Anarcho-Capitalists aren’t Really Capitalists

Anarcho-capitalism is simply the idea that without the state, capitalist socio-economic organisation will become free of the antecedents of state patronage and regulation, which according to them hamper entrepreneurial activity and put businesses in a quagmire of legislative regulation they can’t possibly navigate. As a market anarchist I have sympathies with many ancap arguments and ideas, including those mentioned. Things like polycentric legal systems and competitive defence companies are both intriguing and a good answer to the statist question of legal order under anarchy. However, precisely because of their credentials as anarchists, and thus their rejection of state interference, they cannot in any way describe themselves as capitalists.

Capitalism as a system has relied largely on state intervention and control. What Marxists’ call primitive accumulation. This generally entails the nationalisation of land which is parcelled out to large corporations. The reliance on colonialism as a mechanism of creating new market-based opportunities. The use of legal charters to allow for things joint stock companies and limited liability regimes. And finally the removal of the means of production from labourers and communities and into the hands of capitalists. Historically this has been seen in the enclosures throughout much of Western Europe, as well as the modern enclosures in large areas of the developing world. This removes labourers, or the proletariat, from their position of independent subsistence farmers and workers as their means of independence (their land) is removed from them by the state. Many 18th and 19th century industrialists saw such enclosures as necessary to creating a landless proletariat that can be subsumed into the relations of wage labour. This was the same with the development of wage labour relations in Africa under European colonialism. Land was removed and their simple commodity exchanges and gift economies were suppressed in favour of capital and the creation of landless labourers. Even the likes of Murray Rothbard, seen by many as the founder philosopher of anarcho-capitalism, decried such state involvement in creating what is now seen as private property, a major plank of capitalism. His own ideas suggested that corporations that have benefitted from this should not see the full reward of their profits, and that instead remuneration should be given to the true historical owners, such as through land or profit sharing, and equally the workers exploited under these artificial relations should further gain a stake in that company.

Now if a self-described ancap can see the issues surrounding this idea of state-guaranteed private property, how can they then claim to support capitalism. The reality of its existence shows an historical reliance on statist means of expropriation. The concept of private property put forward by ancaps, that of Lockean homesteading and indefinite ownership except via voluntary transaction has never truly existed or been created out of spontaneous order, as seen by the large scale necessities of primitive accumulation. While such changes in ownership may not be seen as entailing radical redistribution of capital and resources (like me and other market anarchists believe), it would certainly change some of the fundamentals of actually existing capitalism. Rothbard himself accepted this, as did Konkin.

Similarly, the use of state power to maintain capitalist power also shows how much actual capitalism is wrapped up with the state. Intellectual property, transport subsidies and easy access to credit via controlled financial markets and regulated banking systems pretty much guarantee profits for multinational corporations. Without them, localised competition and more efficient forms of firm organisation allowed for by the removal of entry barriers and artificial economic configurations seen under capitalism would swallow them up whole. Kinsella, another ancap, has even admitted as much, suggesting that under conditions of truly free markets profits would be extremely difficult to maintain without significant innovation on the part of individual firms who could not monopolise under such competitive conditions. This radically changes the concept of profits that we see under modern capitalism. Innovation and with it productivity has stagnated under neoliberal capitalism, with only certain companies like Apple breaking through (with Apple being a significant beneficiary of state instruments).

Many ancaps recognise this. They see blatantly the massive level of state intervention that has gone into creating modern capitalism, or what they would term corporatism. The issue then is what would happen under anarchist conditions. People like me see a radical change in firm organisation and ownership models, moving away from capital and toward labour and forms of political collectivities, with property relations becoming a locational issue rather than that of an existential abstraction. Economies of scale would be much smaller and varied, with many being at the neighbourhood and regional level. Ancaps on the other hand see wide-scale private property, varying (and potentially more equal) forms capital-labour relationships and maintained international trade. Now these are legitimate positions that require debate. I don’t deny what ancaps would like to see, seeing them as entirely possible, but not feasible. The main arguments are those of scale and substance, not fundamental ontologies. However, noting this difference, what I do see is that ancaps are in no way true believers in capitalism. By implicitly recognising the state-based issues that underpin capitalism, they are admitting that large-scale profits seen today, while possible, are much less likely. While ancaps may believe in the idea and implementation of corporations, they do realise that modern MNCs are products of corporate intervention, not of spontaneous order. Even if you believe a company like Wal-Mart or Apple could exist, you cannot deny their reliance on forms of state intervention. Again it’s an argument of scale.

In all of this, ancaps can be seen as true anarchists, who simply believe that market organisation and the presence of capital, structured within previously unseen forms of private property and never before freed financial markets, are the most feasible forms of economic organisation. However, to describe this is capitalist is wrong. Capital ownership and markets do not equal capitalism. They may well be systems that have voluntary hierarchies and inegalitarian features, but that doesn’t mean it’s capitalistic. In fact, the hierarchies of capitalism fundamentally on the entry barriers to competitors in markets. Rather capitalism is defined by its capacity to use and rely on state instruments of power. Ancaps really should recognise this, because otherwise they just become defenders of the status quo, something they always purport to rail against. At the end of the day, anarcho-capitalists are not really capitalists. Capitalism and the state are one and the same, forever locked together. Unless one wants to break the historical contingencies that have made capitalism, one cannot call themselves a believer in capitalism.

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