What is Anarcho-Capitalism?

The new Argentine president Javier Milei calls himself an anarcho-capitalist, but not a lot of people know what that is. You might hear people make reference to “privatized police” or things like this, but the actual crux of anarcho-capitalism goes much deeper. In fact the fundamental claim isn’t so much “anarchic” or “capitalistic” as much as it is a demand that all institutions in society, including those which provide for the legal system, be subject to the same rules of ethical behavior that everyone else is expected to follow.

What do you consider to be the defining characteristic of government? Some people might say the government is that institution that makes and enforces laws. Fair enough, but for myself and other self-described anarcho-capitalists the defining characteristic of government is that it is the only institution in society that claims an exemption from the ordinary rules of ethical behavior that everyone else and all other businesses and institutions are expected to follow. That is, it’s the only institution in society that claims the right to act immorally.

There are literally thousands of examples of this, but the most obvious example that we’ll highlight here is taxation. Government is the only institution in society that claims the right to extort revenue from people under threat of violence and imprisonment. All other individuals, groups, or institutions are expected to raise revenue either by offering a product or service up for voluntary purchase or by soliciting voluntary donations. If any other person or group attempted to acquire money the way the government does we would recognize them as behaving immorally. When the mafia shows up at a place of business and says, “This is a nice little shop you have here. It’d be a shame of something happened to it”, they are behaving exactly the same way the government does, but in this case we all recognize it as criminal behavior.

So what accounts for this asymmetry? If you survey academic philosophers on this question you’ll get a wide range of answers including various forms of social contract theory, democratic legitimacy, Rawlsian veil of ignorance, etc. What you wont find is a consensus. This is because all these proposed justifications have issues that cause philosophers to find them unsatisfactory in one way or another.

Isn’t this strange? Philosophers have been thinking about this issue for thousands of years and haven’t been able to come to a consensus on the answer. Maybe this is a clue that the asymmetry isn’t justifiable after all.

Interestingly, if you ask the proverbial “man on the street” the same question, you’ll get a very different answer. Overwhelmingly, ordinary people will argue that government having the authority to act immorally is justified because if it didn’t society would collapse and descend into chaos.

I actually think this is the correct answer. If you’re going to justify having an institution with the authority to act immorally, the only way in which it could be justified is by the fact that not having such an institution would be many, many times worse. This is in line with view of many of the American revolutionaries that government is a “necessary evil”. In that phrase there is an explicit acknowledgement that government is behaving immorally (that it is evil), but not having one would be worse.

But is it true? Would society really collapse if we didn’t have an institution with the authority to act immorally?

It’s a rather strange thing to believe isn’t it? Take a step back. Imagine you weren’t born into a society where 99% of the population believed this and that you were hearing this claim for the first time? Would it not strike you as odd? That we just have to give some people the ability to commit immoral acts without penalty otherwise society will collapse? Would you not at least be suspicious that the people making this claim are not just trying to scam you?

There’s this great video someone made (link) where an alien arrives on Earth and meets a human. And the human asks, “Do you want me to take you to our leader?” And the alien is confused. This causes the human to have to explain the concept of government to the alien. And the alien then says, “Let me get this straight, you think it’s necessary for your survival that a group of people calling themselves government get to order everyone else around like slaves using money they stole from you?”.

The human says, “Yep”.

Notice what we are not saying here:

• We are not saying that we don’t need police or protection from criminals.
• We are not saying that we don’t need courts to resolves disputes among people.
• We are not saying that we don’t need a legal system or a justice system.
• We are certainly not saying that we don’t need roads or infrastructure.

All we are saying is that it is not a necessary precondition for providing those services that a group of people have the authority to act immorally.

Consider that all of those things already are provided in our society today by institutions that do act in accordance with the normal rules of ethical behavior.

• People today spend a substantial amount of money on private security arrangements, including security guards, campus police, neighborhood patrol services, burglar alarm and response systems, etc.
• Private courts (usually called arbitration firms) are extremely prevalent in our society and are generally preferred to government courts for their speed, cost effectiveness, and objectivity. It’s true governments will override their rulings if displeased, but that obviously isn’t necessary for them to function.
• We have a large number of private roads that are created and maintained by HOAs and other associations that people contractually and voluntarily form.

None of these services require the right to act immorally as a prerequisite for their existence. So where does that leave the government? If it’s not, in fact, a necessary evil, then that must mean it’s just plain evil.

But how did nearly everyone come to believe that society would collapse without an institution with the right to act immorally?

Consider this, it’s a universal fact about human nature that we prefer to receive the greatest possible satisfaction of our wants with the least amount of effort on our part. This fact has historically caused people to channel their creative and productive energies into one of two different paths.

First, people have channeled their energy into creating tools, machines, and technology that augment our labor and allow us to produce far more stuff with far less effort.

Second, people have also figured out that the greatest resource to be exploited in furtherance of these ends is other human beings. And they have channeled their creative and productive energies into finding the most efficient forms of human exploitation.

You might think that full blown slavery is the most efficient means of exploitation, but it turns out that it isn’t. Being a slave is incredibly miserable and as such slaves are very unmotivated and under-productive. In addition, because their lives couldn’t get any worse, they don’t stand to risk much if they revolt. These facts mean that the slave masters have to put considerable resources into keeping the slaves in check, and there is a hard limit on the number of slaves they can keep without risking a revolt.

On the other hand people figured out that if instead of conquering a population and taking them as slaves, you just settle amongst them as rulers and demand they pay you a tribute (a tax), you can extract much more wealth. Since you allow the population a high degree of freedom and autonomy, and you allow them to chose their own profession and to keep a large portion of their income, they are much more motivated and productive. And importantly, they are much less likely to revolt, which means you can exploit a larger number of people. And it turns out that if you steal a smaller amount from a large number of people it can sum up to more than if you steal a large amount from a smaller number of people.

But then you have another problem. Since the people being exploited are so much larger in number than those doing the exploiting, there is a severe risk to the ruling class if people ever did revolt. Thus, the primary task of the rulers is to propagandize the population and convince them that their lives would be much worse if the rulers were ever overthrown and if the exploitation ever ended.

This is the history of government. ALL governments have their origins in conquest and exploitation. They only evolved into their present democratic forms very recently on the timeline. But for thousands of years people were subjected to relentless, never ending propaganda designed to convince them of the necessity of their exploitation and horrors that would ensue upon its downfall.

This is why 99% of the population today are convinced of the necessity of having an institution with the authority to act immorally. It is a vestige of an earlier more barbaric age. And as we’ve moved into the modern period, status quo bias and cognitive dissonance have made it such that people have sought out new justifications for the asymmetry as the old ones fall into disfavor.

But the truth is that the asymmetry isn’t justifiable. Government isn’t a necessary evil, it’s just evil. And one day, maybe well past our lifetimes, most people will come to realize this and humans will break free of our barbaric past and usher in an unheralded period of peace and prosperity on Earth.