worse condition than before then that is
372
irrelevant as that we have enforced the eternal principles they have
373
proclaimed as being in our best interests.
374
</p>
375
376
<a name="secf62"><h2>F.6.2 What are the social consequences of such a system?</h2></a>
377
378
<p>
379
The "anarcho" capitalist imagines that there will be police agencies,
380
"defence associations," courts, and appeals courts all organised on a
381
free-market basis and available for hire. As David Wieck points out,
382
however, the major problem with such a system would not be the corruption
383
of "private" courts and police forces (although, as suggested above, this
384
could indeed be a problem):
385
</p><p><blockquote>
386
<i>"There is something more serious than the 'Mafia danger', and this other
387
problem concerns the role of such 'defence' institutions in a given social
388
and economic context.
389
</p><p>
390
"[The] context . . . is one of a free-market economy with no restraints
391
upon accumulation of property. Now, we had an American experience,
392
roughly from the end of the Civil War to the 1930's, in what were in
393
effect private courts, private police, indeed private governments. We
394
had the experience of the (private) Pinkerton police which, by its spies,
395
by its <b>agents provocateurs,</b> and by methods that included violence and
396
kidnapping, was one of the most powerful tools of large corporations
397
and an instrument of oppression of working people. We had the experience
398
as well of the police forces established to the same end, within
399
corporations, by numerous companies . . . (The automobile companies
400
drew upon additional covert instruments of a private nature, usually
401
termed vigilante, such as the Black Legion). These were, in effect,
402
private armies, and were sometimes described as such. The territories
403
owned by coal companies, which frequently included entire towns and their
404
environs, the stores the miners were obliged by economic coercion to
405
patronise, the houses they lived in, were commonly policed by the private
406
police of the United States Steel Corporation or whatever company owned
407
the properties. The chief practical function of these police was, of
408
course, to prevent labour organisation and preserve a certain balance of
409
'bargaining.' . . . These complexes were a law unto themselves, powerful
410
enough to ignore, when they did not purchase, the governments of various
411
jurisdictions of the American federal system. This industrial system was,
412
at the time, often characterised as feudalism."</i> [<b>Anarchist Justice</b>,
413
pp. 223-224]
414
</blockquote></p><p>
415
For a description of the weaponry and activities of these private armies,
416
the Marxist economic historian Maurice Dobb presents an excellent summary in
417
<b>Studies in Capitalist Development</b>. [pp. 353-357] According to a report on
418
<i>"Private Police Systems"</i> quoted by Dobb, in a town dominated by Republican
419
Steel the <i>"civil liberties and the rights of labour were suppressed by
420
company police. Union organisers were driven out of town."</i> Company towns
421
had their own (company-run) money, stores, houses and jails and many
422
corporations had machine-guns and tear-gas along with the usual shot-guns,
423
rifles and revolvers. The <i>"usurpation of police powers by privately paid
424
'guards and 'deputies', often hired from detective agencies, many with
425
criminal records"</i> was <i>"a general practice in many parts of the country."</i>
426
</p><p>
427
The local (state-run) law enforcement agencies turned a blind-eye to what
428
was going on (after all, the workers <b>had</b> broken their contracts and
429
so were "criminal aggressors" against the companies) even when union
430
members and strikers were beaten and killed. The workers own defence
431
organisations (unions) were the only ones willing to help them, and if the
432
workers seemed to be winning then troops were called in to "restore the peace"
433
(as happened in the Ludlow strike, when strikers originally cheered
434
the troops as they thought they would defend them; needless to say, they
435
were wrong).
436
</p><p>
437
Here we have a society which is claimed by many "anarcho"-capitalists
438
as one of the closest examples to their "ideal," with limited state
439
intervention, free reign for property owners, etc. What happened? The
440
rich reduced the working class to a serf-like existence, capitalist
441
production undermined independent producers (much to the annoyance of
442
individualist anarchists at the time), and the result was the emergence
443
of the corporate America that "anarcho"-capitalists (sometimes) say they
444
oppose.
445
</p><p>
446
Are we to expect that "anarcho"-capitalism will be different? That, unlike
447
before, "defence" firms will intervene on behalf of strikers? Given that
448
the <i>"general libertarian law code"</i> will be enforcing capitalist property
449
rights, workers will be in exactly the same situation as they were then.
450
Support of strikers violating property rights would be a violation of
451
the law and be costly for profit making firms to do (if not dangerous as
452
they could be "outlawed" by the rest). This suggests that "anarcho"-capitalism
453
will extend extensive rights and powers to bosses, but few if any rights to
454
rebellious workers. And this difference in power is enshrined within the
455
fundamental institutions of the system. This can easily be seen from Rothbard's
456
numerous anti-union tirades and his obvious hatred of them, strikes and pickets
457
(which he habitually labelled as violent). As such it is not surprising to
458
discover that Rothbard complained in the 1960s that, because of the Wagner Act,
459
the American police <i>"commonly remain 'neutral' when strike-breakers are
460
molested or else blame the strike-breakers for 'provoking' the attacks on them
461
. . . When unions are permitted to resort to violence, the state or other
462
enforcing agency has implicitly delegated this power to the unions. The
463
unions, then, have become 'private states.'"</i> [<b>The Logic of Action II</b>,
464
p. 41] The role of the police was to back the property owner against
465
their rebel workers, in other words, and the state was failing to provide the
466
appropriate service (of course, that bosses exercising power over workers provoked
467
the strike is irrelevant, while private police attacking picket lines is purely a
468
form of "defensive" violence and is, likewise, of no concern).
469
</p><p>
470
In evaluating "anarcho"-capitalism's claim to be a form of anarchism,
471
Peter Marshall notes that <i>"private protection agencies would merely serve
472
the interests of their paymasters."</i> [<b>Demanding the Impossible</b>, p. 653]
473
With the increase of private "defence associations" under "really existing
474
capitalism" today (associations that many "anarcho"-capitalists point to
475
as examples of their ideas), we see a vindication of Marshall's claim.
476
There have been many documented experiences of protesters being badly
477
beaten by private security guards. As far as market theory goes, the
478
companies are only supplying what the buyer is demanding. The rights of
479
others are <b>not a factor</b> (yet more "externalities," obviously). Even
480
if the victims successfully sue the company, the message is clear --
481
social activism can seriously damage your health. With a reversion
482
to <i>"a general libertarian law code"</i> enforced by private companies,
483
this form of "defence" of "absolute" property rights can only increase,
484
perhaps to the levels previously attained in the heyday of US capitalism,
485
as described above by Wieck.
486
</p>
487
488
<a name="secf63"><h2>F.6.3 But surely market forces will stop abuses by the rich?</h2></a>
489
490
<p>
491
Unlikely. The rise of corporations within America indicates exactly how a
492
<i>"general libertarian law code"</i> would reflect the interests of the rich and
493
powerful. The laws recognising corporations as "legal persons" were <b>not</b>
494
primarily a product of "the state" but of private lawyers hired by the
495
rich. As Howard Zinn notes:
496
</p><p><blockquote>
497
<i>"the American Bar Association, organised by lawyers accustomed to
498
serving the wealthy, began a national campaign of education to reverse
499
the [Supreme] Court decision [that companies could not be considered as
500
a person]. . . . By 1886, they succeeded . . . the Supreme Court had
501
accepted the argument that corporations were 'persons' and their money
502
was property protected by the process clause of the Fourteenth Amendment
503
. . . The justices of the Supreme Court were not simply interpreters of
504
the Constitution. They were men of certain backgrounds, of certain [class]
505
interests."</i> [<b>A People's History of the United States</b>, p. 255]
506
</p><p></blockquote>
507
Of course it will be argued that the Supreme Court is chosen by the government
508
and is a state enforced monopoly and so our analysis is flawed. Yet this is not
509
the case. As Rothbard made clear, the <i>"general libertarian law code"</i>
510
would be created by lawyers and jurists and everyone would be expected to
511
obey it. Why expect <b>these</b> lawyers and jurists to be any less class conscious
512
then those in the 19th century? If the Supreme Court <i>"was doing its bit
513
for the ruling elite"</i> then why would those creating the law system be
514
any different? <i>"How could it be neutral between rich and poor,"</i> argues
515
Zinn, <i>"when its members were often former wealthy lawyers, and almost
516
always came from the upper class?"</i> [<b>Op. Cit.</b>, p. 254] Moreover,
517
the corporate laws came about because there was a demand for them. That
518
demand would still have existed in "anarcho"-capitalism. Now, while
519
there may nor be a Supreme Court, Rothbard does maintain that <i>"the basic
520
Law Code . . . would have to be agreed upon by all the judicial agencies"</i>
521
but he maintains that this <i>"would imply no unified legal system"</i>! Even
522
though <i>"[a]ny agencies that transgressed the basic libertarian law
523
code would be open outlaws"</i> and soon crushed this is <b>not</b>, apparently,
524
a monopoly. [<b>The Ethics of Liberty</b>, p. 234] So, you either agree to
525
the law code or you go out of business. And that is <b>not</b> a monopoly!
526
Therefore, we think, our comments on the Supreme Court are valid (see also
527
<a href="secF7.html#secf72">section F.7.2</a>).
528
</p><p>
529
If all the available defence firms enforce the same laws, then it can
530
hardly be called "competitive"! And if this is the case (and it is)
531
<i>"when private wealth is uncontrolled, then a police-judicial complex
532
enjoying a clientele of wealthy corporations whose motto is self-interest
533
is hardly an innocuous social force controllable by the possibility of
534
forming or affiliating with competing 'companies.'"</i> [Wieck, <b>Op. Cit.</b>,
535
p. 225] This is particularly true if these companies are themselves Big Business
536
and so have a large impact on the laws they are enforcing. If the law
537
code recognises and protects capitalist power, property and wealth as
538
fundamental <b>any</b> attempt to change this is "initiation of force" and
539
so the power of the rich is written into the system from the start!
540
</p><p>
541
(And, we must add, if there is a general libertarian law code to which
542
all must subscribe, where does that put customer demand? If people demand
543
a non-libertarian law code, will defence firms refuse to supply it? If so,
544
will not new firms, looking for profit, spring up that will supply what
545
is being demanded? And will that not put them in direct conflict with the
546
existing, pro-general law code ones? And will a market in law codes not
547
just reflect economic power and wealth? David Friedman, who is for a market
548
in law codes, argues that <i>"[i]f almost everyone believes strongly that
549
heroin addiction is so horrible that it should not be permitted anywhere
550
under any circumstances anarcho-capitalist institutions will produce laws
551
against heroin. Laws are being produced on the market, and that is what the
552
market wants."</i> And he adds that <i>"market demands are in dollars, not votes.
553
The legality of heroin will be determined, not by how many are for or against
554
but how high a cost each side is willing to bear in order to get its way."</i>
555
[<b>The Machinery of Freedom</b>, p. 127] And, as the market is less than equal
556
in terms of income and wealth, such a position will mean that the capitalist
557
class will have a higher effective demand than the working class and more
558
resources to pay for any conflicts that arise. Thus any law codes that
559
develop will tend to reflect the interests of the wealthy.)
560
</p><p>
561
Which brings us nicely on to the next problem regarding market forces.
562
</p><p>
563
As well as the obvious influence of economic interests and differences
564
in wealth, another problem faces the "free market" justice of
565
"anarcho"-capitalism. This is the <i>"general libertarian law code"</i> itself.
566
Even if we assume that the system actually works like it should in theory,
567
the simple fact remains that these "defence companies" are enforcing laws
568
which explicitly defend capitalist property (and so social relations).
569
Capitalists own the means of production upon which they hire wage-labourers
570
to work and this is an inequality established <b>prior</b> to any specific
571
transaction in the labour market. This inequality reflects itself in
572
terms of differences in power within (and outside) the company and
573
in the "law code" of "anarcho"-capitalism which protects that power
574
against the dispossessed.
575
</p><p>
576
In other words, the law code within which the defence companies work
577
assumes that capitalist property is legitimate and that force can
578
legitimately be used to defend it. This means that, in effect,
579
"anarcho"-capitalism is based on a monopoly of law, a monopoly which
580
explicitly exists to defend the power and capital of the wealthy.
581
The major difference is that the agencies used to protect that
582
wealth will be in a weaker position to act independently of their
583
pay-masters. Unlike the state, the "defence" firm is not remotely
584
accountable to the general population and cannot be used to equalise
585
even slightly the power relationships between worker and capitalist (as
586
the state has, on occasion done, due to public pressure and to preserve
587
the system as a whole). And, needless to say, it is very likely that the
588
private police forces <b>will</b> give preferential treatment to
589
their wealthier customers (which business does not?) and that the law
590
code will reflect the interests of the wealthier sectors of society
591
(particularly if prosperous judges administer that code) in reality,
592
even if not in theory. Since, in capitalist practice, "the customer
593
is always right," the best-paying customers will get their way in
594
"anarcho"-capitalist society.
595
</p><p>
596
For example, in chapter 29 of <b>The Machinery of Freedom</b>, David Friedman
597
presents an example of how a clash of different law codes could be resolved
598
by a bargaining process (the law in question is the death penalty). This
599
process would involve one defence firm giving a sum of money to the other
600
for them accepting the appropriate (anti/pro capital punishment) court.
601
Friedman claims that <i>"[a]s in any good trade, everyone gains"</i> but this
602
is obviously not true. Assuming the anti-capital punishment defence firm
603
pays the pro one to accept an anti-capital punishment court, then, yes,
604
both defence firms have made money and so are happy, so are the anti-capital
605
punishment consumers but the pro-death penalty customers have only (perhaps)
606
received a cut in their bills. Their desire to see criminals hanged (for
607
whatever reason) has been ignored (if they were not in favour of the
608
death penalty, they would not have subscribed to that company). Friedman
609
claims that the deal, by allowing the anti-death penalty firm to cut its
610
costs, will ensure that it <i>"keep its customers and even get more"</i> but
611
this is just an assumption. It is just as likely to loose customers to a
612
defence firm that refuses to compromise (and has the resources to back it
613
up). Friedman's assumption that lower costs will automatically win over
614
people's passions is unfounded as is the assumption that both firms have
615
equal resources and bargaining power. If the pro-capital punishment firm
616
demands more than the anti can provide and has larger weaponry and troops,
617
then the anti defence firm may have to agree to let the pro one have its
618
way. So, all in all, it is <b>not</b> clear that <i>"everyone gains"</i> --
619
there may be a sizeable percentage of those involved who do not "gain" as
620
their desire for capital punishment is traded away by those who claimed
621
they would enforce it. This may, in turn, produce a demand for defence
622
firms which do <b>not</b> compromise with obvious implications for public
623
peace.
624
</p><p>
625
In other words, a system of competing law codes and privatised rights
626
does not ensure that <b>all</b> individual interests are meet. Given unequal
627
resources within society, it is clear that the "effective demand"
628
of the parties involved to see their law codes enforced is drastically
629
different. The wealthy head of a transnational corporation will have far
630
more resources available to him to pay for <b>his</b> laws to be enforced than
631
one of his employees on the assembly line. Moreover, as we noted in
632
<a href="secF3.html#secf31">section F.3.1</a>, the labour market is usually skewed in favour of capitalists.
633
This means that workers have to compromise to get work and such compromises
634
may involve agreeing to join a specific "defence" firm or not join one
635
at all (just as workers are often forced to sign non-union contracts
636
today in order to get work). In other words, a privatised law system
637
is very likely to skew the enforcement of laws in line with the skewing
638
of income and wealth in society. At the very least, unlike every other
639
market, the customer is <b>not</b> guaranteed to get exactly what they demand
640
simply because the product they "consume" is dependent on others within
641
the same market to ensure its supply. The unique workings of the
642
law/defence market are such as to deny customer choice (we will
643
discuss other aspects of this unique market shortly). Wieck summed by
644
pointing out the obvious:
645
</p><p><blockquote>
646
<i>"any judicial system is going to exist in the
647
context of economic institutions. If there are gross inequalities of
648
power in the economic and social domains, one has to imagine society as
649
strangely compartmentalised in order to believe that those inequalities
650
will fail to reflect themselves in the judicial and legal domain, and that
651
the economically powerful will be unable to manipulate the legal and
652
judicial system to their advantage. To abstract from such influences of
653
context, and then consider the merits of an abstract judicial system. . .
654
is to follow a method that is not likely to take us far. This, by the
655
way, is a criticism that applies. . .to any theory that relies on a rule
656
of law to override the tendencies inherent in a given social and economic
657
system"</i> [<b>Op. Cit.</b>, p. 225]
658
</blockquote></p><p>
659
There is another reason why "market forces" will not stop abuse by the rich,
660
or indeed stop the system from turning from private to public statism. This
661
is due to the nature of the "defence" market (for a similar analysis of
662
the "defence" market see right-"libertarian" economist Tyler Cowen's <i>"Law
663
as a Public Good: The Economics of Anarchy"</i> [<b>Economics and Philosophy</b>,
664
no. 8 (1992), pp. 249-267] and <i>"Rejoinder to David Friedman on the Economics of
665
Anarchy"</i> [<b>Economics and Philosophy</b>, no. 10 (1994), pp. 329-332]). In
666
"anarcho"-capitalist theory it is assumed that the competing "defence companies"
667
have a vested interest in peacefully settling differences between themselves by
668
means of arbitration. In order to be competitive on the market, companies will
669
have to co-operate via contractual relations otherwise the higher price associated
670
with conflict will make the company uncompetitive and it will go under. Those
671
companies that ignore decisions made in arbitration would be outlawed by others,
672
ostracised and their rulings ignored. By this process, it is argued, a system of
673
competing "defence" companies will be stable and not turn into a civil war
674
between agencies with each enforcing the interests of their clients against
675
others by force.
676
</p><p>
677
However, there is a catch. Unlike every other market, the businesses in
678
competition in the "defence" industry <b>must</b> co-operate with its fellows
679
in order to provide its services for its customers. They need to be able
680
to agree to courts and judges, agree to abide by decisions and law codes
681
and so forth. In economics there are other, more accurate, terms to
682
describe co-operative activity between companies: collusion and cartels.
683
These are when companies in a specific market agree to work together
684
(co-operate) to restrict competition and reap the benefits of monopoly
685
power by working to achieve the same ends in partnership with each other.
686
By stressing the co-operative nature of the "defence" market, "anarcho"-capitalists
687
are implicitly acknowledging that collusion is built into the system.
688
The necessary contractual relations between agencies in the "protection"
689
market require that firms co-operate and, by so doing, to behave (effectively)
690
as one large firm (and so resemble a normal state even more than they
691
already do). Quoting Adam Smith seems appropriate here: <i>"People
692
of the same trade seldom meet together, even for merriment and
693
diversion, but the conversation ends in a conspiracy against the
694
public, or in some contrivance to raise prices."</i> [<b>The Wealth of
695
Nations</b>, p. 117] Having a market based on people of the same trade
696
co-operating seems, therefore, an unwise move.
697
</p><p>
698
For example, when buying food it does not matter whether the supermarkets
699
visited have good relations with each other. The goods bought are independent
700
of the relationships that exist between competing companies. However, in the
701
case of private states this is <b>not</b> the case. If a specific "defence"
702
company has bad relationships with other companies in the market then it is
703
against a customer's self-interest to subscribe to it. Why subscribe to a
704
private state if its judgements are ignored by the others and it has to resort
705
to violence to be heard? This, as well as being potentially dangerous, will
706
also push up the prices that have to be paid. Arbitration is one of the most
707
important services a defence firm can offer its customers and its market share
708
is based upon being able to settle interagency disputes without risk of war or
709
uncertainty that the final outcome will not be accepted by all parties. Lose
710
that and a company will lose market share.
711
</p><p>
712
Therefore, the market set-up within the "anarcho"-capitalist "defence" market
713
is such that private states <b>have to co-operate</b> with the others (or go out
714
of business fast) and this means collusion can take place. In other words,
715
a system of private states will have to agree to work together in order to
716
provide the service of "law enforcement" to their customers and the result
717
of such co-operation is to create a cartel. However, unlike cartels in other
718
industries, the "defence" cartel will be a stable body simply because its
719
members <b>have</b> to work with their competitors in order to survive.
720
</p><p>
721
Let us look at what would happen after such a cartel is formed in a specific
722
area and a new "defence company" desired to enter the market. This new
723
company will have to work with the members of the cartel in order to provide
724
its services to its customers (note that "anarcho"-capitalists already
725
assume that they <i>"will have to"</i> subscribe to the same law code). If the
726
new defence firm tries to under-cut the cartel's monopoly prices, the other
727
companies would refuse to work with it. Having to face constant conflict or
728
the possibility of conflict, seeing its decisions being ignored by other
729
agencies and being uncertain what the results of a dispute would be, few
730
would patronise the new "defence company." The new company's prices would
731
go up and it would soon face either folding or joining the cartel. Unlike
732
every other market, if a "defence company" does not have friendly, co-operative
733
relations with other firms in the same industry then it will go out of business.
734
</p><p>
735
This means that the firms that are co-operating have simply to agree not to
736
deal with new firms which are attempting to undermine the cartel in order
737
for them to fail. A "cartel busting" firm goes out of business in the same
738
way an outlaw one does -- the higher costs associated with having to solve
739
all its conflicts by force, not arbitration, increases its production
740
costs much higher than the competitors and the firm faces insurmountable
741
difficulties selling its products at a profit (ignoring any drop of
742
demand due to fears of conflict by actual and potential customers).
743
Even if we assume that many people will happily join the new firm in spite
744
of the dangers to protect themselves against the cartel and its taxation
745
(i.e. monopoly profits), enough will remain members of the cartel so that
746
co-operation will still be needed and conflict unprofitable and dangerous
747
(and as the cartel will have more resources than the new firm, it could
748
usually hold out longer than the new firm could). In effect, breaking the
749
cartel may take the form of an armed revolution -- as it would with any state.
750
</p><p>
751
The forces that break up cartels and monopolies in other industries (such as
752
free entry -- although, of course the "defence" market will be subject to
753
oligopolistic tendencies as any other and this will create barriers to entry)
754
do not work here and so new firms have to co-operate or loose market share
755
and/or profits. This means that "defence companies" will reap monopoly
756
profits and, more importantly, have a monopoly of force over a given area.
757
</p><p>
758
It is also likely that a multitude of cartels would develop, with a given
759
cartel operating in a given locality. This is because law enforcement
760
would be localised in given areas as most crime occurs where the criminal
761
lives (few criminals would live in Glasgow and commit crimes in Paris).
762
However, as defence companies have to co-operate to provide their services,
763
so would the cartels. Few people live all their lives in one area and so
764
firms from different cartels would come into contact, so forming a
765
cartel of cartels. This cartel of cartels may (perhaps) be less powerful
766
than a local cartel, but it would still be required and for exactly the same
767
reasons a local one is. Therefore "anarcho"-capitalism would, like "actually
768
existing capitalism," be marked by a series of public states covering given
769
areas, co-ordinated by larger states at higher levels. Such a set up would
770
parallel the United States in many ways except it would be run directly by
771
wealthy shareholders without the sham of "democratic" elections. Moreover,
772
as in the USA and other states there will still be a monopoly of rules and
773
laws (the <i>"general libertarian law code"</i>).
774
</p><p>
775
Hence a monopoly of private states will develop in addition to the existing
776
monopoly of law and this is a de facto monopoly of force over a given
777
area (i.e. some kind of public state run by share holders). New companies
778
attempting to enter the "defence" industry will have to work with the
779
existing cartel in order to provide the services it offers to its customers.
780
The cartel is in a dominant position and new entries into the market either
781
become part of it or fail. This is exactly the position with the state,
782
with "private agencies" free to operate as long as they work to the state's
783
guidelines. As with the monopolist <i>"general libertarian law code"</i>, if
784
you do not toe the line, you go out of business fast.
785
</p><p>
786
"Anarcho"-capitalists claim that this will not occur, but that the
787
co-operation needed to provide the service of law enforcement will somehow
788
<b>not</b> turn into collusion between companies. However, they are quick to
789
argue that renegade "agencies" (for example, the so-called "Mafia
790
problem" or those who reject judgements) will go out of business because
791
of the higher costs associated with conflict and not arbitration. Yet
792
these higher costs are ensured because the firms in question do not
793
co-operate with others. If other agencies boycott a firm but co-operate with
794
all the others, then the boycotted firm will be at the same disadvantage
795
-- regardless of whether it is a cartel buster or a renegade. So the
796
"anarcho"-capitalist is trying to have it both ways. If the punishment
797
of non-conforming firms cannot occur, then "anarcho"-capitalism will turn
798
into a war of all against all or, at the very least, the service of social
799
peace and law enforcement cannot be provided. If firms cannot deter others
800
from disrupting the social peace (one service the firm provides) then
801
"anarcho"-capitalism is not stable and will not remain orderly as agencies
802
develop which favour the interests of their own customers and enforce their
803
own law codes at the expense of others. If collusion cannot occur (or is
804
too costly) then neither can the punishment of non-conforming firms and
805
"anarcho"-capitalism will prove to be unstable.
806
</p><p>
807
So, to sum up, the "defence" market of private states has powerful forces
808
within it to turn it into a monopoly of force over a given area. From a
809
privately chosen monopoly of force over a specific (privately owned) area,
810
the market of private states will turn into a monopoly of force over a
811
general area. This is due to the need for peaceful relations between
812
companies, relations which are required for a firm to secure market
813
share. The unique market forces that exist within this market ensure
814
collusion and the system of private states will become a cartel and so a
815
public state - unaccountable to all but its shareholders, a state of the
816
wealthy, by the wealthy, for the wealthy.
817
</p>
818
819
<a name="secf64"><h2>F.6.4 Why are these "defence associations" states?</h2></a>
820
821
<p>
822
It is clear that "anarcho"-capitalist defence associations meet the criteria of
823
statehood outlined in section B.2 (<a href="secB2.html">"Why are anarchists
824
against the state"</a>). They defend property and preserve authority
825
relationships, they practice coercion, and are hierarchical institutions
826
which govern those under them on behalf of a "ruling elite," i.e. those who
827
employ both the governing forces and those they govern. Thus, from an anarchist
828
perspective, these "defence associations" are most definitely states.
829
</p><p>
830
What is interesting, however, is that by their own definitions a very
831
good case can be made that these "defence associations" are states
832
in the "anarcho"-capitalist sense too. Capitalist apologists usually
833
define a "government" (or state) as something which has a monopoly of force
834
and coercion within a given area. Relative to the rest of the society,
835
these defence associations would have a monopoly of force and coercion
836
of a given piece of property: thus, by the "anarcho"-capitalists'
837
<b>own definition</b> of statehood, these associations would qualify!
838
</p><p>
839
If we look at Rothbard's definition of statehood, which requires (a) the
840
power to tax and/or (b) a <i>"coerced monopoly of the provision of defence
841
over a given area"</i>, "anarcho"-capitalism runs into trouble.
842
</p><p>
843
In the first place, the costs of hiring defence associations will be
844
deducted from the wealth created by those who use, but do not own, the
845
property of capitalists and landlords. Let us not forget that a capitalist
846
will only employ a worker or rent out land and housing if they make a
847
profit from so doing. Without the labour of the worker, there would be
848
nothing to sell and no wages to pay for rent and so a company's or
849
landlord's "defence" firm will be paid from the revenue gathered from
850
the capitalists power to extract a tribute from those who use, but do
851
not own, a property. In other words, workers would pay for the agencies
852
that enforce their employers' authority over them via the wage system
853
and rent -- taxation in a more insidious form.
854
</p><p>
855
In the second, under capitalism most people spend a large part of their
856
day on other people's property -- that is, they work for capitalists
857
and/or live in rented accommodation. Hence if property owners select a
858
"defence association" to protect their factories, farms, rental housing,
859
etc., their employees and tenants will view it as a <i>"coerced monopoly of
860
the provision of defence over a given area."</i> For certainly the employees
861
and tenants will not be able to hire their own defence companies to
862
expropriate the capitalists and landlords. So, from the standpoint of
863
the employees and tenants, the owners do have a monopoly of "defence"
864
over the areas in question. Of course, the "anarcho"-capitalist will
865
argue that the tenants and workers "consent" to <b>all</b> the rules and
866
conditions of a contract when they sign it and so the property owner's
867
monopoly is not "coerced." However, the "consent" argument is so weak
868
in conditions of inequality as to be useless (see
869
<a href="secF3.html#secf31">section F.3.1</a>, for example) and, moreover, it can and has been used to justify
870
the state. In other words, "consent" in and of itself does not ensure
871
that a given regime is not statist. So an argument along these lines is deeply flawed and can be used to
872
justify regimes which are little better than "industrial feudalism"
873
(such as, as indicated in <a href="secB4.html">section B.4</a>,
874
company towns, for example -- an institution which right-"libertarians"
875
have no problem with). Even the <i>"general libertarian law code,"</i> could be
876
considered a "monopoly of government over a particular area," particularly
877
if ordinary people have no real means of affecting the law code, either
878
because it is market-driven and so is money-determined, or because it
879
will be "natural" law and so unchangeable by mere mortals.
880
</p><p>
881
In other words, <b>if</b> the state <i>"arrogates to itself a monopoly of force,
882
of ultimate decision-making power, over a given area territorial area"</i>
883
then its pretty clear that the property owner shares this power. As we
884
indicated in <a href="secF1.html">section F.1</a>, Rothbard agrees that
885
the owner is, after all, the <i>"ultimate decision-making power"</i> in
886
their workplace or on their land. If the boss takes a dislike to you (for
887
example, you do not follow their orders) then you get fired. If you cannot
888
get a job or rent the land without agreeing to certain conditions (such as
889
not joining a union or subscribing to the "defence firm" approved by your
890
employer) then you either sign the contract or look for something else.
891
Rothbard fails to draw the obvious conclusion and instead refers to the state
892
<i>"prohibiting the voluntary purchase and sale of defence and judicial
893
services."</i> [<b>The Ethics of Liberty</b>, p. 170 and p. 171] But just
894
as surely as the law of contract allows the banning of unions from a
895
property, it can just as surely ban the sale and purchase of defence
896
and judicial services (it could be argued that market forces will stop this
897
happening, but this is unlikely as bosses usually have the advantage on the
898
labour market and workers have to compromise to get a job). After all, in
899
the company towns, only company money was legal tender and company police
900
the only law enforcers.
901
</p><p>
902
Therefore, it is obvious that the "anarcho"-capitalist system meets
903
the Weberian criteria of a monopoly to enforce certain rules in a
904
given area of land. The <i>"general libertarian law code"</i> is a monopoly
905
and property owners determine the rules that apply on their property.
906
Moreover, if the rules that property owners enforce are subject to
907
rules contained in the monopolistic <i>"general libertarian law code"</i> (for
908
example, that they cannot ban the sale and purchase of certain products
909
-- such as defence -- on their own territory) then "anarcho"-capitalism
910
<b>definitely</b> meets the Weberian definition of the state (as described by
911
Ayn Rand as an institution <i>"that holds the exclusive power to <b>enforce</b>
912
certain rules of conduct in a given geographical area"</i> [<b>Capitalism: The
913
Unknown Ideal</b>, p. 239]) as its "law code" overrides the desires of
914
property owners to do what they like on their own property.
915
</p><p>
916
Therefore, no matter how you look at it, "anarcho"-capitalism and its
917
"defence" market promotes a <i>"monopoly of ultimate decision making power"</i>
918
over a <i>"given territorial area"</i>. It is obvious that for anarchists, the
919
"anarcho"-capitalist system is a state system. And, as we note, a reasonable
920
case can be made for it also being a state in the "anarcho"-capitalist sense
921
as well. So, in effect, "anarcho"-capitalism has a <b>different</b> sort of
922
state, one in which bosses hire and fire the policeman. As anarchist Peter
923
Sabatini notes:
924
</p><p><blockquote><i>"Within [right] Libertarianism, Rothbard
925
represents a minority perspective that actually argues for the total
926
elimination of the state. However Rothbard's claim as an anarchist is
927
quickly voided when it is shown that he only wants an end to the public
928
state. In its place he allows countless private states, with each person
929
supplying their own police force, army, and law, or else purchasing these
930
services from capitalist vendors . . . Rothbard sees nothing at all wrong
931
with the amassing of wealth, therefore those with more capital will
932
inevitably have greater coercive force at their disposal, just as
933
they do now."</i> [<b>Libertarianism: Bogus Anarchy</b>]
934
</blockquote></p><p>
935
Far from wanting to abolish the state, then, "anarcho"-capitalists only
936
desire to privatise it - to make it solely accountable to capitalist wealth.
937
Their "companies" perform the same services as the state, for the same
938
people, in the same manner. However, there is one slight difference.
939
Property owners would be able to select between competing companies
940
for their "services." Because such "companies" are employed by the boss,
941
they would be used to reinforce the totalitarian nature of capitalist firms
942
by ensuring that the police and the law they enforce are not even slightly
943
accountable to ordinary people. Looking beyond the "defence association"
944
to the defence market itself (as we argued in the
945
<a href="secF6.html#secf63">last section</a>), this will become a cartel and so become
946
some kind of public state. The very nature of the private state, its need
947
to co-operate with others in the same industry, push it towards a
948
monopoly network of firms and so a monopoly of force over a given
949
area. Given the assumptions used to defend "anarcho"-capitalism, its
950
system of private statism will develop into public statism -- a state
951
run by managers accountable only to the share-holding elite.
952
</p><p>
953
To quote Peter Marshall again, the "anarcho"-capitalists <i>"claim that
954
all would benefit from a free exchange on the market, it is by no means
955
certain; any unfettered market system would most likely sponsor a
956
reversion to an unequal society with defence associations perpetuating
957
exploitation and privilege."</i> [<b>Demanding the Impossible</b>, p. 565]
958
History, and current practice, prove this point.
959
</p><p>
960
In short, "anarcho"-capitalists are not anarchists at all, they are just
961
capitalists who desire to see private states develop -- states which are
962
strictly accountable to their paymasters without even the sham of
963
democracy we have today. Hence a far better name for "anarcho"-capitalism
964
would be "private-state" capitalism. At least that way we get a fairer
965
idea of what they are trying to sell us. Bob Black put it well: <i>"To my
966
mind a right-wing anarchist is just a
967
minarchist who'd abolish the state to his own satisfaction by calling it
968
something else . . . They don't denounce what the state does, they just
969
object to who's doing it."</i> [<i>"The Libertarian As Conservative"</i>,
970
<b>The Abolition of Work and Other Essays</b>, p. 144]
971
</p>
972
973
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974
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