File: Append13.txt

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anarchism 11.7-1
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Appendix -- Is "anarcho"-capitalism a type of anarchism?

1 Are "anarcho"-capitalists really anarchists?
	1.1 Why is the failure to renounce hierarchy the Achilles Heel 
 	      of right-wing libertarianism? 
	1.2 How libertarian is right-Libertarian theory?
	1.3 Is right-Libertarian theory scientific in nature?
      1.4 Is "anarcho"-capitalism a new form of individualist anarchism?

2 What do "anarcho"-capitalists mean by "freedom?"
	2.1 What are the implications of defining liberty in  
	      terms of (property) rights?
	2.2 How does private property affect freedom?
	2.3 Can "anarcho"-capitalist theory justify the state?
	2.4 But surely transactions on the market are voluntary?
	2.5 But surely circumstances are the result of liberty  
	      and so cannot be objected to?
	2.6 Do Libertarian-capitalists support slavery?
	2.7 But surely abolishing capitalism would restrict liberty?
	2.8 Why should we reject the "anarcho"-capitalist definitions 
	      of freedom and justice?

3 Why do 'anarcho'-capitalists generally place little or no 
    value on equality?"
	3.1 Why is this disregard for equality important?
	3.2 But what about "anarcho"-capitalist support for charity?

4 What is the right-libertarian position on private property?
	4.1 What is wrong with a "homesteading" theory of property?
	4.2 Why is the "Lockean Proviso" important?
	4.3 How does private property affect individualism?
	4.4 How does private property affect relationships?
	4.5 Does private property co-ordinate without hierarchy?

5 Will privatising "the commons" increase liberty?

6 Is "anarcho" capitalism against the state?
	6.1 What's wrong with this "free market" justice?
 	6.2 What are the social consequences of such a system?
 	6.3 But surely Market Forces will stop abuse by the rich?
 	6.4 Why are these "defence associations" states?
 	6.5 What other effects would "free market" justice have?

8 What role did the state take in the creation of capitalism?
	8.1 What social forces lay behind the rise of capitalism?
 	8.2 What was the social context of the statement "laissez-faire"?
 	8.3 What other forms did state intervention in creating 
 	      capitalism take?
	8.4 Aren't the enclosures a socialist myth?
	8.5 What about the lack of enclosures in the Americas?
 	8.6 How did working people view the rise of capitalism?
	8.7 Why is the history of capitalism important?

9 Is Medieval Iceland an example of "anarcho"-capitalism working in 
    practice?

10 Would laissez-faire capitalism be stable?
	10.1 Would privatising banking make capitalism stable?
	10.2 How does the labour market effect capitalism?
	10.3 Was laissez-faire capitalism stable?

11 What is the myth of "Natural Law"?
	11.1 Why "Natural Law" in the first place?
 	11.2 But "Natural Law" provides protection for individual 
 	      rights from violation by the State. Those against 
 	      Natural Law desire total rule by the state.
 	11.3 Why is "Natural Law" authoritarian?
	11.4 Does "Natural Law" actually provides protection for 
	      individual liberty?
 	11.5 But Natural Law was discovered, not invented!
	11.6 Why is the notion of "discovery" contradictory?

* Is "anarcho"-capitalism a type of anarchism?

Anyone who has followed political discussion on the net has probably come
across people calling themselves libertarians but arguing from a right-wing,
pro-capitalist perspective. For most Europeans this is weird, as in Europe
the term "libertarian" is almost always used in conjunction with "socialist" 
or "communist." In the US, though, the Right has partially succeeded in
appropriating this term for itself. Even stranger, however, is that a few of 
these right-wingers have started calling themselves "anarchists" in what 
must be one of the finest examples of an oxymoron in the English language: 
'Anarcho-capitalist'!!

Arguing with fools is seldom rewarded, but to allow their foolishness to go
unchallenged risks allowing them to deceive those who are new to anarchism.
That's what this section of the anarchist FAQ is for, to show why the claims
of these "anarchist" capitalists are false. Anarchism has always been
anti-capitalist and any "anarchism" that claims otherwise cannot be part 
of the anarchist tradition. So this section of the FAQ does not reflect 
some kind of debate within anarchism, as many of these types like to pretend, 
but a debate between anarchism and its old enemy, capitalism. In many ways 
this debate mirrors the one between Peter Kropotkin and Herbert Spencer, an
English pro-capitalist, minimal statist, at the turn the 19th century
and, as such, it is hardly new.

The "anarcho"-capitalist argument hinges on using the dictionary definition 
of "anarchism" and/or "anarchy" - they try to define anarchism as being
"opposition to government," and nothing else. However, dictionaries are
hardly politically sophisticated and their definitions rarely reflect the
wide range of ideas associated with political theories and their history.
Thus the dictionary "definition" is anarchism will tend to ignore its 
consistent views on authority, exploitation, property and capitalism (ideas
easily discovered if actual anarchist texts are read). And, of course, many 
dictionaries "define" anarchy as "chaos" or "disorder" but we never see 
"anarcho"-capitalists use that particular definition!

And for this strategy to work, a lot of "inconvenient" history and ideas 
from all branches of anarchism must be ignored. From individualists 
like Spooner and Tucker to communists like Kropotkin and Malatesta, 
anarchists have always been anti-capitalist (see section G for more on 
the anti-capitalist nature of individualist anarchism). Therefore 
"anarcho"-capitalists are not anarchists in the same sense that 
rain is not dry.

Of course, we cannot stop the "anarcho"-capitalists using the words
"anarcho", "anarchism" and "anarchy" to describe their ideas. The
democracies of the west could not stop the Chinese Stalinist state calling 
itself the People's Republic of China. Nor could the social democrats
stop the fascists in Germany calling themselves "National Socialists".
Nor could the Italian anarcho-syndicalists stop the fascists using the
expression "National Syndicalism". This does not mean that any of these
movements actual name reflected their content -- China is a dictatorship,
not a democracy, the Nazi's were not socialists (capitalists made fortunes
in Nazi Germany because it crushed the labour movement), and the Italian 
fascist state had nothing in common with anarcho-syndicalists ideas of
decentralised, "from the bottom up" unions and the abolition of the
state and capitalism. 

Therefore, just because someone uses a label it does not mean that they
support the ideas associated with that label. And this is the case with 
"anarcho"-capitalism -- its ideas are at odds with the key ideas associated
with all forms of traditional anarchism (even individualist anarchism
which is often claimed as being a forefather of the ideology).

All we can do is indicate *why* "anarcho"-capitalism is not part of the
anarchist tradition and so has falsely appropriated the name. This section
of the FAQ aims to do just that -- present the case why "anarcho"-capitalists
are not anarchists. We do this, in part, by indicating where they differ
from genuine anarchists (on such essential issues as private property, 
equality, exploitation and opposition to hierarchy) In addition, we take 
the opportunity to present a general critique of right-libertarian claims 
from an anarchist perspective. In this way we show up why anarchists reject 
that theory as being opposed to liberty and anarchist ideals.

We are covering this topic in an anarchist FAQ for three reasons. 
Firstly, the number of "libertarian" and "anarcho"-capitalists on the 
net means that those seeking to find out about anarchism may conclude
that they are "anarchists" as well. Secondly, unfortunately, some 
academics and writers have taken their claims of being anarchists at 
face value and have included their ideology into general accounts of 
anarchism. These two reasons are obviously related and hence the need
to show the facts of the matter. As we have extensively documented 
in earlier sections, anarchist theory has always been anti-capitalist. 
There is no relationship between anarchism and capitalism, in any 
form. Therefore, there is a need for this section in order to indicate 
exactly why "anarcho"-capitalism is not anarchist. As will be quickly 
seen from our discussion, almost all anarchists who become aware of 
"anarcho"-capitalism quickly reject it as a form of anarchism (the 
better academic accounts do note that anarchists generally reject 
the claim, though). The last reason is to provide other anarchists 
with arguments and evidence to use against "anarcho"-capitalism and
its claims of being a new form of "anarchism."

So this section of the FAQ does not, as we noted above, represent some kind
of "debate" within anarchism. It reflects the attempt by anarchists to 
reclaim the history and meaning of anarchism from those who are attempting
to steal its name (just as right-wingers in America have attempted to
appropriate the name "libertarian" for their pro-capitalist views, and by
so doing ignore over 100 years of anti-capitalist usage). However, this
section also serves two other purposes. Firstly, critiquing right-libertarian
and "anarcho"-capitalist theories allows us to explain anarchist ones at
the same time and indicate why they are better. Secondly, and more 
importantly, the "ideas" and "ideals" that underlie "anarcho"-capitalism
are usually identical (or, at the very least, similar) to those of 
neo-liberalism. This was noted by Bob Black in the early 1980s, when
a "wing of the Reaganist Right has obviously appropriated, with suspect 
selectivity, such libertarian themes as deregulation and voluntarism. 
Ideologues indignant that Reagan has travestied their principles. Tough 
shit! I notice that it's their principles, not mine, that he found suitable 
to travesty." [_The Libertarian As Conservative_] This was echoed by Noam
Chomsky two decades later when while "nobody takes [right-wing libertarianism] 
seriously" as "everybody knows that a society that worked by . . . [its] 
principles would self-destruct in three seconds" the "only reason" why 
some people "pretend to take it seriously is because you can use it as
a weapon." [_Understanding Power_, p. 200] As neo-liberalism is being 
used as the ideological basis of the current attack on the working class, 
critiquing "anarcho"-capitalism and right-libertarianism also allows use 
to build theoretical weapons to use to resist this attack and aid the 
class struggle.

A few more points before beginning. When debating with "libertarian" 
or "anarchist" capitalists it's necessary to remember that while they 
claim "real capitalism" does not exist (because all existing forms of 
capitalism are statist), they will claim that all the good things we 
have -- advanced medical technology, consumer choice of products, etc. 
-- are nevertheless due to "capitalism." Yet if you point out any problems 
in modern life, these will be blamed on "statism." Since there has never 
been and never will be a capitalist system without some sort of state, 
it's hard to argue against this "logic." Many actually use the example 
of the Internet as proof of the power of "capitalism," ignoring the 
fact that the state paid for its development before turning it over 
to companies to make a profit from it. Similar points can be made 
about numerous other products of "capitalism" and the world we live
in. To artificially separate one aspect of a complex evolution fails
to understand the nature and history of the capitalist system.

In addition to this ability to be selective about the history and 
results of capitalism, their theory has a great "escape clause." If 
wealthy employers abuse their power or the rights of the working class
(as they have always done), then they have (according to "libertarian"
ideology) ceased to be capitalists! This is based upon the misperception 
that an economic system that relies on force *cannot* be capitalistic. 
This is *very* handy as it can absolve the ideology from blame for any 
(excessive) oppression which results from its practice. Thus individuals
are always to blame, *not* the system that generated the opportunities for
abuse they freely used.

Anarchism has always been aware of the existence of "free market"
capitalism, particularly its extreme (minimal state) wing, and has
always rejected it. As we discuss in section 7, anarchists from 
Proudhon onwards have rejected the idea of any similar aims and 
goals (and, significantly, vice versa). As academic Alan Carter 
notes, anarchist concern for equality as a necessary precondition 
for genuine freedom means "that is one very good reason for not 
confusing anarchists with liberals or economic 'libertarians' 
-- in other words, for not lumping together everyone who is in 
some way or another critical of the state. It is why calling the 
likes of Nozick 'anarchists' is highly misleading." ["Some notes 
on 'Anarchism'", pp. 141-5, _Anarchist Studies_, vol. 1, no. 2,
p. 143] So anarchists have evaluated "free market" capitalism and 
rejected it as non-anarchist for over 150 years. Attempts by 
"anarcho"-capitalism to say that their system is "anarchist" flies 
in the face of this long history of anarchist analysis. That some 
academics fall for their attempts to appropriate the anarchist 
label for their ideology is down to a false premise: it "is judged 
to be anarchism largely because some anarcho-capitalists *say* they 
are 'anarchists' and because they criticise the State." [Peter 
Sabatini, _Social Anarchism_, no. 23, p. 100]

More generally, we must stress that most (if not all) anarchists do not 
want to live in a society *just like this one* but without state coercion 
and (the initiation of) force. Anarchists do not confuse "freedom" with 
the "right" to govern and exploit others nor with being able to change 
masters. It is not enough to say we can start our own (co-operative) 
business in such a society. We want the abolition of the capitalist 
system of authoritarian relationships, not just a change of bosses 
or the possibility of little islands of liberty within a sea of 
capitalism (islands which are always in danger of being flooded 
and our activity destroyed). Thus, in this section of the FAQ, 
we analysis many "anarcho"-capitalist claims on their own terms 
(for example, the importance of equality in the market or why
capitalism cannot be reformed away by exchanges on the capitalist 
market) but that does not mean we desire a society nearly identical 
to the current one. Far from it, we want to transform this society 
into one more suited for developing and enriching individuality and
freedom. But before we can achieve that we must critically evaluate
the current society and point out its basic limitations.

Finally, we dedicate this section of the FAQ to those who have seen the 
real face of "free market" capitalism at work: the working men and women 
(anarchist or not) murdered in the jails and concentration camps or on the 
streets by the hired assassins of capitalism. 

1 Are "anarcho"-capitalists really anarchists?

In a word, no. While "anarcho"-capitalists obviously try to associate
themselves with the anarchist tradition by using the word "anarcho"
or by calling themselves "anarchists", their ideas are distinctly at 
odds with those associated with anarchism. As a result, any claims that 
their ideas are anarchist or that they are part of the anarchist 
tradition or movement are false. 

"Anarcho"-capitalists claim to be anarchists because they say that they 
oppose government. As such, as noted in the last section, they use 
a dictionary definition of anarchism. However, this fails to appreciate
that anarchism is a *political theory*, not a dictionary definition. 
As dictionaries are rarely politically sophisticated things, this means 
that they fail to recognise that anarchism is more than just opposition to
government, it is also marked a opposition to capitalism (i.e. exploitation
and private property). Thus, opposition to government is a necessary
but not sufficient condition for being an anarchist -- you also need 
to be opposed to exploitation and capitalist private property. As 
"anarcho"-capitalists do not consider interest, rent and profits (i.e.
capitalism) to be exploitative nor oppose capitalist property rights,
they are not anarchists.

Moreover, "anarcho"-capitalism is inherently self-refuting. This can be
seen from leading "anarcho"-capitalist Murray Rothbard. he thundered 
against the evil of the state, arguing that it "arrogates to itself a 
monopoly of force, of ultimate decision-making power, over a given area 
territorial area." In and of itself, this definition is unremarkable. 
That a few people (an elite of rulers) claim the right to rule others 
must be part of any sensible definition of the state or government.
However, the problems begin for Rothbard when he notes that 
"[o]bviously, in a free society, Smith has the ultimate decision-making 
power over his own just property, Jones over his, etc." [_The Ethics of 
Liberty_, p. 170 and p. 173] The logical contradiction in this position
should be obvious, but not to Rothbard. It shows the power of ideology,
the ability of means words (the expression "private property") to turn 
the bad ("ultimate decision-making power over a given area") into the 
good ("ultimate decision-making power over a given area"). 

Now, this contradiction can be solved in only *one* way -- the owners
of the "given area" are also its users. In other words, a system of
possession (or "occupancy and use") as favoured by anarchists. However,
Rothbard is a capitalist and supports private property. In other
words, wage labour and landlords. This means that he supports a 
divergence between ownership and use and this means that this 
"ultimate decision-making power" extends to those who *use,* but do 
not own, such property (i.e. tenants and workers). The statist nature 
of private property is clearly indicated by Rothbard's words -- the
property owner in an "anarcho"-capitalist society possesses the 
"ultimate decision-making power" over a given area, which is also what 
the state has currently. Rothbard has, ironically, proved by his own
definition that "anarcho"-capitalism is not anarchist.

Rothbard does try to solve this obvious contradiction, but utterly fails. 
He simply ignores the crux of the matter, that capitalism is based on 
hierarchy and, therefore, cannot be anarchist. He does this by arguing
that the hierarchy associated with capitalism is fine as long as the
private property that produced it was acquired in a "just" manner. In
so doing he yet again draws attention to the identical authority 
structures and social relationships of the state and property. As
he puts it:

"*If* the State may be said too properly *own* its territory, then 
it is proper for it to make rules for everyone who presumes to 
live in that area. It can legitimately seize or control private 
property because there *is* no private property in its area, 
because it really owns the entire land surface. *So long* as 
the State permits its subjects to leave its territory, then, it 
can be said to act as does any other owner who sets down rules 
for people living on his property." [Op. Cit., p. 170] 

Obviously Rothbard argues that the state does not "justly" own its
territory -- but given that the current distribution of property
is just as much the result of violence and coercion as the state,
his argument is seriously flawed. It amounts, as we note in section
4, to little more than an "immaculate conception of property" 
unrelated to reality. Even assuming that private property was 
produced by the means Rothbard assumes, it does not justify the 
hierarchy associated with it as the current and future generations 
of humanity have, effectively, been excommunicated from liberty by 
previous ones. If, as Rothbard argues, property is a natural right 
and the basis of liberty then why should the many be excluded from 
their birthright by a minority? In other words, Rothbard denies that 
liberty should be universal. He chooses property over liberty while 
anarchists choose liberty over property.

Even worse, the possibility that private property can result in *worse* 
violations of individual freedom (at least of workers) than the state 
of its citizens was implicitly acknowledged by Rothbard. He uses as a 
hypothetical example a country whose King is threatened by a rising 
"libertarian" movement. The King responses by "employ[ing] a cunning 
stratagem," namely he "proclaims his government to be dissolved, but 
just before doing so he arbitrarily parcels out the entire land area 
of his kingdom to the 'ownership' of himself and his relatives." Rather 
than taxes, his subjects now pay rent and he can "regulate to regulate 
the lives of all the people who presume to live on" his property as he 
sees fit. Rothbard then asks:

"Now what should be the reply of the libertarian rebels to this pert 
challenge? If they are consistent utilitarians, they must bow to this 
subterfuge, and resign themselves to living under a regime no less 
despotic than the one they had been battling for so long. Perhaps, 
indeed, *more* despotic, for now the king and his relatives can claim 
for themselves the libertarians' very principle of the absolute right 
of private property, an absoluteness which they might not have dared 
to claim before." [Op. Cit., pp. 54-5]

So not only does the property owner have the same monopoly of power 
over a given area as the state, it is *more* despotic as it is based 
on the "absolute right of private property"! And remember, Rothbard
is arguing *in favour* of "anarcho"-capitalism. ("if you have unbridled
capitalism, you will have all kinds of authority: you will have *extreme* 
authority." [Chomksy, _Understanding Power_, p. 200]). So in practice, 
private property is a major source of oppression and authoritarianism within 
society -- there is little or no freedom within capitalist production 
(as Bakunin noted, "the worker sells his person and his liberty for 
a given time"). So, in stark contrast to anarchists, "anarcho"-capitalists 
have no problem with factory fascism (i.e. wage labour), a position which 
seems highly illogical for a theory calling itself libertarian. If it 
were truly libertarian, it would oppose all forms of domination, not 
just statism. This position flows from the "anarcho"-capitalist 
definition of freedom as the absence of coercion and will be discussed 
in section 2 in more detail.

Of course, Rothbard has yet another means to escape the obvious, namely
that the market will limit the abuses of the property owners. If workers
do not like their ruler then they can seek another. However, this reply
completely ignores the reality of economic and social power. Thus the
"consent" argument fails because it ignores the social circumstances of 
capitalism which limit the choice of the many. Anarchists have long argued 
that, as a class, workers have little choice but to "consent" to capitalist 
hierarchy. The alternative is either dire poverty or starvation. 

"Anarcho"-capitalists dismiss such claims by denying that there is such a 
thing as economic power. Rather, it is simply freedom of contract. Anarchists 
consider such claims as a joke. To show why, we need only quote (yet again)
Rothbard on the abolition of slavery and serfdom in the 19th century. He 
argued, correctly, that the "*bodies* of the oppressed were freed, but the 
property which they had worked and eminently deserved to own, remained in 
the hands of their former oppressors. With economic power thus remaining 
in their hands, the former lords soon found themselves virtual masters 
once more of what were now free tenants or farm labourers. The serfs and 
slaves had tasted freedom, but had been cruelly derived of its fruits." 
[Op. Cit., p. 74]

To say the least, anarchists fail to see the logic in this position. Contrast 
this with the standard "anarcho"-capitalist claim that if market forces 
("voluntary exchanges") result in the creation of "free tenants or farm 
labourers" then they are free. Yet labourers dispossessed by market forces 
are in exactly the same social and economic situation as the ex-serfs and 
ex-slaves. If the latter do not have the fruits of freedom, neither do 
the former. Rothbard sees the obvious "economic power" in the latter case, 
but denies it in the former. It is only Rothbard's ideology that stops 
him from drawing the obvious conclusion -- identical economic conditions 
produce identical social relationships and so capitalism is marked by 
"economic power" and "virtual masters." The only solution is for 
"anarcho"-capitalists to simply say the ex-serfs and ex-slaves were 
actually free to choose and, consequently, Rothbard was wrong. It might 
be inhuman, but at least it would be consistent!

Rothbard's perspective is alien to anarchism. For example, as 
individualist anarchist William Bailie noted, under capitalism 
there is a class system marked by "a dependent industrial class of 
wage-workers" and "a privileged class of wealth-monopolisers, each
becoming more and more distinct from the other as capitalism advances."
This has turned property into "a social power, an economic force 
destructive of rights, a fertile source of injustice, a means of
enslaving the dispossessed." He concludes: "Under this system equal
liberty cannot obtain." Bailie notes that the modern "industrial
world under capitalistic conditions" have "arisen under the *regime*
of status" (and so "law-made privileges") however, it seems unlikely
that he would have concluded that such a class system would be fine 
if it had developed naturally or the current state was abolished 
while leaving the class structure intact (as we note in section G.4, 
Tucker recognised that even the "freest competition" was powerless 
against the "enormous concentration of wealth" associated with modern 
capitalism). [_The Individualist Anarchists_, p. 121] 

Therefore anarchists recognise that "free exchange" or "consent" in 
unequal circumstances will reduce freedom as well as increasing inequality 
between individuals and classes. In other words, as we discuss in 
section 3, inequality will produce social relationships which are based on 
hierarchy and domination, *not* freedom. As Noam Chomsky put it:

"Anarcho-capitalism, in my opinion, is a doctrinal system which, if ever
implemented, would lead to forms of tyranny and oppression that have few
counterparts in human history. There isn't the slightest possibility that
its (in my view, horrendous) ideas would be implemented, because they would
quickly destroy any society that made this colossal error. The idea of 'free
contract' between the potentate and his starving subject is a sick joke,
perhaps worth some moments in an academic seminar exploring the consequences
of (in my view, absurd) ideas, but nowhere else." [_Noam Chomsky on 
Anarchism_, interview with Tom Lane, December 23, 1996]

Clearly, then, by its own arguments "anarcho"-capitalism is not anarchist.
This should come as no surprise to anarchists. Anarchism, as a political 
theory, was born when Proudhon wrote _What is Property?_ specifically to 
refute the notion that workers are free when capitalist property forces 
them to seek employment by landlords and capitalists. He was well aware 
that in such circumstances property "violates equality by the rights of 
exclusion and increase, and freedom by despotism . . . [and has] perfect 
identity with robbery." He, unsurprisingly, talks of the "proprietor, to 
whom [the worker] has sold and surrendered his liberty." For Proudhon,
anarchy was "the absence of a master, of a sovereign" while "proprietor"
was "synonymous" with "sovereign" for he "imposes his will as law, and 
suffers neither contradiction nor control." This meant that "property 
engenders despotism," as "each proprietor is sovereign lord within the 
sphere of his property." [_What is Property_, p. 251, p. 130, p. 264
and pp. 266-7] It must also be stressed that Proudhon's classic work is 
a lengthy critique of the kind of apologetics for private property 
Rothbard espouses to salvage his ideology from its obvious contradictions. 

Ironically, Rothbard repeats the same analysis as Proudhon but draws
the *opposite* conclusions and expects to be considered an anarchist! 
Moreover, it seems equally ironic that "anarcho"-capitalism calls itself 
"anarchist" while basing itself on the arguments that anarchism was 
created in opposition to. As shown, "anarcho"-capitalism makes as much 
sense as "anarcho-statism" -- an oxymoron, a contradiction in terms. The 
idea that "anarcho"-capitalism warrants the name "anarchist" is simply 
false. Only someone ignorant of anarchism could maintain such a thing.
While you expect anarchist theory to show this to be the case, the 
wonderful thing is that "anarcho"-capitalism itself does the same. 

Little wonder Bob Black argues that "[t]o demonise state authoritarianism 
while ignoring identical albeit contract-consecrated subservient arrangements 
in the large-scale corporations which control the world economy is fetishism 
at its worst." [_Libertarian as Conservative_] The similarities between 
capitalism and statism are clear -- and so why "anarcho"-capitalism cannot 
be anarchist. To reject the authority (the "ultimate decision-making power") 
of the state and embrace that of the property owner indicates not only a 
highly illogical stance but one at odds with the basic principles of anarchism.
This whole-hearted support for wage labour and capitalist property rights 
indicates that "anarcho"-capitalists are not anarchists because they do 
not reject all forms of *archy.* They obviously support the hierarchy 
between boss and worker (wage labour) and landlord and tenant. Anarchism, 
by definition, is against all forms of archy, including the hierarchy 
generated by capitalist property. To ignore the obvious archy associated 
with capitalist property is highly illogical.

In addition, we must note that such inequalities in power and wealth 
will need  "defending" from those subject to them ("anarcho"-capitalists 
recognise the need for private police and courts to defend property 
from theft -- and, anarchists add, to defend the theft and despotism 
associated with property!). Due to its support of private property (and 
thus authority), "anarcho"-capitalism ends up retaining a state in its 
"anarchy"; namely a *private* state whose existence its proponents 
attempt to deny simply by refusing to call it a state, like an ostrich 
hiding its head in the sand (see section 6 for more on this and why 
"anarcho"-capitalism is better described as "private state" capitalism). 
As Albert Meltzer put it:

"Common-sense shows that any capitalist society might dispense with
a 'State' . . . but it could not dispense with organised government,
or a privatised form of it, if there were people amassing money and 
others working to amass it for them. The philosophy of 'anarcho-capitalism'
dreamed up by the 'libertarian' New Right, has nothing to do with 
Anarchism as known by the Anarchist movement proper. It is a lie
. . . Patently unbridled capitalism . . . needs some force at its
disposal to maintain class privileges, either form the State itself
or from private armies. What they believe in is in fact a limited
State -- that us, one in which the State has one function, to protect
the ruling class, does not interfere with exploitation, and comes as
cheap as possible for the ruling class. The idea also serves another 
purpose . . . a moral justification for bourgeois consciences in 
avoiding taxes without feeling guilty about it." [_Anarchism: 
Arguments For and Against_, p. 50]

For anarchists, this need of capitalism for some kind of state is 
unsurprising. For "Anarchy without socialism seems equally as impossible 
to us [as socialism without anarchy], for in such a case it could not be 
other than the domination of the strongest, and would therefore set in 
motion right away the organisation and consolidation of this domination; 
that is to the constitution of government." [Errico Malatesta, _Life and 
Ideas_, p. 148] Because of this, the "anarcho"-capitalist rejection of 
anarchist ideas on capitalist property economics and the need for 
equality, they cannot be considered anarchists or part of the anarchist 
tradition.

Thus anarchism is far more than the common dictionary definition
of "no government" -- it also entails being against all forms of
*archy*, including those generated by capitalist property. This 
is clear from the roots of the word "anarchy." As we noted 
in section A.1, the word anarchy means "no rulers" or "contrary 
to authority." As Rothbard himself acknowledges, the property 
owner is the ruler of their property and, therefore, those who 
use it. For this reason "anarcho"-capitalism cannot be considered as
a form of anarchism -- a real anarchist must logically oppose 
the authority of the property owner along with that of the state.
As "anarcho"-capitalism does not explicitly (or implicitly, for 
that matter) call for economic arrangements that will end wage 
labour and usury it cannot be considered anarchist or part of the 
anarchist tradition.

Political theories should be identified by their actual features and 
history rather than labels. Once we recognise that, we soon find out that 
"anarcho"-capitalism is an oxymoron. Anarchists and "anarcho"-capitalists 
are not part of the same movement or tradition. Their ideas and aims 
are in direct opposition to those of all kinds of anarchists. 

While anarchists have always opposed capitalism, "anarcho"-capitalists 
have embraced it. And due to this embrace their "anarchy" will be marked 
by extensive differences in wealth and power, differences that will show 
themselves up in relationships based upon subordination and hierarchy 
(such as wage labour), *not* freedom (little wonder that Proudhon 
argued that "property is despotism" -- it creates authoritarian and
hierarchical relationships between people in a similar way to statism).

Their support for "free market" capitalism ignores the impact of wealth 
and power on the nature and outcome of individual decisions within the 
market (see sections 2 and 3 for further discussion). For example, 
as we indicate in sections J.5.10, J.5.11 and J.5.12, wage labour is less 
efficient than self-management in production but due to the structure and 
dynamics of the capitalist market, "market forces" will actively discourage 
self-management due to its empowering nature for workers. In other words,
a developed capitalist market will promote hierarchy and unfreedom in 
production in spite of its effects on individual workers and their 
wants (see also section 10.2). Thus "free market" capitalism tends 
to re-enforce inequalities of wealth and power, *not* eliminate them.

Furthermore, any such system of (economic and social) power will require 
extensive force to maintain it and the "anarcho"-capitalist system of 
competing "defence firms" will simply be a new state, enforcing 
capitalist power, property rights and law.

Overall, the lack of concern for meaningful freedom within production and 
the effects of vast differences in power and wealth within society as a 
whole makes "anarcho"-capitalism little better than "anarchism for the rich." 
Emma Goldman recognised this when she argued that "'Rugged individualism' 
has meant all the 'individualism' for the masters . . . in whose name
political tyranny and social oppression are defended and held up as 
virtues while every aspiration and attempt of man to gain freedom . . . 
is denounced as . . . evil in the name of that same individualism." 
[_Red Emma Speaks_, p. 112] And, as such, is no anarchism at all.

So, unlike anarchists, "anarcho"-capitalists do not seek the "abolition
of the proletariat" (to use Proudhon's expression) via changing capitalist 
property rights and institutions. Thus the "anarcho"-capitalist and the 
anarchist have different starting positions and opposite ends in mind 
and so they cannot be considered part of the same (anarchist) tradition.
As we discuss further in later sections, the "anarcho"-capitalist
claims to being anarchists are bogus simply because they reject so much
of the anarchist tradition as to make what they do accept non-anarchist
in theory and practice. Little wonder Peter Marshall said that "few
anarchists would accept the 'anarcho-capitalists' into the anarchist
camp since they do not share a concern for economic equality and
social justice." [_Demanding the Impossible_, p. 565]

1.1 Why is the failure to renounce hierarchy the Achilles Heel of 
      right-wing libertarianism and "anarcho"-capitalism? 

Any capitalist system will produce vast differences in economic (and social)
wealth and power. As we argue in section 3.1, such differences will
reflect themselves in the market and any "free" contracts agreed there 
will create hierarchical relationships. Thus capitalism is marked by
hierarchy (see section B.1.2) and, unsurprisingly, right-libertarians
and "anarcho"-capitalists fail to oppose such "free market" generated
hierarchy.

Both groups approve of it in the capitalist workplace or rented accommodation 
and the right-Libertarians also approve of it in a 'minimal' state to protect 
private property ("anarcho"-capitalists, in contrast, approve of the use
of private defence firms to protect property). But the failure of these 
two movements to renounce hierarchy is their weakest point. For 
anti-authoritarianism has sunk deep roots into the modern psyche, 
as a legacy of the sixties.

Many people who do not even know what anarchism is have been profoundly
affected by the personal liberation and counterculture movements of the
past thirty years, epitomised by the popular bumper sticker, "Question
Authority." As a result, society now tolerates much more choice than ever
before in matters of religion, sexuality, art, music, clothing, and other
components of lifestyle. We need only recall the conservatism that reigned
in such areas during the fifties to see that the idea of liberty has made
tremendous advances in just a few decades.

Although this liberatory impulse has so far been confined almost entirely
to the personal and cultural realms, it may yet be capable of spilling
over and affecting economic and political institutions, provided it
continues to grow. The Right is well aware of this, as seen in its ongoing
campaigns for "family values," school prayer, suppression of women's
rights, fundamentalist Christianity, sexual abstinence before marriage,
and other attempts to revive the Ozzie-and-Harriet mindset of the Good Old
Days. This is where the efforts of "cultural anarchists" -- artists,
musicians, poets, and others -- are important in keeping alive the ideal
of personal freedom and resistance to authority as a necessary foundation
for economic and political restructuring.

Indeed, the libertarian right (as a whole) support restrictions on freedom
*as long as its not the state that is doing it*! Their support for
capitalism means that they have no problem with bosses dictating what
workers do during working hours (nor outside working hours, if the job
requires employees to take drug tests or not be gay in order to keep it).
If a private landlord or company decrees a mandatory rule or mode of 
living, workers/tenets must "love it or leave it!" Of course, that the
same argument also applies to state laws is one hotly denied by 
right-Libertarians -- a definite case of not seeing the wood for the
trees (see section 2.3).

Of course, the "anarcho"-capitalist will argue, workers and tenants can
find a more liberal boss or landlord. This, however, ignores two key facts.
Firstly, being able to move to a more liberal state hardly makes state
laws less offensive (as they themselves will be the first to point out).
Secondly, looking for a new job or home is not that easy. Just a moving
to a new state can involve drastic upheavals, so change changing jobs
and homes. Moreover, the job market is usually a buyers market (it has
to be in capitalism, otherwise profits are squeezed -- see sections C.7
and 10.2) and this means that workers are not usually in a position 
(unless they organise) to demand increased liberties at work. 

It seems somewhat ironic, to say the least, that right-libertarians 
place rights of property over the rights of self-ownership, even though 
(according to their ideology) self-ownership is the foundational right 
from which property rights are derived. Thus in right-libertarianism the 
rights of property owners to discriminate and govern the property-less 
are more important than the freedom from discrimination (i.e. to be 
yourself) or the freedom to govern oneself at all times.

So, when it boils down to it, right-libertarians are not really bothered 
about restrictions on liberty and, indeed, they will defend private 
restrictions on liberty with all their might. This may seem a strange 
position for self-proclaimed "libertarians" to take, but it flows 
naturally from their definition of freedom (see section 2 for a 
full discussion of this). but by not attacking hierarchy beyond certain 
forms of statism, the 'libertarian' right fundamentally undermines its 
claim to be libertarian. Freedom cannot be compartmentalised, but is 
holistic. The denial of liberty in, say, the workplace, quickly results 
in its being denied elsewhere in society (due to the impact of the
inequalities it would produce) , just as the degrading effects of wage 
labour and the hierarchies with which is it bound up are felt by the worker 
outside work. 

Neither the Libertarian Party nor so-called "anarcho"-capitalism is
*genuinely* anti-authoritarian, as those who are truly dedicated to 
liberty must be. 

1.2 How libertarian is right-Libertarian theory?

The short answer is, not very. Liberty not only implies but also requires 
independent, critical thought (indeed, anarchists would argue that critical 
thought requires free development and evolution and that it is precisely
*this* which capitalist hierarchy crushes). For anarchists a libertarian 
theory, if it is to be worthy of the name, must be based upon critical 
thought and reflect the key aspect that characterises life - change and the 
ability to evolve. To hold up dogma and base "theory" upon assumptions (as 
opposed to facts) is the opposite of a libertarian frame of mind. A 
libertarian theory must be based upon reality and recognise the need 
for change and the existence of change. Unfortunately, right-Libertarianism 
is marked more by ideology than critical analysis.

Right-Libertarianism is characterised by a strong tendency of creating
theories based upon assumptions and deductions from these axioms (for a
discussion on the pre-scientific nature of this methodology and of its
dangers, see the next section). Robert Nozick, for example, in _Anarchy, 
State, and Utopia_ makes no attempt to provide a justification of the 
property rights his whole theory is based upon. His main assumption is 
that "[i]ndividuals have rights, and there are certain things no person 
or group may do to them (without violating their rights)." [_Anarchy, 
State and Utopia_, p. ix] While this does have its intuitive appeal, 
it is not much to base a political ideology upon. After all, what rights 
people consider as valid can be pretty subjective and have constantly 
evolved during history. To say that "individuals have rights" is to open up 
the question "what rights?" Indeed, as we argue in greater length in section
2, such a rights based system as Nozick desires can and does lead to 
situations developing in which people "consent" to be exploited and 
oppressed and that, intuitively, many people consider supporting the 
"violation" of these "certain rights" (by creating other ones) simply 
because of their evil consequences. 

In other words, starting from the assumption "people have [certain] rights" 
Nozick constructs a theory which, when faced with the reality of unfreedom 
and domination it would create for the many, justifies this unfreedom 
as an expression of liberty. In other words, regardless of the outcome,
the initial assumptions are what matter. Nozick's intuitive rights system 
can lead to some very non-intuitive outcomes.

And does Nozick prove the theory of property rights he assumes? He states 
that "we shall not formulate [it] here." [Op. Cit., p. 150] Moreover, it 
is not formulated anywhere else in his book. And if it is not formulated,
what is there to defend? Surely this means that his Libertarianism is 
without foundations? As Jonathan Wolff notes, Nozick's "Libertarian property 
rights remain substantially undefended." [_Robert Nozick: Property, Justice 
and the Minimal State_, p. 117] Given that the right to acquire property 
is critical to his whole theory you would think it important enough to go 
into in some detail (or at least document). After all, unless he provides us 
with a firm basis for property rights then his entitlement theory is nonsense 
as no one has the right to (private) property.

It could be argued that Nozick *does* present enough information to allow 
us to piece together a possible argument in favour of property rights 
based on his modification of the "Lockean Proviso" (although he does
not point us to these arguments). However, assuming this is the case, 
such a defence actually fails (see section B.3.4 for more on this). If 
individuals *do* have rights, these rights do not include property rights 
in the form Nozick assumes (but does not prove). Nozick appears initially 
convincing because what he assumes with regards to property is a normal 
feature of the society we are in (we would be forgiven when we note here 
that feeble arguments pass for convincing when they are on the same side 
as the prevailing sentiment). 

Similarly, both Murray Rothbard and Ayn Rand (who is infamous for repeating 
"A is A" ad infinitum) do the same - base their ideologies on assumptions 
(see section 11 for more on this). 

Therefore, we see that most of the leading right-Libertarian ideologues 
base themselves on assumptions about what "Man" is or the rights they 
should have (usually in the form that people have (certain) rights because 
they are people). From these theorems and assumptions they build their 
respective ideologies, using logic to deduce the conclusions that their 
assumptions imply. Such a methodology is unscientific and, indeed, a relic 
of religious (pre-scientific) society (see next section) but, more 
importantly, can have negative effects on maximising liberty. This is
because this "methodology" has distinct problems. Murray Bookchin 
argues:

"Conventional reason rests on identity, not change; its fundamental 
principle is that *A equals A,* the famous 'principle of identity,' which 
means that any given phenomenon can be only itself and cannot be other than
what we immediately perceive it to be at a given moment in time. It does not
address the problem of change. A human being is an infant at one time, a
child at another, an adolescent at still another, and finally a youth and
an adult. When we analyse an infant by means of conventional reason, we
are not exploring what it is *becoming* in the process of developing into
a child." ["A Philosophical Naturalism", _Society and Nature_, No.2, p. 64]

In other words, right-Libertarian theory is based upon ignoring the
fundamental aspect of life - namely *change* and *evolution.* Perhaps
it will be argued that identity also accounts for change by including
potentiality -- which means, that we have the strange situation that 
A can *potentially* be A! If A is not actually A, but only has the 
potential to be A, then A is not A. Thus to include change is to 
acknowledge that A does not equal A -- that individuals and humanity 
evolves and so what constitutes A also changes. To maintain identity
and then to deny it seems strange.

That change is far from the "A is A" mentality can be seen from Murray 
Rothbard who goes so far as to state that "one of the notable attributes 
of natural law" is "its applicability to all men [sic!], regardless of 
time or place. Thus ethical law takes its place alongside physical or 
'scientific' natural laws." [_The Ethics of Liberty_, p. 42] Apparently 
the "nature of man" is the only living thing in nature that does not evolve 
or change! Of course, it could be argued that by "natural law" Rothbard is 
only referring to his method of deducing his (and, we stress, they are
just his -- not natural) "ethical laws" -- but his methodology starts
by assuming certain things about "man." Whether these assumptions seem
far or not is besides the point, by using the term "natural law" Rothbard
is arguing that any actions that violate *his* ethical laws are somehow
"against nature" (but if they were against nature, they could not occur 
-- see section 11 for more on this). Deductions from assumptions is a
Procrustean bed for humanity (as Rothbard's ideology shows).

So, as can be seen, many leading right-Libertarians place great store
by the axiom "A is A" or that "man" has certain rights simply because 
"he" is a "man". And as Bookchin points out, such conventional reason 
"doubtless plays an indispensable role in mathematical thinking and 
mathematical sciences . . . and in the nuts-and-bolts of dealing with 
everyday life" and so is essential to "understand or design mechanical 
entities." [Ibid., p.67] But the question arises, is such reason 
useful when considering people and other forms of life?

Mechanical entities are but one (small) aspect of human life. Unfortunately 
for right-Libertarians (and fortunately for the rest of humanity), human 
beings are *not* mechanical entities but instead are living, breathing, 
feeling, hoping, dreaming, *changing* living organisms. They are not
mechanical entities and any theory that uses reason based on such 
(non-living) entities will flounder when faced with living ones. In 
other words, right-Libertarian theory treats people as the capitalist 
system tries to -- namely as commodities, as things. Instead of human 
beings, whose ideas, ideals and ethics change, develop and grow, capitalism 
and capitalist ideologues try to reduce human life to the level of corn or 
iron (by emphasising the unchanging "nature" of man and their starting
assumptions/rights). 

This can be seen from their support for wage labour, the reduction of
human activity to a commodity on the market. While paying lip service 
to liberty and life, right-libertarianism justifies the commodification 
of labour and life, which within a system of capitalist property rights
can result in the treating of people as means to an end as opposed 
to an end in themselves (see sections 2 and 3.1). 

And as Bookchin points out, "in an age of sharply conflicting values and
emotionally charges ideals, such a way of reasoning is often repellent. 
Dogmatism, authoritarianism, and fear seem all-pervasive." [Ibid., p. 68]
Right-Libertarianism provides more than enough evidence for Bookchin's 
summary with its support for authoritarian social relationships, hierarchy
and even slavery (see section 2).

This mechanical viewpoint is also reflected in their lack of appreciation 
that social institutions and relationships evolve over time and, sometimes,
fundamentally change. This can best be seen from property. Right-libertarians
fail to see that over time (in the words of Proudhon) property "changed
its nature." Originally, "the word *property* was synonymous with . . .
*individual possession*" but it became more "complex" and turned into 
*private property* -- "the right to use it by his neighbour's labour." 
The changing of use-rights to (capitalist) property rights created relations
of domination and exploitation between people absent before. For the
right-Libertarian, both the tools of the self-employed artisan and the 
capital of a transnational corporation are both forms of "property" and 
(so) basically identical. In practice, of course, the social relations 
they create and the impact they have on society are totally different. 
Thus the mechanical mind-set of right-Libertarianism fails to understand
how institutions, like property, evolve and come to replace whatever 
freedom enhancing features they had with oppression (indeed, von Mises
argued that "[t]here may possibly be a difference of opinion about
whether a particular institution is socially beneficial or harmful. But
once it has been judged [by whom, we ask] beneficial, one can no longer
contend that, for some inexplicable reason, it must be condemned as 
immoral." [_Liberalism_, p. 34] So much for evolution and change!).

Anarchism, in contrast, is based upon the importance of critical thought 
informed by an awareness that life is in a constant process of change. This 
means that our ideas on human society must be informed by the facts, not by 
what we wish was true. For Bookchin, an evaluation of conventional wisdom 
(as expressed in "the law of identity") is essential and its conclusions 
have "enormous importance for how we behave as ethical beings, the nature 
of nature, and our place in the natural world. Moreover. . . these issues 
directly affect the kind of society, sensibility, and lifeways we wish to 
foster." [Bookchin, Op. Cit., pp. 69-70]

Bookchin is correct. While anarchists oppose hierarchy in the name of 
liberty, right-libertarians support authority and hierarchy, all of which 
deny freedom and restrict individual development. This is unsurprising 
because the right-libertarian ideology rejects change and critical thought 
based upon the scientific method and so is fundamentally *anti-life* in 
its assumptions and *anti-human* in its method. Far from being a libertarian 
set of ideas, right-Libertarianism is a mechanical set of dogmas that deny 
the fundamental nature of life (namely change) and of individuality (namely 
critical thought and freedom). Moreover, in practice their system of 
(capitalist) rights would soon result in extensive restrictions on liberty 
and authoritarian social relationships (see sections 2 and 3) -- a 
strange result of a theory proclaiming itself "libertarian" but one 
consistent with its methodology.

From a wider viewpoint, such a rejection of liberty by right-libertarians 
is unsurprising. They do, after all, support capitalism. Capitalism 
produces an inverted set of ethics, one in which capital (dead labour) is
more important that people (living labour). After all, workers are usually 
easier to replace than investments in capital and the person who owns
capital commands the person who "only" owns his life and productive 
abilities. And as Oscar Wilde once noted, crimes against property "are 
the crimes that the English law, valuing what a man has more than what 
a man is, punishes with the harshest and most horrible severity." [_The 
Soul of Man Under Socialism_, p. 1182] 

This mentality is reflected in right-libertarianism when it claims that 
stealing food is a crime while starving to death (due to the action of 
market forces/power and property rights) is no infringement of your rights 
(see section 4.2 for a similar argument with regards to water). It can 
also be seen when right-libertarian's claim that the taxation "of earnings 
from labour" (e.g. of one dollar from a millionaire) is "*on a par with* 
forced labour" [Nozick, Op. Cit., p. 169] while working in a sweatshop 
for 14 hours a day (enriching said millionaire) does not affect your 
liberty as you "consent" to it due to market forces (although, of course, 
many rich people have earned their money *without* labouring themselves -- 
their earnings derive from the wage labour of others so would taxing
those, non-labour, earnings be "forced labour"?) Interestingly, the
Individualist Anarchist Ben Tucker argued that an income tax was "a 
recognition of the fact that industrial freedom and equality of
opportunity no longer exist here [in the USA in the 1890s] even in
the imperfect state in which they once did exist" [quoted by James
Martin, _Men Against the State_, p. 263] which suggests a somewhat
different viewpoint on this matter than Nozick or Rothbard.

That capitalism produces an inverted set of ethics can be seen when the
Ford produced the Pinto. The Pinto had a flaw in it which meant that if
it was hit in a certain way in a crash the fuel tank exploded. The Ford
company decided it was more "economically viable" to produce that car and
pay damages to those who were injured or the relatives of those who died 
than pay to change the invested capital. The needs for the owners of 
capital to make a profit came before the needs of the living. Similarly, 
bosses often hire people to perform unsafe work in dangerous conditions
and fire them if they protest. Right-libertarian ideology is the 
philosophical equivalent. Its dogma is "capital" and it comes before 
life (i.e. "labour").

As Bakunin once put it, "you will always find the idealists in the very
act of practical materialism, while you will see the materialists pursuing
and realising the most grandly ideal aspirations and thoughts." [_God
and the State_, p. 49] Hence we see right "libertarians" supporting
sweat shops and opposing taxation -- for, in the end, money (and the
power that goes with it) counts far more in that ideology than ideals 
such as liberty, individual dignity, empowering, creative and productive 
work and so forth for all. The central flaw of right-libertarianism is
that it does not recognise that the workings of the capitalist market can 
easily ensure that the majority end up becoming a resource for others in 
ways far worse than that associated with taxation. The legal rights 
of self-ownership supported by right-libertarians does not mean that 
people have the ability to avoid what is in effect enslavement to 
another (see sections 2 and 3).

Right-Libertarian theory is not based upon a libertarian methodology or
perspective and so it is hardly surprising it results in support for
authoritarian social relationships and, indeed, slavery (see section 
2.6).

1.3 Is right-Libertarian theory scientific in nature?

Usually, no. The scientific approach is *inductive,* much of the 
right-libertarian approach is *deductive.* The first draws generalisations 
from the data, the second applies preconceived generalisations to the data. 
A completely deductive approach is pre-scientific, however, which is why 
many right-Libertarians cannot legitimately claim to use a scientific 
method. Deduction does occur in science, but the generalisations are 
primarily based on other data, not *a priori* assumptions, and are checked 
against data to see if they are accurate. Anarchists tend to fall into the 
inductive camp, as Kropotkin put it:

"Precisely this natural-scientific method applied to economic facts,
enables us to prove that the so-called 'laws' of middle-class sociology,
including also their political economy, are not laws at all, but 
simply guesses, or mere assertions which have never been verified
at all." [_Kropotkin's Revolutionary Pamphlets_, p. 153]

The idea that natural-scientific methods can be applied to economic and
social life is one that many right-libertarians reject. Instead they 
favour the deductive (pre-scientific) approach (this we must note is
not limited purely to Austrian economists, many more mainstream 
capitalist economists also embrace deduction over induction).

The tendency for right-Libertarianism to fall into dogmatism (or *a priori* 
theorems, as they call it) and its implications can best be seen from the 
work of Ludwig von Mises and other economists from the right-Libertarian
"Austrian school." Of course, not all right-libertarians necessarily 
subscribe to this approach (Murray Rothbard for one did) but its use by
so many leading lights of both schools of thought is significant and 
worthy of comment. And as we are concentrating on *methodology* it is
not essential to discuss the starting assumptions. The assumptions (such 
as, to use Rothbard's words, the Austrian's "fundamental axiom that 
individual human beings act") may be correct, incorrect or incomplete -- 
but the method of using them advocated by von Mises ensures that such 
considerations are irrelevant.

Von Mises (a leading member of the Austrian school of economics) begins by 
noting that social and economic theory "is not derived from experience; it 
is prior to experience..." Which is back to front. It is obvious that 
experience of capitalism is necessary in order to develop a viable theory 
about how it works. Without the experience, any theory is just a flight of 
fantasy. The actual specific theory we develop is therefore derived from 
experience, informed by it and will have to get checked against reality 
to see if it is viable. This is the scientific method - any theory must 
be checked against the facts. However, von Mises goes on to argue at length 
that "no kind of experience can ever force us to discard or modify *a priori* 
theorems; they are logically prior to it and cannot be either proved by 
corroborative experience or disproved by experience to the contrary . . ."

And if this does not do justice to a full exposition of the phantasmagoria 
of von Mises' *a priorism*, the reader may take some joy (or horror) from 
the following statement:

"If a contradiction appears between a theory and experience, *we must 
always assume* that a condition pre-supposed by the theory was not 
present, or else there is some error in our observation. The disagreement 
between the theory and the facts of experience frequently forces us to think
through the problems of the theory again. *But so long as a rethinking of 
the theory uncovers no errors in our thinking, we are not entitled to doubt 
its truth*" [emphasis added -- the quotes presented here are cited 
in _Ideology and Method in Economics_ by Homa Katouzian, pp. 39-40]

In other words, if reality is in conflict with your ideas, do not adjust 
your views because reality must be at fault! The scientific method would 
be to revise the theory in light of the facts. It is not scientific to
reject the facts in light of the theory! This anti-scientific perspective
is at the heart of his economics as experience "can never . . . prove or 
disprove any particular theorem": 

"What assigns economics to its peculiar and unique position in the
orbit of pure knowledge and of the practical utilisation of knowledge
is the fact that its particular theorems are not open to any verification
or falsification on the grounds of experience . . .. . . The ultimate 
yardstick of an economic theorem's correctness or incorrectness is solely 
reason unaided by experience." [_Human Action_, p. 858]

Von Mises rejects the scientific approach as do all Austrian Economists.
Murray Rothbard states approvingly that "Mises indeed held not only that 
economic theory does not need to be 'tested' by historical fact but also 
that it *cannot* be so tested." ["Praxeology: The Methodology of Austrian 
Economics" in _The Foundation of Modern Austrian Economics_, p. 32]
Similarly, von Hayek wrote that economic theories can "never be verified 
or falsified by reference to facts. All that we can and must verify is the 
presence of our assumptions in the particular case." [_Individualism and 
Economic Order_, p. 73] 

This may seen somewhat strange to non-Austrians. How can we ignore reality
when deciding whether a theory is a good one or not? If we cannot evaluate
our ideas, how can we consider them anything bar dogma? The Austrian's
maintain that we cannot use historical evidence because every historical
situation is unique. Thus we cannot use "complex heterogeneous historical
facts as if they were repeatable homogeneous facts" like those in a
scientist's experiment [Rothbard, Op. Cit., p. 33]. While such a position
*does* have an element of truth about it, the extreme *a priorism* that
is drawn from this element is radically false (just as extreme empiricism 
is also false, but for different reasons).

Those who hold such a position ensure that their ideas cannot be evaluated 
beyond logical analysis. As Rothbard makes clear, "since praxeology begins 
with a true axiom, A, all that can be deduced from this axiom must also 
be true. For if A implies be, and A is true, then B must also be true." 
[Op. Cit., pp. 19-20] But such an approach makes the search for truth a
game without rules. The Austrian economists (and other right-libertarians) 
who use this method are free to theorise anything they want, without such 
irritating constrictions as facts, statistics, data, history or experimental 
confirmation. Their only guide is logic. But this is no different from what 
religions do when they assert the logical existence of God. Theories 
ungrounded in facts and data are easily spun into any belief a person 
wants. Starting assumptions and trains of logic may contain inaccuracies 
so small as to be undetectable, yet will yield entirely false conclusions.

In addition, trains of logic may miss things which are only brought 
to light by actual experiences (after all, the human mind is not all 
knowing or all seeing). To ignore actual experience is to loose that
input when evaluating a theory. Hence our comments on the irrelevance 
of the assumptions used -- the methodology is such that incomplete or 
incorrect assumptions or steps cannot be identified in light of experience. 
This is because one way of discovering if a given chain of logic requires 
checking is to test its conclusions against available evidence (although 
von Mises did argue that the "ultimate yardstick" was "solely reason unaided 
by experience"). If we *do* take experience into account and rethink a 
given theory in the light of contradictory evidence, the problem 
remains that a given logical chain may be correct, but incomplete 
or concentrate on or stress inappropriate factors. In other words, our 
logical deductions may be correct but our starting place or steps wrong 
and as the facts are to be rejected in the light of the deductive method, 
we cannot revise our ideas.

Indeed, this approach could result in discarding (certain forms of) human 
behaviour as irrelevant (which the Austrian system claims using empirical 
evidence does). For there are too many variables that can have an influence 
upon individual acts to yield conclusive results explaining human behaviour. 
Indeed, the deductive approach may ignore as irrelevant certain human 
motivations which have a decisive impact on an outcome. There could be 
a strong tendency to project "right-libertarian person" onto the rest of 
society and history, for example, and draw inappropriate insights into the
way human society works or has worked. This can be seen, for example, 
in attempts to claim pre-capitalist societies as examples of
"anarcho"-capitalism in action.

Moreover, deductive reasoning cannot indicate the relative significance 
of assumptions or theoretical factors. That requires empirical study. It 
could be that a factor considered important in the theory actually turns 
out to have little effect in practice and so the derived axioms are so 
weak as to be seriously misleading.

In such a purely ideal realm, observation and experience are distrusted
(when not ignored) and instead theory is the lodestone. Given the bias
of most theorists in this tradition, it is unsurprising that this style
of economics can always be trusted to produce results proving free markets
to be the finest principle of social organisation. And, as an added
bonus, reality can be ignored as it is *never* "pure" enough according
to the assumptions required by the theory. It could be argued, because
of this, that many right-libertarians insulate their theories from 
criticism by refusing to test them or acknowledge the results of such
testing (indeed, it could also be argued that much of right-libertarianism 
is more a religion than a political theory as it is set-up in such a 
way that it is either true or false, with this being determined not 
by evaluating facts but by whether you accept the assumptions and 
logical chains presented with them).

Strangely enough, while dismissing the "testability" of theories many
right-Libertarians (including Murray Rothbard) *do* investigate historical 
situations and claim them as examples of how well their ideas work in 
practice. But why does historical fact suddenly become useful when it 
can be used to bolster the right-Libertarian argument? Any such example 
is just as "complex" as any other and the good results indicated may 
not be accountable to the assumptions and steps of the theory but to other
factors totally ignored by it. If economic (or other) theory is untestable 
then *no* conclusions can be drawn from history, including claims for the
superiority of laissez-faire capitalism. You cannot have it both ways 
-- although we doubt that right-libertarians will stop using history
as evidence that their ideas work.

Perhaps the Austrian desire to investigate history is not so strange 
after all. Clashes with reality make a-priori deductive systems implode 
as the falsifications run back up the deductive changes to shatter the 
structure built upon the original axioms. Thus the desire to find *some*
example which proves their ideology must be tremendous. However, the 
deductive a-priori methodology makes them unwilling to admit to being 
mistaken -- hence their attempts to downplay examples which refute their 
dogmas. Thus we have the desire for historical examples while at the same 
time they have extensive ideological justifications that ensure reality 
only enters their world-view when it agrees with them. In practice,
the latter wins as real-life refuses to be boxed into their dogmas
and deductions.

Of course it is sometimes argued that it is *complex* data that is
the problem. Let use assume that this is the case. It is argued that
when dealing with complex information it is impossible to use aggregate 
data without first having more simple assumptions (i.e. that "humans
act"). Due to the complexity of the situation, it is argued, it is 
impossible to aggregate data because this hides the individual activities 
that creates it. Thus "complex" data cannot be used to invalidate 
assumptions or theories. Hence, according to Austrians, the axioms 
derived from the "simple fact" that "humans act" are the only basis 
for thinking about the economy.

Such a position is false in two ways.

Firstly, the aggregation of data *does* allow us to understand complex 
systems. If we look at a chair, we cannot find out whether it is 
comfortable, its colour, whether it is soft or hard by looking at 
the atoms that make it up. To suggest that you can is to imply the 
existence of green, soft, comfortable atoms. Similarly with gases. 
They are composed to countless individual atoms but scientists do 
not study them by looking at those atoms and their actions. Within
limits, this is also valid for human action. For example, it would
be crazy to maintain from historical data that interest rates will
be a certain percentage a week but it is valid to maintain that 
interest rates are known to be related to certain variables in certain
ways. Or that certain experiences will tend to result in certain forms
of psychological damage. General tendencies and "rules of thumb" can
be evolved from such study and these can be used to *guide* current 
practice and theory. By aggregating data you can produce valid 
information, rules of thumb, theories and evidence which would be 
lost if you concentrated on "simple data" (such as "humans act").
Therefore, empirical study produces facts which vary across time 
and place, and yet underlying and important patterns can be
generated (patterns which can be evaluated against *new* data
and improved upon).

Secondly, the simple actions themselves influence and are influenced 
in turn by overall (complex) facts. People act in different ways in 
different circumstances (something we can agree with Austrians about, 
although  we refuse to take it to their extreme position of rejecting 
empirical evidence as such). To use simple acts to understand
complex systems means to miss the fact that these acts are not 
independent of their circumstances. For example, to claim that the
capitalist market is "just" the resultant of bilateral exchanges
ignores the fact that the market activity shapes the nature and
form of these bilateral exchanges. The "simple" data is dependent
on the "complex" system -- and so the complex system *cannot* be
understood by looking at the simple actions in isolation. To do so
would be to draw incomplete and misleading conclusions (and it is
due to these interrelations that we argue that aggregate data should
be used critically). This is particularly important when looking at
capitalism, where the "simple" acts of exchange in the labour market
are dependent upon and shaped by circumstances outside these acts.

So to claim that (complex) data cannot be used to evaluate a theory 
is false. Data can be useful when seeing whether a theory is confirmed by 
reality. This is the nature of the scientific method -- you compare the 
results expected by your theory to the facts and if they do not match you 
check your facts *and* check your theory. This may involve revising the
assumptions, methodology and theories you use if the evidence is such as 
to bring them into question. For example, if you claim that capitalism is 
based on freedom but that the net result of capitalism is to produce 
relations of domination between people then it would be valid to revise, 
for example, your definition of freedom rather than deny that domination 
restricts freedom (see section 2 on this). But if actual experience is 
to be distrusted when evaluating theory, we effectively place ideology 
above people -- after all, how the ideology affects people in *practice* 
is irrelevant as experiences cannot be used to evaluate the (logically
sound but actually deeply flawed) theory.

Moreover, there is a slight arrogance in the "Austrian" dismissal of 
empirical evidence. If, as they argue, the economy is just too complex 
to allow us to generalise from experience then how can one person 
comprehend it sufficiently to create an economic ideology as the 
Austrian's suggest? Surely no one mind (or series of minds) can 
produce a model which accurately reflects such a complex system? To 
suggest that one can deduce a theory for an exceedingly complex social 
system from the theoretical work based on an analysis technique which 
deliberately ignores that reality as being unreliable seems to require 
a deliberate suspension of one's reasoning faculties. Of course, it 
may be argued that such a task is possible, given a small enough subset 
of economic activity. However, such a process is sure to lead its 
practitioners astray as the subset is not independent of the whole 
and, consequently, can be influenced in ways the ideologist does not 
(indeed, cannot) take into account. Simply put, even the greatest mind
cannot comprehend the complexities of real life and so empirical 
evidence needs to inform any theory seeking to describe and explain 
it. To reject it is simply to retreat into dogmatism and ideology,
which is precisely what right-wing libertarians generally do.

Ultimately, this dismissal of empirical evidence seems little more 
than self-serving. It's utility to the ideologist is obvious. It 
allows them to speculate to their hearts content, building models of 
the economy with no bearing to reality. Their models and the conclusions 
it generates need never be bothered with reality -- nor the effects of 
their dogma. Which shows its utility to the powerful. It allows them 
to spout comments like "the free market benefits all" while the rich
get richer and allows them to brush aside any one who points out such
troublesome facts. 

That this position is self-serving can be seen from the fact that most 
right libertarians are very selective about applying von Mises' argument. 
As a rule of thumb, it is only applied when the empirical evidence goes 
against capitalism. In such circumstances the fact that the current 
system is not a free market will also be mentioned. However, if the 
evidence seems to bolster the case for propertarianism then empirical 
evidence becomes all the rage. Needless to say, the fact that we do not 
have a free market will be conveniently forgotten. Depending on the 
needs of the moment, fundamental facts are dropped and retrieved to
bolster the ideology.

As we indicated above (in section 1.2) and will discuss in more depth
later (in section 11) most of the leading right-Libertarian theorists
base themselves on such deductive methodologies, starting from assumptions
and "logically" drawing conclusions from them. The religious undertones
of such methodology can best be seen from the roots of right-Libertarian
"Natural law" theory.

Carole Pateman, in her analysis of Liberal contract theory, indicates
the religious nature of the "Natural Law" argument so loved by the
theorists of the "Radical Right." She notes that for Locke (the main source
of the Libertarian Right's Natural Law cult) "natural law" was equivalent
of "God's Law" and that "God's law exists externally to and independently
of individuals." [_The Problem of Political Obligation_, p. 154] No role
for critical thought there, only obedience. Most modern day "Natural Law"
supporters forget to mention this religious undercurrent and instead
talk of about "Nature" (or "the market") as the deity that creates Law, 
not God, in order to appear "rational." So much for science.

Such a basis in dogma and religion can hardly be a firm foundation for
liberty and indeed "Natural Law" is marked by a deep authoritarianism:

"Locke's traditional view of natural law provided individual's with an 
external standard which they could recognise, but which they did not 
voluntarily choose to order their political life." [Pateman, Op. Cit., 
p. 79]

In Section 11 we discuss the authoritarian nature of "Natural Law" 
and will not do so here. However, here we must point out the political 
conclusions Locke draws from his ideas. In Pateman's words, Locke 
believed that "obedience lasts only as long as protection. His 
individuals are able to take action themselves to remedy their political
lot. . . but this does not mean, as is often assumed, that Locke's theory
gives direct support to present-day arguments for a right of civil
disobedience. . . His theory allows for two alternatives only: either
people go peacefully about their daily affairs under the protection of
a liberal, constitutional government, or they are in revolt against a
government which has ceased to be 'liberal' and has become arbitrary and
tyrannical, so forfeiting its right to obedience." [Op. Cit., p. 77]

Locke's "rebellion" exists purely to reform a *new* 'liberal' government, 
not to change the existing socio-economic structure which the 'liberal' 
government exists to protect. His theory, therefore, indicates the results 
of a priorism, namely a denial of any form of social dissent which may change 
the "natural law" as defined by Locke. This perspective can be found in
Rothbard who lambasted the individualist anarchists for arguing that
juries should judge the law as well as the facts. For Rothbard, the law
would be drawn up by jurists and lawyers, not ordinary people (see 
section 1.4 for details). The idea that those subject to laws should
have a say in forming them is rejected in favour of elite rule. As 
von Mises put it:

"The flowering of human society depends on two factors: the 
intellectual power of outstanding men to conceive sound social 
and economic theories, and the ability of these or other men 
to make these ideologies palatable to the majority" [_Human 
Action_, p. 864]

Yet such a task would require massive propaganda work and would only, 
ultimately, succeed by removing the majority from any say in the 
running of society. Once that is done then we have to believe that 
the ruling elite will be altruistic in the extreme and not abuse 
their position to create laws and processes which defended what
*they* thought was "legitimate" property, property rights and what 
constitutes "aggression." Which, ironically, contradicts the key 
capitalist notion that people are driven by self-gain. The obvious 
conclusion from such argument is that any right-libertarian regime 
would have to exclude change. If people can change the regime they 
are under they may change it in ways that right libertarian's do 
not support. The provision for ending amendments to the regime or 
the law would effectively ban most opposition groups or parties 
as, by definition, they could do nothing once in office (for 
minimal state "libertarians") or in the market for "defence" 
agencies (for "anarcho"-capitalists). How this differs from a 
dictatorship is hard to say -- after all, most dictatorships have 
parliamentary bodies which have no power but which can talk a lot.
Perhaps the knowledge that it is *private* police enforcing *private*
power will make those subject to the regime maximise their utility
by keeping quiet and not protesting. Given this, von Mises' praise
for fascism in the 1920s may be less contradictory than it first 
appears (see section 6.5) as it successfully "deterred democracy"
by crushing the labour, socialist and anarchist movements across
the world.

So, von Mises, von Hayek and most right-libertarians reject the scientific 
method in favour of ideological correctness -- if the facts contradict your
theory then they can be dismissed as too "complex" or "unique". Facts, 
however, should inform theory and any theory's methodology should take 
this into account. To dismiss facts out of hand is to promote dogma.
This is not to suggest that a theory should be modified very time new
data comes along -- that would be crazy as unique situations *do* exist,
data can be wrong and so forth -- but it does suggest that if your theory
*continually* comes into conflict with reality, it is time to rethink the
theory and not assume that facts cannot invalidate it. A true libertarian 
would approach a contradiction between reality and theory by evaluating
the facts available and changing the theory is this is required, not by 
ignoring reality or dismissing it as "complex". 

Thus, much of right-Libertarian theory is neither libertarian nor scientific.
Much of right-libertarian thought is highly axiomatic, being logically
deduced from such starting axioms as "self-ownership" or "no one should
initiate force against another". Hence the importance of our discussion
of von Mises as this indicates the dangers of this approach, namely the
tendency to ignore/dismiss the consequences of these logical chains and, 
indeed, to justify them in terms of these axioms rather than from the
facts. In addition, the methodology used is such as that it would be 
fair to argue that right-libertarians get to critique reality but reality 
can never be used to critique right-libertarianism -- for any empirical 
data presented as evidence as be dismissed as "too complex" or "unique" 
and so irrelevant (unless it can be used to support their claims, of 
course). 

Hence W. Duncan Reekie's argument (quoting leading Austrian economist 
Israel Kirzner) that "empirical work 'has the function of establishing 
the *applicability* of particular theorems, and thus *illustrating* their 
operation' . . . Confirmation of theory is not possible because there is no 
constants in human action, nor is it necessary because theorems themselves 
describe relationships logically developed from hypothesised conditions. 
Failure of a logically derived axiom to fit the facts does not render 
it invalid, rather it 'might merely indicate inapplicability' to the 
circumstances of the case.'" [_Markets, Entrepreneurs and Liberty_, p. 31]

So, if facts confirm your theory, your theory is right. If facts do not 
confirm your theory, it is still right but just not applicable in this case! 
Which has the handy side effect of ensuring that facts can *only* be used 
to support the ideology, *never* to refute it (which is, according to this
perspective, impossible anyway). As Karl Popper argued, a "theory 
which is not refutable by any conceivable event is non-scientific."
[_Conjectures and Refutations_, p. 36] In other words (as we noted 
above), if reality contradicts your theory, ignore reality! 

Kropotkin hoped "that those who believe in [current economic doctrines]
will themselves become convinced of their error as soon as they come 
to see the necessity of verifying their quantitative deductions by 
quantitative investigation." [Op. Cit., p. 178] However, the Austrian
approach builds so many barriers to this that it is doubtful that
this will occur. Indeed, right-libertarianism, with its focus on exchange
rather than its consequences, seems to be based upon justifying domination
in terms of their deductions than analysing what freedom actually means 
in terms of human existence (see section 2 for a fuller discussion).

The real question is why are such theories taken seriously and arouse 
such interest. Why are they not simply dismissed out of hand, given their
methodology and the authoritarian conclusions they produce? The answer is, 
in part, that feeble arguments can easily pass for convincing when they
are on the same side as the prevailing sentiment and social system. And, of
course, there is the utility of such theories for ruling elites - "[a]n 
ideological defence of privileges, exploitation, and private power will be 
welcomed, regardless of its merits." [Noam Chomsky, _The Chomsky Reader_,
p. 188]

1.4 Is "anarcho"-capitalism a new form of individualist anarchism?

Some "anarcho"-capitalists shy away from the term, preferring such
expressions as "market anarchist" or "individualist anarchist." This
suggests that there is some link between their ideology and that of
Tucker. However, the founder of "anarcho"-capitalism, Murray Rothbard,
refused that label for, while "strongly tempted," he could not do so
because "Spooner and Tucker have in a sense pre-empted that name for
their doctrine and that from that doctrine I have certain differences."
Somewhat incredibly Rothbard argued that on the whole politically
"these differences are minor," economically "the differences are 
substantial, and this means that my view of the consequences of 
putting our more of less common system into practice is very far from 
theirs." ["The Spooner-Tucker Doctrine: An Economist's View", _Journal 
of Libertarian Studies_, vol. 20, no. 1, p. 7] 

What an understatement! Individualist anarchists advocated an economic 
system in which there would have been very little inequality of wealth 
and so of power (and the accumulation of capital would have been minimal 
without profit, interest and rent). Removing this social and economic 
basis would result in *substantially* different political regimes. This 
can be seen from the fate of Viking Iceland, where a substantially 
communal and anarchistic system was destroyed from within by increasing 
inequality and the rise of tenant farming (see section 9 for details). 
In other words, politics is not isolated from economics. As David
Wieck put it, Rothbard "writes of society as though some part of it 
(government) can be extracted and replaced by another arrangement while 
other things go on before, and he constructs a system of police and 
judicial power without any consideration of the influence of historical 
and economic context." ["Anarchist Justice," in _Nomos XIX_, Pennock 
and Chapman, eds., p. 227]

Unsurprisingly, the political differences he highlights *are* significant,
namely "the role of law and the jury system" and "the land question."
The former difference relates to the fact that the individualist anarchists 
"allow[ed] each individual free-market court, and more specifically, each 
free-market jury, totally free rein over judicial decision." This horrified 
Rothbard. The reason is obvious, as it allows real people to judge the law 
as well as the facts, modifying the former as society changes and evolves. 
For Rothbard, the idea that ordinary people should have a say in the law is 
dismissed. Rather, "it would not be a very difficult task for Libertarian 
lawyers and jurists to arrive at a rational and objective code of libertarian 
legal principles and procedures." [Op. Cit., p. 7-8] Of course, the fact that 
"lawyers" and "jurists" may have a radically different idea of what is just 
than those subject to their laws is not raised by Rothbard, never mind 
answered. While Rothbard notes that juries may defend the people against 
the state, the notion that they may defend the people against the authority
and power of the rich is not even raised. That is why the rich have tended to 
oppose juries as well as popular assemblies.

Unsurprisingly, the few individualist anarchists that remained pointed this
out. Laurance Labadie, the son of Tucker associate Joseph Labadie, argued
in response to Rothbard as follows:

"Mere common sense would suggest that any court would be influenced 
by experience; and any free-market court or judge would in the very 
nature of things have some precedents guiding them in their instructions 
to a jury. But since no case is exactly the same, a jury would have 
considerable say about the heinousness of the offence in each case, 
realising that circumstances alter cases, and prescribing penalty 
accordingly. This appeared to Spooner and Tucker to be a more flexible 
and equitable administration of justice possible or feasible, human 
beings being what they are.. . .

"But when Mr. Rothbard quibbles about the jurisprudential ideas of 
Spooner and Tucker, and at the same time upholds *presumably in his 
courts* the very economic evils which are at bottom the very reason 
for human contention and conflict, he would seem to be a man who 
chokes at a gnat while swallowing a camel." [quoted by Mildred J. 
Loomis and Mark A. Sullivan, "Laurance Labadie: Keeper Of The Flame",
pp. 116-30, _Benjamin R. Tucker and the Champions of Liberty_, 
Coughlin, Hamilton and Sullivan (eds.), p. 124]

In other words, to exclude the general population from any say in the
law and how it changes is hardly a "minor" difference! Particularly
if you are proposing an economic system which is based on inequalities
of wealth, power and influence and the means of accumulating more.
It is like a supporter of the state saying that it is a "minor"
difference if you favour a dictatorship rather than a democratically 
elected government. As Tucker argued, "it is precisely in the 
tempering of the rigidity of enforcement that one of the chief
excellences of Anarchism consists . . . under Anarchism all rules
and laws will be little more than suggestions for the guidance of
juries, and that all disputes . . . will be submitted to juries 
which will judge not only the facts but the law, the justice of
the law, its applicability to the given circumstances, and the
penalty or damage to be inflicted because of its infraction . . .
under Anarchism the law . . . will be regarded as *just* in 
proportion to its flexibility, instead of now in proportion to 
its rigidity." [_The Individualist Anarchists_, pp. 160-1] In 
others, the law will evolve to take into account changing social
circumstances and, as a consequence, public opinion on specific 
events and rights. Tucker's position is fundamentally *democratic* 
and evolutionary while Rothbard's is autocratic and fossilised.

On the land question, Rothbard opposed the individualist position of
"occupancy and use" as it "would automatically abolish all rent
payments for land."  Which was *precisely* why the individualist 
anarchists advocated it! In a predominantly rural economy, this 
would result in a significant levelling of income and social 
power as well as bolstering the bargaining position of non-land 
workers by reducing unemployment. He bemoans that landlords
cannot charge rent on their "justly-acquired private property"
without noticing that is begging the question as anarchists deny
that this is "justly-acquired" land. Unsurprising, Rothbard
considers "the property theory" of land ownership as John Locke's,
ignoring the fact that the first self-proclaimed anarchist book
was written to refute that kind of theory. His argument simply shows 
how far from anarchism his ideology is. For Rothbard, it goes
without saying that the landlord's "freedom of contract" tops the 
worker's freedom to control their own work and live and, of course, 
their right to life. [Op. Cit., p. 8 and p. 9] However, for 
anarchists, "the land is indispensable to our existence, 
consequently a common thing, consequently insusceptible of
appropriation." [Proudhon, _What is Property?_, p. 107]

The reason question is why Rothbard considers this a *political*
difference rather than an economic one. Unfortunately, he does not
explain. Perhaps because of the underlying *socialist* perspective 
behind the anarchist position? Or perhaps the fact that feudalism
and monarchism was based on the owner of the land being its ruler
suggests a political aspect to the ideology best left unexplored?
Given that the idea of grounding rulership on land ownership receded 
during the Middle Ages, it may be unwise to note that under 
"anarcho"-capitalism the landlord and capitalist would, likewise, 
be sovereign over the land *and* those who used it? As we noted
in section 1, this is the conclusion that Rothbard does draw.
As such, there *is* a political aspect to this difference. 

Moreover. "the expropriation of the mass of the people from the 
soil forms the basis of the capitalist mode of production." [Marx, 
_Capital_, vol. 1, p. 934] For there are "two ways of oppressing 
men: either directly by brute force, by physical violence; or 
indirectly by denying them the means of life and this reducing them 
to a state of surrender." In the second case, government is "an 
organised instrument to ensure that dominion and privilege will be 
in the hands of those who . . . have cornered all the means of life,
first and foremost the land, which they make use of to keep the
people in bondage and to make them work for their benefit."
[Malatesta, _Anarchy_, p. 21] Privatising the coercive functions
of said government hardly makes much difference.

Of course, Rothbard is simply skimming the surface. There are two
main ways "anarcho"-capitalists differ from individualist anarchists.
The first one is the fact that the individualist anarchists are 
socialists. The second is on whether equality is essential or not 
to anarchism. Each will be discussed in turn.

Unlike both Individualist (and social) anarchists, "anarcho"-capitalists 
support capitalism (a "pure" free market type, which has never existed 
although it has been approximated occasionally). This means that they 
reject totally the ideas of anarchists with regards to property and 
economic analysis. For example, like all supporters of capitalists 
they consider rent, profit and interest as valid incomes. In contrast, 
all Anarchists consider these as exploitation and agree with the 
Individualist Anarchist Benjamin Tucker when he argued that 
"*[w]hoever* contributes to production is alone entitled. *What* 
has no rights that *who* is bound to respect. *What* is a thing. *Who* 
is a person. Things have no claims; they exist only to be claimed. The 
possession of a right cannot be predicted of dead material, but only a 
living person."[quoted by Wm. Gary Kline, _The Individualist Anarchists_, 
p. 73] 

This, we must note, is the fundamental critique of the capitalist theory 
that capital is productive. In and of themselves, fixed costs do not 
create value. Rather value is creation depends on how investments are 
developed and used once in place. Because of this the Individualist 
Anarchists, like other anarchists, considered non-labour derived income 
as usury, unlike "anarcho"-capitalists. Similarly, anarchists reject 
the notion of capitalist property rights in favour of possession 
(including the full fruits of one's labour). For example, anarchists 
reject private ownership of land in favour of a "occupancy and use" 
regime. In this we follow Proudhon's _What is Property?_ and argue that 
"property is theft". Rothbard, as noted, rejected this perspective.

As these ideas are an *essential* part of anarchist politics, they cannot
be removed without seriously damaging the rest of the theory. This can
be seen from Tucker's comments that "*Liberty* insists. . . [on] the abolition 
of the State and the abolition of usury; on no more government of man by 
man, and no more exploitation of man by man." [cited by Eunice Schuster in 
_Native American Anarchism_, p. 140]. He indicates that anarchism has 
specific economic *and* political ideas, that it opposes capitalism along
with the state. Therefore anarchism was never purely a "political" concept, 
but always combined an opposition to oppression with an opposition to 
exploitation. The social anarchists made exactly the same point.  Which 
means that when Tucker argued that "*Liberty* insists on Socialism. . . - 
true Socialism, Anarchistic Socialism: the prevalence on earth of Liberty, 
Equality, and Solidarity" he knew exactly what he was saying and meant it 
wholeheartedly. [_Instead of a Book_, p. 363] 

So because "anarcho"-capitalists embrace capitalism and reject socialism, 
they cannot be considered anarchists or part of the anarchist tradition.

Which brings us nicely to the second point, namely a lack of concern for
equality. In stark contrast to anarchists of all schools, inequality
is not seen to be a problem with "anarcho"-capitalists (see section 3). 
However, it is a truism that not all "traders" are equally subject to the 
market (i.e. have the same market power). In many cases, a few have 
sufficient control of resources to influence or determine price and in 
such cases, all others must submit to those terms or not buy the commodity. 
When the commodity is labour power, even this option is lacking -- workers 
have to accept a job in order to live. As we argue in section 10.2, 
workers are usually at a disadvantage on the labour market when compared 
to capitalists, and this forces them to sell their liberty in return for 
making profits for others. These profits increase inequality in society
as the property owners receive the surplus value their workers produce. 
This increases inequality further, consolidating market power and so weakens
the bargaining position of workers further, ensuring that even the freest
competition possible could not eliminate class power and society (something 
B. Tucker recognised as occurring with the development of trusts within 
capitalism -- see section G.4). 

By removing the underlying commitment to abolish non-labour income, any
"anarchist" capitalist society would have vast differences in wealth
and so power. Instead of a government imposed monopolies in land, money
and so on, the economic power flowing from private property and capital 
would ensure that the majority remained in (to use Spooner's words) "the 
condition of servants" (see sections 2 and 3.1 for more on this). 
The Individualist Anarchists were aware of this danger and so supported
economic ideas that opposed usury (i.e. rent, profit and interest) and
ensured the worker the full value of her labour. While not all of them
called these ideas "socialist" it is clear that these ideas *are* socialist
in nature and in aim (similarly, not all the Individualist Anarchists
called themselves anarchists but their ideas are clearly anarchist in
nature and in aim).

This combination of the political and economic is essential as they mutually
reinforce each other. Without the economic ideas, the political ideas 
would be meaningless as inequality would make a mockery of them. As Kline
notes, the Individualist Anarchists' "proposals were designed to establish
true equality of opportunity . . . and they expected this would result in
a society without great wealth or poverty. In the absence of monopolistic
factors which would distort competition, they expected a society largely
of self-employed workmen with no significant disparity of wealth between
any of them since all would be required to live at their own expense and 
not at the expense of exploited fellow human beings." [Op. Cit., pp. 103-4]

Because of the evil effects of inequality on freedom, both social 
and individualist anarchists desired to create an environment in which 
circumstances would not drive people to sell their liberty to others 
at a disadvantage. In other words, they desired an equalisation of 
market power by opposing interest, rent and profit and capitalist 
definitions of private property. Kline summarises this by saying "the 
American [individualist] anarchists exposed the tension existing in 
liberal thought between private property and the ideal of equal access. 
The Individual Anarchists were, at least, aware that existing conditions 
were far from ideal, that the system itself working against the majority 
of individuals in their efforts to attain its promises. Lack of capital, 
the means to creation and accumulation of wealth, usually doomed a 
labourer to a life of exploitation. This the anarchists knew and they 
abhorred such a system." [Op. Cit., p. 102]

And this desire for bargaining equality is reflected in their economic 
ideas and by removing these underlying economic ideas of the individualist
anarchists, "anarcho"-capitalism makes a mockery of any ideas they 
do appropriate. Essentially, the Individualist Anarchists agreed with
Rousseau that in order to prevent extreme inequality of fortunes you 
deprive people of the means to accumulate in the first place and 
*not* take away wealth from the rich. An important point which 
"anarcho"-capitalism fails to understand or appreciate.

There are, of course, overlaps between individualist anarchism and
"anarcho"-capitalism, just as there are overlaps between it and Marxism
(and social anarchism, of course). However, just as a similar analysis
of capitalism does not make individualist anarchists Marxists, so 
apparent similarities between individualist anarchism does not make
it a forerunner of "anarcho"-capitalism. For example, both schools
support the idea of "free markets." Yet the question of markets is 
fundamentally second to the issue of property rights for what is
exchanged on the market is dependent on what is considered legitimate
property. In this, as Rothbard notes, individualist anarchists and
"anarcho"-capitalists differ and different property rights produce 
different market structures and dynamics. This means that capitalism 
is not the only economy with markets and so support for markets cannot 
be equated with support for capitalism. Equally, opposition to markets 
is *not* the defining characteristic of socialism (as we note in 
section G.2.1). As such, it *is* possible to be a market socialist 
(and many socialist are). This is because "markets" and "property" do
not equate to capitalism:

"Political economy confuses, on principle, two very different kinds of 
private property, one of which rests on the labour of the producers 
himself, and the other on the exploitation of the labour of others. It 
forgets that the latter is not only the direct antithesis of the former, 
but grows on the former's tomb and nowhere else. 

"In Western Europe, the homeland of political economy, the process of 
primitive accumulation is more of less accomplished. . . . 

"It is otherwise in the colonies. There the capitalist regime constantly
comes up against the obstacle presented by the producer, who, as owner 
of his own conditions of labour, employs that labour to enrich himself 
instead of the capitalist. The contradiction of these two diametrically 
opposed economic systems has its practical manifestation here in the 
struggle between them." [Karl Marx, _Capital_, vol. 1, p. 931]

Individualist anarchism is obviously an aspect of this struggle 
between the system of peasant and artisan production of early America 
and the state encouraged system of private property and wage labour.
"Anarcho"-capitalists, in contrast, assume that generalised wage labour 
would remain under their system (while paying lip-service to the possibilities 
of co-operatives -- and if an "anarcho"-capitalist thinks that co-operative
will become the dominant form of workplace organisation, then they are
some kind of market socialist, *not* a capitalist). It is clear that their 
end point (a pure capitalism, i.e. generalised wage labour) is directly 
the opposite of that desired by anarchists. This was the case of the 
Individualist Anarchists who embraced the ideal of (non-capitalist) 
laissez faire competition -- they did so, as noted, to *end* exploitation, 
*not* to maintain it. Indeed, their analysis of the change in American 
society from one of mainly independent producers into one based mainly 
upon wage labour has many parallels with, of all people, Karl Marx's 
presented in chapter 33 of _Capital_. Marx, correctly, argues that "the 
capitalist mode of production and accumulation, and therefore capitalist 
private property, have for their fundamental condition the annihilation 
of that private property which rests on the labour of the individual
himself; in other words, the expropriation of the worker." [Op. Cit., 
p. 940] He notes that to achieve this, the state is used:

"How then can the anti-capitalistic cancer of the colonies be healed? 
. . . Let the Government set an artificial price on the virgin soil,
a price independent of the law of supply and demand, a price that compels 
the immigrant to work a long time for wages before he can earn enough 
money to buy land, and turn himself into an independent farmer." 
[Op. Cit., p. 938]

Moreover, tariffs are introduced with "the objective of manufacturing
capitalists artificially" for the "system of protection was an artificial
means of manufacturing manufacturers, or expropriating independent
workers, of capitalising the national means of production and 
subsistence, and of forcibly cutting short the transition . . . to
the modern mode of production," to capitalism [Op. Cit., p. 932 and 
pp. 921-2]

It is this process which Individualist Anarchism protested against, the use
of the state to favour the rising capitalist class. However, unlike social
anarchists, many individualist anarchists were not consistently against
wage labour. This is the other significant overlap between "anarcho"-capitalism 
and individualist anarchism. However, they were opposed to exploitation and
argued (unlike "anarcho"-capitalism) that in their system workers bargaining
powers would be raised to such a level that their wages would equal the full
product of their labour. However, as we discuss in section G.1.1 the social
context the individualist anarchists lived in must be remembered. America
at the times was a predominantly rural society and industry was not as 
developed as it is now wage labour would have been minimised (Spooner,
for example, explicitly envisioned a society made up mostly entirely of 
self-employed workers). As Kline argues:

"Committed as they were to equality in the pursuit of property, the 
objective for the anarchist became the construction of a society 
providing equal access to those things necessary for creating wealth. 
The goal of the anarchists who extolled mutualism and the abolition of 
all monopolies was, then, a society where everyone willing to work would 
have the tools and raw materials necessary for production in a 
non-exploitative system . . . the dominant vision of the future society 
. . . [was] underpinned by individual, self-employed workers." [Op. Cit., 
p. 95]

As such, a limited amount of wage labour within a predominantly 
self-employed economy does not make a given society capitalist any 
more than a small amount of governmental communities within an
predominantly anarchist world would make it statist. As Marx argued.
when "the separation of the worker from the conditions of labour
and from the soil . . . does not yet exist, or only sporadically,
or on too limited a scale . . . Where, amongst such curious 
characters, is the 'field of abstinence' for the capitalists?
. . . Today's wage-labourer is tomorrow's independent peasant
or artisan, working for himself. He vanishes from the labour-market
-- but not into the workhouse." There is a "constant transformation 
of wage-labourers into independent producers, who work for themselves
instead of for capital" and so "the degree of exploitation of the
wage-labourer remain[s] indecently low." In addition, the 
"wage-labourer also loses, along with the relation of dependence,
the feeling of dependence on the abstemious capitalist." [Op. Cit.,
pp. 935-6]

Saying that, as we discuss in section G.4, individualist anarchist support 
for wage labour is at odds with the ideas of Proudhon and, far more 
importantly, in contradiction to many of the stated principles of the 
individualist anarchists themselves. In particular, wage labour violates 
"occupancy and use" as well as having more than a passing similarity to 
the state. However, these problems can be solved by consistently applying 
the principles of individualist anarchism, unlike "anarcho"-capitalism,
and that is why it is a real school of anarchism. In other words, a 
system of *generalised* wage labour would not be anarchist nor would 
it be non-exploitative. Moreover, the social context these ideas were 
developed in and would have been applied ensure that these contradictions 
would have been minimised. If they had been applied, a genuine anarchist 
society of self-employed workers would, in all likelihood, have been 
created (at least at first, whether the market would increase inequalities 
is a moot point -- see section G.4). 

We must stress that the social situation is important as it shows how 
apparently superficially similar arguments can have radically different 
aims and results depending on who suggests them and in what circumstances. 
As noted, during the rise of capitalism the bourgeoisie were not shy in 
urging state intervention against the masses. Unsurprisingly, working class 
people generally took an anti-state position during this period. The 
individualist anarchists were part of that tradition, opposing what Marx 
termed "primitive accumulation" in favour of the pre-capitalist forms of
property and society it was destroying.

However, when capitalism found its feet and could do without such obvious 
intervention, the possibility of an "anti-state" capitalism could arise.
Such a possibility became a definite once the state started to intervene
in ways which, while benefiting the system as a whole, came into conflict
with the property and power of individual members of the capitalist and
landlord class. Thus social legislation which attempted to restrict the
negative effects of unbridled exploitation and oppression on workers and
the environment were having on the economy were the source of much outrage
in certain bourgeois circles:

"Quite independently of these tendencies [of individualist anarchism] 
. . . the anti-state bourgeoisie (which is also anti-statist, being 
hostile to any social intervention on the part of the State to protect 
the victims of exploitation -- in the matter of working hours, hygienic 
working conditions and so on), and the greed of unlimited exploitation, 
had stirred up in England a certain agitation in favour of
pseudo-individualism, an unrestrained exploitation. To this end, they 
enlisted the services of a mercenary pseudo-literature . . . which 
played with doctrinaire and fanatical ideas in order to project a species 
of 'individualism' that was absolutely sterile, and a species of 
'non-interventionism' that would let a man die of hunger rather than 
offend his dignity." [Max Nettlau, _A Short History of Anarchism_, p. 39]

This perspective can be seen when Tucker denounced Herbert Spencer as
a champion of the capitalistic class for his vocal attacks on social
legislation which claimed to benefit working class people but stays
strangely silent on the laws passed to benefit (usually indirectly)
capital and the rich. "Anarcho"-capitalism is part of that tradition, 
the tradition associated with a capitalism which no longer needs obvious 
state intervention as enough wealth as been accumulated to keep workers 
under control by means of market power. 

As with the original nineteenth century British "anti-state" 
capitalists like Spencer and Herbert, Rothbard "completely overlooks 
the role of the state in building and maintaining a capitalist economy 
in the West. Privileged to live in the twentieth century, long after 
the battles to establish capitalism have been fought and won, Rothbard 
sees the state solely as a burden on the market and a vehicle for 
imposing the still greater burden of socialism. He manifests a kind 
of historical nearsightedness that allows him to collapse many centuries 
of human experience into one long night of tyranny that ended only with 
the invention of the free market and its 'spontaneous' triumph over the
past. It is pointless to argue, as Rothbard seems ready to do, that
capitalism would have succeeded without the bourgeois state; the fact
is that all capitalist nations have relied on the machinery of government
to create and preserve the political and legal environments required
by their economic system." That, of course, has not stopped him "critis[ing]
others for being unhistorical." [Stephen L Newman, _Liberalism at Wit's 
End_, pp. 77-8 and p. 79]

In other words, there is substantial differences between the victims of a 
thief trying to stop being robbed and be left alone to enjoy their property 
and the successful thief doing the same! Individualist Anarchist's were
aware of this. For example, Victor Yarros stressed this key difference 
between individualist anarchism and the proto-"libertarian" capitalists 
of "voluntaryism":

"[Auberon Herbert] believes in allowing people to retain all their 
possessions, no matter how unjustly and basely acquired, while getting 
them, so to speak, to swear off stealing and usurping and to promise to 
behave well in the future. We, on the other hand, while insisting on the 
principle of private property, in wealth honestly obtained under the reign 
of liberty, do not think it either unjust or unwise to dispossess the 
landlords who have monopolised natural wealth by force and fraud. We hold 
that the poor and disinherited toilers would be justified in expropriating, 
not alone the landlords, who notoriously have no equitable titles to their 
lands, but *all* the financial lords and rulers, all the millionaires and 
very wealthy individuals. . . . Almost all possessors of great wealth 
enjoy neither what they nor their ancestors rightfully acquired (and if 
Mr. Herbert wishes to challenge the correctness of this statement, we are 
ready to go with him into a full discussion of the subject). . . . 

"If he holds that the landlords are justly entitled to their lands, let 
him make a defence of the landlords or an attack on our unjust proposal."
[quoted by Carl Watner, "The English Individualists As They Appear In 
Liberty," pp. 191-211, _Benjamin R. Tucker and the Champions of Liberty_, 
Coughlin, Hamilton and Sullivan (eds.), pp. 199-200]

Significantly, Tucker and other individualist anarchists saw state intervention
has a result of capital manipulating legislation to gain an advantage on the 
so-called free market which allowed them to exploit labour and, as such, it
benefited the *whole* capitalist class. Rothbard, at best, acknowledges
that *some* sections of big business benefit from the current system and so
fails to have the comprehensive understanding of the dynamics of capitalism
as a *system* (rather as an ideology). This lack of understanding of capitalism
as a historic and dynamic system rooted in class rule and economic power is 
important in evaluating "anarcho"-capitalist claims to anarchism. Marxists 
are not considered anarchists as they support the state as a means of 
transition to an anarchist society. Much the same logic can be applied to 
right-wing libertarians (even if they do call themselves "anarcho"-capitalists). 
This is because they do not seek to correct the inequalities produced by 
previous state action before ending it nor do they seek to change the 
definitions of "private property" imposed by the state. In effect, they 
argue that the "dictatorship of the bourgeoisie" should "wither away" and 
be limited to defending the property accumulated in a few hands. Needless 
to say, starting from the current (coercively produced) distribution of 
property and then eliminating "force" simply means defending the power and 
privilege of ruling minorities:

"The modern Individualism initiated by Herbert Spencer is, like the critical 
theory of Proudhon, a powerful indictment against the dangers and wrongs of 
government, but its practical solution of the social problem is miserable -- 
so miserable as to lead us to inquire if the talk of 'No force' be merely an 
excuse for supporting landlord and capitalist domination." [_Act For 
Yourselves_, p. 98]

2 What do "anarcho"-capitalists mean by "freedom"?

For "anarcho"-capitalists, the concept of freedom is limited to the idea
of "freedom from."  For them, freedom means simply freedom from the
"initiation of force," or the "non-aggression against anyone's person and
property." [Murray Rothbard, _For a New Liberty_, p. 23] The notion that
real freedom must combine both freedom "to" *and* freedom "from" is
missing in their ideology, as is the social context of the so-called
freedom they defend.

Before starting, it is useful to quote Alan Haworth when he notes that
"[i]n fact, it is surprising how *little* close attention the concept 
of freedom receives from libertarian writers. Once again _Anarchy, 
State, and Utopia_ is a case in point. The word 'freedom' doesn't 
even appear in the index. The word 'liberty' appears, but only to 
refer the reader to the 'Wilt Chamberlain' passage. In a supposedly 
'libertarian' work, this is more than surprising. It is truly 
remarkable." [_Anti-Libertarianism_, p. 95] 

Why this is the case can be seen from how the "anarcho"-capitalist 
defines freedom.

In a right-libertarian or "anarcho"-capitalist society, freedom is
considered to be a product of property. As Murray Rothbard puts it, "the
libertarian defines the concept of 'freedom' or 'liberty'. . .[as a]
condition in which a person's ownership rights in his body and his
legitimate material property rights are not invaded, are not aggressed
against. . . . Freedom and unrestricted property rights go hand in hand."
[Op. Cit., p.41]

This definition has some problems, however. In such a society, one cannot
(legitimately) do anything with or on another's property if the owner
prohibits it.  This means that an individual's only *guaranteed* freedom
is determined by the amount of property that he or she owns. This has the
consequence that someone with no property has no guaranteed freedom at
all (beyond, of course, the freedom not to be murdered or otherwise 
harmed by the deliberate acts of others). In other words, a distribution 
of property is a distribution of freedom, as the right-libertarians 
themselves define it. It strikes anarchists as strange that an ideology 
that claims to be committed to promoting freedom entails the conclusion 
that some people should be more free than others. However, this is the 
logical implication of their view, which raises a serious doubt as to 
whether "anarcho"-capitalists are actually interested in freedom. 

Looking at Rothbard's definition of "liberty" quoted above, we can 
see that freedom is actually no longer considered to be a fundamental,
independent concept.  Instead, freedom is a derivative of something 
more fundamental, namely the "legitimate rights" of an individual, 
which are identified as property rights.  In other words, given that 
"anarcho"-capitalists and right libertarians in general consider the 
right to property as "absolute," it follows that freedom and property 
become one and the same.  This suggests an alternative name for the right
Libertarian, namely "Propertarian." And, needless to say, if we do not 
accept the right-libertarians' view of what constitutes "legitimate" 
"rights," then their claim to be defenders of liberty is weak.

Another important implication of this "liberty as property" concept is
that it produces a strangely alienated concept of freedom. Liberty, as 
we noted, is no longer considered absolute, but a derivative of property 
-- which has the important consequence that you can "sell" your liberty 
and still be considered free by the ideology. This concept of liberty
(namely "liberty as property") is usually termed "self-ownership." But, 
to state the obvious, I do not "own" myself, as if were an object somehow 
separable from my subjectivity -- I *am* myself. However, the concept of 
"self-ownership" is handy for justifying various forms of domination and 
oppression -- for by agreeing (usually under the force of circumstances, 
we must note) to certain contracts, an individual can "sell" (or rent out) 
themselves to others (for example, when workers sell their labour power to 
capitalists on the "free market"). In effect, "self-ownership" becomes the 
means of justifying treating people as objects -- ironically, the very thing 
the concept was created to stop! As L. Susan Brown notes, "[a]t the moment 
an individual 'sells' labour power to another, he/she loses self-determination
and instead is treated as a subjectless instrument for the fulfilment of 
another's will." [_The Politics of Individualism_, p. 4]

Given that workers are paid to obey, you really have to wonder which planet
Murray Rothbard is on when he argues that a person's "labour service is
alienable, but his *will* is not" and that he [sic!] "cannot alienate his 
*will*, more particularly his control over his own mind and body." [_The 
Ethics of Liberty_, p. 40, p. 135] He contrasts private property and
self-ownership by arguing that "[a]ll physical property owned by a person 
is alienable . . . I can give away or sell to another person my shoes, my 
house, my car, my money, etc. But there are certain vital things which, in 
natural fact and in the nature of man, are *in*alienable . . . [his] will 
and control over his own person are inalienable." [Op. Cit., pp. 134-5] 

But "labour services" are unlike the private possessions Rothbard lists
as being alienable. As we argued in section B.1 ("Why do anarchists oppose 
hierarchy") a person's "labour services" and "will" cannot be divided -- if 
you sell your labour services, you also have to give control of your body 
and mind to another person! If a worker does not obey the commands of her 
employer, she is fired. That Rothbard denies this indicates a total lack 
of common-sense. Perhaps Rothbard will argue that as the worker can quit at 
any time she does not alienate their will (this seems to be his case against 
slave contracts -- see section 2.6). But this ignores the fact that between 
the signing and breaking of the contract and during work hours (and perhaps 
outside work hours, if the boss has mandatory drug testing or will fire 
workers who attend union or anarchist meetings or those who have an 
"unnatural" sexuality and so on) the worker *does* alienate his will 
and body. In the words of Rudolf Rocker, "under the realities of the 
capitalist economic form . . . there can be no talk of a 'right over one's
own person,' for that ends when one is compelled to submit to the economic
dictation of another if he does not want to starve." [_Anarcho-Syndicalism_,
p. 17]

Ironically, the rights of property (which are said to flow from an 
individual's self-ownership of themselves) becomes the means, under
capitalism, by which self-ownership of non-property owners is denied. The 
foundational right (self-ownership) becomes denied by the derivative right 
(ownership of things). Under capitalism, a lack of property can be just
as oppressive as a lack of legal rights because of the relationships of
domination and subjection this situation creates.

So Rothbard's argument (as well as being contradictory) misses the point 
(and the reality of capitalism). Yes, *if* we define freedom as "the absence 
of coercion" then the idea that wage labour does not restrict liberty is 
unavoidable, but such a definition is useless. This is because it hides 
structures of power and relations of domination and subordination. As Carole 
Pateman argues, "the contract in which the worker allegedly sells his labour 
power is a contract in which, since he cannot be separated from his 
capacities, he sells command over the use of his body and himself. . . 
To sell command over the use of oneself for a specified period . . . 
is to be an unfree labourer." [_The Sexual Contract_, p. 151]

In other words, contracts about property in the person inevitably create
subordination. "Anarcho"-capitalism defines this source of unfreedom away,
but it still exists and has a major impact on people's liberty. Therefore 
freedom is better described as "self-government" or "self-management" -- 
to be able to govern ones own actions (if alone) or to participate in the 
determination of join activity (if part of a group). Freedom, to put it
another way, is not an abstract legal concept, but the vital concrete 
possibility for every human being to bring to full development all their 
powers, capacities, and talents which nature has endowed them. A key
aspect of this is to govern one own actions when within associations
(self-management). If we look at freedom this way, we see that coercion 
is condemned but so is hierarchy (and so is capitalism for during working 
hours, people are not free to make their own plans and have a say in what 
affects them. They are order takers, *not* free individuals). 

It is because anarchists have recognised the authoritarian nature of 
capitalist firms that they have opposed wage labour and capitalist
property rights along with the state. They have desired to replace 
institutions structured by subordination with institutions constituted 
by free relationships (based, in other words, on self-management) in
*all* areas of life, including economic organisations. Hence Proudhon's 
argument that the "workmen's associations . . . are full of hope both as a
protest against the wage system, and as an affirmation of *reciprocity*"
and that their importance lies "in their denial of the rule of capitalists,
money lenders and governments." [_The General Idea of the Revolution_, 
pp. 98-99]

Unlike anarchists, the "anarcho"-capitalist account of freedom allows an 
individual's freedom to be rented out to another while maintaining that the 
person is still free. It may seem strange that an ideology proclaiming its 
support for liberty sees nothing wrong with the alienation and denial of 
liberty but, in actual fact, it is unsurprising. After all, contract theory 
is a "theoretical strategy that justifies subjection by presenting it as
freedom" and nothing more. Little wonder, then, that contract "creates
a relation of subordination" and not of freedom [Carole Pateman, Op. Cit.,
p. 39, p. 59] 

Any attempt to build an ethical framework starting from the abstract 
individual (as Rothbard does with his "legitimate rights" method) will 
result in domination and oppression between people, *not* freedom. 
Indeed, Rothbard provides an example of the dangers of idealist 
philosophy that Bakunin warned about when he argued that while
"[m]aterialism denies free will and ends in the establishment of 
liberty; idealism, in the name of human dignity, proclaims free 
will, and on the ruins of every liberty founds authority." [_God 
and the State_, p. 48] This is the case with "anarcho"-capitalism 
can be seen from Rothbard's wholehearted support for wage labour 
and the rules imposed by property owners on those who use, but do 
not own, their property. Rothbard, basing himself on abstract
individualism, cannot help but justify authority over liberty.

Overall, we can see that the logic of the right-libertarian definition of 
"freedom" ends up negating itself, because it results in the creation 
and encouragement of *authority,* which is an *opposite* of freedom. For
example, as Ayn Rand points out, "man has to sustain his life by his own
effort, the man who has no right to the product of his effort has no means
to sustain his life. The man who produces while others dispose of his
product, is a slave." [_The Ayn Rand Lexicon: Objectivism from A to Z_, 
pp. 388-9] But, as was shown in section C, capitalism is based on, as 
Proudhon put it, workers working "for an entrepreneur who pays them and 
keeps their products," and so is a form of *theft.* Thus, by "libertarian"
capitalism's *own* logic, capitalism is based not on freedom, but on
(wage) slavery; for interest, profit and rent are derived from a worker's
*unpaid* labour, i.e. "others dispose of his [sic] product."

And if a society *is* run on the wage- and profit-based system suggested
by the "anarcho" and "libertarian" capitalists, freedom becomes a
commodity. The more money you have, the more freedom you get. Then, since
money is only available to those who earn it, Libertarianism is based on
that classic saying "work makes one free!" (_Arbeit macht frei!_), which
the Nazis placed on the gates of their concentration camps. Of course,
since it is capitalism, this motto is somewhat different for those at the
top. In this case it is "other people's work makes one free!" -- a truism
in any society based on private property and the authority that stems from
it.

Thus it is debatable that a libertarian or "anarcho" capitalist society 
would have less unfreedom or coercion in it than "actually existing 
capitalism." In contrast to anarchism, "anarcho"-capitalism, with its 
narrow definitions, restricts freedom to only a few aspects of social life 
and ignores domination and authority beyond those aspects. As Peter Marshall 
points out, the right-libertarian's "definition of freedom is entirely 
negative.  It calls for the absence of coercion but cannot guarantee the 
positive freedom of individual autonomy and independence." [_Demanding 
the Impossible_, p. 564] By confining freedom to such a narrow range of 
human action, "anarcho"-capitalism is clearly *not* a form of anarchism. 
Real anarchists support freedom in every aspect of an individual's life.

2.1 What are the implications of defining liberty in terms of (property) 
      rights?

The change from defending liberty to defending (property) rights has 
important implications. For one thing, it allows right libertarians to 
imply that private property is similar to a "fact of nature," and so to 
conclude that the restrictions on freedom produced by it can be ignored. 
This can be seen in Robert Nozick's argument that decisions are voluntary 
if the limitations on one's actions are not caused by human action which 
infringe the rights of others. Thus, in a "pure" capitalist society the 
restrictions on freedom caused by wage slavery are not really restrictions 
because the worker voluntarily consents to the contract. The circumstances 
that drive a worker to make the contract are irrelevant because they are 
created by people exercising their rights and not violating other peoples' 
ones (see the section on "Voluntary Exchange" in _Anarchy, State, and 
Utopia_, pp. 262-265).

This means that within a society "[w]hether a person's actions are voluntary 
depends on what limits his alternatives. If facts of nature do so, the 
actions are voluntary. (I may voluntarily walk to someplace I would prefer 
to fly to unaided)." [_Anarchy, State, and Utopia_, p. 262] Similarly,
the results of voluntary actions and the transference of property can
be considered alongside the "facts of nature" (they are, after all, the 
resultants of "natural rights"). This means that the circumstances created 
by the existence and use of property can be considered, in essence, as
a "natural" fact and so the actions we take in response to these circumstances 
are therefore "voluntary" and we are "free" (Nozick presents the example 
[p. 263] of someone who marries the only available person -- all the more 
attractive people having already chosen others -- as a case of an action 
that is voluntary despite removal of all but the least attractive alternative 
through the legitimate actions of others. Needless to say, the example can 
be -- and is -- extended to workers on the labour market -- although, of
course, you do not starve to death if you decide not to marry).

However, such an argument fails to notice that property is different from
gravity or biology. Of course not being able to fly does not restrict 
freedom. Neither does not being able to jump 10 feet into the air.  But 
unlike gravity (for example), private property has to be protected by laws 
and the police. No one stops you from flying, but laws and police forces 
must exist to ensure that capitalist property (and the owners' authority 
over it) is respected. The claim, therefore, that private property in 
general, and capitalism in particular, can be considered as "facts of 
nature," like gravity, ignores an important fact:  namely that the 
people involved in an economy must accept the rules of its operation -- 
rules that, for example, allow contracts to be enforced; forbid using 
another's property without his or her consent ("theft," trespass, copyright 
infringement, etc.); prohibit "conspiracy," unlawful assembly, rioting, 
and so on; and create monopolies through regulation, licensing, charters, 
patents, etc.  This means that capitalism has to include the mechanisms 
for deterring property crimes as well as mechanisms for compensation and 
punishment should such crimes be committed. In other words, capitalism 
is in fact far more than "voluntary bilateral exchange," because it *must* 
include the policing, arbitration, and legislating mechanisms required 
to ensure its operation. Hence, like the state, the capitalist market 
is a social institution, and the distributions of goods that result 
from its operation are therefore the distributions sanctioned by a 
capitalist society. As Benjamin Franklin pointed out, "Private property
. . . is a Creature of Society, and is subject to the Calls of that 
Society."

Thus, to claim with Sir Isaiah Berlin (the main, modern, source of the 
concepts of "negative" and "positive" freedom -- although we must add that 
Berlin was not a right-Libertarian), that "[i]f my poverty were a kind of
disease, which prevented me from buying bread . . . as lameness prevents 
me from running, this inability would not naturally be described as a 
lack of freedom" totally misses the point ["Two Concepts of Liberty", 
in _Four Essays on Liberty_, p. 123]. If you are lame, police officers 
do not come round to stop you running. They do not have to. However, they 
*are* required to protect property against the dispossessed and those who 
reject capitalist property rights. 

This means that by using such concepts as "negative" liberty and ignoring 
the social nature of private property, right-libertarians are trying to 
turn the discussion away from liberty toward "biology" and other facts
of nature.  And conveniently, by placing property rights alongside gravity
and other natural laws, they also succeed in reducing debate even about
rights. 

Of course, coercion and restriction of liberty *can* be resisted, unlike
"natural forces" like gravity.  So if, as Berlin argues, "negative"
freedom means that you "lack political freedom only if you are prevented
from attaining a goal by human beings," then capitalism is indeed based on
such a lack, since property rights need to be enforced by human beings ("I
am prevented by others from doing what I could otherwise do"). After all,
as Proudhon long ago noted, the market is manmade, hence any constraint 
it imposes is the coercion of man by man and so economic laws are not as
inevitable as natural ones [see Alan Ritter's _The Political Thought of 
Pierre-Joseph Proudhon_, p. 122]. Or, to put it slightly differently, 
capitalism requires coercion in order to work, and hence, is *not* 
similar to a "fact of nature," regardless of Nozick's claims (i.e. 
property rights have to be defined and enforced by human beings, although 
the nature of the labour market resulting from capitalist property 
definitions is such that direct coercion is usually not needed). This 
implication is actually recognised by right-libertarians, because they 
argue that the rights-framework of society should be set up in one way 
rather than another. In other words, they recognise that society is not 
independent of human interaction, and so can be changed. 

Perhaps, as seems the case, the "anarcho"-capitalist or right-Libertarian
will claim that it is only *deliberate* acts which violate your (libertarian
defined) rights by other humans beings that cause unfreedom ("we define 
freedom . . . as the *absence of invasion* by another man of an man's 
person or property" [Rothbard, _The Ethics of Liberty_, p. 41]) and so
if no-one deliberately coerces you then you are free. In this way the 
workings of the capitalist market can be placed alongside the "facts of 
nature" and ignored as a source of unfreedom. However, a moments thought 
shows that this is not the case. Both deliberate and non-deliberate acts 
can leave individuals lacking freedom. 

Let us assume (in an example paraphrased from Alan Haworth's excellent 
book _Anti-Libertarianism_, p. 49) that someone kidnaps you and places you 
down a deep (naturally formed) pit, miles from anyway, which is impossible 
to climb up. No one would deny that you are unfree. Let us further assume
that another person walks by and accidentally falls into the pit with you. 

According to right-libertarianism, while you are unfree (i.e. subject to 
deliberate coercion) your fellow pit-dweller is perfectly free for they 
have subject to the "facts of nature" and not human action (deliberate or 
otherwise). Or, perhaps, they "voluntarily choose" to stay in the pit, 
after all, it is "only" the "facts of nature" limiting their actions. But, 
obviously, both of you are in *exactly the same position,* have *exactly 
the same choices* and so are *equally* unfree! Thus a definition of 
"liberty" that maintains that only deliberate acts of others -- for 
example, coercion -- reduces freedom misses the point totally.

Why is this example important? Let us consider Murray Rothbard's analysis
of the situation after the abolition of serfdom in Russia and slavery in
America. He writes:

"The *bodies* of the oppressed were freed, but the property which they
had worked and eminently deserved to own, remained in the hands of their
former oppressors. With economic power thus remaining in their hands, the
former lords soon found themselves virtual masters once more of what
were now free tenants or farm labourers. The serfs and slaves had tasted
freedom, but had been cruelly derived of its fruits." [_The Ethics of
Liberty_, p. 74]

However, contrast this with Rothbard's claims that if market forces 
("voluntary exchanges") result in the creation of free tenants or labourers
then these labourers and tenants are free (see, for example, _The Ethics of
Liberty_, pp. 221-2 on why "economic power" within capitalism does not
exist). But the labourers dispossessed by market forces are in *exactly* 
the same situation as the former serfs and slaves. Rothbard sees the 
obvious "economic power" in the later case, but denies it in the former. 
But the *conditions* of the people in question are identical and it 
is these conditions that horrify us. It is only his ideology that stops 
Rothbard drawing the obvious conclusion -- identical conditions produce 
identical social relationships and so if the formally "free" ex-serfs are
subject to "economic power" and "masters" then so are the formally "free" 
labourers within capitalism! Both sets of workers may be formally free,
but their circumstances are such that they are "free" to "consent" to
sell their freedom to others (i.e. economic power produces relationships
of domination and unfreedom between formally free individuals).

Thus Rothbard's definition of liberty in terms of rights fails to provide
us with a realistic and viable understanding of freedom. Someone can be
a virtual slave while still having her rights non-violated (conversely,
someone can have their property rights violated and still be free; for
example, the child who enters your backyard without your permission to
get her ball hardly violates your liberty -- indeed, you would never know
that she has entered your property unless you happened to see her do it).
So the idea that freedom means non-aggression against person and their 
legitimate material property justifies extensive *non-freedom* for the 
working class. The non-violation of property rights does *not* imply freedom, 
as Rothbard's discussion of the former slaves shows. Anyone who, along with 
Rothbard, defines freedom "as the *absence of invasion* by another man of 
any man's person or property" in a deeply inequality society is supporting,
and justifying, capitalist and landlord domination. As anarchists have
long realised, in an unequal society, a contractarian starting point 
implies an absolutist conclusion.

Why is this? Simply because freedom is a result of *social* interaction,
not the product of some isolated, abstract individual (Rothbard uses the
model of Robinson Crusoe to construct his ideology). But as Bakunin 
argued, "the freedom of the individual is a function of men in society,
a necessary consequence of the collective development of mankind." He
goes on to argue that "man in isolation can have no awareness of his 
liberty . . .  Liberty is therefore a feature not of isolation but of
interaction, not of exclusion but rather of connection." [_Selected
Writings_, p. 146, p. 147] Right Libertarians, by building their
definition of freedom from the isolated person, end up by supporting
restrictions of liberty due to a neglect of an adequate recognition 
of the actual interdependence of human beings, of the fact what each
person does is effected by and affects others. People become aware of
their humanity (liberty) in society, not outside it. It is the *social 
relationships* we take part in which determine how free we are and
any definition of freedom which builds upon an individual without 
social ties is doomed to create relations of domination, not freedom,
between individuals -- as Rothbard's theory does (to put it another
way, voluntary association is a necessary, but not sufficient,
condition for freedom. Which is why anarchists have always stressed
the importance of equality -- see section 3 for details).

So while facts of nature can restrict your options and freedom, it is the 
circumstances within which they act and the options they limit that are 
important (a person trapped at the bottom of a pit is unfree as the options 
available are so few; the lame person is free because their available options 
are extensive). In the same manner, the facts of society can and do restrict 
your freedom because they are the products of human action and are defined 
and protected by human institutions, it is the circumstances within which 
individuals make their decisions and the social relationships these decisions 
produce that are important (the worker driven by poverty to accept a slave 
contract in a sweat shop is unfree because the circumstances he faces have 
limited his options and the relations he accepts are based upon hierarchy; 
the person who decides to join an anarchist commune is free because the 
commune is non-hierarchical and she has the option of joining another
commune, working alone and so forth).

All in all, the right-Libertarian concept of freedom is lacking. For an 
ideology that takes the name "Libertarianism" it is seems happy to ignore 
actual liberty and instead concentrate on an abstract form of liberty which 
ignores so many sources of unfreedom as to narrow the concept until it 
becomes little more than a justification for authoritarianism. This can be 
seen from right-Libertarian attitudes about private property and its effects
on liberty (as discussed in the next section).

2.2 How does private property affect freedom?

The right-libertarian does not address or even acknowledge that the 
(absolute) right of private property may lead to extensive control by 
property owners over those who use, but do not own, property (such as
workers and tenants). Thus a free-market capitalist system leads to a 
very selective and class-based protection of "rights" and "freedoms." 
For example, under capitalism, the "freedom" of employers inevitably 
conflicts with the "freedom" of employees. When stockholders or their 
managers exercise their "freedom of enterprise" to decide how their 
company will operate, they violate their employee's right to decide 
how their labouring capacities will be utilised. In other words, under 
capitalism, the "property rights" of employers will conflict with and 
restrict the "human right" of employees to manage themselves. Capitalism 
allows the right of self-management only to the few, not to all. Or, 
alternatively, capitalism does not recognise certain human rights as 
*universal* which anarchism does.

This can be seen from Austrian Economist W. Duncan Reekie's defence of
wage labour. While referring to "intra-firm labour markets" as "hierarchies",
Reekie (in his best *ex cathedra* tone) states that "[t]here is nothing 
authoritarian, dictatorial or exploitative in the relationship. Employees 
order employers to pay them amounts specified in the hiring contract just 
as much as employers order employees to abide by the terms of the contract." 
[_Markets, Entrepreneurs and Liberty_, p. 136, p. 137] Given that "the 
terms of contract" involve the worker agreeing to obey the employers 
orders and that they will be fired if they do not, its pretty clear that the 
ordering that goes on in the "intra-firm labour market" is decidedly *one 
way*. Bosses have the power, workers are paid to obey. And this begs the 
question, *if* the employment contract creates a free worker, why must 
she abandon her liberty during work hours?

Reekie actually recognises this lack of freedom in a "round about" way 
when he notes that "employees in a firm at any level in the hierarchy can 
exercise an entrepreneurial role. The area within which that role can be 
carried out increases the more authority the employee has." [Op. Cit., 
p. 142] Which means workers *are* subject to control from above which 
restricts the activities they are allowed to do and so they are *not* 
free to act, make decisions, participate in the plans of the organisation, 
to create the future and so forth within working hours. And it is strange 
that while recognising the firm as a hierarchy, Reekie tries to deny that 
it is authoritarian or dictatorial -- as if you could have a hierarchy 
without authoritarian structures or an unelected person in authority 
who is not a dictator. His confusion is shared by Austrian guru Ludwig
von Mises, who asserts that the "entrepreneur and capitalist are not
irresponsible autocrats" because they are "unconditionally subject to
the sovereignty of the consumer" while, *on the next page*, admitting
there is a "managerial hierarchy" which contains "the average subordinate
employee." [_Human Action_, p. 809 and p. 810] It does not enter his
mind that the capitalist may be subject to some consumer control while
being an autocrat to their subordinated employees. Again, we find the
right-"libertarian" acknowledging that the capitalist managerial 
structure is a hierarchy and workers are subordinated while denying 
it is autocratic to the workers! Thus we have "free" workers within 
a relationship distinctly *lacking* freedom (in the sense of 
self-government) -- a strange paradox. Indeed, if your personal 
life were as closely monitored and regulated as the work life of 
millions of people across the world, you would rightly consider it 
oppression.

Perhaps Reekie (like most right-libertarians) will maintain that workers
voluntarily agree ("consent") to be subject to the bosses dictatorship 
(he writes that "each will only enter into the contractual agreement 
known as a firm if each believes he will be better off thereby. The 
firm is simply another example of mutually beneficial exchange" 
[Op. Cit., p. 137]). However, this does not stop the relationship 
being authoritarian or dictatorial (and so exploitative as it is 
*highly* unlikely that those at the top will not abuse their power). 
And as we argue further in the next section (and also see sections B.4, 
3.1 and 10.2), in a capitalist society workers have the option of 
finding a job or facing abject poverty and/or starvation.
 
Little wonder, then, that people "voluntarily" sell their labour and
"consent" to authoritarian structures! They have little option to do 
otherwise. So, *within* the labour market, workers *can* and *do* seek 
out the best working conditions possible, but that does not mean that 
the final contract agreed is "freely" accepted and not due to the 
force of circumstances, that both parties have equal bargaining power 
when drawing up the contract or that the freedom of both parties is 
ensured. Which means to argue (as many right-libertarians do) that 
freedom cannot be restricted by wage labour because people enter 
into relationships they consider will lead to improvements over their 
initial situation totally misses the points. As the initial situation 
is not considered relevant, their argument fails. After all, agreeing
to work in a sweatshop 14 hours a day *is* an improvement over starving
to death -- but it does not mean that those who so agree are free 
when working there or actually *want* to be there. They are not and
it is the circumstances, created and enforced by the law, that have 
ensured that they "consent" to such a regime (given the chance, they 
would desire to *change* that regime but cannot as this would violate 
their bosses property rights and they would be repressed for trying).

So the right-wing "libertarian" right is interested only in a narrow 
concept of freedom (rather than in "freedom" or "liberty" as such).
This can be seen in the argument of Ayn Rand (a leading ideologue of
"libertarian" capitalism) that "*Freedom*, in a political context, means
freedom from government coercion. It does *not* mean freedom from the
landlord, or freedom from the employer, or freedom from the laws of nature
which do not provide men with automatic prosperity. It means freedom from
the coercive power of the state -- and nothing else!" [_Capitalism: The
Unknown Ideal_, p. 192] By arguing in this way, right libertarians ignore
the vast number of authoritarian social relationships that exist in
capitalist society and, as Rand does here, imply that these social
relationships are like "the laws of nature." However, if one looks at the
world without prejudice but with an eye to maximising freedom, the major
coercive institution is seen to be not the state  but capitalist social
relationships (as indicated in section B.4). 

The right "libertarian," then, far from being a defender of freedom, is 
in fact a keen defender of certain forms of authority and domination. As
Peter Kropotkin noted, the "modern Individualism initiated by Herbert
Spencer is, like the critical theory of Proudhon, a powerful indictment
against the dangers and wrongs of government, but its practical solution
of the social problem is miserable -- so miserable as to lead us to
inquire if the talk of 'No force' be merely an excuse for supporting
landlord and capitalist domination." [_Act For Yourselves_, p. 98]

To defend the "freedom" of property owners is to defend authority and 
privilege -- in other words, statism. So, in considering the concept of 
liberty as "freedom from," it is clear that by defending private property 
(as opposed to possession) the "anarcho"-capitalist is defending the power 
and authority of property owners to govern those who use "their" property. 
And also, we must note, defending all the petty tyrannies that make the 
work lives of so many people frustrating, stressful and unrewarding.

However, anarchism, by definition, is in favour of organisations and social 
relationships which are non-hierarchical and non-authoritarian. Otherwise, 
some people are more free than others. Failing to attack hierarchy leads 
to massive contradiction. For example, since the British Army is a 
volunteer one, it is an "anarchist" organisation! (see next section 
for a discussion on why the "anarcho"-capitalism concept of freedom 
also allows the state to appear "libertarian"). 

In other words, "full capitalist property rights" do not protect freedom,
in fact they actively deny it. But this lack of freedom is only inevitable
if we accept capitalist private property rights. If we reject them, we
can try and create a world based on freedom in all aspects of life, 
rather than just in a few.

2.3 Can "anarcho"-capitalist theory justify the state?

Ironically enough, "anarcho"-capitalist ideology actually allows the state
to be justified along with capitalist hierarchy. This is because the reason
why capitalist authority is acceptable to the "anarcho"-capitalist is 
because it is "voluntary" -- no one forces the worker to join or remain
within a specific company (force of circumstances are irrelevant in this 
viewpoint). Thus capitalist domination is not really domination at all. But
the same can be said of all democratic states as well. Few such states bar 
exit for its citizens -- they are free to leave at any time and join any 
other state that will have them (exactly as employees can with companies). 
Of course there *are* differences between the two kinds of authority -- 
anarchists do not deny that -- but the similarities are all too clear.

The "anarcho"-capitalist could argue that changing jobs is easier than 
changing states and, sometimes, this is correct -- but not always. Yes, 
changing states does require the moving of home and possessions over 
great distances but so can changing job (indeed, if a worker has 
to move half-way across a country or even the world to get a job 
"anarcho"-capitalists would celebrate this as an example of the 
benefits of a "flexible" labour market). Yes, states often conscript
citizens and send them into dangerous situations but bosses often force
their employees to accept dangerous working environments on pain of 
firing. Yes, many states do restrict freedom of association and speech,
but so do bosses. Yes, states tax their citizens but landlords and 
companies only let others use their property if they get money in
return (i.e. rent or profits). Indeed, if the employee or tenant does not
provide the employer or landlord with enough profits, they will quickly
be shown the door. Of course employees can start their own companies 
but citizens can start their own state if they convince an existing state 
(the owner of a set of resources) to sell/give land to them. Setting up 
a company also requires existing owners to sell/give resources to those 
who need them. Of course, in a democratic state citizens can influence 
the nature of laws and orders they obey. In a capitalist company, this 
is not the case.

This means that, logically, "anarcho"-capitalism must consider a series
of freely exitable states as "anarchist" and not a source of domination. 
If consent (not leaving) is what is required to make capitalist domination 
not domination then the same can be said of statist domination. Stephen
L. Newman makes the same point:

"The emphasis [right-wing] libertarians place on the opposition of liberty
and political power tends to obscure the role of authority in their 
worldview . . . the authority exercised in private relationships, however
-- in the relationship between employer and employee, for instance --
meets with no objection. . . . [This] reveals a curious insensitivity to
the use of private authority as a means of social control. Comparing public
and private authority, we might well ask of the [right-wing] libertarians:
When the price of exercising one's freedom is terribly high, what practical
difference is there between the commands of the state and those issued
by one's employer? . . . Though admittedly the circumstances are not
identical, telling disgruntled empowers that they are always free to leave
their jobs seems no different in principle from telling political dissidents
that they are free to emigrate." [_Liberalism at Wit's End_, pp. 45-46]

Murray Rothbard, in his own way, agrees:

"*If* the State may be said too properly *own* its territory, then it is
proper for it to make rules for everyone who presumes to live in that
area. It can legitimately seize or control private property because there
*is* no private property in its area, because it really owns the entire 
land surface. *So long* as the State permits its subjects to leave its 
territory, then, it can be said to act as does any other owner who
sets down rules for people living on his property." [_The Ethics of
Liberty_, p. 170]

Rothbard's argues that this is *not* the case simply because the state
did not acquire its property in a "just" manner and that it claims 
rights over virgin land (both of which violates Rothbard's "homesteading"
theory of property -- see section 4.1 for details and a critique).
Rothbard argues that this defence of statism (the state as property owner)
is unrealistic and ahistoric, but his account of the origins of property 
is equally unrealistic and ahistoric and that does not stop him supporting 
capitalism. People in glass houses should not throw stones!

Thus he claims that the state is evil and its claims to authority/power 
false simply because it acquired the resources it claims to own "unjustly" 
-- for example, by violence and coercion (see _The Ethics of Liberty_, 
pp. 170-1, for Rothbard's attempt to explain why the state should not be 
considered as the owner of land). And even *if* the state *was* the 
owner of its territory, it cannot appropriate virgin land (although, 
as he notes elsewhere, the "vast" US frontier no longer exists "and 
there is no point crying over the fact" [Op. Cit., p. 240]). 

So what makes hierarchy legitimate for Rothbard is whether the property
it derives from was acquired justly or unjustly. Which leads us to a 
few *very* important points. 

Firstly, Rothbard is explicitly acknowledging the similarities between 
statism and capitalism. He is arguing that *if* the state had developed 
in a "just" way, then it is perfectly justifiable in governing ("set[ting] 
down rules") those who "consent" to live on its territory in *exactly* 
the same why a property owner does. In other words, private property 
can be considered as a "justly" created state! These similarities between
property and statism have long been recognised by anarchists and that
is why we reject private property along with the state (Proudhon did,
after all, note that "property is despotism" and well as "theft"). But, 
according to Rothbard, something can look like a state (i.e. be a 
monopoly of decision making over an area) and act like a state (i.e.
set down rules for people, govern them, impose a monopoly of force)
but not be a state. But if it looks like a duck and sounds like a duck, 
it is a duck. Claiming that the origins of the thing are what counts is
irrelevant --  for example, a cloned duck is just as much a duck as 
a naturally born one. A statist organisation is authoritarian whether 
it comes from "just" or "unjust" origins. Does transforming the 
ownership of the land from states to capitalists *really* make the
relations of domination created by the dispossession of the many 
less authoritarian and unfree? Of course not.

Secondly, much property in "actually existing" capitalism is the product 
(directly or indirectly) of state laws and violence ("the emergence of
both agrarian and industrial capitalism in Britain [and elsewhere, we
must add] . . . could not have got off the ground without resources
to state violence -- legal or otherwise" [Brian Morris, _Ecology &
Anarchism_, p. 190]). If state claims of ownership are invalid due to 
their history, then so are many others (particularly those which claim 
to own land). As the initial creation was illegitimate, so are the 
transactions which have sprung from it. Thus if state claims of property 
rights are invalid, so are most (if not all) capitalist claims. If the 
laws of the state are illegitimate, so are the rules of the capitalist. 
If taxation is illegitimate, then so are rent, interest and profit. 
Rothbard's "historical" argument against the state can also be applied 
to private property and if the one is unjustified, then so is the other.

Thirdly, *if* the state had evolved "justly" then Rothbard would actually 
have nothing against it! A strange position for an anarchist to take. 
Logically this means that if a system of corporate states evolved 
from the workings of the capitalist market then the "anarcho"-capitalist 
would have nothing against it. This can be seen from "anarcho"-capitalist
support for company towns even though they have correctly been described
as "industrial feudalism" (see section 6 for more on this).

Fourthly, Rothbard's argument implies that similar circumstances producing 
similar relationships of domination and unfreedom are somehow different 
if they are created by "just" and "unjust" means. Rothbard claims that
because the property is "justly" acquired it means the authority a 
capitalist over his employees is totally different from that of a state 
over its subject. But such a claim is false -- both the subject/citizen 
and the employee are in a similar relationship of domination and 
authoritarianism. As we argued in section 2.2, how a person got 
into a situation is irrelevant when considering how free they are. 
Thus, the person who "consents" to be governed by another because all 
available resources are privately owned is in exactly the same situation
as a person who has to join a state because all available resources are 
owned by one state or another. Both are unfree and are part of authoritarian 
relationships based upon domination.

And, lastly, while "anarcho"-capitalism may be a "just" society, it is
definitely *not* a free one. It will be marked by extensive hierarchy, 
unfreedom and government, but these restrictions of freedom will be of a 
private nature. As Rothbard indicates, the property owner and the state 
create/share the same authoritarian relationships. If statism is unfree, 
then so is capitalism. And, we must add, how "just" is a system which 
undermines liberty. Can "justice" ever be met in a society in which 
one class has more power and freedom than another. If one party is in 
an inferior position, then they have little choice but to agree to the 
disadvantageous terms offered by the superior party (see section 3.1). 
In such a situation, a "just" outcome will be unlikely as any contract 
agreed will be skewed to favour one side over the other.

The implications of these points are important. We can easily imagine 
a situation within "anarcho"-capitalism where a few companies/people 
start to buy up land and form company regions and towns. After all, 
this *has* happened continually throughout capitalism. Thus a "natural" 
process may develop where a few owners start to accumulate larger and 
larger tracks of land "justly". Such a process does not need to result
in *one* company owning the world. It is likely that a few hundred,
perhaps a few thousand, could do so. But this is not a cause for 
rejoicing -- after all the current "market" in "unjust" states also
has a few hundred competitors in it. And even if there is a large
multitude of property owners, the situation for the working class is
exactly the same as the citizen under current statism! Does the fact 
that it is "justly" acquired property that faces the worker really
change the fact she must submit to the government and rules of another 
to gain access to the means of life?

When faced with anarchist criticisms that *circumstances* force workers
to accept wage slavery the "anarcho"-capitalist claims that these are to
be considered as objective facts of nature and so wage labour is not 
domination. However, the same can be said of states -- we are born into 
a world where states claim to own all the available land. If states are 
replaced by individuals or groups of individuals does this change the 
essential nature of our dispossession? Of course not. 

Rothbard argues that "[o]bviously, in a free society, Smith has 
the ultimate decision-making power over his own just property, Jones 
over his, etc." [Op. Cit., p. 173] and, equally obviously, this 
ultimate-decision making power extends to those who *use,* but do 
not own, such property. But how "free" is a free society where the 
majority have to sell their liberty to another in order to live? 
Rothbard (correctly) argues that the State "uses its monopoly of 
force . . . to control, regulate, and coerce its hapless subjects. 
Often it pushes its way into controlling the morality and the very
lives of its subjects." [Op. Cit., p. 171] However he fails to note 
that employers do exactly the same thing to their employees. This, 
from an anarchist perspective, is unsurprising, for (after all) the 
employer *is* "the ultimate decision-making power over his just 
property" just as the state is over its "unjust" property. That
similar forms of control and regulation develop is not a surprise
given the similar hierarchical relations in both structures.

That there is a choice in available states does not make statism 
any less unjust and unfree. Similarly, just because we have a choice
between employers does not make wage labour any less unjust or unfree.
But trying to dismiss one form of domination as flowing from "just"
property while attacking the other because it flows from "unjust"
property is not seeing the wood for the trees. If one reduces liberty, 
so does the other. Whether the situation we are in resulted from "just" 
or "unjust" steps is irrelevant to the restrictions of freedom we face 
because of them (and as we argue in section 2.5, "unjust" situations
can easily flow from "just" steps).

The "anarcho"-capitalist insistence that the voluntary nature of an 
association determines whether it is anarchistic is deeply flawed -- so 
flawed in fact that states and state-like structures (such as capitalist
firms) can be considered anarchistic! In contrast, anarchists think that 
the hierarchical nature of the associations we join is equally as 
important as its voluntary nature when determining whether it is 
anarchistic or statist. However this option is not available to the 
"anarcho"-capitalist as it logically entails that capitalist companies 
are to be opposed along with the state as sources of domination, 
oppression and exploitation.

2.4 But surely transactions on the market are voluntary?

Of course, it is usually maintained by "anarcho"-capitalists that no-one 
puts a gun to a worker's head to join a specific company. Yes, indeed,
this is true -- workers can apply for any job they like. But the point
is that the vast majority cannot avoid having to sell their liberty to 
others (self-employment and co-operatives *are* an option, but they
account for less than 10% of the working population and are unlikely
to spread due to the nature of capitalist market forces -- see section 
J.5.11 and J.5.12 for details). And as Bob Black pointed out, right
libertarians argue that "'one can at least change jobs.' but you can't
avoid having a job -- just as under statism one can at least change
nationalities but you can't avoid subjection to one nation-state
or another. But freedom means more than the right to change masters."
[_The Libertarian as Conservative_]
 
So why do workers agree to join a company? Because circumstances force 
them to do so - circumstances created, we must note, by *human* actions
and institutions and not some abstract "fact of nature." And if the world 
that humans create by their activity is detrimental to what we should 
value most (individual liberty and individuality) then we should consider 
how to *change that world for the better.* Thus "circumstances" (current 
"objective reality") is a valid source of unfreedom and for human 
investigation and creative activity -- regardless of the claims of 
right-Libertarians.

Let us look at the circumstances created by capitalism. Capitalism is 
marked by a class of dispossessed labourers who have nothing to sell by 
their labour. They are legally barred from access to the means of life 
and so have little option but to take part in the labour market. As 
Alexander Berkman put it:

"The law says your employer does not sell anything from you, because it
is done with your consent. You have agreed to work for your boss for 
certain pay, he to have all that you produce . . .

"But did you really consent?

"When the highway man holds his gun to your head, you turn your valuables
over to him. You 'consent' all right, but you do so because you cannot
help yourself, because you are *compelled* by his gun.

"Are you not *compelled* to work for an employer? Your need compels you
just as the highwayman's gun. You must live. . . You can't work for
yourself . . .The factories, machinery, and tools belong to the 
employing class, so you *must* hire yourself out to that class in order
to work and live. Whatever you work at, whoever your employer may be, it
is always comes to the same: you must work *for him*. You can't help
yourself. You are *compelled*." [_What is Communist Anarchism?_, p. 9]

Due to this class monopoly over the means of life, workers (usually) are 
at a disadvantage in terms of bargaining power -- there are more workers
than jobs (see section B.4.3 and 10.2 for a discussion why this is
the normal situation on the labour market).

As was indicated in section B.4 (How does capitalism affect liberty?), 
within capitalism there is no equality between owners and the dispossessed, 
and so property is a source of *power.* To claim that this power should be 
"left alone" or is "fair" is "to the anarchists. . . preposterous. Once a 
State has been established, and most of the country's capital privatised, 
the threat of physical force is no longer necessary to coerce workers 
into accepting jobs, even with low pay and poor conditions. To use Ayn 
Rand's term, 'initial force' has *already taken place,* by those who now 
have capital against those who do not. . . . In other words, if a thief 
died and willed his 'ill-gotten gain' to his children, would the children 
have a right to the stolen property? Not legally. So if 'property is theft,' 
to borrow Proudhon's quip, and the fruit of exploited labour is simply legal 
theft, then the only factor giving the children of a deceased capitalist a 
right to inherit the 'booty' is the law, the State. As Bakunin wrote, 
'Ghosts should not rule and oppress this world, which belongs only to 
the living'" [Jeff Draughn, _Between Anarchism and Libertarianism_]. 

Or, in other words, right-Libertarianism fails to "meet the charge that 
normal operations of the market systematically places an entire class of 
persons (wage earners) in circumstances that compel them to accept the 
terms and conditions of labour dictated by those who offer work. While 
it is true that individuals are formally free to seek better jobs or 
withhold their labour in the hope of receiving higher wages, in the end 
their position in the market works against them; they cannot live if they 
do not find employment. When circumstances regularly bestow a relative 
disadvantage on one class of persons in their dealings with another class, 
members of the advantaged class have little need of coercive measures to 
get what they want." [Stephen L. Newman, _Liberalism at Wit's End_, 
p. 130]

To ignore the circumstances which drive people to seek out the most 
"beneficial exchange" is to blind yourself to the power relationships
inherent within capitalism -- power relationships created by the
unequal bargaining power of the parties involved (also see section
3.1). And to argue that "consent" ensures freedom is false; if you 
are "consenting" to be join a dictatorial organisation, you "consent" 
*not* to be free (and to paraphrase Rousseau, a person who renounces 
freedom renounces being human). 

Which is why circumstances are important -- if someone truly wants to
join an authoritarian organisation, then so be it. It is their life. But 
if circumstances ensure their "consent" then they are not free. The
danger is, of course, that people become *accustomed* to authoritarian 
relationships and end up viewing them as forms of freedom. This can be 
seen from the state, which the vast majority support and "consent" to.
And this also applies to wage labour, which many workers today accept 
as a "necessary evil" (like the state) but, as we indicate in section 
8.6, the first wave of workers viewed with horror as a form of (wage) 
slavery and did all that they could to avoid. In such situations all
we can do is argue with them and convince them that certain forms of
organisations (such as the state and capitalist firms) are an evil 
and urge them to change society to ensure their extinction.

So due to this lack of appreciation of circumstances (and the fact that 
people become accustomed to certain ways of life) "anarcho"-capitalism 
actively supports structures that restrict freedom for the many. And how 
is "anarcho"-capitalism *anarchist* if it generates extensive amounts of 
archy? It is for this reason that all anarchists support self-management 
within free association -- that way we maximise freedom both inside *and* 
outside organisations. But only stressing freedom outside organisations,
"anarcho"-capitalism ends up denying freedom as such (after all, we 
spend most of our waking hours at work). If "anarcho"-capitalists 
*really* desired freedom, they would reject capitalism and become 
anarchists -- only in a libertarian socialist society would agreements 
to become a wage worker be truly voluntary as they would not be driven 
by circumstances to sell their liberty.

This means that while right-Libertarianism appears to make "choice" an ideal 
(which sounds good, liberating and positive) in practice it has become a 
"dismal politics," a politics of choice where most of the choices are bad. 
And, to state the obvious, the choices we are "free" to make are shaped by
the differences in wealth and power in society (see section 3.1) as 
well as such things as "isolation paradoxes" (see section B.6) and the 
laws and other human institutions that exist. If we ignore the context 
within which people make their choices then we glorify abstract processes 
at the expense of real people. And, as importantly, we must add that many 
of the choices we make under capitalism (shaped as they are by the 
circumstances within which they are made), such as employment contracts, 
result in our "choice" being narrowed to "love it or leave it" in the 
organisations we create/join as a result of these "free" choices. 

This ideological blind spot flows from the "anarcho"-capitalist definition
of "freedom" as "absence of coercion" -- as workers "freely consent" to
joining a specific workplace, their freedom is unrestricted. But to 
defend *only* "freedom from" in a capitalist society means to defend 
the power and authority of the few against the attempts of the many to 
claim their freedom and rights. To requote Emma Goldman, "'Rugged 
individualism' has meant all the 'individualism' for the masters . . . , 
in whose name political tyranny and social oppression are defended and 
held up as virtues' while every aspiration and attempt of man to gain 
freedom . . . is denounced as . . . evil in the name of that same 
individualism." [_Red Emma Speaks_, p. 112]

In other words, its all fine and well saying (as right-libertarians do) 
that you aim to abolish force from human relationships but if you support 
an economic system which creates hierarchy (and so domination and oppression) 
by its very workings, "defensive" force will always be required to maintain
and enforce that domination. Moreover, if one class has extensive power 
over another due to the systematic (and normal) workings of the market,  
any force used to defend that power is *automatically* "defensive". Thus 
to argue against the use of force and ignore the power relationships that 
exist within and shape a society (and so also shape the individuals within 
it) is to defend and justify capitalist and landlord domination and 
denounce any attempts to resist that domination as "initiation of
force." 

Anarchists, in contrast, oppose *hierarchy* (and so domination
within relationships -- bar S&M personal relationships, which are a 
totally different thing altogether; they are truly voluntary and they
also do not attempt to hide the power relationships involved by using 
economic jargon). This opposition, while also including opposition to 
the use of force against equals (for example, anarchists are opposed
to forcing workers and peasants to join a self-managed commune or 
syndicate), also includes support for the attempts of those subject 
to domination to end it (for example, workers striking for union 
recognition are not "initiating force", they are fighting for their 
freedom). 

In other words, apparently "voluntary" agreements can and do limit 
freedom and so the circumstances that drive people into them *must* be 
considered when deciding whether any such limitation is valid. By 
ignoring circumstances, "anarcho"-capitalism ends up by failing to 
deliver what it promises -- a society of free individuals -- and
instead presents us with a society of masters and servants. The question
is, what do we feel moved to insist that people enjoy? Formal, abstract
(bourgeois) self-ownership ("freedom") or a more substantive control
over one's life (i.e. autonomy)?

2.5 But surely circumstances are the result of liberty and so cannot
      be objected to?

It is often argued by right-libertarians that the circumstances we face 
within capitalism are the result of individual decisions (i.e. individual 
liberty) and so we must accept them as the expressions of these acts (the 
most famous example of this argument is in Nozick's _Anarchy, State, and 
Utopia_ pp. 161-163 where he maintains that "liberty upsets patterns"). 
This is because whatever situation evolves from a just situation by just 
(i.e. non-coercive steps) is also (by definition) just. 

However, it is not apparent that adding just steps to a just situation 
will result in a just society. We will illustrate with a couple of 
banal examples. If you add chemicals which are non-combustible together
you can create a new, combustible, chemical (i.e. X becomes not-X by 
adding new X to it). Similarly, if you have an odd number and add another 
odd number to it, it becomes even (again, X becomes not-X by adding a new
X to it). So it *is* very possible to go from an just state to an unjust
state by just step (and it is possible to remain in an unjust state by
just acts; for example if we tried to implement "anarcho"-capitalism
on the existing -- unjustly created -- situation of "actually existing"
capitalism it would be like having an odd number and adding even numbers 
to it). In other words, the outcome of "just" steps can increase inequality 
within society and so ensure that some acquire an unacceptable amount of 
power over others, via their control over resources. Such an inequality of
power would create an "unjust" situation where the major are free to
sell their liberty to others due to inequality in power and resources 
on the "free" market.

Ignoring this objection, we could argue (as many "anarcho"-capitalists
and right-libertarians do) that the unforeseen results of human action 
are fine unless we assume that these human actions are in themselves bad 
(i.e. that individual choice is evil). 

Such an argument is false for three reasons. 

First, when we make our choices the aggregate impact of these choices are 
unknown to us -- and not on offer when we make our choices. Thus we cannot 
be said to "choose" these outcomes, outcomes which we may consider deeply 
undesirable, and so the fact that these outcomes are the result of 
individual choices is besides the point (if we knew the outcome
we could refrain from doing them). The choices themselves, therefore, 
do not validate the outcome as the outcome was not part of the choices 
when they where made (i.e. the means do not justify the ends). In other
words, private acts often have important public consequences (and 
"bilateral exchanges" often involve externalities for third parties). 
Secondly, if the outcome of individual choices is to deny or restrict 
individual choice on a wider scale at a later stage, then we are hardly 
arguing that individual choice is a bad thing. We want to arrange it so 
that the decisions we make now do not result in them restricting our 
ability to make choices in important areas of life at a latter stage. 
Which means we are in favour of individual choices and so liberty, not
against them. Thirdly, the unforeseen or unplanned results of individual 
actions are not necessarily a good thing. If the aggregate outcome of 
individual choices harms individuals then we have a right to modify the 
circumstances within which choices are made and/or the aggregate results 
of these choices. 

An example will show what we mean (again drawn from Haworth's excellent
_Anti-Libertarianism_, p. 35). Millions of people across the world bought 
deodorants which caused a hole to occur in the ozone layer surrounding
the Earth. The resultant of these acts created a situation in which 
individuals and the eco-system they inhabited were in great danger. 
The actual acts themselves were by no means wrong, but the aggregate
impact was. A similar argument can apply to any form of pollution.
Now, unless the right-Libertarian argues that skin cancer or other
forms of pollution related illness are fine, its clear that the 
resultant of individual acts can be harmful to individuals. 

The right-Libertarian could argue that pollution is an "initiation of
force" against an individual's property-rights in their person and so
individuals can sue the polluters. But hierarchy also harms the individual
(see section B.1) -- and so can be considered as an infringement of 
their "property-rights" (i.e. liberty, to get away from the insane 
property fetish of right-Libertarianism). The loss of autonomy can be
just as harmful to an individual as lung cancer although very different
in form. And the differences in wealth resulting from hierarchy is
well known to have serious impacts on life-span and health. 

As noted in section 2.1, the market is just as man-made as pollution. This 
means that the "circumstances" we face are due to aggregate of millions of 
individual acts and these acts occur within a specific framework of rights, 
institutions and ethics. Anarchists think that a transformation of our 
society and its rights and ideals is required so that the resultant of 
individual choices does not have the ironic effect of limiting individual 
choice (freedom) in many important ways (such as in work, for example). 

In other words, the *circumstances* created by capitalist rights and 
institutions requires a *transformation* of these rights and institutions 
in such a way as to maximise individual choice for all -- namely, to abolish 
these rights and replace them with new ones (for example, replace property 
rights with use rights). Thus Nozick's claims that "Z does choose voluntarily 
if the other individuals A through Y each acted voluntarily and within their
rights" [Op. Cit., p. 263] misses the point -- it is these rights that are 
in question (given that Nozick *assumes* these rights then his whole thesis 
is begging the question).

And we must add (before anyone points it out) that, yes, we are aware that 
many decisions will unavoidably limit current and future choices. For 
example, the decision to build a factory on a green-belt area will make 
it impossible for people to walk through the woods that are no longer 
there. But such "limitations" (if they can be called that) of choice are 
different from the limitations we are highlighting here, namely the lose 
of freedom that accompanies the circumstances created via exchange in the 
market. The human actions which build the factory modify reality but 
do not generate social relationships of domination between people in 
so doing. The human actions of market exchange, in contrast, modify the 
relative strengths of everyone in society and so has a distinct impact 
on the social relationships we "voluntarily" agree to create. Or, to put 
it another way, the decision to build on the green-belt site does "limit" 
choice in the abstract but it does *not* limit choice in the kind of 
relationships we form with other people nor create authoritarian 
relationships between people due to inequality influencing the content
of the associations we form. However, the profits produced from using the 
factory increases inequality (and so market/economic power) and so weakens 
the position of the working class in respect to the capitalist class within
society. This increased inequality will be reflected in the "free" 
contracts and working regimes that are created, with the weaker "trader"
having to compromise far more than before. 

So, to try and defend wage slavery and other forms of hierarchy by arguing 
that "circumstances" are created by individual liberty runs aground on its 
own logic. If the circumstances created by individual liberty results in 
pollution then the right-Libertarian will be the first to seek to change 
those circumstances. They recognise that the right to pollute while producing
is secondary to our right to be healthy. Similarly, if the circumstances 
created by individual liberty results in hierarchy (pollution of the mind 
and our relationships with others as opposed to the body, although it 
affects that to) then we are entitled to change these circumstances too 
and the means by which we get there (namely the institutional and rights 
framework of society). Our right to liberty is more important than the 
rights of property -- sadly, the right-Libertarian refuses to recognise 
this.

2.6 Do Libertarian-capitalists support slavery? 

Yes. It may come as a surprise to many people, but right-Libertarianism is 
one of the few political theories that justifies slavery. For example, Robert 
Nozick asks whether "a free system would allow [the individual] to sell 
himself into slavery" and he answers "I believe that it would." [_Anarchy,
State and Utopia_, p. 371] While some right-Libertarians do not agree with 
Nozick, there is no logical basis in their ideology for such disagreement.

The logic is simple, you cannot really own something unless you can sell 
it. Self-ownership is one of the cornerstones of laissez-faire capitalist 
ideology. Therefore, since you own yourself you can sell yourself. 

(For Murray Rothbard's claims of the "unenforceability, in libertarian 
theory, of voluntary slave contracts" see _The Ethics of Liberty_, pp. 
134-135 -- of course, *other* libertarian theorists claim the exact 
opposite so "libertarian theory" makes no such claims, but nevermind! 
Essentially, his point revolves around the assertion that a person 
"cannot, in nature, sell himself into slavery and have this sale enforced 
- for this would mean that his future will over his own body was being 
surrendered in advance" and that if a "labourer remains totally subservient 
to his master's will voluntarily, he is not yet a slave since his submission 
is voluntary." [p. 40] However, as we noted in section 2, Rothbard 
emphasis on quitting fails to recognise that actual denial of will and 
control over ones own body that is explicit in wage labour. It is this 
failure that pro-slave contract "libertarians" stress -- as we will 
see, they consider the slave contract as an extended wage contract. 
Moreover, a modern slave contract would likely take the form of a
"performance bond" [p. 136] in which the slave agrees to perform X 
years labour or pay their master substantial damages. The threat of 
damages that enforces the contract and such a "contract" Rothbard does 
agree is enforceable -- along with "conditional exchange" [p. 141] 
which could be another way of creating slave contracts.)

Nozick's defence of slavery should not come as a surprise to any one 
familiar with classical liberalism. An elitist ideology, its main rationale
is to defend the liberty and power of property owners and justify unfree 
social relationships (such as government and wage labour) in terms of 
"consent." Nozick just takes it to its logical conclusion, a conclusion
which Rothbard, while balking at the label used, does not actually 
disagree with. 

This is because Nozick's argument is not new but, as with so many 
others, can be found in John Locke's work. The key difference is
that Locke refused the term "slavery" and favoured "drudgery" as, 
for him, slavery mean a relationship "between a lawful conqueror 
and a captive" where the former has the power of life and death over
the latter. Once a "compact" is agreed between them, "an agreement 
for a limited power on the one side, and obedience on the other . . .
slavery ceases." As long as the master could not kill the slave, then
it was "drudgery." Like Nozick, he acknowledges that "men did sell 
themselves; but, it is plain, this was only to drudgery, not to slavery: 
for, it is evident, the person sold  was not under an absolute, arbitrary, 
despotical power: for the master could not have power to kill him, at 
any time, whom, at a  certain time, he was obliged to let go free out 
of his service." [Locke, _Second Treatise of Government_, Section 24]
In other words, like Rothbard, voluntary slavery was fine but just call 
it something else.

Not that Locke was bothered by involuntary slavery. He was heavily 
involved in the slave trade. He owned shares in the "Royal Africa 
Company" which carried on the slave trade for England, making a 
profit when he sold them. He also held a significant share in another 
slave company, the "Bahama Adventurers." In the "Second Treatise", 
Locke justified slavery in terms of "Captives taken in a just war." 
[Section 85] In other words, a war waged against aggressors. That, of 
course, had nothing to do with the *actual* slavery Locke profited from 
(slave raids were common, for example). Nor did his "liberal" principles 
stop him suggesting a constitution that would ensure that "every freeman 
of Carolina shall have absolute power and authority over his Negro slaves." 
The constitution itself was typically autocratic and hierarchical, designed 
explicitly to "avoid erecting a numerous democracy." [_The Works of John 
Locke_, vol. X, p. 196]

So the notion of contractual slavery has a long history within right-wing
liberalism, although most refuse to call it by that name. It is of course
simply embarrassment that stops Rothbard calling a spade a spade. He 
incorrectly assumes that slavery has to be involuntary. In fact, historically,
voluntary slave contracts have been common (David Ellerman's  _Property and 
Contract in Economics_ has an excellent overview). Any new form of voluntary
slavery would be a "civilised" form of slavery and could occur when an 
individual would "agree" to sell themselves to themselves to another (as 
when a starving worker would "agree" to become a slave in return for food).
In addition, the contract would be able to be broken under certain conditions
(perhaps in return for breaking the contract, the former slave would have
pay damages to his or her master for the labour their master would lose - 
a sizeable amount no doubt and such a payment could result in debt slavery,
which is the most common form of "civilised" slavery. Such damages
may be agreed in the contract as a "performance bond" or "conditional
exchange"). 

In summary, right-Libertarians are talking about "civilised" slavery (or, 
in other words, civil slavery) and not forced slavery. While some may have
reservations about calling it slavery, they agree with the basic concept
that since people own themselves they can sell themselves as well as 
selling their labour for a lifetime.

We must stress that this is no academic debate. "Voluntary" slavery has 
been a problem in many societies and still exists in many countries today
(particularly third world ones where bonded labour -- i.e. where debt is
used to enslave people -- is the most common form). With the rise of sweat 
shops and child labour in many "developed" countries such as the USA, 
"voluntary" slavery (perhaps via debt and bonded labour) may become 
common in all parts of the world -- an ironic (if not surprising) result
of "freeing" the market and being indifferent to the actual freedom of 
those within it. 

And it is interesting to note that even Murray Rothbard is not against
the selling of humans. He argued that children are the property of their 
parents. They can (bar actually murdering them by violence) do whatever 
they please with them, even sell them on a "flourishing free child market." 
[_The Ethics of Liberty_, p. 102] Combined with a whole hearted support 
for child labour (after all, the child can leave its parents if it objects 
to working for them) such a "free child market" could easily become a 
"child slave market" -- with entrepreneurs making a healthy profit selling 
infants to other entrepreneurs who could make profits from the toil of 
"their" children (and such a process did occur in 19th century Britain). 
Unsurprisingly, Rothbard ignores the possible nasty aspects of such a 
market in human flesh (such as children being sold to work in factories, 
homes and brothels). And, of course, such a market could see women 
"specialising" in producing children for it (the use of child labour 
during the Industrial Revolution actually made it economically sensible 
for families to have more children) and, perhaps, gluts and scarcities 
of babies due to changing market conditions. But this is besides the 
point.

Of course, this theoretical justification for slavery at the heart of an 
ideology calling itself "libertarianism" is hard for many right-Libertarians
to accept. Some of the "anarcho"-capitalist type argue that such contracts 
would be very hard to enforce in their system of capitalism. This attempt 
to get out of the contradiction fails simply because it ignores the nature
of the capitalist market. If there is a demand for slave contracts to be 
enforced, then companies will develop to provide that "service" (and it would 
be interesting to see how two "protection" firms, one defending slave contracts 
and another not, could compromise and reach a peaceful agreement over whether 
slave contracts were valid). Thus we could see a so-called "anarchist" or 
"free" society producing companies whose specific purpose was to hunt down 
escaped slaves (i.e. individuals in slave contracts who have not paid 
damages to their owners for freedom). Of course, perhaps Rothbard would
claim that such slave contracts would be "outlawed" under his "general
libertarian law code" but this is a denial of market "freedom". If slave 
contracts *are* "banned" then surely this is paternalism, stopping 
individuals from contracting out their "labour services" to whom and 
however long they "desire". You cannot have it both ways.

So, ironically, an ideology proclaiming itself to support "liberty" ends 
up justifying and defending slavery. Indeed, for the right-libertarian the
slave contract is an exemplification, not the denial, of the individual's 
liberty! How is this possible? How can slavery be supported as an expression 
of liberty? Simple, right-Libertarian support for slavery is a symptom of
a *deeper* authoritarianism, namely their uncritical acceptance of contract
theory. The central claim of contract theory is that contract is the means 
to secure and enhance individual freedom. Slavery is the antithesis to freedom
and so, in theory, contract and slavery must be mutually exclusive. However,
as indicated above, some contract theorists (past and present) have included 
slave contracts among legitimate contracts. This suggests that contract 
theory cannot provide the theoretical support needed to secure and enhance 
individual freedom. Why is this?

As Carole Pateman argues, "contract theory is primarily about a way of 
creating social relations constituted by subordination, not about exchange." 
Rather than undermining subordination, contract theorists justify modern 
subjection -- "contract doctrine has proclaimed that subjection to a master 
-- a boss, a husband -- is freedom." [_The Sexual Contract_, p. 40 and 
p. 146] The question central to contract theory (and so right-Libertarianism) 
is not "are people free" (as one would expect) but "are people free to 
subordinate themselves in any manner they please." A radically different 
question and one only fitting to someone who does not know what liberty
means.

Anarchists argue that not all contracts are legitimate and no free individual 
can make a contract that denies his or her own freedom. If an individual 
is able to express themselves by making free agreements then those free 
agreements must also be based upon freedom internally as well. Any agreement 
that creates domination or hierarchy negates the assumptions underlying the 
agreement and makes itself null and void. In other words, voluntary 
government is still government and the defining chararacteristic of 
an anarchy must be, surely, "no government" and "no rulers."

This is most easily seen in the extreme case of the slave contract. John 
Stuart Mill stated that such a contract would be "null and void." He argued
that an individual may voluntarily choose to enter such a contract but
in so doing "he abdicates his liberty; he foregoes any future use of it
beyond that single act. He therefore defeats, in his own case, the
very purpose which is the justification of allowing him to dispose of
himself. . .The principle of freedom cannot require that he should be
free not to be free. It is not freedom, to be allowed to alienate his
freedom." He adds that "these reasons, the force of which is so 
conspicuous in this particular case, are evidently of far wider 
application." [quoted by Pateman, Op. Cit., pp. 171-2]

And it is such an application that defenders of capitalism fear (Mill did
in fact apply these reasons wider and unsurprisingly became a supporter of 
a market syndicalist form of socialism). If we reject slave contracts as 
illegitimate then, logically, we must also reject *all* contracts that 
express qualities similar to slavery (i.e. deny freedom) including wage 
slavery. Given that, as David Ellerman points out, "the voluntary 
slave . . . and the employee cannot in fact take their will out of their 
intentional actions so that they could be 'employed' by the master or 
employer" we are left with "the rather implausible assertion that a 
person can vacate his or her will for eight or so hours a day for weeks, 
months, or years on end but cannot do so for a working lifetime." 
[_Property and Contract in Economics_, p. 58]

The implications of supporting voluntary slavery is quite devastating  
for all forms of right-wing "libertarianism." This was proven by Ellerman
when he wrote an extremely robust defence of it under the  pseudonym 
"J. Philmore" called _The Libertarian Case for Slavery_ (first published
in _The Philosophical Forum_, xiv, 1982). This classic rebuttal takes the 
form of "proof by contradiction" (or *reductio ad absurdum*) whereby he 
takes the arguments of right-libertarianism to their logical end and shows 
how they reach the memorably conclusion that the "time has come for liberal 
economic and political thinkers to stop dodging this issue and to 
critically re-examine their shared prejudices about certain voluntary 
social institutions . . . this critical process will inexorably drive 
liberalism to its only logical conclusion: libertarianism that finally 
lays the true moral foundation for economic and political slavery."</i>

Ellerman shows how, from a right-"libertarian" perspective there is a 
"fundamental contradiction" in a modern liberal society for the state 
to prohibit slave contracts. He notes that there "seems to be a basic 
shared prejudice of liberalism that slavery is inherently involuntary, 
so the issue of genuinely voluntary slavery has received little scrutiny. 
The perfectly valid liberal argument that involuntary slavery is inherently 
unjust is thus taken to include voluntary slavery (in which case, the 
argument, by definition, does not apply).  This has resulted in an 
abridgment of the freedom of contract in modern liberal society." Thus it 
is possible to argue for a "civilised form of contractual slavery." 
["J. Philmore,", Op. Cit.] 

So accurate and logical was Ellerman's article that many of its readers
were convinced it *was* written by a right-libertarian (including, we have
to say, us!). One such writer was Carole Pateman, who correctly noted
that "[t]here is a nice historical irony here. In the American South, 
slaves were emancipated and turned into wage labourers, and now 
American contractarians argue that all workers should have the
opportunity to turn themselves into civil slaves." [Op. Cit., p. 63]).

The aim of Ellerman's article was to show the problems that employment (wage 
labour) presents for the concept of self-government and how contract need
not result in social relationships based on freedom. As "Philmore" put it, 
"[a]ny thorough and decisive critique of voluntary slavery or constitutional 
nondemocratic government would carry over to the employment contract -- 
which is the voluntary contractual basis for the free-market 
free-enterprise system.  Such a critique would thus be a *reductio ad 
absurdum*." As "contractual slavery" is an "extension of the employer-employee 
contract," he shows that the difference between wage labour and slavery is 
the time scale rather than the principle or social relationships involved.
[Op. Cit.] This explains, firstly, the early workers' movement called 
capitalism "wage slavery" (anarchists still do) and, secondly, why 
capitalists like Rothbard support the concept but balk at the name. It 
exposes the unfree nature of the system they support! While it is possible
to present wage labour as "freedom" due to its "consensual" nature, it
becomes much harder to do so when talking about slavery or dictatorship.
Then the contradictions are exposed for all to see and be horrified by.

All this does not mean that we must reject free agreement. Far from it! Free
agreement is *essential* for a society based upon individual dignity and
liberty. There are a variety of forms of free agreement and anarchists
support those based upon co-operation and self-management (i.e. individuals
working together as equals). Anarchists desire to create relationships
which reflect (and so express) the liberty that is the basis of free 
agreement. Capitalism creates relationships that deny liberty. The opposition 
between autonomy and subjection can only be maintained by modifying or
rejecting contract theory, something that capitalism cannot do and so the 
right-wing Libertarian rejects autonomy in favour of subjection (and so 
rejects socialism in favour of capitalism).
 
The real contrast between anarchism and right-Libertarianism is best 
expressed in their respective opinions on slavery. Anarchism is based 
upon the individual whose individuality depends upon the maintenance of 
free relationships with other individuals. If individuals deny their
capacities for self-government from themselves through a contract 
the individuals bring about a qualitative change in their relationship 
to others - freedom is turned into mastery and subordination. For the 
anarchist, slavery is thus the paradigm of what freedom is *not*, instead
of an exemplification of what it is (as right-Libertarians state). As 
Proudhon argued: 

"If I were asked to answer the following question: What is slavery? 
and I should answer in one word, It is murder, my meaning would be 
understood at once. No extended argument would be required to show that 
the power to take from a man his thought, his will, his personality, is a 
power of life and death; and that to enslave a man is to kill him." [_What
is Property?_, p. 37]

In contrast, the right-Libertarian effectively argues that "I support slavery 
because I believe in liberty." It is a sad reflection of the ethical and 
intellectual bankruptcy of our society that such an "argument" is actually 
taken seriously by (some) people. The concept of "slavery as freedom" is
far too Orwellian to warrant a critique - we will leave it up to right
Libertarians to corrupt our language and ethical standards with an attempt
to prove it.

From the basic insight that slavery is the opposite of freedom, the anarchist 
rejection of authoritarian social relations quickly follows (the right-wing 
Libertarians fear):

"Liberty is inviolable. I can neither sell nor alienate my liberty; every
contract, every condition of a contract, which has in view the alienation or
suspension of liberty, is null: the slave, when he plants his foot upon the
soil of liberty, at that moment becomes a free man. . . Liberty is the original 
condition of man; to renounce liberty is to renounce the nature of man: after 
that, how could we perform the acts of man?" [P.J. Proudhon, Op. Cit., p. 67]

The employment contract (i.e. wage slavery) abrogates liberty. It is based
upon inequality of power and "exploitation is a consequence of the fact 
that the sale of labour power entails the worker's subordination." [Carole
Pateman, Op. Cit., P. 149] Hence Proudhon's (and Mill's) support of 
self-management and opposition to capitalism - any relationship that 
resembles slavery is illegitimate and no contract that creates a 
relationship of subordination is valid. Thus in a truly anarchistic 
society, slave contracts would be unenforceable -- people in a truly 
free (i.e. non-capitalist) society would *never* tolerate such a 
horrible institution or consider it a valid agreement. If someone was
silly enough to sign such a contract, they would simply have to 
say they now rejected it in order to be free -- such contracts are
made to be broken and without the force of a law system (and private
defence firms) to back it up, such contracts will stay broken.

The right-Libertarian support for slave contracts (and wage slavery) 
indicates that their ideology has little to do with liberty and far more 
to do with justifying property and the oppression and exploitation it 
produces. Their support and theoretical support for slavery indicates 
a deeper authoritarianism which negates their claims to be libertarians.

2.7 But surely abolishing capitalism would restrict liberty?

Many "anarcho"-capitalists and other supporters of capitalism argue that 
it would be "authoritarian" to restrict the number of alternatives that 
people can choose between by abolishing capitalism. If workers become wage 
labourers, so it is argued, it is because they "value" other things more -- 
otherwise they would not agree to the exchange. But such an argument
ignores that reality of capitalism.

By *maintaining* capitalist private property, the options available 
to people *are* restricted. In a fully developed capitalist economy the 
vast majority have the "option" of selling their labour or starving/living
in poverty -- self-employed workers account for less than 10% of the working 
population. Usually, workers are at a disadvantage on the labour market 
due to the existence of unemployment and so accept wage labour because 
otherwise they would starve (see section 10.2 for a discussion on why
this is the case). And as we argue in sections J.5.11 and J.5.12, 
even *if* the majority of the working population desired co-operative 
workplaces, a capitalist market will not provide them with that outcome 
due to the nature of the capitalist workplace (also see Juliet C. Schor's 
excellent book _The Overworked American_ for a discussion of why workers 
desire for more free time is not reflected in the labour market). In other 
words, it is a myth to claim that wage labour exists or that workplaces are 
hierarchical because workers value other things -- they are hierarchical 
because bosses have more clout on the market than workers and, to use
Schor's expression, workers end up wanting what they get rather than 
getting what they want. 

Looking at the reality of capitalism we find that because of inequality 
in resources (protected by the full might of the legal system, we should 
note) those with property get to govern those without it during working 
hours (and beyond in many cases). If the supporters of capitalism were 
actually concerned about liberty (as opposed to property) that situation 
would be abhorrent to them -- after all, individuals can no longer exercise 
their ability to make decisions, choices, and are reduced to being order 
takers. If choice and liberty are the things we value, then the ability 
to make choices in all aspects of life automatically follows (including 
during work hours). However, the authoritarian relationships and the
continual violation of autonomy wage labour implies are irrelevant to 
"anarcho"-capitalists (indeed, attempts to change this situation are 
denounced as violations of the autonomy of the property owner!). By
purely concentrating on the moment that a contract is signed they
blind themselves to the restricts of liberty that wage contracts create.

Of course, anarchists have no desire to *ban* wage labour -- we aim to 
create a society within which people are not forced by circumstances 
to sell their liberty to others. In order to do this, anarchists propose 
a modification of property and property rights to ensure true freedom of
choice (a freedom of choice denied to us by capitalism). As we have
noted many times, "bilateral exchanges" can and do adversely effect the
position of third parties if they result in the build-up of power/money 
in the hands of a few. And one of these adverse effects can be the 
restriction of workers options due to economic power. Therefore it is 
the supporter of capitalist who restricts options by supporting an economic 
system and rights framework that by their very workings reduce the options 
available to the majority, who then are "free to choose" between those 
that remain (see also section B.4). Anarchists, in contrast, desire 
to expand the available options by abolishing capitalist private property 
rights and removing inequalities in wealth and power that help restrict 
our options and liberties artificially.

So does an anarchist society have much to fear from the spread of
wage labour within it? Probably not. If we look at societies such as 
the early United States or the beginnings of the Industrial Revolution 
in Britain, for example, we find that, given the choice, most people
preferred to work for themselves. Capitalists found it hard to find 
enough workers to employ and the amount of wages that had to be offered
to hire workers were so high as to destroy any profit margins. Moreover,
the mobility of workers and their "laziness" was frequently commented
upon, with employers despairing at the fact workers would just work 
enough to make end meet and then disappear. Thus, left to the actions
of the "free market," it is doubtful that wage labour would have spread.
But it was not left to the "free market".

In response to these "problems", the capitalists turned to the state
and enforced various restrictions on society (the most important being 
the land, tariff and money monopolies -- see section B.3 and 8). In
free competition between artisan and wage labour, wage labour only 
succeeded due to the use of state action to create the required 
circumstances to discipline the labour force and to accumulate 
enough capital to  give capitalists an edge over artisan production 
(see section 8 for more details). 

Thus an anarchist society would not have to fear the spreading of
wage labour within it. This is simply because would-be capitalists 
(like those in the early United States) would have to offer such 
excellent conditions, workers' control and high wages as to make 
the possibility of extensive profits from workers' labour nearly 
impossible. Without the state to support them, they will not be
able to accumulate enough capital to give them an advantage within
a free society. Moreover, it is somewhat ironic to hear capitalists 
talking about anarchism denying choice when we oppose wage labour 
considering the fact workers were not given any choice when the 
capitalists used the state to develop wage labour in the first place!

2.8 Why should we reject the "anarcho"-capitalist definitions of freedom
      and justice?

Simply because they lead to the creation of authoritarian social relationships
and so to restrictions on liberty. A political theory which, when consistently
followed, has evil or iniquitous consequences, is a bad theory.

For example, any theory that can justify slavery is obviously a bad theory
- slavery does not cease to stink the moment it is seen to follow your
theory. As right-Libertarians can justify slave contracts as a type of wage 
labour (see section 2.6) as well as numerous other authoritarian social 
relationships, it is obviously a bad theory.

It is worth quoting Noam Chomsky at length on this subject:

"Consider, for example, the 'entitlement theory of justice'. . . [a]ccording
to this theory, a person has a right to whatever he has acquired by means
that are just. If, by luck or labour or ingenuity, a person acquires
such and such, then he is entitled to keep it and dispose of it as he
wills, and a just society will not infringe on this right.

"One can easily determine where such a principle might lead. It is entirely
possible that by legitimate means - say, luck supplemented by contractual
arrangements 'freely undertaken' under pressure of need - one person
might gain control of the necessities of life. Others are then free to
sell themselves to this person as slaves, if he is willing to accept
them. Otherwise, they are free to perish. Without extra question-begging
conditions, the society is just.

"The argument has all the merits of a proof that 2 + 2 = 5 . . . Suppose
that some concept of a 'just society' is advanced that fails to characterise
the situation just described as unjust. . . Then one of two conclusions
is in order. We may conclude that the concept is simply unimportant and
of no interest as a guide to thought or action, since it fails to
apply properly even in such an elementary case as this. Or we may conclude
that the concept advanced is to be dismissed in that it fails to correspond 
to the pretheorectical notion that it intends to capture in clear cases.
If our intuitive concept of justice is clear enough to rule social
arrangements of the sort described as grossly unjust, then the sole interest
of a demonstration that this outcome might be 'just' under a given 'theory
of justice' lies in the inference by *reductio ad absurdum* to the
conclusion that the theory is hopelessly inadequate. While it may capture
some partial intuition regarding justice, it evidently neglects others.

"The real question to be raised about theories that fail so completely
to capture the concept of justice in its significant and intuitive
sense is why they arouse such interest. Why are they not simply dismissed
out of hand on the grounds of this failure, which is striking in
clear cases? Perhaps the answer is, in part, the one given by Edward 
Greenberg in a discussion of some recent work on the entitlement theory
of justice. After reviewing empirical and conceptual shortcomings, he
observes that such work 'plays an important function in the process of
. . . 'blaming the victim,' and of protecting property against egalitarian
onslaughts by various non-propertied groups.' An ideological defence of
privileges, exploitation, and private power will be welcomed, regardless
of its merits.

"These matters are of no small importance to poor and oppressed people
here and elsewhere." [_The Chomsky Reader_, pp. 187-188]

It may be argued that the reductions in liberty associated with capitalism 
is not really an iniquitous outcome, but such an argument is hardly fitting 
for a theory proclaiming itself "libertarian." And the results of these 
authoritarian social relationships? To quote Adam Smith, under the capitalist 
division of labour the worker "has no occasion to exert his understanding, or 
exercise his invention" and "he naturally loses, therefore, the habit of such 
exercise and generally becomes as stupid and ignorant as it is possible for
a human creature to become." The worker's mind falls "into that drowsy
stupidity, which, in a civilised society, seems to benumb the understanding 
of almost all of the inferior [sic!] ranks of people." [cited by Chomsky,
Op. Cit., p. 186]

Of course, it may be argued that these evil effects of capitalist authority 
relations on individuals are also not iniquitous (or that the very real
domination of workers by bosses is not really domination) but that suggests 
a desire to sacrifice real individuals, their hopes and dreams and lives to 
an abstract concept of liberty, the accumulative effect of which would be 
to impoverish all our lives. The kind of relationships we create *within*
the organisations we join are of as great an importance as their 
voluntary nature. Social relations *shape* the individual in many 
ways, restricting their freedom, their perceptions of what freedom 
is and what their interests actually are. This means that, in order not
to be farcical, any relationships we create must reflect in their internal
workings the critical evaluation and self-government that created them
in the first place. Sadly capitalist individualism masks structures of
power and relations of domination and subordination within seemingly
"voluntary" associations -- it fails to note the relations of domination
resulting from private property and so "what has been called 'individualism'
up to now has been only a foolish egoism which belittles the individual. 
Foolish because it was not individualism at all. It did not lead to what
was established as a goal; that is the complete, broad, and most perfectly
attainable development of individuality." [Peter Kropotkin, _Selected
Writings_, p. 297]

This right-Libertarian lack of concern for concrete individual freedom 
and individuality is a reflection of their support for "free markets" (or 
"economic liberty" as they sometimes phrase it). However, as Max Stirner 
noted, this fails to understand that "[p]olitical liberty means that the 
*polis,* the State, is free; . . . not, therefore, that I am free of the 
State. . . It does not mean *my* liberty, but the liberty of a power that 
rules and subjugates me; it means that one of my *despots* . . . is free." 
[_The Ego and Its Own_, p. 107] Thus the desire for "free markets" results 
in a blindness that while the market may be "free" the individuals within 
it may not be (as Stirner was well aware, "[u]nder the *regime* of the
commonality the labourers always fall into the hands of the possessors 
. . . of the capitalists, therefore." [Op. Cit., p. 115])

In other words, right-libertarians give the greatest importance to an 
abstract concept of freedom and fail to take into account the fact that 
real, concrete freedom is the outcome of self-managed activity, solidarity 
and voluntary co-operation. For liberty to be real it must exist in all 
aspects of our daily life and cannot be contracted away without seriously 
effecting our minds, bodies and lives. Thus, the right-Libertarian's 
"defence of freedom is undermined by their insistence on the concept of
negative liberty, which all too easily translates in experience as the
negation of liberty." [Stephan L. Newman, _Liberalism as Wit's End_, 
p. 161]

Thus right-Libertarian's fundamental fallacy is that "contract" does not
result in the end of power or domination (particularly when the bargaining 
power or wealth of the would-be contractors is not equal). As Carole 
Pateman notes, "[i]ronically, the contractarian ideal cannot encompass
capitalist employment. Employment is not a continual series of discrete
contracts between employer and worker, but . . . one contract in which a
worker binds himself to enter an enterprise and follow the directions
of the employer for the duration of the contract. As Huw Benyon has
bluntly stated, 'workers are paid to obey.'" [_The Sexual Contract_, 
p. 148] This means that "the employment contract (like the marriage
contract) is not an exchange; both contracts create social relations
that endure over time - social relations of subordination." [Ibid.]

Authority impoverishes us all and must, therefore, be combated wherever 
it appears. That is why anarchists oppose capitalism, so that there shall 
be "no more government of man by man, by means of accumulation of capital." 
[P-J Proudhon, cited by Woodcock in _Anarchism_, p. 110] If, as Murray
Bookchin point it, "the object of anarchism is to increase choice" [_The
Ecology of Freedom_, p. 70] then this applies both to when we are creating
associations/relationships with others and when we are *within* these 
associations/relationships -- i.e. that they are consistent with the
liberty of all, and that implies participation and self-management *not*
hierarchy. "Anarcho"-capitalism fails to understand this essential point 
and by concentrating purely on the first condition for liberty ensures a 
society based upon domination, oppression and hierarchy and not freedom.

It is unsurprising, therefore, to find that the basic unit of analysis
of the "anarcho"-capitalist/right-libertarian is the transaction (the
"trade," the "contract"). The freedom of the individual is seen as
revolving around an act, the contract, and *not* in our relations with
others. All the social facts and mechanisms that precede, surround and 
result from the transaction are omitted. In particular, the social 
relations that result from the transaction are ignored (those, and 
the circumstances that make people contract, are the two unmentionables 
of right-libertarianism). 

For anarchists it seems strange to concentrate on the moment that a
contract is signed and ignore the far longer time the contract is
active for (as we noted in section A.2.14, if the worker is free when
they sign a contract, slavery soon overtakes them). Yes, the voluntary
nature of a decision is important, but so are the social relationships 
we experience due to those decisions.

For the anarchist, freedom is based upon the insight that other people, 
apart from (indeed, *because* of) having their own intrinsic value, also 
are "means to my end", that it is through their freedom that I gain my 
own -- so enriching my life. As Bakunin put it: 

"I who want to be free cannot be because all the men around me do not yet 
want to be free, and consequently they become tools of oppression against 
me." [quoted by Errico Malatesta in _Anarchy_, p. 27]

Therefore anarchists argue that we must reject the right-Libertarian
theories of freedom and justice because they end up supporting the
denial of liberty as the expression of liberty. What this fails to 
recognise is that freedom is a product of social life and that (in
Bakunin's words) "[n]o man can achieve his own emancipation without 
at the same time working for the emancipation of all men around him. 
My freedom is the freedom of all since I am not truly free in thought 
and in fact, except when my freedom and my rights are confirmed and 
approved in the freedom and rights of all men who are my equals." 
[Ibid.]

Other people give us the possibilities to develop our full human potentiality 
and thereby our freedom, so when we destroy the freedom of others we limit 
our own. "To treat others and oneself as property," argues anarchist L. Susan 
Brown, "objectifies the human individual, denies the unity of subject and 
object and is a negation of individual will . . . even the freedom gained
by the other is compromised by this relationship, for to negate the will
of another to achieve one's own freedom destroys the very freedom one
sought in the first place." [_The Politics of Individualism_, p. 3]

Fundamentally, it is for this reason that anarchists reject the 
right-Libertarian theories of freedom and justice -- it just does 
not ensure individual freedom or individuality.

3 Why do anarcho"-capitalists generally place little or no value 
    on "equality," and what do they mean by that term?

Murray Rothbard argues that "the 'rightist' libertarian is not opposed 
to inequality." [_For a New Liberty_, p. 47]In contrast, "leftist" 
libertarians oppose inequality because it has harmful effects on 
individual liberty.

Part of the reason "anarcho"-capitalism places little or no value on 
"equality" derives from their definition of that term. Murray Rothbard 
defines equality as:

"A and B are 'equal' if they are identical to each other with respect to a
given attribute... There is one and only one way, then, in which any two
people can really be 'equal' in the fullest sense: they must be identical
in *all* their attributes." He then points out the obvious fact that "men 
are not uniform,. . . . the species, mankind, is uniquely characterised by a 
high degree of variety, diversity, differentiation: in short, inequality." 
[_Egalitarianism as a Revolt against Nature and Other Essays_, p. 4, p.5] 

In others words, every individual is unique. Something no egalitarian 
has ever denied. On the basis of this amazing insight, he concludes that 
equality is impossible (except "equality of rights") and that the attempt 
to achieve "equality" is a "revolt against nature" -- as if any anarchist 
had ever advocated such a notion of equality as being identical! 

And so, because we are all unique, the outcome of our actions will not 
be identical and so social inequality flows from natural differences 
and not due to the economic system we live under. Inequality of 
endowment implies inequality of outcome and so social inequality.
As individual differences are a fact of nature, attempts to create
a society based on "equality" (i.e. making everyone identical in terms
of possessions and so forth) is impossible and "unnatural."

Before continuing, we must note that Rothbard is destroying language to 
make his point and that he is not the first to abuse language in this
particular way. In George Orwell's _1984_, the expression "all men are
created equal" could be translated into Newspeak, but it would make as
much sense as saying "all men have red hair," an obvious falsehood
(see "The Principles of Newspeak" Appendix). It's nice to know that 
"Mr. Libertarian" is stealing ideas from Big Brother, and for the same 
reason: to make critical thought impossible by restricting the meaning 
of words.

"Equality," in the context of political discussion, does not mean 
"identical," it usually means equality of rights, respect, worth, power
and so forth. It does not imply treating everyone identically (for example,
expecting an eighty year old man to do identical work to an eighteen 
violates treating both with respect as unique individuals). For anarchists,
as Alexander Berkman writes, "equality does not mean an equal amount but 
equal *opportunity*. . . Do not make the mistake of identifying equality 
in liberty with the forced equality of the convict camp. True anarchist 
equality implies freedom, not quantity. It does not mean that every one 
must eat, drink, or wear the same things, do the same work, or live in 
the same manner. Far from it: the very reverse, in fact. Individual needs 
and tastes differ, as appetites differ. It is *equal* opportunity to satisfy
them that constitutes true equality. Far from levelling, such equality opens 
the door for the greatest possible variety of activity and development. For 
human character is diverse, and only the repression of this free diversity 
results in levelling, in uniformity and sameness. Free opportunity and 
acting out your individuality means development of natural dissimilarities 
and variations. . . . Life in freedom, in anarchy will do more than liberate 
man merely from his present political and economic bondage. That will be 
only the first step, the preliminary to a truly human existence."
[_The ABC of Anarchism_, p. 25]

Thus anarchists reject the Rothbardian-Newspeak definition of equality
as meaningless within political discussion. No two people are identical
and so imposing "identical" equality between them would mean treating
them as *unequals*, i.e. not having equal worth or giving them equal
respect as befits them as human beings and fellow unique individuals.

So what should we make of Rothbard's claim? It is tempting just to quote 
Rousseau when he argued "it is . . . useless to inquire whether there is any
essential connection between the two inequalities [social and natural];
for this would be only asking, in other words, whether those who command
are necessarily better than those who obey, and if strength of body or
of mind, wisdom, or virtue are always found in particular individuals, 
in proportion to their power or wealth: a question fit perhaps to be
discussed by slaves in the hearing of their masters, but highly unbecoming
to reasonable and free men in search of the truth." [_The Social Contract
and Discourses_, p. 49] But a few more points should be raised.

The uniqueness of individuals has always existed but for the vast majority 
of human history we have lived in very egalitarian societies. If social 
inequality did, indeed, flow from natural inequalities then *all*
societies would be marked by it. This is not the case. Indeed, taking
a relatively recent example, many visitors to the early United States 
noted its egalitarian nature, something that soon changed with the rise
of wage labour and industrial capitalism (a rise dependent upon state
action, we must add, -- see section 8). This implies that the society 
we live in (its rights framework, the social relationships it generates 
and so forth) has a far more of a decisive impact on inequality than
individual differences. Thus certain rights frameworks will tend to 
magnify "natural" inequalities (assuming that is the source of the 
initial inequality, rather than, say, violence and force). As Noam 
Chomsky argues:

"Presumably it is the case that in our 'real world' some combination of
attributes is conducive to success in responding to 'the demands of the
economic system' . . . One might suppose that some mixture of avarice,
selfishness, lack of concern for others, aggressiveness, and similar
characteristics play a part in getting ahead [in capitalism]. . . Whatever
the correct collection of attributes may be, we may ask what follows
from the fact, if it is a fact, that some partially inherited combination
of attributes tends to material success? All that follows . . . is a 
comment on our particular social and economic arrangements . . . The
egalitarian might responds, in all such cases, that the social order
should be changes so that the collection of attributes that tends to
bring success no longer do so . . . " [_The Chomsky Reader_, p. 190]

So, perhaps, if we change society then the social inequalities we see today
would disappear. It is more than probable that natural difference has been 
long ago been replaced with *social* inequalities, especially inequalities 
of property (which will tend to increase, rather than decrease, inequality).
And as we argue in section 8 these inequalities of property were initially 
the result of force, *not* differences in ability. Thus to claim that social 
inequality flows from natural differences is false as most social inequality 
has flown from violence and force. This initial inequality has been magnified 
by the framework of capitalist property rights and so the inequality within 
capitalism is far more dependent upon, say, the existence of wage labour, 
rather than "natural" differences between individuals. 

If we look at capitalism, we see that in workplaces and across industries
many, if not most, unique individuals receive identical wages for identical 
work (although this often is not the case for women and blacks, who receive
less wages than male, white workers). Similarly, capitalists have 
deliberately introduced wage inequalities and hierarchies for no other
reason that to divide (and so rule) the workforce (see section D.10).
Thus, if we assume egalitarianism *is* a revolt against nature, then 
much of capitalist economic life is in such a revolt (and when it is 
not, the "natural" inequalities have been imposed artificially by those 
in power).

Thus "natural" differences do not necessarily result in inequality as such.
Given a different social system, "natural" differences would be encouraged
and celebrated far wider than they are under capitalism (where, as we
argued in section B.1, hierarchy ensures the crushing of individuality
rather than its encouragement) without any change in social equality.
The claim that "natural" differences generates social inequalities is
question begging in the extreme -- it takes the rights framework of
society as a given and ignores the initial source of inequality in
property and power. Indeed, inequality of outcome or reward is more
likely to be influenced by social conditions rather than individual
differences (as would be the case in a society based on wage labour
or other forms of exploitation).

Another reason for "anarcho"-capitalist lack of concern for equality is 
that they think that "liberty upsets patterns" (see section 2.5, 
for example). It is argued that equality can only be maintained by 
restricting individual freedom to make exchanges or by taxation of
income. However, what this argument fails to acknowledge is that 
inequality also restricts individual freedom (see next section, for 
example) and that the capitalist property rights framework is not
the only one possible. After all, money is power and inequalities
in terms of power easily result in restrictions of liberty and the
transformation of the majority into order takers rather than free
producers. In other words, once a certain level of inequality is
reached, property does not promote, but actually conflicts with,
the ends which render private property legitimate. Moreover, Nozick 
(in his "liberty upsets patterns" argument) "has produced . . . an 
argument for unrestricted private property using unrestricted private 
property, and thus he begs the question he tries to answer." [Andrew 
Kerhohan, "Capitalism and Self-Ownership", from _Capitalism_, p. 71] 
For example, a worker employed by a capitalist cannot freely exchange 
the machines or raw materials they have been provided with to use but 
Nozick does not class this distribution of "restricted" property rights 
as infringing liberty (nor does he argue that wage slavery itself 
restricts freedom, of course). 

So in response to the claim that equality could only be maintained by 
continuously interfering with people's lives, anarchists would say that
the inequalities produced by capitalist property rights also involve 
extensive and continuous interference with people's lives. After all, as 
Bob Black notes "[y]our foreman or supervisor gives you more or-else 
orders in a week than the police do in a decade" nevermind the other 
effects of inequality such as stress, ill health and so on [_Libertarian 
as Conservative_]. Thus claims that equality involves infringing liberty
ignores the fact that inequality also infringes liberty. A reorganisation 
of society could effectively minimise inequalities by eliminating the 
major source of such inequalities (wage labour) by self-management (see 
section  I.5.11 for a discussion of "capitalistic acts" within an anarchist
society). We have no desire to restrict free exchanges (after all, most
anarchists desire to see the "gift economy" become a reality sooner or
later) but we argue that free exchanges need not involve the unrestricted
property rights Nozick assumes. As we argue in sections 2 and 3.1, 
inequality can easily led to the situation where self-ownership is used 
to justify its own negation and so unrestricted property rights may 
undermine the meaningful self-determination (what anarchists would 
usually call "freedom" rather than self-ownership) which many people 
intuitively understand by the term "self-ownership".

Thus, for anarchists, the "anarcho"-capitalist opposition to equality
misses the point and is extremely question begging. Anarchists do not 
desire to make humanity "identical" (which would be impossible and a 
total denial of liberty *and* equality) but to make the social 
relationships between individuals equal in *power.* In other words, 
they desire a situation where people interact together without
institutionalised power or hierarchy and are influenced by each other
"naturally," in proportion to how the (individual) *differences* 
between (social) *equals* are applicable in a given context. To quote 
Michael Bakunin, "[t]he greatest intelligence would not be equal to a
comprehension of the whole. Thence results. . . the necessity of the
division and association of labour. I receive and I give -- such is human
life. Each directs and is directed in his turn. Therefore there is no
fixed and constant authority, but a continual exchange of mutual,
temporary, and, above all, voluntary authority and subordination." 
[_God and the State_, p. 33]

Such an environment can only exist within self-managed associations, 
for capitalism (i.e. wage labour) creates very specific relations 
and institutions of authority. It is for this reason anarchists are 
socialists (i.e. opposed to wage labour, the existence of a proletariat
or working class). In other words, anarchists support equality precisely
*because* we recognise that everyone is unique. If we are serious about
"equality of rights" or "equal freedom" then conditions must be such
that people can enjoy these rights and liberties. If we assume the right
to develop one's capacities to the fullest, for example, then inequality
of resources and so power within society destroys that right simply because
people do not have the means to freely exercise their capacities (they 
are subject to the authority of the boss, for example, during work hours).

So, in direct contrast to anarchism, right-Libertarianism is unconcerned 
about any form of equality except "equality of rights". This blinds
them to the realities of life; in particular, the impact of economic and 
social power on individuals within society and the social relationships 
of domination they create. Individuals may be "equal" before the law and
in rights, but they may not be free due to the influence of social 
inequality, the relationships it creates and how it affects the law and
the ability of the oppressed to use it. Because of this, all anarchists 
insist that equality is essential for freedom, including those in the 
Individualist Anarchist tradition the "anarcho"-capitalist tries to 
co-opt -- "Spooner and Godwin insist that inequality corrupts freedom. 
Their anarchism is directed as much against inequality as against tyranny" 
and "[w]hile sympathetic to Spooner's individualist anarchism, they 
[Rothbard and David Friedman] fail to notice or conveniently overlook 
its egalitarian implications." [Stephen L. Newman, _Liberalism at Wit's 
End_, p. 74, p. 76] 

Why equality is important is discussed more fully in the next section.
Here we just stress that without social equality, individual freedom is 
so restricted that it becomes a mockery (essentially limiting freedom
of the majority to choosing *which* employer will govern them rather
than being free within and outside work).

Of course, by defining "equality" in such a restrictive manner, Rothbard's 
own ideology is proved to be nonsense. As L.A. Rollins notes, "Libertarianism, 
the advocacy of 'free society' in which people enjoy 'equal freedom' and 
'equal rights,' is actually a specific form of egalitarianism. As such, 
Libertarianism itself is a revolt against nature. If people, by their very 
biological nature, are unequal in all the attributes necessary to achieving, 
and preserving 'freedom' and 'rights'. . . then there is no way that people 
can enjoy 'equal freedom' or 'equal rights'. If a free society is conceived 
as a society of 'equal freedom,' then there ain't no such thing as 'a 
free society'." [_The Myth of Natural Law_, p. 36]

Under capitalism, freedom is a commodity like everything else. The more 
money you have, the greater your freedom. "Equal" freedom, in the 
Newspeak-Rothbardian sense, *cannot* exist! As for "equality before the 
law", its clear that such a hope is always dashed against the rocks of 
wealth and market power (see next section for more on this). As far as 
rights go, of course, both the rich and the poor have an "equal right" to 
sleep under a bridge (assuming the bridge's owner agrees of course!); but 
the owner of the bridge and the homeless have *different* rights, and so 
they cannot be said to have "equal rights" in the Newspeak-Rothbardian 
sense either. Needless to say, poor and rich will not "equally" use the 
"right" to sleep under a bridge, either.
 
Bob Black observes in _The Libertarian as Conservative_ that "[t]he 
time of your life is the one commodity you can sell but never buy 
back. Murray Rothbard thinks egalitarianism is a revolt against 
nature, but his day is 24 hours long, just like everybody else's."

By twisting the language of political debate, the vast differences
in power in capitalist society can be "blamed" not on an unjust
and authoritarian system but on "biology" (we are all unique
individuals, after all). Unlike genes (although biotechnology 
corporations are working on this, too!), human society *can* be 
changed, by the individuals who comprise it, to reflect the basic
features we all share in common -- our humanity, our ability to 
think and feel, and our need for freedom.

3.1 Why is this disregard for equality important?

Simply because a disregard for equality soon ends with liberty for the 
majority being negated in many important ways. Most "anarcho"-capitalists 
and right-Libertarians deny (or at best ignore) market power. Rothbard, 
for example, claims that economic power does not exist; what people 
call "economic power" is "simply the right under freedom to refuse to 
make an exchange" [_The Ethics of Liberty_, p. 222] and so the concept 
is meaningless.

However, the fact is that there are substantial power centres in
society (and so are the source of hierarchical power and authoritarian 
social relations) which are *not the state.* The central fallacy of 
"anarcho"-capitalism is the (unstated) assumption that the various 
actors within an economy have relatively equal power. This assumption
has been noted by many readers of their works. For example, Peter Marshall 
notes that "'anarcho-capitalists' like Murray Rothbard assume individuals 
would have equal bargaining power in a [capitalist] market-based society" 
[_Demanding the Impossible_, p. 46] George Walford also makes this clear 
in his comments on David Friedman's _The Machinery of Freedom_:

"The private ownership envisages by the anarcho-capitalists would be very
different from that which we know. It is hardly going too far to say that
while the one is nasty, the other would be nice. In anarcho-capitalism there
would be no National Insurance, no Social Security, no National Health
Service and not even anything corresponding to the Poor Laws; there would be
no public safety-nets at all. It would be a rigorously competitive society:
work, beg or die. But as one reads on, learning that each individual would
have to buy, personally, all goods and services needed, not only food,
clothing and shelter but also education, medicine, sanitation, justice,
police, all forms of security and insurance, even permission to use the
streets (for these also would be privately owned), as one reads about all
this a curious feature emerges: everybody always has enough money to buy 
all these things.

"There are no public casual wards or hospitals or hospices, but neither is
there anybody dying in the streets. There is no public educational system
but no uneducated children, no public police service but nobody unable to
buy the services of an efficient security firm, no public law but nobody
unable to buy the use of a private legal system. Neither is there anybody
able to buy much more than anybody else; no person or group possesses
economic power over others.

"No explanation is offered. The anarcho-capitalists simply take it for
granted that in their favoured society, although it possesses no machinery
for restraining competition (for this would need to exercise authority over
the competitors and it is an *anarcho*- capitalist society) competition
would not be carried to the point where anybody actually suffered from it.
While proclaiming their system to be a competitive one, in which private
interest rules unchecked, they show it operating as a co-operative one, 
in which no person or group profits at the cost of another." [_On the 
Capitalist Anarchists_]

This assumption of (relative) equality comes to the fore in Murray
Rothbard's "Homesteading" concept of property (discussed in section
4.1). "Homesteading" paints a picture of individuals and families
doing into the wilderness to make a home for themselves, fighting
against the elements and so forth. It does *not* invoke the idea
of transnational corporations employing tens of thousands of people
or a population without land, resources and selling their labour to
others. Indeed, Rothbard argues that economic power does not exist 
(at least under capitalism; as we saw in section 2.1 he does make
-- highly illogical -- exceptions). Similarly, David Friedman's example 
of a pro-death penalty and anti-death penalty "defence" firm coming 
to an agreement (see section 6.3) assumes that the firms have equal 
bargaining powers and resources -- if not, then the bargaining process 
would be very one-sided and the smaller company would think twice before 
taking on the larger one in battle (the likely outcome if they cannot 
come to an agreement on this issue) and so compromise.

However, the right-libertarian denial of market power is unsurprising. The 
necessity, not the redundancy, of equality is required if the inherent 
problems of contract are not to become too obvious. If some individuals 
*are* assumed to have significantly more power than others, and if they 
are always self-interested, then a contract that creates equal partners 
is impossible -- the pact will establish an association of masters and 
servants. Needless to say, the strong will present the contract as being 
to the advantage of both: the strong no longer have to labour (and become 
rich, i.e. even stronger) and the weak receive an income and so do not 
starve.

If freedom is considered as a function of ownership then it is very
clear that individuals lacking property (outside their own body, of 
course) loses effective control over their own person and labour (which 
was, lets not forget, the basis of their equal natural rights). When 
ones bargaining power is weak (which is typically the case in the 
labour market) exchanges tend to magnify inequalities of wealth 
and power over time rather than working towards an equalisation. 

In other words, "contract" need not replace power if the bargaining 
position and wealth of the would-be contractors are not equal (for, if
the bargainers had equal power it is doubtful they would agree to sell
control of their liberty/time to another). This means that "power" and 
"market" are not antithetical terms. While, in an abstract sense, all 
market relations are voluntary in practice this is not the case within 
a capitalist market. For example, a large company has a comparative 
advantage over small ones and communities which will definitely shape 
the outcome of any contract. For example, a large company or rich person 
will have access to more funds and so stretch out litigations and strikes 
until their opponents resources are exhausted. Or, if a local company is 
polluting the environment, the local community may put up with the damage 
caused out of fear that the industry (which it depends upon) would relocate 
to another area. If members of the community *did* sue, then the company 
would be merely exercising its property rights when it threatened to move
to another location. In such circumstances, the community would "freely" 
consent to its conditions or face massive economic and social disruption. 
And, similarly, "the landlords' agents who threaten to discharge agricultural 
workers and tenants who failed to vote the reactionary ticket" in the 1936 
Spanish election were just exercising their legitimate property rights
when they threatened working people and their families with economic 
uncertainty and distress. [Murray Bookchin, _The Spanish Anarchists_, 
p. 260]

If we take the labour market, it is clear that the "buyers" and "sellers"
of labour power are rarely on an equal footing (if they were, then 
capitalism would soon go into crisis -- see section 10.2). In fact, 
competition "in labour markets is typically skewed in favour of 
employers: it is a buyer's market. And in a buyer's market, it is the 
sellers who compromise." [Juliet B. Schor, _The Overworked American_, 
p. 129] Thus the ability to refuse an exchange weights most heavily on
one class than another and so ensures that "free exchange" works to
ensure the domination (and so exploitation) of one party by the other.

Inequality in the market ensures that the decisions of the majority
of within it are shaped in accordance with that needs of the powerful,
not the needs of all. It was for this reason that the Individual Anarchist 
J.K. Ingalls opposed Henry George's proposal of nationalising the land. 
Ingalls was well aware that the rich could outbid the poor for leases
on land and so the dispossession of the working classes would continue.

The market, therefore, does not end power or unfreedom -- they are still 
there, but in different forms. And for an exchange to be truly voluntary, 
both parties must have equal power to accept, reject, or influence its 
terms. Unfortunately, these conditions are rarely meet on the labour market 
or within the capitalist market in general. Thus Rothbard's argument that 
economic power does not exist fails to acknowledge that the rich can 
out-bid the poor for resources and that a corporation generally has 
greater ability to refuse a contract (with an individual, union or 
community) than vice versa (and that the impact of such a refusal is 
such that it will encourage the others involved to "compromise" far 
sooner). And in such circumstances, formally free individuals will 
have to "consent" to be unfree in order to survive. 

As Max Stirner pointed out in the 1840s, free competition "is not 'free,'
because I lack the *things* for competition." [_The Ego and Its Own_, 
p. 262] Due to this basic inequality of wealth (of "things") we find
that "[u]nder the *regime* of the commonality the labourers always fall
into the hands of the possessors . . . of the capitalists, therefore. The
labourer cannot *realise* on his labour to the extent of the value that
it has for the customer." [Op. Cit., p. 115] Its interesting to note that
even Stirner recognises that capitalism results in exploitation. And we 
may add that value the labourer does not "realise" goes into the hands of 
the capitalists, who invest it in more "things" and which consolidates and
increases their advantage in "free" competition.

To quote Stephan L. Newman:

"Another disquieting aspect of the libertarians' refusal to acknowledge 
power in the market is their failure to confront the tension between freedom 
and autonomy. . . Wage labour under capitalism is, of course, formally free 
labour. No one is forced to work at gun point. Economic circumstance, however, 
often has the effect of force; it compels the relatively poor to accept work 
under conditions dictated by owners and managers. The individual worker 
retains freedom [i.e. negative liberty] but loses autonomy [positive 
liberty]." [_Liberalism at Wit's End_, pp. 122-123]

(As an aside, we should point out that the full Stirner quote cited above
is "[u]nder the *regime* of the commonality the labourers always fall
into the hands of the possessors, of those who have at their disposal some
bit of the state domains (and everything possessible in State domain belongs
to the State and is only a fief of the individual), especially money and
land; of the capitalists, therefore. The labourer cannot *realise* on his 
labour to the extent of the value that it has for the customer."

It could be argued that we misrepresenting Stirner by truncating the quote,
but we feel that such a claim this is incorrect. Its clear from his book that 
Stirner is considering the "minimal" state ("The State is a - commoners' 
State . . . It protects man . . .according to whether the rights entrusted 
to him by the State are enjoyed and managed in accordance with the will, 
that is, laws, of the State." The State "looks on indifferently as one grows 
poor and the other rich, unruffled by this alternation. As *individuals* 
they are really equal before its face." [Op. Cit., p. 115, p. 252]). As 
"anarcho"-capitalists consider their system to be one of rights and 
laws (particularly property rights), we feel that its fair to generalise 
Stirner's comments into capitalism *as such* as opposed to "minimum state"
capitalism. If we replace "State" by "libertarian law code" you will see
what we mean. We have included this aside before any right-libertarians
claim that we are misrepresenting Stirner' argument.)

If we consider "equality before the law" it is obvious that this also
has limitations in an (materially) unequal society. Brian Morris notes
that for Ayn Rand, "[u]nder capitalism . . .  politics (state) and economics
(capitalism) are separated . . . This, of course, is pure ideology, for
Rand's justification of the state is that it 'protects' private property,
that is, it supports and upholds the economic power of capitalists by
coercive means." [_Ecology & Anarchism_, p. 189] The same can be said
of "anarcho"-capitalism and its "protection agencies" and "general
libertarian law code." If within a society a few own all the resources
and the majority are dispossessed, then any law code which protects 
private property *automatically* empowers the owning class. Workers 
will *always* be initiating force if act against the code and so 
"equality before the law" reinforces inequality of power and wealth.

This means that a system of property rights protects the liberties of
some people in a way which gives them an unacceptable degree of power 
over others. And this cannot be met merely by reaffirming the rights
in question, we have to assess the relative importance of various kinds
of liberty and other values we how dear.

Therefore right-libertarian disregard for equality is important because 
it allows "anarcho"-capitalism to ignore many important restrictions of 
freedom in society. In addition, it allows them to brush over the negative 
effects of their system by painting an unreal picture of a capitalist 
society without vast extremes of wealth and power (indeed, they often 
construe capitalist society in terms of an ideal -- namely artisan 
production -- that is really *pre*-capitalist and whose social 
basis has been eroded by capitalist development). Inequality shapes 
the decisions we have available and what ones we make -- "An 'incentive' 
is always available in conditions of substantial social inequality that 
ensure that the 'weak' enter into a contract. When social inequality 
prevails, questions arises about what counts as voluntary entry into 
a contract . . . Men and women . . . are now juridically free and equal
citizens, but, in unequal social conditions, the possibility cannot be
ruled out that some or many contracts create relationships that bear
uncomfortable resemblances to a slave contract." [Carole Pateman, 
_The Sexual Contract_, p. 62]

This ideological confusion of right-libertarianism can also be seen from 
their opposition to taxation. On the one hand, they argue that taxation 
is wrong because it takes money from those who "earn" it and gives it to 
the poor. On the other hand, "free market" capitalism is assumed to be 
a more equal society! If taxation takes from the rich and gives to the 
poor, how will "anarcho"-capitalism be more egalitarian? That equalisation
mechanism would be gone (of course, it could be claimed that all great
riches are purely the result of state intervention skewing the "free
market" but that places all their "rags to riches" stories in a strange
position). Thus we have a problem, either we have relative equality or
we do not. Either we have riches, and so market power, or we do not.
And its clear from the likes of Rothbard, "anarcho"-capitalism will
not be without its millionaires (there is, after all, apparently nothing
un-libertarian about "organisation, hierarchy, wage-work, granting of
funds by libertarian millionaires, and a libertarian party"). And so
we are left with market power and so extensive unfreedom.

Thus, for a ideology that denounces egalitarianism as a "revolt against
nature" it is pretty funny that they paint a picture of "anarcho"-capitalism
as a society of (relative) equals. In other words, their propaganda is 
based on something that has never existed, and never will, namely an 
egalitarian capitalist society.

3.2 But what about "anarcho"-capitalist support for charity?

Yes, while being blind to impact of inequality in terms of economic and 
social power and influence, most right-libertarians *do* argue that the 
very poor could depend on charity in their system. But such a recognition
of poverty does not reflect an awareness of the need for equality or the
impact of inequality on the agreements we make. Quite the reverse in 
fact, as the existence of extensive inequality is assumed -- after all,
in a society of relative equals, poverty would not exist, nor would 
charity be needed.

Ignoring the fact that their ideology hardly promotes a charitable 
perspective, we will raise four points. Firstly, charity will not 
be enough to countermand the existence and impact of vast inequalities 
of wealth (and so power). Secondly, it will be likely that charities 
will be concerned with "improving" the moral quality of the poor and 
so will divide them into the "deserving" (i.e. obedient) and "undeserving" 
(i.e. rebellious) poor. Charity will be forthcoming to the former, those
who agree to busy-bodies sticking their noses into their lives. In this
way charity could become another tool of economic and social power (see
Oscar Wilde's _The Soul of Man Under Socialism_ for more on charity). 
Thirdly, it is unlikely that charity will be able to replace all the
social spending conducted by the state -- to do so would require a
ten-fold increase in charitable donations (and given that most 
right-libertarians denounce the government for making them pay taxes
to help the poor, it seems unlikely that they will turn round and
*increase* the amount they give). And, lastly, charity is an implicate
recognition that, under capitalism, no one has the right of life -- its 
a privilege you have to pay for. That in itself is enough to reject the
charity option. And, of course, in a system designed to secure the life 
and liberty of each person, how can it be deemed acceptable to leave the
life and protection of even one individual to the charitable whims of
others? (Perhaps it will be argued that individual's have the right to
life, but not a right to be a parasite. This ignores the fact some people
*cannot* work -- babies and some handicapped people -- and that, in a
functioning capitalist economy, many people cannot find work all the
time. Is it this recognition of that babies cannot work that prompts many 
right-libertarians to turn them into property? Of course, rich folk
who have never done a days work in their lives are never classed as
parasites, even if they inherited all their money). All things 
considered, little wonder that Proudhon argued that:

"Even charitable institutions serve the ends of those in authority
marvellously well.

"Charity is the strongest chain by which privilege and the Government, 
bound to protect them, holds down the lower classes. With charity, 
sweeter to the heart of men, more intelligible to the poor man than 
the abstruse laws of Political Economy, one may dispense with justice."
[_The General Idea of the Revolution_, pp. 69-70]

As noted, the right-libertarian (passing) acknowledgement of poverty does 
not mean that they recognise the existence of market power. They never
ask themselves how can someone be free if their social situation is such 
that they are drowning in a see of usury and have to sell their labour
(and so liberty) to survive.

4 What is the right-libertarian position on private property?

Right libertarians are not interested in eliminating capitalist
private property and thus the authority, oppression and exploitation
which goes with it. It is true that they call for an end to the state, 
but this is not because they are concerned about workers being exploited 
or oppressed but because they don't want the state to impede capitalists' 
"freedom" to exploit and oppress workers even more than is the case now!

They make an idol of private property and claim to defend absolute,
"unrestricted" property rights (i.e. that property owners can do anything
they like with their property, as long as it does not damage the property
of others. In particular, taxation and theft are among the greatest evils 
possible as they involve coercion against "justly held" property). They 
agree with John Adams that "[t]he moment that idea is admitted into 
society that property is not as sacred as the Laws of God, and that 
there is not a force of law and public justice to protect it, anarchy 
and tyranny commence. Property must be sacred or liberty cannot exist." 

But in their celebration of property as the source of liberty they 
ignore the fact that private property is a source of "tyranny" in itself 
(see sections B.1 and B.4, for example -- and please note that anarchists 
only object to private property, *not* individual possession, see section 
B.3.1). However, as much anarchists may disagree about other matters, 
they are united in condemning private property. Thus Proudhon argued 
that property was "theft" and "despotism" while Stirner indicated the 
religious and statist nature of private property and its impact on 
individual liberty when he wrote :

"Property in the civic sense means *sacred* property, such that I must 
*respect* your property... Be it ever so little, if one only has somewhat 
of his own - to wit, a *respected* property: The more such owners... the 
more 'free people and good patriots' has the State.

"Political liberalism, like everything religious, counts on *respect,* 
humaneness, the virtues of love. . . . For in practice people respect 
nothing, and everyday the small possessions are bought up again by greater 
proprietors, and the 'free people' change into day labourers." [_The Ego
and Its Own_, p. 248]

Thus "anarcho"-capitalists reject totally one of the common (and so
defining) features of all anarchist traditions -- the opposition to
capitalist property. From Individualist Anarchists like Tucker to
Communist-Anarchists like Bookchin, anarchists have been opposed to
what Godwin termed "accumulated property." This was because it was in 
"direct contradiction" to property in the form of "the produce of his 
[the worker's] own industry" and so it allows "one man. . . [to] dispos[e] 
of the produce of another man's industry." [_The Anarchist Reader_, 
pp. 129-131] Thus, for anarchists, capitalist property is a source 
exploitation and domination, *not* freedom (it undermines the freedom 
associated with possession by created relations of domination between 
owner and employee).

Hardly surprising then the fact that, according to Murray Bookchin, Murray 
Rothbard "attacked me [Bookchin] as an anarchist with vigour because, as 
he put it, I am opposed to private property." [_The Raven_, no. 29, p. 343]
 
We will discuss Rothbard's "homesteading" justification of property in 
the next section. However, we will note here one aspect of right-libertarian
defence of "unrestricted" property rights, namely that it easily generates 
evil side effects such as hierarchy and starvation. As famine expert Amartya 
Sen notes:

"Take a theory of entitlements based on a set of rights of 'ownership, 
transfer and rectification.' In this system a set of holdings of 
different people are judged to be just (or unjust) by looking at past
history, and not by checking the consequences of that set of holdings.
But what if the consequences are recognisably terrible? . . .[R]efer[ing]
to some empirical findings in a work on famines . . . evidence [is
presented] to indicate that in many large famines in the recent past,
in which millions of people have died, there was no over-all decline
in food availability at all, and the famines occurred precisely because
of shifts in entitlement resulting from exercises of rights that are
perfectly legitimate. . . . [Can] famines . . . occur with a system of
rights of the kind morally defended in various ethical theories, including
Nozick's. I believe the answer is straightforwardly yes, since for many
people the only resource that they legitimately possess, viz. their
labour-power, may well turn out to be unsaleable in the market, giving
the person no command over food . . . [i]f results such as starvations
and famines were to occur, would the distribution of holdings still
be morally acceptable despite their disastrous consequences? There is
something deeply implausible in the affirmative answer." [_Resources,
Values and Development_, pp. 311-2]

Thus "unrestricted" property rights can have seriously bad consequences
and so the existence of "justly held" property need not imply a just
or free society -- far from it. The inequalities property can generate 
can have a serious on individual freedom (see section 3.1). Indeed, 
Murray Rothbard argued that the state was evil not because it restricted 
individual freedom but because the resources it claimed to own were 
not "justly" acquired. Thus right-libertarian theory judges property 
*not* on its impact on current freedom but by looking at past history. 
This has the interesting side effect of allowing its supporters to 
look at capitalist and statist hierarchies, acknowledge their similar 
negative effects on the liberty of those subjected to them but argue 
that one is legitimate and the other is not simply because of their 
history! As if this changed the domination and unfreedom that both 
inflict on people living today (see section 2.3 for further 
discussion and sections 2.8 and 4.2 for other examples of 
"justly acquired" property producing terrible consequences).

The defence of capitalist property does have one interesting side 
effect, namely the need arises to defend inequality and the authoritarian 
relationships inequality creates. In order to protect the private property 
needed by capitalists in order to continue exploiting the working class, 
"anarcho"-capitalists propose private security forces rather than state 
security forces (police and military) -- a proposal that is equivalent 
to bringing back the state under another name. 

Due to (capitalist) private property, wage labour would still exist under 
"anarcho"-capitalism (it is capitalism after all). This means that "defensive" 
force, a state, is required to "defend" exploitation, oppression, hierarchy 
and authority from those who suffer them. Inequality makes a mockery of
free agreement and "consent" (see section 3.1). As Peter Kropotkin 
pointed out long ago:

"When a workman sells his labour to an employer . . . it is a mockery to 
call that a free contract. Modern economists may call it free, but the 
father of political economy -- Adam Smith -- was never guilty of such 
a misrepresentation. As long as three-quarters of humanity are compelled 
to enter into agreements of that description, force is, of course, 
necessary, both to enforce the supposed agreements and to maintain such 
a state of things. Force -- and a good deal of force -- is necessary to 
prevent the labourers from taking possession of what they consider unjustly 
appropriated by the few. . . . The Spencerian party [proto-right-libertarians] 
perfectly well understand that; and while they advocate no force for changing 
the existing conditions, they advocate still more force than is now used 
for maintaining them. As to Anarchy, it is obviously as incompatible with 
plutocracy as with any other kind of -cracy." [_Anarchism and Anarchist 
Communism_, pp. 52-53]

Because of this need to defend privilege and power, "anarcho"-capitalism 
is best called "private-state" capitalism. This will be discussed in more 
detail in section 6.

By advocating private property, right libertarians contradict many of 
their other claims. For example, they say that they support the right of 
individuals to travel where they like. They make this claim because they
assume that only the state limits free travel. But this is a false
assumption. Owners must agree to let you on their land or property 
("people only have the right to move to those properties and lands where
the owners desire to rent or sell to them." [Murray Rothbard, _The Ethics
of Liberty_, p. 119]. There is no "freedom of travel" onto private property
(including private roads). Therefore immigration may be just as hard under 
"anarcho"-capitalism as it is under statism (after all, the state, like
the property owner, only lets people in whom it wants to let in). People 
will still have to get another property owner to agree to let them in 
before they can travel -- exactly as now (and, of course, they also have
to get the owners of the road to let them in as well). Private property, 
as can be seen from this simple example, is the state writ small.

One last point, this ignoring of ("politically incorrect") economic and 
other views of dead political thinkers and activists while claiming them 
as "libertarians" seems to be commonplace in right-Libertarian circles. For 
example, Aristotle (beloved by Ayn Rand) "thought that only living things
could bear fruit. Money, not a living thing, was by its nature barren, and
any attempt to make it bear fruit (*tokos*, in Greek, the same word used
for interest) was a crime against nature." [Marcello de Cecco, quoted
by Doug Henwood, _Wall Street_, p. 41] Such opposition to interest hardly
fits well into capitalism, and so either goes unmentioned or gets classed 
as an "error" (although we could ask why Aristotle is in error while Rand is 
not). Similarly, individualist anarchist opposition to capitalist property
and rent, interest and profits is ignored or dismissed as "bad economics"
without realising that these ideas played a key role in their politics 
and in ensuring that an anarchy would not see freedom corrupted by 
inequality. To ignore such an important concept in a person's ideas is
to distort the remainder into something it is not.

4.1 What is wrong with a "homesteading" theory of property?

So how do "anarcho"-capitalists justify property? Looking at Murray 
Rothbard, we find that he proposes a "homesteading theory of property". 
In this theory it is argued that property comes from occupancy and mixing 
labour with natural resources (which are assumed to be unowned). Thus the 
world is transformed into private property, for "title to an unowned 
resource (such as land) comes properly only from the expenditure of 
labour to transform that resource into use." [_The Ethics of Liberty_, 
p. 63] 

Rothbard paints a conceptual history of individuals and families
forging a home in the wilderness by the sweat of their labour (its 
tempting to rename his theory the "immaculate conception of property" 
as his conceptual theory is somewhat at odds with actual historical 
fact).

Sadly for Murray Rothbard, his "homesteading" theory was refuted 
by Proudhon in _What is Property?_ in 1840 (along with many other 
justifications of property). Proudhon rightly argues that "if the 
liberty of man is sacred, it is equally sacred in all individuals; 
that, if it needs property for its objective action, that is, for its 
life, the appropriation of material is equally necessary for all . . . 
Does it not follow that if one individual cannot prevent another . . . 
from appropriating an amount of material equal to his own, no more can 
he prevent individuals to come." And if all the available resources
are appropriated, and the owner "draws boundaries, fences himself in
. . . Here, then, is a piece of land upon which, henceforth, no one
has a right to step, save the proprietor and his friends . . . Let
[this]. . . multiply, and soon the people . . . will have nowhere
to rest, no place to shelter, no ground to till. They will die at
the proprietor's door, on the edge of that property which was their
birthright." [_What is Property?_, pp. 84-85, p. 118]

As Rothbard himself noted in respect to the aftermath of slavery
(see section 2.1), not having access to the means of life places
one the position of unjust dependency on those who do. Rothbard's 
theory fails because for "[w]e who belong to the proletaire class, 
property excommunicates us!" [P-J Proudhon, Op. Cit., p. 105] and so 
the vast majority of the population experience property as theft and 
despotism rather than as a source of liberty and empowerment (which 
possession gives). Thus, Rothbard's account fails to take into account 
the Lockean Proviso (see section B.3.4) and so, for all its intuitive 
appeal, ends up justifying capitalist and landlord domination (see 
next section on why the Lockean Proviso is important).

It also seems strange that while (correctly) attacking social contract
theories of the state as invalid (because "no past generation can bind
later generations" [Op. Cit., p. 145]) he fails to see he is doing
*exactly that* with his support of private property (similarly, Ayn
Rand argued that "[a]ny alleged 'right' of one man, which necessitates
the violation of the right of another, is not and cannot be a right"
[_Capitalism: The Unknown Ideal_, p. 325] but obviously appropriating
land does violate the rights of others to walk, use or appropriate that
land). Due to his support for appropriation and inheritance, he is 
clearly ensuring that future generations are *not* born as free as 
the first settlers were (after all, they cannot appropriate any land, 
it is all taken!). If future generations cannot be bound by past ones, 
this applies equally to resources and property rights. Something 
anarchists have long realised -- there is no defensible reason why 
those who first acquired property should control its use by future 
generations.

However, if we take Rothbard's theory at face value we find numerous
problems with it. If title to unowned resources comes via the "expenditure
of labour" on it, how can rivers, lakes and the oceans be appropriated? 
The banks of the rivers can be transformed, but can the river itself? How
can you mix your labour with water? "Anarcho"-capitalists usually blame
pollution on the fact that rivers, oceans, and so forth are unowned, but
how can an individual "transform" water by their labour? Also, does fencing 
in land mean you have "mixed labour" with it? If so then transnational 
corporations can pay workers to fence in vast tracks of virgin land
(such as rainforest) and so come to "own" it. Rothbard argues that this
is not the case (he expresses opposition to "arbitrary claims"). He notes
that it is *not* the case that "the first discoverer . . . could properly
lay claim to [a piece of land] . . . [by] laying out a boundary for the
area." He thinks that "their claim would still be no more than the boundary
*itself*, and not to any of the land within, for only the boundary will
have been transformed and used by men" [Op. Cit., p. 50f] 

However, if the boundary *is* private property and the owner refuses others 
permission to cross it, then the enclosed land is inaccessible to others! If 
an "enterprising" right-libertarian builds a fence around the only oasis in
a desert and refuses permission to cross it to travellers unless they pay
his price (which is everything they own) then the person *has* appropriated
the oasis without "transforming" it by his labour. The travellers have the
choice of paying the price or dying (and the oasis owner is well within his
rights letting them die). Given Rothbard's comments, it is probable that
he will claim that such a boundary is null and void as it allows "arbitrary"
claims -- although this position is not at all clear. After all, the fence
builder *has* transformed the boundary and "unrestricted" property rights
is what right-libertarianism is all about. 

And, of course, Rothbard ignores the fact of economic power -- a transnational 
corporation can "transform" far more virgin resources in a day than a family 
could in a year. Transnational's "mixing their labour" with the land does
not spring into mind reading Rothbard's account of property growth, but in 
the real world that is what will happen.

If we take the question of wilderness (a topic close to many eco-anarchists'
and deep ecologists' hearts) we run into similar problems. Rothbard states
clearly that "libertarian theory must invalidate [any] claim to ownership"
of land that has "never been transformed from its natural state" (he
presents an example of an owner who has left a piece of his "legally owned"
land untouched). If another person appears who *does* transform the land, 
it becomes "justly owned by another" and the original owner cannot stop her 
(and should the original owner "use violence to prevent another settler from 
entering this never-used land and transforming it into use" they also become 
a "criminal aggressor"). Rothbard also stresses that he is *not* saying that 
land must continually be in use to be valid property [Op. Cit., pp. 63-64] 
(after all, that would justify landless workers seizing the land from 
landowners during a depression and working it themselves). 

Now, where does that leave wilderness? In response to ecologists who oppose
the destruction of the rainforest, "anarcho"-capitalists suggest that they
put their money where their mouth is and *buy* rainforest land. In this way,
it is claimed, rainforest will be protected (see section B.5 for why such
arguments are nonsense). As ecologists desire the rainforest *because it 
is wilderness* they are unlikely to "transform" it by human labour (its
precisely that they want to stop). From Rothbard's arguments it is fair
to ask whether logging companies have a right to "transform" the virgin
wilderness owned by ecologists, after all it meets Rothbard's criteria 
(it is still wilderness). Perhaps it will be claimed that fencing off 
land "transforms" it (hardly what you imagine "mixing labour" with to 
mean, but nevermind) -- but that allows large companies and rich 
individuals to hire workers to fence in vast tracks of land (and 
recreate the land monopoly by a "libertarian" route). But as we noted 
above, fencing off land does not seem to imply that it becomes property
in Rothbard's theory. And, of course, fencing in areas of rainforest 
disrupts the local eco-system -- animals cannot freely travel, for example -- 
which, again, is what ecologists desire to stop. Would Rothbard accept a 
piece of paper as "transforming" land? We doubt it (after all, in his 
example the wilderness owner *did* legally own it) -- and so most 
ecologists will have a hard time in "anarcho"-capitalism (wilderness 
is just not an option). 

As an aside, we must note that Rothbard fails to realise -- and this comes 
from his worship of the market and his "Austrian economics" -- is that people 
value many things which do not appear on the market. He claims that wilderness
is "valueless unused natural objects" (for it people valued them, they would
use -- i.e. appropriate -- them). But unused things may be of *considerable*
value to people, wilderness being a classic example. And if something *cannot*
be transformed into private property, does that mean people do not value it?
For example, people value community, stress free working environments, 
meaningful work -- if the market cannot provide these, does that mean they
do not value them? Of course not (see Juliet Schor's _The Overworked American_
on how working people's desire for shorter working hours was not transformed
into options on the market).

Moreover, Rothbard's "homesteading" theory actually violates his support
for unrestricted property rights. What if a property owner *wants* part
of her land to remain wilderness? Their desires are violated by the
"homesteading" theory (unless, of course, fencing things off equals
"transforming" them, which it apparently does not). How can companies 
provide wilderness holidays to people if they have no right to stop 
settlers (including large companies) "homesteading" that wilderness? 
And, of course, where does Rothbard's theory leave hunter-gather or 
nomad societies. They *use* the resources of the wilderness, but they 
do not "transform" them (in this case you cannot easily tell if virgin 
land is empty or being used as a resource). If a troop of nomads find 
its traditionally used, but natural, oasis appropriated by a homesteader 
what are they to do? If they ignore the homesteaders claims he can call 
upon his "defence" firm to stop them -- and then, in true Rothbardian 
fashion, the homesteader can refuse to supply water to them unless they 
hand over all their possessions (see section 4.2 on this). And if 
the history of the United States (which is obviously the model for 
Rothbard's theory) is anything to go by, such people will become 
"criminal aggressors" and removed from the picture.

Which is another problem with Rothbard's account. It is completely
ahistoric (and so, as we noted above, is more like an "immaculate 
conception of property"). He has transported "capitalist man" into 
the dawn of time and constructed a history of property based upon
what he is trying to justify (not surprising, as he does this with
his "Natural Law" theory too -- see section 11). What *is* interesting
to note, though, is that the *actual* experience of life on the US
frontier (the historic example Rothbard seems to want to claim) was
far from the individualistic framework he builds upon it and (ironically
enough) it was destroyed by the development of capitalism.

As Murray Bookchin notes, "the independence that the New England yeomanry
enjoyed was itself a function of the co-operative social base from which
it emerged. To barter home-grown goods and objects, to share tools and
implements, to engage in common labour during harvesting time in a
system of mutual aid, indeed, to help new-comers in barn-raising, 
corn-husking, log-rolling, and the like, was the indispensable cement
that bound scattered farmsteads into a united community." [_The Third
Revolution_, vol. 1, p. 233] Bookchin quotes David P. Szatmary (author
of a book on Shay' Rebellion) stating that it was a society based
upon "co-operative, community orientated interchanges" and not a
"basically competitive society." [Ibid.]

Into this non-capitalist society came capitalist elements. Market forces 
and economic power soon resulted in the transformation of this society.
Merchants asked for payment in specie which (and along with taxes) 
soon resulted in indebtedness and the dispossession of the homesteaders 
from their land and goods. In response Shay's rebellion started, 
a rebellion which was an important factor in the centralisation of
state power in America to ensure that popular input and control over 
government were marginalised and that the wealthy elite and their
property rights were protected against the many (see Bookchin, Op. 
Cit., for details). Thus the homestead system was undermined, 
essentially, by the need to pay for services in specie (as demanded
by merchants).

So while Rothbard's theory as a certain appeal (reinforced by watching
too many Westerns, we imagine) it fails to justify the "unrestricted"
property rights theory (and the theory of freedom Rothbard derives
from it). All it does is to end up justifying capitalist and landlord 
domination (which is probably what it was intended to do).

4.2 Why is the "Lockean Proviso" important?

Robert Nozick, in his work _Anarchy, State, and Utopia_ presented a
case for private property rights that was based on what he termed
the "Lockean Proviso" -- namely that common (or unowned) land and
resources could be appropriated by individuals as long as the position
of others is not worsen by so doing. However, if we *do* take this
Proviso seriously private property rights cannot be defined (see 
section B.3.4 for details). Thus Nozick's arguments in favour of
property rights fail.

Some right-libertarians, particularly those associated with the
Austrian school of economics argue that we must reject the Lockean
Proviso (probably due to the fact it can be used to undermine the
case for absolute property rights). Their argument goes as follows:
if an individual appropriates and uses a previously unused resource, 
it is because it has value to him/her, as an individual, to engage in 
such action. The individual has stolen nothing because it was previously
unowned and we cannot know if other people are better or worse off, all 
we know is that, for whatever reason, they did not appropriate the 
resource ("If latecomers are worse off, well then that is their proper
assumption of risk in this free and uncertain world. There is no longer
a vast frontier in the United States, and there is no point crying
over the fact." [Murray Rothbard, _The Ethics of Liberty_, p. 240]).

Hence the appropriation of resources is an essentially individualistic,
asocial act -- the requirements of others are either irrelevant or
unknown. However, such an argument fails to take into account *why*
the Lockean Proviso has such an appeal. When we do this we see that
rejecting it leads to massive injustice, even slavery.

However, let us start with a defence of rejecting the Proviso from a
leading Austrian economist:

"Consider . . . the case . . . of the unheld sole water hole in the
desert (which *everyone* in a group of travellers knows about), which
one of the travellers, by racing ahead of the others, succeeds in
appropriating . . . [This] clearly and unjustly violates the Lockean
proviso. . . For us, however, this view is by no means the only one
possible. We notice that the energetic traveller who appropriated
all the water was not doing anything which (always ignoring, of course,
prohibitions resting on the Lockean proviso itself) the other travellers
were not equally free to do. The other travellers, too, could have
raced ahead . . . [they] did *not* bother to race for the water . . .
It does not seem obvious that these other travellers can claim that
they were *hurt* by an action which they could themselves have easily
taken." [Israel M. Kirzner, "Entrepreneurship, Entitlement, and Economic
Justice", pp. 385-413, in _Reading Nozick_, p. 406]

Murray Rothbard, we should note, takes a similar position in a similar
example, arguing that "the owner [of the sole oasis] is scarcely being 
'coercive'; in fact he is supplying a vital service, and should have 
the right to refuse a sale or charge whatever the customers will pay. 
The situation may be unfortunate for the customers, as are many situations 
in life." [_The Ethics of Liberty_, p. 221] (Rothbard, we should note, 
is relying to the right-libertarian von Hayek who -- to his credit -- 
does maintain that this is a coercive situation; but as others, including 
other right-libertarians, point out, he has to change his definition 
of coercion/freedom to do so -- see Stephan L. Newman's _Liberalism at 
Wit's End_, pp. 130-134 for an excellent summary of this debate). 

Now, we could be tempted just to rant about the evils of the right
libertarian mind-frame but we will try to present a clam analysis
of this position. Now, what Kirzner (and Rothbard et al) fails to note is 
that without the water the other travellers will die in a matter of days. 
The monopolist has the power of life and death over his fellow travellers.
Perhaps he hates one of them and so raced ahead to ensure their death. 
Perhaps he just recognised the vast power that his appropriation would 
give him and so, correctly, sees that the other travellers would give 
up all their possessions and property to him in return for enough water 
to survive. 

Either way, its clear that perhaps the other travellers did not "race
ahead" because they were ethical people -- they would not desire to
inflict such tyranny on others because they would not like it inflicted
upon them. 

Thus we can answer Kirzner's question -- "What . . . is so obviously 
acceptable about the Lockean proviso. . . ?" [Ibid.] 

It is the means by which human actions are held accountable to social
standards and ethics. It is the means by which the greediest, most
evil and debased humans are stopped from dragging the rest of humanity
down to their level (via a "race to the bottom") and inflicting untold
tyranny and domination on their fellow humans. An ideology that could 
consider the oppression which could result from such an appropriation 
as "supplying a vital service" and any act to remove this tyranny as 
"coercion" is obviously a very sick ideology. And we may note that 
the right-libertarian position on this example is a good illustration
of the dangers of deductive logic from assumptions (see section 1.3 
for more on this right-libertarian methodology) -- after all W. Duncan 
Reekie, in his introduction to Austrian Economics, states that "[t]o be 
intellectually consistent one must concede his absolute right to the 
oasis." [_Markets, Entrepreneurs and Liberty_, p. 181] To place ideology
before people is to ensure humanity is placed on a Procrustean bed.

Which brings us to another point. Often right-libertarians say that
anarchists and other socialists are "lazy" or "do not want to work".
You could interpret Kirzner's example as saying that the other
travellers are "lazy" for not rushing ahead and appropriating the
oasis. But this is false. For under capitalism you can only get rich
by exploiting the labour of others via wage slavery or, within a 
company, get better pay by taking "positions of responsibility" 
(i.e. management positions). If you have an ethical objection to
treating others as objects ("means to an end") then these options 
are unavailable to you. Thus anarchists and other socialists are
not "lazy" because they are not rich -- they just have no desire to
get rich off the labour and liberty of others (as expressed in their
opposition to private property and the relations of domination it
creates). In other words, Anarchism is not the "politics of envy";  
it is the politics of liberty and the desire to treat others as 
"ends in themselves".

Rothbard is aware of what is involved in accepting the Lockean Proviso
-- namely the existence of private property ("Locke's proviso may lead 
to the outlawry of *all* private property of land, since one can always
say that the reduction of available land leaves everyone else . . . 
worse off", _The Ethics of Liberty_, p. 240 -- see section B.3.4 for 
a discussion on why the Proviso *does* imply the end of capitalist 
property rights). Which is why he, and other right-libertarians, reject 
it. Its simple. Either you reject the Proviso and embrace capitalist 
property rights (and so allow one class of people to be dispossessed 
and another empowered at their expense) or you reject private property 
in favour of possession and liberty. Anarchists, obviously, favour 
the latter option.

As an aside, we should point out that (following Stirner) the would-be
monopolist is doing nothing wrong (as such) in attempting to monopolise
the oasis. He is, after all, following his self-interest. However, what
is objectionable is the right-libertarian attempt to turn thus act into
a "right" which must be respected by the other travellers. Simply put,
if the other travellers gang up and dispose of this would be tyrant
then they are right to do so -- to argue that this is a violation of
the monopolists "rights" is insane and an indication of a slave
mentality (or, following Rousseau, that the others are "simple"). 
Of course, if the would-be monopolist has the necessary *force* to 
withstand the other travellers then his property then the matter is
closed -- might makes right. But to worship rights, even when they
obviously result in despotism, is definitely a case of "spooks in
the head" and "man is created for the Sabbath" not "the Sabbath
is created for man."

4.3 How does private property effect individualism?

Private property is usually associated by "anarcho"-capitalism with 
individualism. Usually private property is seen as the key way of
ensuring individualism and individual freedom (and that private 
property is the expression of individualism). Therefore it is useful
to indicate how private property can have a serious impact on 
individualism.

Usually right-libertarians contrast the joys of "individualism" with
the evils of "collectivism" in which the individual is sub-merged into
the group or collective and is made to work for the benefit of the 
group (see any Ayn Rand book or essay on the evils of collectivism). 

But what is ironic is that right-libertarian ideology creates a view
of industry which would (perhaps) shame even the most die-hard fan of
Stalin. What do we mean? Simply that right-libertarians stress the
abilities of the people at the top of the company, the owner, the 
entrepreneur, and tend to ignore the very real subordination of those
lower down the hierarchy (see, again, any Ayn Rand book on the worship
of business leaders). In the Austrian school of economics, for example, 
the entrepreneur is considered the driving force of the market process 
and tend to abstract away from the organisations they govern. This 
approach is usually followed by right-libertarians. Often you get the
impression that the accomplishments of a firm are the personal triumphs
of the capitalists, as though their subordinates are merely tools not
unlike the machines on which they labour.

We should not, of course, interpret this to mean that right-libertarians 
believe that entrepreneurs run their companies single-handedly (although
you do get that impression sometimes!). But these abstractions help hide
the fact that the economy is overwhelmingly interdependent and organised
hierarchically within industry. Even in their primary role as organisers, 
entrepreneurs depend on the group. A company president can only issue 
general guidelines to his managers, who must inevitably organise and
direct much of their departments on their own. The larger a company gets,
the less personal and direct control an entrepreneur has over it. They must
delegate out an increasing share of authority and responsibility, and is
more dependent than ever on others to help him run things, investigate
conditions, inform policy, and make recommendations. Moreover, the 
authority structures are from the "top-down" -- indeed the firm is 
essentially a command economy, with all members part of a collective 
working on a common plan to achieve a common goal (i.e. it is essentially 
collectivist in nature -- which means it is not too unsurprising that Lenin 
argued that state socialism could be considered as one big firm or office 
and why the system he built on that model was so horrific).

So the firm (the key component of the capitalist economy) is marked 
by a distinct *lack* of individualism, a lack usually ignored by right
libertarians (or, at best, considered as "unavoidable"). As these firms 
are hierarchical structures and workers are paid to obey, it does make 
*some* sense -- in a capitalist environment -- to assume that the 
entrepreneur is the main actor, but as an individualistic model of 
activity it fails totally. Perhaps it would not be unfair to say that
capitalist individualism celebrates the entrepreneur because this
reflects a hierarchical system in which for the one to flourish, the
many must obey? (Also see section 1.1).

Capitalist individualism does not recognise the power structures that
exist within capitalism and how they affect individuals. In Brian
Morris' words, what they fail "to recognise is that most productive
relations under capitalism allow little scope for creativity and
self-expression on the part of workers; that such relationships
are not equitable; nor are they freely engaged in for the mutual
benefit of both parties, for workers have no control over the 
production process or over the product of their labour. Rand [like
other right-libertarians] misleadingly equates trade, artistic
production and wage-slavery. . . [but] wage-slavery . . . is quite
different from the trade principle" as it is a form of "exploitation"
[_Ecology & Anarchism_, p. 190]

He further notes that "[s]o called trade relations involving human
labour are contrary to the egoist values Rand [and other capitalist
individualists] espouses - they involve little in the way of
independence, freedom, integrity or justice." [Ibid., p. 191]

Moreover, capitalist individualism actually *supports* authority and
hierarchy. As Joshua Chen and Joel Rogers point out, the "achievement
of short-run material satisfaction often makes it irrational [from
an individualist perspective] to engage in more radical struggle, since
that struggle is by definition against those institutions which 
provide one's current gain." In other words, to rise up the company
structure, to "better oneself," (or even get a good reference) you 
cannot be a pain in the side of management -- obedient workers do 
well, rebel workers do not.

Thus the hierarchical structures help develop an "individualistic"
perspective which actually reinforces those authority structures.
This, as Cohn and Rogers notes, means that "the structure in which
[workers] find themselves yields less than optimal social results
from their isolated but economically rational decisions." [quoted
by Alfie Kohn, _No Contest_, p. 67, p. 260f] 

Steve Biko, a black activist murdered by the South African police 
in the 1970s, argued that "the most potent weapon of the oppressor 
is the mind of the oppressed." And this is something capitalists 
have long recognised. Their investment in "Public Relations" and
"education" programmes for their employees shows this clearly,
as does the hierarchical nature of the firm. By having a ladder 
to climb, the firm rewards obedience and penalises rebellion. This 
aims at creating a mind-set which views hierarchy as good and so 
helps produce servile people.

This is why anarchists would agree with Alfie Kohn when he argues that 
"the individualist worldview is a profoundly conservative doctrine: it 
inherently stifles change." [Ibid., p. 67] So, what is the best way 
for a boss to maintain his or her power? Create a hierarchical workplace
and encourage capitalist individualism (as capitalist individualism 
actually works *against* attempts to increase freedom from hierarchy).
Needless to say, such a technique cannot work forever -- hierarchy 
also encourages revolt -- but such divide and conquer can be *very*
effective.

And as anarchist author Michael Moorcock put it, "Rugged individualism 
also goes hand in hand with a strong faith in paternalism -- albeit a 
tolerant and somewhat distant paternalism -- and many otherwise 
sharp-witted libertarians seem to see nothing in the morality of a 
John Wayne Western to conflict with their views. Heinlein's paternalism 
is at heart the same as Wayne's. . . To be an anarchist, surely, is 
to reject authority but to accept self-discipline and community 
responsibility. To be a rugged individualist a la Heinlein and 
others is to be forever a child who must obey, charm and cajole 
to be tolerated by some benign, omniscient father: Rooster Coburn 
shuffling his feet in front of a judge he respects for his office 
(but not necessarily himself) in True Grit." [_Starship Stormtroopers_]

One last thing, don't be fooled into thinking that individualism or concern 
about individuality -- not *quite* the same thing -- is restricted to the 
right, they are not. For example, the "individualist theory of society . . .
might be advanced in a capitalist or in an anti-capitalist form . . . the
theory as developed by critics of capitalism such as Hodgskin and the
anarchist Tucker saw ownership of capital by a few as an obstacle to
genuine individualism, and the individualist ideal was realisable only
through the free association of labourers (Hodgskin) or independent 
proprietorship (Tucker)." [David Miller, _Social Justice_, pp. 290-1]

And the reason why social anarchists oppose capitalism is that it creates
a *false* individualism, an abstract one which crushes the individuality
of the many and  justifies (and supports) hierarchical and authoritarian 
social relations. In Kropotkin's words, "what has been called 'individualism'
up to now has been only a foolish egoism which belittles the individual.
It did not led to what it was established as a goal: that is the complete,
broad, and most perfectly attainable development of individuality." The
new individualism desired by Kropotkin "will not consist . . . in the
oppression of one's neighbour . . . [as this] reduced the [individualist]
. . . to the level of an animal in a herd." [_Selected Writings_, p, 295,
p. 296]

4.4 How does private property affect relationships?

Obviously, capitalist private property affects relationships between people
by creating structures of power. Property, as we have argued all through
this FAQ, creates relationships based upon domination -- and this cannot
help but produce servile tendencies within those subject to them (it also
produces rebellious tendencies as well, the actual ratio between the two
tendencies dependent on the individual in question and the community they
are in). As anarchists have long recognised, power corrupts -- both those
subjected to it and those who exercise it.

While few, if any, anarchists would fail to recognise the importance of
possession -- which creates the necessary space all individuals need to
be themselves -- they all agree that private property corrupts this 
liberatory aspect of "property" by allowing relationships of domination 
and oppression to be built up on top of it. Because of this recognition,
all anarchists have tried to equalise property and turn it back into
possession.

Also, capitalist individualism actively builds barriers between people.
Under capitalism, money rules and individuality is expressed via 
consumption choices (i.e. money). But money does not encourage an
empathy with others. As Frank Stronach (chair of Magna International, 
a Canadian auto-parts maker that shifted its production to Mexico) 
put it, "[t]o be in business your first mandate is to make money, and
money has no heart, no soul, conscience, homeland." [cited by Doug
Henwood, _Wall Street_, p. 113] And for those who study economics,
it seems that this dehumanising effect also strikes them as well:

"Studying economics also seems to make you a nastier person. Psychological
studies have shown that economics graduate students are more likely to
'free ride' -- shirk contributions to an experimental 'public goods'
account in the pursuit of higher private returns -- than the general
public. Economists also are less generous that other academics in
charitable giving. Undergraduate economics majors are more likely to
defect in the classic prisoner's dilemma game that are other majors.
And on other tests, students grow less honest -- expressing less of
a tendency, for example, to return found money -- after studying 
economics, but not studying a control subject like astronomy.

"This is no surprise, really. Mainstream economics is built entirely
on a notion of self-interested individuals, rational self-maximisers
who can order their wants and spend accordingly. There's little room
for sentiment, uncertainty, selflessness, and social institutions.
Whether this is an accurate picture of the average human is open to
question, but there's no question that capitalism as a system and
economics as a discipline both reward people who conform to the
model." [Doug Henwood, Op. Cit., p, 143]

Which, of course, highlights the problems within the "trader" model
advocated by Ayn Rand. According to her, the trader is *the* example
of moral behaviour -- you have something I want, I have something you
want, we trade and we both benefit and so our activity is self-interested
and no-one sacrifices themselves for another. While this has *some* 
intuitive appeal it fails to note that in the real world it is a pure 
fantasy. The trader wants to get the best deal possible for themselves 
and if the bargaining positions are unequal then one person will gain 
at the expense of the other (if the "commodity" being traded is labour, 
the seller may not even have the option of not trading at all). The 
trader is only involved in economic exchange, and has no concern for 
the welfare of the person they are trading with. They are a bearer of 
things, *not* an individual with a wide range of interests, concerns, 
hopes and dreams. These are irrelevant, unless you can make money out 
of them of course! Thus the trader is often a manipulator and outside 
novels it most definitely is a case of "buyer beware!"

If the trader model is taken as the basis of interpersonal relationships,
economic gain replaces respect and empathy for others. It replaces human
relationships with relationships based on things -- and such a mentality
does not encompass how interpersonal relationships affect both you 
and the society you life in. In the end, it impoverishes society and 
individuality. Yes, any relationship must be based upon self-interest
(mutual aid is, after all, something we do because we benefit from it
in some way) but the trader model presents such a *narrow* self-interest
that it is useless and actively impoverishes the very things it should be
protecting -- individuality and interpersonal relationships (see section
I.7.4 on how capitalism does not protect individuality).

4.5 Does private property co-ordinate without hierarchy?

It is usually to find right-libertarians maintain that private property
(i.e. capitalism) allows economic activity to be co-ordinated by 
non-hierarchical means. In other words, they maintain that capitalism 
is a system of large scale co-ordination without hierarchy. These 
claims follow the argument of noted right-wing, "free market" 
economist Milton Friedman who contrasts "central planning involving 
the use of coercion - the technique of the army or the modern
totalitarian state" with  "voluntary co-operation between 
individuals - the technique of the marketplace" as two distinct
ways of co-ordinating the economic activity of large groups 
("millions") of people. [_Capitalism and Freedom_, p. 13]

However, this is just playing with words. As they themselves point 
out the internal structure of a corporation or capitalist company 
is *not* a "market" (i.e. non-hierarchical) structure, it is a 
"non-market" (hierarchical) structure of a market participant
(see section 2.2). However "market participants" are part of 
the market. In other words, capitalism is *not* a system of 
co-ordination without hierarchy because it does contain hierarchical 
organisations which *are an essential part of the system*!

Indeed, the capitalist company *is* a form of central planning and 
shares the same "technique" as the army. As the pro-capitalist writer
Peter Drucker noted in his history of General Motors, "[t]here is a
remarkably close parallel between General Motors' scheme of organisation
and those of the two institutions most renowned for administrative
efficiency: that of the Catholic Church and that of the modern army . . ."
[quoted by David Enger, _Apostles of Greed_, p. 66] And so capitalism
is marked by a series of totalitarian organisations -- and since when
was totalitarianism liberty enhancing? Indeed, many "anarcho"-capitalists 
actually celebrate the command economy of the capitalist firm as being 
more "efficient" than self-managed firms (usually because democracy 
stops action with debate). The same argument is applied by the Fascists 
to the political sphere. It does not change much -- nor does it become 
less fascistic -- when applied to economic structures. To state the 
obvious, such glorification of workplace dictatorship seems somewhat 
at odds with an ideology calling itself "libertarian" or "anarchist". 
Is dictatorship more liberty enhancing to those subject to it than 
democracy? Anarchists doubt it (see section A.2.11 for details).

In order to claim that capitalism co-ordinates individual activity 
without hierarchy right-libertarians have to abstract from individuals 
and how they interact *within* companies and concentrate purely on 
relationships *between* companies. This is pure sophistry. Like markets, 
companies require at least two or more people to work - both are forms 
of social co-operation. If co-ordination within companies is hierarchical, 
then the system they work within is based upon hierarchy. To claim that 
capitalism co-ordinates without hierarchy is simply false - its based 
on hierarchy and authoritarianism. Capitalist companies are based upon 
denying workers self-government (i.e. freedom) during work hours. The 
boss tells workers what to do, when to do, how to do and for how long. 
This denial of freedom is discussed in greater depth in sections B.1 
and B.4.

Because of the relations of power it creates, opposition to capitalist
private property (and so wage labour) and the desire to see it ended 
is an essential aspect of anarchist theory. Due to its ideological 
blind spot with regards to apparently "voluntary" relations of 
domination and oppression created by the force of circumstances
(see section 2 for details), "anarcho"-capitalism considers 
wage labour as a form of freedom and ignore its fascistic aspects
(when not celebrating those aspects). Thus "anarcho"-capitalism is not
anarchist. By concentrating on the moment the contract is signed, they 
ignore that freedom is restricted during the contract itself. While
denouncing (correctly) the totalitarianism of the army, they ignore
it in the workplace. But factory fascism is just as freedom destroying
as the army or political fascism. 

Due to this basic lack of concern for freedom, "anarcho"-capitalists 
cannot be considered as anarchists.  Their total lack of concern 
about factory fascism (i.e. wage labour) places them totally outside 
the anarchist tradition. Real anarchists have always been aware of that
private property and wage labour restriction freedom and desired to 
create a society in which people would be able to avoid it. In other 
words, where *all* relations are non-hierarchical and truly co-operative.

To conclude, to claim that private property eliminates hierarchy is false.
Nor does capitalism co-ordinate economic activities without hierarchical
structures. For this reason anarchists support co-operative forms of
production rather than capitalistic forms.

5 Will privatising "the commons" increase liberty?

"Anarcho"-capitalists aim for a situation in which "no land areas, 
no square footage in the world shall remain 'public,'" in other words
*everything* will be "privatised." [Murray Rothbard, _Nations by
Consent_, p. 84] They claim that privatising "the commons" (e.g. roads, 
parks, etc.) which are now freely available to all will increase liberty. 
Is this true? We have shown before why the claim that privatisation can
protect the environment is highly implausible (see section E.2). Here we
will concern ourselves with private ownership of commonly used "property" 
which we all take for granted and pay for with taxes.

Its clear from even a brief consideration of a hypothetical society based
on "privatised" roads (as suggested by Murray Rothbard in _For a New 
Liberty_, pp. 202-203 and David Friedman in _The Machinery of Freedom_, 
pp. 98-101) that the only increase of liberty will be for the ruling elite. 
As "anarcho"-capitalism is based on paying for what one uses, privatisation 
of roads would require some method of tracking individuals to ensure that 
they pay for the roads they use. In the UK, for example, during the 1980s 
the British Tory government looked into the idea of toll-based motorways. 
Obviously having toll-booths on motorways would hinder their use and restrict 
"freedom," and so they came up with the idea of tracking cars by satellite. 
Every vehicle would have a tracking device installed in it and a satellite 
would record where people went and which roads they used. They would then 
be sent a bill or have their bank balances debited based on this information
(in the fascist city-state/company town of Singapore such a scheme *has* 
been introduced).

If we extrapolate from this example to a system of *fully* privatised
"commons," it would clearly require all individuals to have tracking
devices on them so they could be properly billed for use of roads,
pavements, etc. Obviously being tracked by private firms would be a
serious threat to individual liberty. Another, less costly, option would
be for private guards to randomly stop and question car-owners and
individuals to make sure they had paid for the use of the road or pavement
in question. "Parasites" would be arrested and fined or locked up. Again,
however, being stopped and questioned by uniformed individuals has more
in common with police states than liberty. Toll-boothing *every* street
would be highly unfeasible due to the costs involved and difficulties for
use that it implies. Thus the idea of privatising roads and charging 
drivers to gain access seems impractical at best and distinctly freedom
endangering if implemented at worse.

Of course, the option of owners letting users have free access to the
roads and pavements they construct and run would be difficult for a 
profit-based company. No one could make a profit in that case. If 
companies paid to construct roads for their customers/employees to use, 
they would be financially hindered in competition with other companies 
that did not, and thus would be unlikely to do so. If they restricted 
use purely to their own customers, the tracking problem appears again.

Some may object that this picture of extensive surveillance of 
individuals would not occur or be impossible. However, Murray 
Rothbard (in a slightly different context) argued that technology 
would be available to collate information about individuals. He 
argued that "[i]t should be pointed out that modern technology 
makes even more feasible the collection and dissemination of 
information about people's credit ratings and records of keeping or
violating their contracts or arbitration agreements. Presumably, an 
anarchist [sic!] society would see the expansion of this sort of
dissemination of data." ["Society Without A State", in _Nomos XIX_,
Pennock and Chapman (eds.), p. 199] So, perhaps, with the total
privatisation of society we would also see the rise of private
Big Brothers, collecting information about individuals for use by
property owners. The example of the _Economic League_ (a British 
company who provided the "service" of tracking the political 
affiliations and activities of workers for employers) springs 
to mind.

And, of course, these privatisation suggestions ignore differences in 
income and market power. If, for example, variable pricing is used to 
discourage road use at times of peak demand (to eliminate traffic jams 
at rush-hour) as is suggested both by Murray Rothbard and David Friedman, 
then the rich will have far more "freedom" to travel than the rest of 
the population. And we may even see people having to go into debt just
to get to work or move to look for work.

Which raises another problem with notion of total privatisation, the
problem that it implies the end of freedom of travel. Unless you get
permission or (and this seems more likely) pay for access, you will
not be able to travel *anywhere.* As Rothbard *himself* makes clear,
"anarcho"-capitalism means the end of the right to roam or even
travel. He states that "it became clear to me that a totally privatised
country would not have open borders at all. If every piece of land
in a country were owned . . . no immigrant could enter there unless
invited to enter and allowed to rent, or purchase, property." [_Nations
by Consent_, p. 84] What happens to those who cannot *afford* to
pay for access is not addressed (perhaps, being unable to exit a
given capitalist's land they will become bonded labourers? Or be
imprisoned and used to undercut workers' wages via prison labour?
Perhaps they will just be shot as trespassers? Who can tell?). Nor
is it addressed how this situation actually *increases* freedom.
For Rothbard, a "totally privatised country would be as closed as
the particular inhabitants and property owners [*not* the same 
thing, we must point out] desire. It seems clear, then, that the 
regime of open borders that exists *de facto* in the US really 
amounts to a compulsory opening by the central state. . . and does 
not genuinely reflect the wishes of the proprietors." [Op. Cit., 
p. 85] Of course, the wishes of *non*-proprietors (the vast 
majority) do not matter in the slightest. Thus, it is clear, that
with the privatisation of "the commons" the right to roam, to
travel, would become a privilege, subject to the laws and rules
of the property owners. This can hardly be said to *increase*
freedom for anyone bar the capitalist class.

Rothbard acknowledges that "in a fully privatised world, access 
rights would obviously be a crucial part of land ownership." 
[_Nations by Consent_, p. 86] Given that there is no free lunch, 
we can imagine we would have to pay for such "rights." The implications 
of this are obviously unappealing and an obvious danger to individual 
freedom. The problem of access associated with the idea of privatising 
the roads can only be avoided by having a "right of passage" encoded
into the "general libertarian law code."  This would mean that road 
owners would be required, by law, to let anyone use them. But where 
are "absolute" property rights in this case? Are the owners of roads 
not to have the same rights as other owners? And if "right of passage" 
is enforced, what would this mean for road owners when people sue 
them for car-pollution related illnesses? (The right of those injured 
by pollution to sue polluters is the main way "anarcho"-capitalists 
propose to protect the environment. See sections E.2 and E.3). It 
is unlikely that those wishing to bring suit could find, never mind 
sue, the millions of individual car owners who could have potentially 
caused their illness. Hence the road-owners would be sued for letting 
polluting (or unsafe) cars onto "their" roads. The road-owners would 
therefore desire to restrict pollution levels by restricting the 
right to use their property, and so would resist the "right of 
passage" as an "attack" on their "absolute" property rights. If 
the road-owners got their way (which would be highly likely given 
the need for "absolute" property rights and is suggested by the variable 
pricing way to avoid traffic jams mentioned above) and were able to 
control who used their property, freedom to travel would be *very* 
restricted and limited to those whom the owner considered "desirable." 
Indeed, Murray Rothbard supports such a regime ("In the free [sic!] 
society, they [travellers] would, in the first instance, have the 
right to travel only on those streets whose owners agree to have 
them there" [_The Ethics of Liberty_, p. 119]). The threat to 
liberty in such a system is obvious -- to all but Rothbard and 
other right-libertarians, of course.

To take another example, let us consider the privatisation of parks, 
streets and other public areas. Currently, individuals can use these areas
to hold political demonstrations, hand out leaflets, picket and so on.
However, under "anarcho"-capitalism the owners of such property can 
restrict such liberties if they desire, calling such activities "initiation 
of force" (although they cannot explain how speaking your mind is an
example of "force"). Therefore, freedom of speech, assembly and a host 
of other liberties we take for granted would be reduced (if not eliminated)
under a right-"libertarian" regime. Or, taking the case of pickets and 
other forms of social struggle, its clear that privatising "the commons" 
would only benefit the bosses. Strikers or other activists picketing or 
handing out leaflets in shopping centre's are quickly ejected by private 
security even today. Think about how much worse it would become under 
"anarcho"-capitalism when the whole world becomes a series of malls -- it 
would be impossible to hold a picket when the owner of the pavement objects, 
for example (as Rothbard himself argues, Op. Cit., p. 132) and if the owner 
of the pavement also happens to be the boss being picketed, then workers' 
rights would be zero. Perhaps we could also see capitalists suing working 
class organisations for littering their property if they do hand out 
leaflets (so placing even greater stress on limited resources).

The I.W.W. went down in history for its rigorous defence of freedom of 
speech because of its rightly famous "free speech" fights in numerous 
American cities and towns. Repression was inflicted upon wobblies who 
joined the struggle by "private citizens," but in the end the I.W.W. won. 
Consider the case under "anarcho"-capitalism. The wobblies would have 
been "criminal aggressors" as the owners of the streets have refused 
to allow "undesirables" to use them to argue their case. If they 
refused to acknowledge the decree of the property owners, private 
cops would have taken them away. Given that those who controlled 
city government in the historical example were the wealthiest citizens 
in town, its likely that the same people would have been involved in 
the fictional ("anarcho"-capitalist) account. Is it a good thing that 
in the real account the wobblies are hailed as heroes of freedom but 
in the fictional one they are "criminal aggressors"? Does converting 
public spaces into private property *really* stop restrictions on free 
speech being a bad thing?

Of course, Rothbard (and other right-libertarians) are aware that
privatisation will not remove restrictions on freedom of speech,
association and so on (while, at the same time, trying to portray
themselves as supporters of such liberties!). However, for 
right-libertarians such restrictions are of no consequence. As 
Rothbard argues, any "prohibitions would not be state imposed, 
but would simply be requirements for residence or for use of 
some person's or community's land area." [_Nations by Consent_, 
p. 85] Thus we yet again see the blindness of right-libertarians 
to the commonality between private property and the state. The
state also maintains that submitting to its authority is the
requirement for taking up residence in its territory (see
also section 2.3 for more on this). As Benjamin Tucker noted, 
the state can be defined as (in part) "the assumption of sole 
authority over a given area and all within it." [_The Individualist 
Anarchists_, p. 24] If the property owners can determine 
"prohibitions" (i.e. laws and rules) for those who use the 
property then they are the "sole authority over a given area 
and all within it," i.e. a state. Thus privatising "the commons" 
means subjecting the non-property owners to the rules and laws 
of the property owners -- in effect, privatising the state and 
turning the world into a series of Monarchies and oligarchies 
without the pretence of democracy and democratic rights. 

These examples can hardly be said to be increasing liberty for society as 
a whole, although "anarcho" capitalists seem to think they would. So far 
from *increasing* liberty for all, then, privatising the commons would 
only increase it for the ruling elite, by giving them yet another monopoly 
from which to collect income and exercise their power over. It would
*reduce* freedom for everyone else. As Peter Marshall notes, "[i]n the name 
of freedom, the anarcho-capitalists would like to turn public spaces into 
private property, but freedom does not flourish behind high fences protected 
by private companies but expands in the open air when it is enjoyed by all." 
[_Demanding the Impossible_, p. 564]

Little wonder Proudhon argued that "if the public highway is nothing but
an accessory of private property; if the communal lands are converted into
private property; if the public domain, in short, is guarded, exploited,
leased, and sold like private property -- what remains for the proletaire?
Of what advantage is it to him that society has left the state of war to 
enter the regime of police?" [_System of Economic Contradictions_, p. 371]

6 Is "anarcho"-capitalism against the state?

No. Due to its basis in private property, "anarcho"-capitalism implies a
class division of society into bosses and workers. Any such division
will require a state to maintain it. However, it need not be the same
state as exists now. Regarding this point, "anarcho"-capitalism plainly
advocates "defence associations" to protect property. For the
"anarcho"-capitalist, however, these private companies are not 
states. For anarchists, they most definitely are.

According to Murray Rothbard ["Society Without A State", in _Nomos XIX_,
Pennock and Chapman, eds., p. 192], a state must have one or both of the
following characteristics:

	1) The ability to tax those who live within it.
	2) It asserts and usually obtains a coerced monopoly of the
	   provision of defence over a given area.

He makes the same point in _The Ethics of Liberty_ [p. 171].

Instead of this, the "anarcho"-capitalist thinks that people should be
able to select their own "defence companies" (which would provide the
needed police) and courts from the free market in "defence" which would
spring up after the state monopoly has been eliminated. These companies 
"all. . . would have to abide by the basic law code" ["Society Without 
A State", p. 206]. Thus a "general libertarian law code" would govern the 
actions of these companies. This "law code" would prohibit coercive 
aggression at the very least, although to do so it would have to specify 
what counted as legitimate property, how said can be owned and what 
actually constitutes aggression. Thus the law code would be quite 
extensive.

How is this law code to be actually specified? Would these laws be 
democratically decided? Would they reflect common usage (i.e. custom)?
"supply and demand"? "Natural law"? Given the strong dislike of
democracy shown by "anarcho"-capitalists, we think we can safely say
that some combination of the last two options would be used. Murray
Rothbard, as noted in section 1.4, opposed the individualist anarchist
principle that juries would judge both the facts and the law, suggesting
instead that "Libertarian lawyers and jurists" would determine a "rational 
and objective code of libertarian legal principles and procedures." The
judges in his system would "not [be] making the law but finding it on the 
basis of agreed-upon principles derived either from custom or reason." 
["Society without a State", Op. Cit., p. 206] David Friedman, on the other
hand, argues that different defence firms would sell their own laws. 
[_The Machinery of Freedom_, p. 116] It is sometimes acknowledged
that non-libertarian laws may be demanded (and supplied) in such a 
market.

Around this system of "defence companies" is a free market in "arbitrators"
and "appeal judges" to administer justice and the "basic law code." Rothbard
believes that such a system would see "arbitrators with the best reputation
for efficiency and probity . . . [being] chosen by the various parties in the
market . . . [and] will come to be given an increasing amount of business."
Judges "will prosper on the market in proportion to their reputation for 
efficiency and impartiality." [Op. Cit., p. 199 and p. 204] Therefore, 
like any other company, arbitrators would strive for profits and wealth, 
with the most successful ones becoming "prosperous." Of course, such 
wealth would have no impact on the decisions of the judges, and if it did, 
the population (in theory) are free to select any other judge (although, of 
course, they would also "strive for profits and wealth" -- which means the 
choice of character may be somewhat limited! -- and the laws which they
were using to guide their judgements would be enforcing capitalist rights). 

Whether or not this system would work as desired is discussed in the 
following sections. We think that it will not. Moreover, we will argue that 
"anarcho"-capitalist "defence companies" meet not only the criteria of 
statehood we outlined in section B.2, but also Rothbard's own criteria 
for the state, quoted above. 

As regards the anarchist criterion, it is clear that "defence companies" 
exist to defend private property; that they are hierarchical (in that 
they are capitalist companies which defend the power of those who employ 
them); that they are professional coercive bodies; and that they exercise 
a monopoly of force over a given area (the area, initially, being the 
property of the person or company who is employing the "association"). 
If, as Ayn Rand noted (using a Weberian definition of the state) a government
is an institution "that holds the exclusive power to *enforce* certain rules
of conduct in a given geographical area" [_Capitalism: The Unknown Ideal_, 
p. 239] then these "defence companies" are the means by which the property 
owner (who exercises a monopoly to determine the rules governing their 
property) enforce their rules.

For this (and other reasons), we should call the "anarcho"-capitalist
defence firms "private states" -- that is what they are -- and
"anarcho"-capitalism "private state" capitalism.

Before discussing these points further, it is necessary to point out a
relatively common fallacy of "anarcho"-capitalists. This is the idea that
"defence" under the system they advocate means defending people, not
territorial areas. This, for some, means that defence companies are not
"states." However, as people and their property and possessions do not
exist merely in thought but on the Earth, it is obvious that these
companies will be administering "justice" over a given area of the
planet. It is also obvious, therefore, that these "defence associations" 
will operate over a (property-owner defined) area of land and enforce
the property-owner's laws, rules and regulations. The deeply
anti-libertarian, indeed fascistic, aspects of this "arrangement" 
will be examined in the following sections.

6.1 What's wrong with this "free market" justice?

It does not take much imagination to figure out whose interests "prosperous" 
arbitrators, judges and defence companies would defend: their own, as well 
as those who pay their wages -- which is to say, other members of the rich 
elite. As the law exists to defend property, then it (by definition) exists
to defend the power of capitalists against their workers.

Rothbard argues that the "judges" would "not [be] making the law but
finding it on the basis of agreed-upon principles derived either from
custom or reason" [Rothbard, Op. Cit., p. 206]. However, this begs the
question: *whose* reason? *whose* customs? Do individuals in different
classes share the same customs? The same ideas of right and wrong? Would
rich and poor desire the same from a "basic law code"? Obviously not. The
rich would only support a code which defended their power over the poor.

Although only "finding" the law, the arbitrators and judges still exert
an influence in the "justice" process, an influence not impartial or
neutral. As the arbitrators themselves would be part of a profession, with
specific companies developing within the market, it does not take a
genius to realise that when "interpreting" the "basic law code," such
companies would hardly act against their own interests as companies. In
addition, if the "justice" system was based on "one dollar, one vote," the
"law" would best defend those with the most "votes" (the question of
market forces will be discussed in section 6.3). Moreover, even if 
"market forces" would ensure that "impartial" judges were dominant, all 
judges would be enforcing a *very* partial law code (namely one that 
defended *capitalist* property rights). Impartiality when enforcing 
partial laws hardly makes judgements less unfair.

Thus, due to these three pressures -- the interests of arbitrators/judges, 
the influence of money and the nature of the law -- the terms of "free 
agreements" under such a law system would be tilted in favour of lenders 
over debtors, landlords over tenants, employers over employees, and in 
general, the rich over the poor, just as we have today. This is what one 
would expect in a system based on "unrestricted" property rights and a 
(capitalist) free market. A similar tendency towards the standardisation 
of output in an industry in response to influences of wealth can be seen 
from the current media system (see section D.3 -- How does wealth 
influence the mass media?)

Some "anarcho"-capitalists, however, claim that just as cheaper cars were
developed to meet demand, so cheaper defence associations and "people's
arbitrators" would develop on the market for the working class. In this
way impartiality will be ensured. This argument overlooks a few key points:

Firstly, the general "libertarian" law code would be applicable to *all*
associations, so they would have to operate within a system determined
by the power of money and of capital. The law code would reflect, 
therefore, property *not* labour and so "socialistic" law codes would
be classed as "outlaw" ones. The options then facing working people
is to select a firm which best enforced the *capitalist* law in their
favour. And as noted above, the impartial enforcement of a biased law
code will hardly ensure freedom or justice for all.

Secondly, in a race between a Jaguar and a Volkswagen Beetle, who is more
likely to win? The rich would have "the best justice money can buy," as
they do now. Members of the capitalist class would be able to select the
firms with the best lawyers, best private cops and most resources. Those
without the financial clout to purchase quality "justice" would simply be
out of luck - such is the "magic" of the marketplace.

Thirdly, because of the tendency toward concentration, centralisation,
and oligopoly under capitalism (due to increasing capital costs for new
firms entering the market, as discussed in section C.4), a few companies
would soon dominate the market -- with obvious implications for "justice." 
Different firms will have different resources. In other words, in a
conflict between a small firm and a larger one, the smaller one is at a
disadvantage in terms of resources. They may not be in a position to fight 
the larger company if it rejects arbitration and so may give in simply
because, as the "anarcho"-capitalists so rightly point out, conflict and
violence will push up a company's costs and so they would have to be avoided 
by smaller companies. It is ironic that the "anarcho"-capitalist implicitly 
assumes that every "defence company" is approximately of the same size, with 
the same resources behind it. In real life, this would clearly *not* the case.

Fourthly, it is *very* likely that many companies would make subscription to 
a specific "defence" firm or court a requirement of employment. Just as today 
many (most?) workers have to sign no-union contracts (and face being fired 
if they change their minds), it does not take much imagination to see that 
the same could apply to "defence" firms and courts. This was/is the case 
in company towns (indeed, you can consider unions as a form of "defence"
firm and these companies refused to recognise them). As the labour market
is almost always a buyer's market, it is not enough to argue that workers
can find a new job without this condition. They may not and so have to put 
up with this situation. And if (as seems likely) the laws and rules of the 
property-owner will take precedence in any conflict, then workers and tenants 
will be at a disadvantage no matter how "impartial" the judges.

Ironically, some "anarcho"-capitalists point to current day company/union
negotiations as an example of how different defence firms would work
out their differences peacefully. Sadly for this argument, union rights
under "actually existing capitalism" were created and enforced by the
state in direct opposition to capitalist "freedom of contract." Before
the law was changed, unions were often crushed by force -- the companies
were better armed, had more resources and had the law on their side.
Today, with the "downsizing" of companies we can see what happens to
"peaceful negotiation" and "co-operation" between unions and companies
when it is no longer required (i.e. when the resources of both sides
are unequal). The market power of companies far exceeds those of the 
unions and the law, by definition, favours the companies. As an example 
of how competing "protection agencies" will work in an "anarcho"-capitalist 
society, it is far more insightful than originally intended!

Now let us consider the "basic law code" itself. How the laws in the
"general libertarian law code" would actually be selected is anyone's
guess, although many "anarcho"-capitalists support the myth of "natural
law," and this would suggest an unchangeable law code selected by those
considered as "the voice of nature" (see section 11. for a discussion of
its authoritarian implications). David Friedman argues that as well as a 
market in defence companies, there will also be a market in laws and rights.
However, there will be extensive market pressure to unify these differing
law codes into one standard one (imagine what would happen if ever CD
manufacturer created a unique CD player, or every computer manufacturer
different sized floppy-disk drivers -- little wonder, then, that over 
time companies standardise their products). Friedman himself acknowledges
that this process is likely (and uses the example of standard paper sizes
to indicate such a process).

In any event, the laws would not be decided on the basis of "one person, one
vote"; hence, as market forces worked their magic, the "general" law code 
would reflect vested interests and so be very hard to change. As rights and 
laws would be a commodity like everything else in capitalism, they would soon 
reflect the interests of the rich -- particularly if those interpreting the 
law are wealthy professionals and companies with vested interests of their 
own. Little wonder that the individualist anarchists proposed "trial by jury" 
as the only basis for real justice in a free society. For, unlike professional
"arbitrators," juries are ad hoc, made up of ordinary people and do not
reflect power, authority, or the influence of wealth. And by being able 
to judge the law as well as a conflict, they can ensure a populist revision
of laws as society progresses.

Thus a system of "defence" on the market will continue to reflect the 
influence and power of property owners and wealth and not be subject to 
popular control beyond choosing between companies to enforce the capitalist 
laws.

6.2 What are the social consequences of such a system?

The "anarcho" capitalist imagines that there will be police agencies,
"defence associations," courts, and appeals courts all organised on a
free-market basis and available for hire. As David Weick points out,
however, the major problem with such a system would not be the corruption
of "private" courts and police forces (although, as suggested above, this
could indeed be a problem): 

"There is something more serious than the 'Mafia danger', and this other 
problem concerns the role of such 'defence' institutions in a given social 
and economic context.

"[The] context. . . is one of a free-market economy with no restraints
upon accumulation of property. Now, we had an American experience,
roughly from the end of the Civil War to the 1930's, in what were in
effect private courts, private police, indeed private governments. We 
had the experience of the (private) Pinkerton police which, by its spies, 
by its *agents provocateurs,* and by methods that included violence and
kidnapping, was one of the most powerful tools of large corporations 
and an instrument of oppression of working people. We had the experience 
as well of the police forces established to the same end, within
corporations, by numerous companies. . . . (The automobile companies 
drew upon additional covert instruments of a private nature, usually 
termed vigilante, such as the Black Legion). These were, in effect,
private armies, and were sometimes described as such. The territories 
owned by coal companies, which frequently included entire towns and their
environs, the stores the miners were obliged by economic coercion to
patronise, the houses they lived in, were commonly policed by the private
police of the United States Steel Corporation or whatever company owned
the properties. The chief practical function of these police was, of
course, to prevent labour organisation and preserve a certain balance of
'bargaining.'

"These complexes were a law unto themselves, powerful enough to ignore,
when they did not purchase, the governments of various jurisdictions of
the American federal system. This industrial system was, at the time,
often characterised as feudalism. . . ." ["Anarchist Justice", Op. Cit., 
pp. 223-224]

For a description of the weaponry and activities of these private armies,
the economic historian Maurice Dobbs presents an excellent summary in
_Studies in Capitalist Development_ [pp. 353-357]. According to a report on 
"Private Police Systems" cited by Dobbs, in a town dominated by Republican 
Steel, the "civil liberties and the rights of labour were suppressed by 
company police. Union organisers were driven out of town." Company towns 
had their own (company-run) money, stores, houses and jails and many 
corporations had machine-guns and tear-gas along with the usual shot-guns, 
rifles and revolvers. The "usurpation of police powers by privately paid 
'guards and 'deputies', often hired from detective agencies, many with 
criminal records" was "a general practice in many parts of the country."

The local (state-run) law enforcement agencies turned a blind-eye to what
was going on (after all, the workers *had* broken their contracts and
so were "criminal aggressors" against the companies) even when union
members and strikers were beaten and killed. The workers own defence 
organisations were the only ones willing to help them, and if the workers
seemed to be winning then troops were called in to "restore the peace"
(as happened in the Ludlow strike, when strikers originally cheered
the troops as they thought they would defend their civil rights; needless
to say, they were wrong).

Here we have a society which is claimed by many "anarcho"-capitalists
as one of the closest examples to their "ideal," with limited state
intervention, free reign for property owners, etc. What happened? The
rich reduced the working class to a serf-like existence, capitalist
production undermined independent producers (much to the annoyance of
individualist anarchists at the time), and the result was the emergence
of the corporate America that "anarcho"-capitalists say they oppose.

Are we to expect that "anarcho"-capitalism will be different? That, unlike
before, "defence" firms will intervene on behalf of strikers? Given that
the "general libertarian law code" will be enforcing capitalist property
rights, workers will be in exactly the same situation as they were then.
Support of strikers violating property rights would be a violation of
the "general libertarian law code" and be costly for profit making firms
to do (if not dangerous as they could be "outlawed" by the rest). Thus
"anarcho"-capitalism will extend extensive rights and powers to bosses,
but few if any rights to rebellious workers. And this difference in power
is enshrined within the fundamental institutions of the system. 

In evaluating "anarcho"-capitalism's claim to be a form of anarchism,
Peter Marshall notes that "private protection agencies would merely serve
the interests of their paymasters." [_Demanding the Impossible_, p. 653]
With the increase of private "defence associations" under "really existing
capitalism" today (associations that many "anarcho"-capitalists point to
as examples of their ideas), we see a vindication of Marshall's claim.
There have been many documented experiences of protesters being badly
beaten by private security guards. As far as market theory goes, the
companies are only supplying what the buyer is demanding. The rights of
others are *not a factor* (yet more "externalities," obviously). Even
if the victims successfully sue the company, the message is clear -- 
social activism can seriously damage your health. With a reversion 
to "a general libertarian law code" enforced by private companies, 
this form of "defence" of "absolute" property rights can only increase, 
perhaps to the levels previously attained in the heyday of US capitalism, 
as described above by Weick.

6.3 But surely market forces will stop abuses by the rich?

Unlikely. The rise of corporations within America indicates exactly how a
"general libertarian law code" would reflect the interests of the rich and
powerful. The laws recognising corporations as "legal persons" were *not*
primarily a product of "the state" but of private lawyers hired by the
rich -- a result with which Rothbard would have no problem. As Howard 
Zinn notes:

"the American Bar Association, organised by lawyers accustomed to
serving the wealthy, began a national campaign of education to reverse 
the [Supreme] Court decision [that companies could not be considered as
a person]. . . . By 1886. . . the Supreme Court had accepted the argument
that corporations were 'persons' and their money was property protected by
the process clause of the Fourteenth Amendment. . . . The justices of the
Supreme Court were not simply interpreters of the Constitution. They were
men of certain backgrounds, of certain [class] interests." [_A People's
History of the United States_, p. 255]

Of course it will be argued that the Supreme Court is a monopoly and so
our analysis is flawed. In "anarcho"-capitalism there is no monopoly.
But the corporate laws came about because there was a demand for them.
That demand would still have existed in "anarcho"-capitalism. Now, while
there may be no Supreme Court, Rothbard does maintain that "the basic
Law Code . . .would have to be agreed upon by all the judicial agencies"
but he maintains that this "would imply no unified legal system"! Even
though "[a]ny agencies that transgressed the basic libertarian law
code would be open outlaws" and soon crushed this is *not*, apparently, 
a monopoly. [_The Ethics of Liberty_, p. 234] So, you either agree to 
the law code or you go out of business. And that is *not* a monopoly! 
Therefore, we think, our comments on the Supreme Court decision are 
valid.

If all the available defence firms enforce the same laws, then it can
hardly be called "competitive"! And if this is the case (and it is)
"when private wealth is uncontrolled, then a police-judicial complex
enjoying a clientele of wealthy corporations whose motto is self-interest
is hardly an innocuous social force controllable by the possibility of 
forming or affiliating with competing 'companies.'" [Weick, Op. Cit., 
p. 225] 

This is particularly true if these companies are themselves Big Business 
and so have a large impact on the laws they are enforcing. If the law 
code recognises and protects capitalist power, property and wealth as 
fundamental *any* attempt to change this is "initiation of force" and 
so the power of the rich is written into the system from the start!

(And, we must add, if there is a general libertarian law code to which 
all must subscribe, where does that put customer demand? If people demand 
a non-libertarian law code, will defence firms refuse to supply it? If so, 
will not new firms, looking for profit, spring up that will supply what 
is being demanded? And will that not put them in direct conflict with the
existing, pro-general law code ones? And will a market in law codes not
just reflect economic power and wealth? David Friedman, who is for a market 
in law codes, argues that "[i]f almost everyone believes strongly that 
heroin addiction is so horrible that it should not be permitted anywhere 
under any circumstances anarcho-capitalist institutions will produce laws 
against heroin. Laws are being produced on the market, and that is what the 
market wants." And he adds that "market demands are in dollars, not votes. 
The legality of heroin will be determined, not by how many are for or against 
but how high a cost each side is willing to bear in order to get its way." 
[_The Machinery of Freedom_, p. 127] And, as the market is less than equal 
in terms of income and wealth, such a position will mean that the capitalist 
class will have a higher effective demand than the working class, and more 
resources to pay for any conflicts that arise. Thus any law codes that 
develop will tend to reflect the interests of the wealthy.)

Which brings us nicely on to the next problem regarding market forces.

As well as the obvious influence of economic interests and differences
in wealth, another problem faces the "free market" justice of 
"anarcho"-capitalism. This is the "general libertarian law code" itself. 
Even if we assume that the system actually works like it should in theory, 
the simple fact remains that these "defence companies" are enforcing laws 
which explicitly defend capitalist property (and so social relations). 
Capitalists own the means of production upon which they hire wage-labourers 
to work and this is an inequality established *prior* to any specific 
transaction in the labour market. This inequality reflects itself in 
terms of differences in power within (and outside) the company and 
in the "law code" of "anarcho"-capitalism which protects that power 
against the dispossessed.

In other words, the law code within which the defence companies work
assumes that capitalist property is legitimate and that force can 
legitimately be used to defend it. This means that, in effect, 
"anarcho"-capitalism is based on a monopoly of law, a monopoly which
explicitly exists to defend the power and capital of the wealthy. 
The major difference is that the agencies used to protect that
wealth will be in a weaker position to act independently of their
pay-masters. Unlike the state, the "defence" firm is not remotely
accountable to the general population and cannot be used to equalise
even slightly the power relationships between worker and capitalist.

And, needless to say, it is very likely that the private police forces 
*will* give preferential treatment to their wealthier customers (what 
business does not?) and that the law code will reflect the interests of the 
wealthier sectors of society (particularly if "prosperous" judges administer 
that code) in reality, even if not in theory. Since, in capitalist practice, 
"the customer is always right," the best-paying customers will get their 
way in "anarcho"-capitalist society.

For example, in chapter 29 of _The Machinery of Freedom_, David Friedman 
presents an example of how a clash of different law codes could be resolved 
by a bargaining process (the law in question is the death penalty). This 
process would involve one defence firm giving a sum of money to the other
for them accepting the appropriate (anti/pro capital punishment) court.
Friedman claims that "[a]s in any good trade, everyone gains" but this
is obviously not true. Assuming the anti-capital punishment defence firm
pays the pro one to accept an anti-capital punishment court, then, yes,
both defence firms have made money and so are happy, so are the anti-capital
punishment consumers but the pro-death penalty customers have only (perhaps)
received a cut in their bills. Their desire to see criminals hanged (for
whatever reason) has been ignored (if they were not in favour of the
death penalty, they would not have subscribed to that company). Friedman
claims that the deal, by allowing the anti-death penalty firm to cut its
costs, will ensure that it "keep its customers and even get more" but
this is just an assumption. It is just as likely to loose customers to a 
defence firm that refuses to compromise (and has the resources to back it 
up). Friedman's assumption that lower costs will automatically win over
people's passions is unfounded. As is the assumption that both firms have 
equal resources and bargaining power. If the pro-capital punishment firm
demands more than the anti can provide and has larger weaponry and troops,
then the anti defence firm may have to agree to let the pro one have its
way. 

So, all in all, it is *not* clear that "everyone gains" -- there may be a 
sizeable percentage of those involved who do not "gain" as their desire for 
capital punishment is traded away by those who claimed they would enforce 
it.

In other words, a system of competing law codes and privatised rights 
does not ensure that *all* consumers interests are meet. Given unequal
resources within society, it is also clear that the "effective demand"
of the parties involved to see their law codes enforced is drastically
different. The wealthy head of a transnational corporation will have far 
more resources available to him to pay for *his* laws to be enforced than 
one of his employees on the assembly line. Moreover, as we argue in sections
3.1 and 10.2, the labour market is usually skewed in favour of capitalists. 
This means that workers have to compromise to get work and such compromises
may involve agreeing to join a specific "defence" firm or not join one
at all (just as workers are often forced to sign non-union contracts 
today in order to get work). In other words, a privatised law system 
is very likely to skew the enforcement of laws in line with the skewing 
of income and wealth in society. At the very least, unlike every other 
market, the customer is *not* guaranteed to get exactly what they demand 
simply because the product they "consume" is dependent on other within
the same market to ensure its supply. The unique workings of the 
law/defence market are such as to deny customer choice (we will 
discuss other aspects of this unique market shortly).

Weick sums up by saying "any judicial system is going to exist in the
context of economic institutions. If there are gross inequalities of
power in the economic and social domains, one has to imagine society as
strangely compartmentalised in order to believe that those inequalities
will fail to reflect themselves in the judicial and legal domain, and that
the economically powerful will be unable to manipulate the legal and
judicial system to their advantage. To abstract from such influences of
context, and then consider the merits of an abstract judicial system. . .
is to follow a method that is not likely to take us far. This, by the
way, is a criticism that applies. . .to any theory that relies on a rule
of law to override the tendencies inherent in a given social and economic
system" [Weick, Op. Cit., p. 225] (For a discussion of this problem 
as it would surface in attempts to protect the environment under
"anarcho"-capitalism, see sections E.2 and E.3.)

There is another reason why "market forces" will not stop abuse by the rich,
or indeed stop the system from turning from private to public statism. This
is due to the nature of the "defence" market (for a similar analysis of
the "defence" market see Tyler Cowen's "Law as a Public Good: The Economics
of Anarchy" in _Economics and Philosophy_, no. 8 (1992), pp. 249-267 and
"Rejoinder to David Friedman on the Economics of Anarchy" in _Economics
and Philosophy_, no. 10 (1994), pp. 329-332). In "anarcho"-capitalist theory
it is assumed that the competing "defence companies" have a vested interest
in peacefully settling differences between themselves by means of arbitration.
In order to be competitive on the market, companies will have to co-operate
via contractual relations otherwise the higher price associated with conflict
will make the company uncompetitive and it will go under. Those companies
that ignore decisions made in arbitration would  be outlawed by others, 
ostracised and their rulings ignored. By this process, it is argued, a 
system of competing "defence" companies will be stable and not turn into 
a civil war between agencies with each enforcing the interests of their 
clients against others by force.

However, there is a catch. Unlike every other market, the businesses in competition in the "defence" industry *must* co-operate with its fellows 
in order to provide its services for its customers. They need to be able 
to agree to courts and judges, agree to abide by decisions and law codes 
and so forth. In economics there are other, more accurate, terms to 
describe co-operative activity between companies: collusion and cartels. 
Collusion and cartels is where companies in a specific market agree to 
work together to restrict competition and reap the benefits of monopoly
power by working to achieve the same ends in partnership with each other.
In other words this means that collusion is built into the system, with 
the necessary contractual relations between agencies in the "protection" 
market requiring that firms co-operate and, by so doing, to behave 
(effectively) as one large firm (and so, effectively, resemble the 
state even more than they already do). Quoting Adam Smith seems appropriate
here: "People of the same trade seldom meet together, even for merriment 
and diversion, but the conversation ends in a conspiracy against the
public, or in some contrivance to raise prices." [_The Wealth of 
Nations_, p. 117]

For example, when buying food it does not matter whether the supermarkets 
I visit have good relations with each other. The goods I buy are independent 
of the relationships that exist between competing companies. However, in the 
case of private states, this is *not* the case. If a specific "defence" 
company has bad relationships with other companies in the market then 
it is against my self-interest to subscribe to it. Why join a private state 
if its judgements are ignored by the others and it has to resort to violence 
to be heard? This, as well as being potentially dangerous, will also push up 
the prices I have to pay. Arbitration is one of the most important services 
a defence firm can offer its customers and its market share is based upon 
being able to settle interagency disputes without risk of war or uncertainty 
that the final outcome will not be accepted by all parties.

Therefore, the market set-up within the "anarcho"-capitalist "defence" market
is such that private states *have to co-operate* with the others (or go out 
of business fast) and this means collusion can take place. In other words, 
a system of private states will have to agree to work together in order to
provide the service of "law enforcement" to their customers and the result 
of such co-operation is to create a cartel. However, unlike cartels in other
industries, the "defence" cartel will be a stable body simply because its
members *have* to work with their competitors in order to survive.

Let us look at what would happen after such a cartel is formed in a specific
area and a new "defence company" desired to enter the market. This new
company will have to work with the members of the cartel in order to provide 
its services to its customers (note that "anarcho"-capitalists already 
assume that they "will have to" subscribe to the same law code). If the 
new defence firm tries to under-cut the cartel's monopoly prices, the other
companies would refuse to work with it. Having to face constant conflict or
the possibility of conflict, seeing its decisions being ignored by other 
agencies and being uncertain what the results of a dispute would be, few 
would patronise the new "defence company." The new company's prices would 
go up and so face either folding or joining the cartel. Unlike every other 
market, if a "defence company" does not have friendly, co-operative relations 
with other firms in the same industry then it will go out of business. 

This means that the firms that are co-operating have but to agree not to
deal with new firms which are attempting to undermine the cartel in order
for them to fail. A "cartel busting" firm goes out of business in the same 
way an outlaw one does - the higher costs associated with having to solve 
all its conflicts by force, not arbitration, increases its production 
costs much higher than the competitors and the firm faces insurmountable
difficulties selling its products at a profit (ignoring any drop of
demand due to fears of conflict by actual and potential customers). 
Even if we assume that many people will happily join the new firm in spite
of the dangers to protect themselves against the cartel and its taxation
(i.e. monopoly profits), enough will remain members of the cartel (perhaps
they will be fired if they change, perhaps they dislike change and think
the extra money is worth peace, perhaps they fear that by joining the
new company their peace will be disrupted or the outcomes of their problems
with others too unsure to be worth it, perhaps they are shareholders and 
want to maintain their income) so that co-operation will still be needed 
and conflict unprofitable and dangerous (and as the cartel will have more 
resources than the new firm, it could usually hold out longer than the new 
firm could). In effect, breaking the cartel may take the form of an 
armed revolution -- as it would with any state.

The forces that break up cartels and monopolies in other industries (such as 
free entry -- although, of course the "defence" market will be subject to 
oligopolistic tendencies as any other and this will create barriers to entry,
see section C.4) do not work here and so new firms have to co-operate or loose 
market share and/or profits. This means that "defence companies" will reap
monopoly profits and, more importantly, have a monopoly of force over a given 
area.

Hence a monopoly of private states will develop in addition to the existing 
monopoly of law and this is a de facto monopoly of force over a given
area (i.e. some kind of public state run by share holders). New companies
attempting to enter the "defence" industry will have to work with the
existing cartel in order to provide the services it offers to its customers. 
The cartel is in a dominant position and new entries into the market either 
become part of it or fail. This is exactly the position with the state,
with "private agencies" free to operate as long as they work to the state's
guidelines. As with the monopolist "general libertarian law code", if
you do not toe the line, you go out of business fast.

It is also likely that a multitude of cartels would develop, with a given
cartel operating in a given locality. This is because law enforcement
would be localised in given areas as most crime occurs where the criminal
lives. Few criminals would live in New York and commit crimes in Portland.
However, as defence companies have to co-operate to provide their services,
so would the cartels. Few people live all their lives in one area and so
firms from different cartels would come into contact, so forming a
cartel of cartels.

A cartel of cartels may (perhaps) be less powerful than a local cartel, but 
it would still be required and for exactly the same reasons a local one
is. Therefore "anarcho"-capitalism would, like "actually existing capitalism,"
be marked by a series of public states covering given areas, co-ordinated by 
larger states at higher levels. Such a set up would parallel the United States
in many ways except it would be run directly by wealthy shareholders without 
the sham of "democratic" elections. Moreover, as in the USA and other states
there will still be a monopoly of rules and laws (the "general libertarian
law code").

Some "anarcho"-capitalists claim that this will not occur, but that the
co-operation needed to provide the service of law enforcement will somehow
*not* turn into collusion between companies. However, they are quick to
argue that renegade "agencies" (for example, the so-called "Mafia
problem" or those who reject judgements) will go out of business because
of the higher costs associated with conflict and not arbitration. However,
these higher costs are ensured because the firms in question do not
co-operate with others. If other agencies boycott a firm but co-operate with 
all the others, then the boycotted firm will be at the same disadvantage
-- regardless of whether it is a cartel buster or a renegade.

The "anarcho"-capitalist is trying to have it both ways. If the punishment 
of non-conforming firms cannot occur, then "anarcho"-capitalism will turn
into a war of all against all or, at the very least, the service of social 
peace and law enforcement cannot be provided. If firms cannot deter others
from disrupting the social peace (one service the firm provides) then
"anarcho"-capitalism is not stable and will not remain orderly as agencies 
develop which favour the interests of their own customers and enforce their 
own law codes at the expense of others. If collusion cannot occur (or is
too costly) then neither can the punishment of non-conforming firms and
"anarcho"-capitalism will prove to be unstable.

So, to sum up, the "defence" market of private states has powerful forces
within it to turn it into a monopoly of force over a given area. From a 
privately chosen monopoly of force over a specific (privately owned) area, 
the market of private states will turn into a monopoly of force over a 
general area. This is due to the need for peaceful relations between 
companies, relations which are required for a firm to secure market 
share. The unique market forces that exist within this market ensure
collusion and monopoly.

In other words, the system of private states will become a cartel and so a 
public state - unaccountable to all but its shareholders, a state of the
wealthy, by the wealthy, for the wealthy. In other words, fascism.

6.4 Why are these "defence associations" states?

It is clear that "anarcho"-capitalist defence associations meet the
criteria of statehood outlined in section B.2 ("Why are anarchists 
against the state"). They defend property and preserve authority 
relationships, they practice coercion, and are hierarchical 
institutions which govern those under them on behalf of a 
"ruling elite," i.e. those who employ both the governing forces 
and those they govern. Thus, from an anarchist perspective, these
"defence associations" as most definitely states.

What is interesting, however, is that by their own definitions a very
good case can be made that these "defence associations" as states
in the "anarcho"-capitalist sense too. Capitalist apologists usually
define a "government" (or state) as those who have a monopoly of force 
and coercion within a given area. Relative to the rest of the society,
these defence associations would have a monopoly of force and coercion 
of a given piece of property; thus, by the "anarcho"-capitalists' 
*own definition* of statehood, these associations would qualify! 

If we look at Rothbard's definition of statehood, which requires (a) the 
power to tax and/or (b) a "coerced monopoly of the provision of defence 
over a given area", "anarcho"-capitalism runs into trouble. 

In the first place, the costs of hiring defence associations will be 
deducted from the wealth created by those who use, but do not own, the 
property of capitalists and landlords. Let not forget that a capitalist 
will only employ a worker or rent out land and housing if they make a 
profit from so doing. Without the labour of the worker, there would be 
nothing to sell and no wages to pay for rent. Thus a company's or 
landlord's "defence" firm will be paid from the revenue gathered from 
the capitalists power to extract a tribute from those who use, but do 
not own, a property.  In other words, workers would pay for the agencies 
that enforce their employers' authority over them via the wage system 
and rent -- taxation in a more insidious form.

In the second, under capitalism most people spend a large part of their 
day on other people's property -- that is, they work for capitalists 
and/or live in rented accommodation. Hence if property owners select a 
"defence association" to protect their factories, farms, rental housing, 
etc., their employees and tenants will view it as a "coerced monopoly of 
the provision of defence over a given area." For certainly the employees 
and tenants will not be able to hire their own defence companies to
expropriate the capitalists and landlords. So, from the standpoint of 
the employees and tenants, the owners do have a monopoly of "defence"
over the areas in question. Of course, the "anarcho"-capitalist will
argue that the tenants and workers "consent" to *all* the rules and
conditions of a contract when they sign it and so the property owner's
monopoly is not "coerced." However, the "consent" argument is so weak
in conditions of inequality as to be useless (see sections 2.4 and 
3.1, for example) and, moreover, it can and has been used to justify 
the state. In other words, "consent" in and of itself does not ensure 
that a given regime is not statist (see section 2.3 for more on this). 
So an argument along these lines is deeply flawed and can be used to 
justify regimes which are little better than "industrial feudalism"
(such as, as indicated in section B.4, company towns, for example -- 
an institution which right-libertarianism has no problem with). Even 
the "general libertarian law code," could be considered a "monopoly 
of government over a particular area," particularly if ordinary 
people have no real means of affecting the law code, either because 
it is market-driven and so is money-determined, or because it 
will be "natural" law and so unchangeable by mere mortals.

In other words, *if* the state "arrogates to itself a monopoly of force,
of ultimate decision-making power, over a given area territorial area" 
[Rothbard, _The Ethics of Liberty_, p. 170] then its pretty clear that the 
property owner shares this power. The owner is, after all, the "ultimate
decision-making power" in their workplace or on their land. If the boss takes
a dislike to you (for example, you do not follow their orders) then you 
get fired. If you cannot get a job or rent the land without agreeing
to certain conditions (such as not joining a union or subscribing
to the "defence firm" approved by your employer) then you either
sign the contract or look for something else. Of course Rothbard fails
to note that bosses have this monopoly of power and is instead referring
to "prohibiting the voluntary purchase and sale of defence and judicial 
services." [Op. Cit., p. 171] But just as surely as the law of contract
allows the banning of unions from a property, it can just as surely
ban the sale and purchase of defence and judicial services (it could
be argued that market forces will stop this happening, but this is
unlikely as bosses usually have the advantage on the labour market 
and workers have to compromise to get a job -- see section 10.2 on
why this is the case). After all, in the company towns, only company 
money was legal tender and company police the only law enforcers. 

Therefore, it is obvious that the "anarcho"-capitalist system meets
the Weberian criteria of a monopoly to enforce certain rules in a
given area of land. The "general libertarian law code" is a monopoly
and property owners determine the rules that apply to their property.
Moreover, if the rules that property owners enforce are subject to 
rules contained in the monopolistic "general libertarian law code" (for
example, that they cannot ban the sale and purchase of certain products
-- such as defence -- on their own territory) then "anarcho"-capitalism 
*definitely* meets the Weberian definition of the state (as described by 
Ayn Rand as an institution "that holds the exclusive power to *enforce* 
certain rules of conduct in a given geographical area" [_Capitalism: The 
Unknown Ideal_, p. 239]) as its "law code" overrides the desires of 
property owners to do what they like on their own property. 

Therefore, no matter how you look at it, "anarcho"-capitalism and its 
"defence" market promotes a "monopoly of ultimate decision making power" 
over a "given territorial area". It is obvious that for anarchists, the 
"anarcho"-capitalist system is a state system. As, as we note, a reasonable 
case can be made for it also being a state in "anarcho"-capitalist theory 
as well.

So, in effect, "anarcho"-capitalism has a *different* sort of state, one 
in which bosses hire and fire the policeman. As Peter Sabatini notes [in
_Libertarianism: Bogus Anarchy_], "[w]ithin Libertarianism, Rothbard
represents a minority perspective that actually argues for the total
elimination of the state. However Rothbard's claim as an anarchist is
quickly voided when it is shown that he only wants an end to the public
state. In its place he allows countless private states, with each person
supplying their own police force, army, and law, or else purchasing these
services from capitalist vendors. . . Rothbard sees nothing at all wrong 
with the amassing of wealth, therefore those with more capital will 
inevitably have greater coercive force at their disposal, just as
they do now."

Far from wanting to abolish the state, then, "anarcho"-capitalists only
desire to privatise it - to make it solely accountable to capitalist wealth. 
Their "companies" perform the same services as the state, for the same
people, in the same manner. However, there is one slight difference.
Property owners would be able to select between competing companies
for their "services." Because such "companies" are employed by the boss,
they would be used to reinforce the totalitarian nature of capitalist firms 
by ensuring that the police and the law they enforce are not even slightly 
accountable to ordinary people.

Looking beyond the "defence association" to the defence market itself (as
we argued in the last section), this will become a cartel and so become 
some kind of public state. The very nature of the private state, its need
to co-operate with others in the same industry, push it towards a
monopoly network of firms and so a monopoly of force over a given
area. Given the assumptions used to defend "anarcho"-capitalism, its
system of private statism will develop into public statism - a state
run by managers accountable only to the share-holding elite.

To quote Peter Marshall again, the "anarcho"-capitalists "claim that 
all would benefit from a free exchange on the market, it is by no means
certain; any unfettered market system would most likely sponsor a
reversion to an unequal society with defence associations perpetuating
exploitation and privilege." [_Demanding the Impossible_, p. 565]
History, and current practice, prove this point.

In short, "anarcho"-capitalists are not anarchists at all, they are just
capitalists who desire to see private states develop -- states which are
strictly accountable to their paymasters without even the sham of
democracy we have today. Hence a far better name for "anarcho"-capitalism
would be "private-state" capitalism. At least that way we get a fairer
idea of what they are trying to sell us. As Bob Black writes in _The
Libertarian as Conservative_, "To my mind a right-wing anarchist is just a 
minarchist who'd abolish the state to his own satisfaction by calling it 
something else. . . . They don't denounce what the state does, they just 
object to who's doing it."

6.5 What other effects would "free market" justice have?

Such a system would be dangerous simply because of the power it places
in the hands of companies. As Michael Taylor notes, "whether the [protection]
market is competitive or not, it must be remembered that the product
is a peculiar one: when we buy cars or shoes or telephone services we
do not give the firm power based on force, but armed protection agencies,
like the state, make customers (their own and others') vulnerable, and
having given them power we cannot be sure that they will use it only for
our protection." [_Community, Anarchy and Liberty_, p. 65]

As we argued above, there are many reasons to believe that a "protection"
market will place most of society (bar the wealthy elite) in a "vulnerable"
position. One such reason is the assumptions of the "anarcho"-capitalists
themselves. As they note, capitalism is marked by an extreme division of
labour. Instead of everyone having all the skills they need, these skills
are distributed throughout society and all (so it is claimed) benefit.

This applies equally to the "defence" market. People subscribe to a
"defence firm" because they either cannot or do not want the labour of 
having to protect their own property and person. The skills of defence, 
therefore, are concentrated in these companies and so these firms will 
have an advantage in terms of experience and mental state (they are trained 
to fight) as well as, as seems likely, weaponry. This means that most normal 
people will be somewhat at a disadvantage if a cartel of defence firms
decides to act coercively. The division of labour society will discourage
the spread of skills required for sustained warfare throughout society
and so, perhaps, ensure that customers remain "vulnerable." The price
of liberty may be eternal vigilance, but are most people willing to
include eternal preparation of war as well? For modern society, the 
answer seems to be no, they prefer to let others do that (namely the
state and its armed forces). And, we should note, an armed society may be
a polite one, but its politeness comes from fear, *not* mutual respect
and so totally phoney and soul destroying.

If we look at inequality within society, this may produce a ghettoisation
effect within "anarcho"-capitalism. As David Friedman notes, conflict
between defence firms is bad for business. Conflict costs money both
in terms of weaponry used and increased ("danger money") wages. For this
reason he thinks that peaceful co-operation will exist between firms.
However, if we look at poor areas with high crime rates then its clear
that such an area will be a dangerous place. In other words, it is very
likely to be high in conflict. But conflict increases costs, and so
prices. Does this mean that those areas which need police most will
also have the highest prices for law enforcement? That is the case
with insurance now, so perhaps we will see whole areas turning into
Hobbesian anarchy simply because the high costs associated with 
dangerous areas will make the effective demand for their services
approach zero. 

In a system based on "private statism," police and justice would be
determined by "free market" forces. As indicated in section B.4.1, 
right-libertarians maintain that one would have few rights on other 
peoples' property, and so the owner's will would be the law (possibly 
restricted somewhat by a "general libertarian law code", perhaps not
-- see last section). In this situation, those who could not afford 
police protection would become victims of roving bandits and rampant 
crime, resulting in a society where the wealthy are securely protected 
in their bastions by their own armed forces, with a bunch of poor 
crowded around them for protection. This would be very similar to 
feudal Europe.

The competing police forces would also be attempting to execute the laws
of their sponsors in areas that may not be theirs to begin with, which
would lead to conflicts unless everyone agreed to follow a "general
libertarian law code" (as Rothbard, for one, wants). If there were
competing law codes, the problem of whose "laws" to select and enforce
would arise, with each of the wealthy security sponsors desiring that
their law control all of the land. And, as noted earlier, if there
were *one* "libertarian law code," this would be a "monopoly of
government" over a given area, and therefore statist.

In addition, it should be noted that the right-libertarian claim that
under their system anarchistic associations would be allowed as long as
they are formed voluntarily just reflects their usual vacuous concept of
freedom. This is because such associations would exist within and be
subject to the "general libertarian law code" of "anarcho"-capitalist
society. These laws would reflect and protect the interests and power of
those with capitalist property, meaning that unless these owners agree,
trying to live an anarchist life would be nearly impossible (its all
fine and well to say that those with property can do what they like, if
you do not have property then experimentation could prove difficult --
not to mention, of course, few areas are completely self-sufficient meaning
that anarchistic associations will be subject to market forces, market 
forces which stress and reward the opposite of the values these communes 
were set up to create). Thus we must *buy* the right to be free!

If, as anarchists desire, most people refuse to recognise or defend the 
rights of private property and freely associate accordingly to organise 
their own lives and ignore their bosses, this would still be classed as 
"initiation of force" under "anarcho"-capitalism, and thus repressed. 
In other words, like any authoritarian system, the "rules" within 
"anarcho"-capitalism do not evolve with society and its changing 
concepts (this can be seen from the popularity of "natural law" with 
right-libertarians, the authoritarian nature of which is discussed 
in section 11). 

Therefore, in "anarcho"-capitalism you are free to follow the (capitalist)
laws and to act within the limits of these laws. It is only within this
context that you can experiment (if you can afford to). If you act outside
these laws, then you will be subject to coercion. The amount of coercion
required to prevent such actions depends on how willing people are to
respect the laws. Hence it is not the case that an "anarcho"-capitalist
society is particularly conducive to social experimentation and free
evolution, as its advocates like to claim. Indeed, the opposite may be the
case, as any capitalist system will have vast differences of wealth and
power within it, thus  ensuring that the ability to experiment is limited
to those who can afford it. As Jonathan Wolff points out, the "image of
people freely moving from one utopia to another until they find their
heaven, ignores the thought that certain choices may be irreversible. . .
This thought may lead to speculation about whether a law of evolution
would apply to the plural utopias. Perhaps, in the long run, we may find
the framework regulated by the law of survival of the economically most
fit, and so we would expect to see a development not of diversity but of
homogeneity. Those communities with great market power would eventually
soak up all but the most resistant of those communities around them."
[_Robert Nozick: Property, Justice and the Minimal State_, p. 135] 

And if the initial distribution of resources is similar to that already
existing then the "economically most fit" will be capitalistic (as argued
in section J.5.12, the capitalist market actively selects against 
co-operatives even though they are more productive). Given the head
start provided by statism, it seems likely that explicitly capitalist 
utopia's would remain the dominant type (particularly as the rights
framework is such as to protect capitalist property rights). Moreover, 
we doubt that most "anarcho"-capitalists would embrace the ideology if
it was more than likely that non-capitalist utopias would overcome
the capitalist ones (after all, they *are* self-proclaimed capitalists).

So, given that "anarcho"-capitalists who follow Murray Rothbard's ideas and 
minimal-statist right-libertarians agree that *all* must follow the basic 
"general libertarian law code" which defends capitalist property rights, 
we can safely say that the economically "most fit" would be capitalist ones. 
Hardly surprising if the law code reflects capitalist ideas of right and 
wrong. In addition, as George Reitzer has argued (see _The McDonaldization 
of Society_), capitalism is driven towards standardisation and conformity 
by its own logic. This suggests that plurality of communities would soon 
be replaced by a series of "communities" which share the same features 
of hierarchy and ruling elites. ("Anarcho"-capitalists who follow David 
Friedman's ideas consider it possible, perhaps likely, that a free market 
in laws will result in one standard law code and so this also applies to 
that school as well)

So, in the end, the "anarcho" capitalists argue that in their system you
are free to follow the (capitalist) law and work in the (capitalist)
economy, and if you are lucky, take part in a "commune" as a collective
capitalist.  How *very* generous of them!  Of course, any attempt to
change said rules or economy are illegal and would be stopped by private
states. 

As well as indicating the falsity of "anarcho"-capitalist claims to
support "experimentation," this discussion has also indicated that
coercion would not be absent from "anarcho"-capitalism. This would be the
case only if everyone voluntarily respected private property rights and
abided by the law (i.e. acted in a capitalist-approved way). As long as
you follow the law, you will be fine -- which is exactly the same as under
public statism.  Moreover, if the citizens of a society do not want a
capitalist order, it may require a lot of coercion to impose it. This 
can be seen from the experiences of the Italian factory occupations 
in 1920 (see section A.5.5), in which workers refused to accept capitalist
property or authority as valid and ignored it. In response to this 
change of thought within a large part of society, the capitalists 
backed fascism in order to stop the evolutionary process within society. 

The socialist economic historian Maurice Dobbs, after reviewing the private
armies in 1920s and 1930s America made much the same point: "When business
policy takes the step of financing and arming a mass political movement
to capture the machinery of government, to outlaw opposing forms of
organisation and suppress hostile opinions we have merely a further and
more logical stage beyond [private armies]" [Op. Cit., p. 357]

(Noted Austrian Economist Ludwig von Mises whose extreme free market
liberal political and economic ideas inspired right-libertarianism in 
many ways had this to say about fascism: "It cannot be denied that Fascism
and similar movements aiming at the establishment of dictatorships are full 
of the best intentions and that their intervention has, for the moment, 
saved European civilisation. The merit that Fascism has thereby won for 
itself will live eternally in history." [_Liberalism_, p. 51])

This example illustrates the fact that capitalism *per se* is essentially
authoritarian, because it is necessarily based on coercion and hierarchy,
which explains why capitalists have resorted to the most extreme forms of
authoritarianism -- including totalitarian dictatorship -- during crises
that threatened the fundamental rules of the system itself.  There is no
reason to think that "anarcho"-capitalism would be any different.  

Since "anarcho"-capitalism, with its private states, does not actually
want to get rid of hierarchical forms of authority, the need for one
government to unify the enforcement activities of the various defence
companies becomes apparent. In the end, that is what "anarcho"-capitalism
recognises with its "general libertarian law code" (based either on market
forces or "natural law"). Thus it appears that one government/hierarchy 
over a given territory is inevitable under any form of capitalism. That 
being the case, it is obvious that a democratic form of statism, with 
its checks and balances, is preferable to a dictatorship that imposes 
"absolute" property rights and so "absolute" power.

Of course, we do have another option than either private or public
statism. This is anarchism, the end of hierarchical authority and its
replacement by the "natural" authority of communal and workplace
self-management.

7 How does the history of "anarcho"-capitalism show that
    it is not anarchist?

Of course, "anarcho"-capitalism does have historic precedents and
"anarcho"-capitalists spend considerable time trying to co-opt 
various individuals into their self-proclaimed tradition of 
"anti-statist" liberalism. That, in itself, should be enough to
show that anarchism and "anarcho"-capitalism have little in 
common as anarchism developed in opposition to liberalism and
its defence of capitalism. Unsurprisingly, these "anti-state"
liberals tended to, at best, refuse to call themselves anarchists
or, at worse, explicitly deny they were anarchists.

One "anarcho"-capitalist overview of their tradition is presented
by David M. Hart. His perspective on anarchism is typical of the
school, noting that in his essay anarchism or anarchist "are used 
in the sense of a political theory which advocates the maximum 
amount of individual liberty, a necessary condition of which is 
the elimination of governmental or other organised force." [David 
M. Hart, "Gustave de Molinari and the Anti-statist Liberal 
Tradition: Part I",  pp. 263-290, _Journal of Libertarian Studies_, 
vol. V, no. 3, p. 284] Yet anarchism has *never* been solely 
concerned with abolishing the state. Rather, anarchists have always
raised economic and social demands and goals along with their 
opposition to the state. As such, anti-statism may be a necessary 
condition to be an anarchist, but not a sufficient one to count a 
specific individual or theory as anarchist.

Specifically, anarchists have turned their analysis onto private
property noting that the hierarchical social relationships created
by inequality of wealth (for example, wage labour) restricts 
individual freedom. This means that if we do seek "the maximum
of individual liberty" then our analysis cannot be limited to
just the state or government. Consequently, to limit anarchism
as Hart does requires substantial rewriting of history, as can
be seen from his account of William Godwin.

Hart tries to co-opt of William Godwin into the ranks of "anti-state" 
liberalism, arguing that he "defended individualism and the right to 
property." [Op. Cit., p. 265] He, of course, quotes from Godwin to 
support his claim yet strangely truncates Godwin's argument to exclude 
his conclusion that "[w]hen the laws of morality shall be clearly 
understood, their excellence universally apprehended, and themselves 
seen to be coincident with each man's private advantage, the idea of 
property in this sense will remain, but no man will have the least 
desire, for purposes of ostentation or luxury, to possess more than 
his neighbours." [_An Enquiry into Political Justice_, p. 199] In 
other words, personal property (possession) would still exist but 
not private property in the sense of capital or inequality of wealth.

This analysis is confirmed in book 8 of Godwin's classic work 
entitled "On Property." Needless to say, Hart fails to mention 
this analysis, unsurprising as it was later reprinted as a socialist 
pamphlet. Godwin thought that the "subject of property is the 
key-stone that completes the fabric of political justice." Like 
Proudhon, Godwin subjects property as well as the state to an 
anarchist analysis. For Godwin, there were "three degrees" of 
property. The first is possession of things you need to live. 
The second is "the empire to which every man is entitled over 
the produce of his own industry." The third is "that which 
occupies the most vigilant attention in the civilised states 
of Europe. It is a system, in whatever manner established, by 
which one man enters into the faculty of disposing of the produce 
of another man's industry." He notes that it is "clear therefore 
that the third species of property is in direct contradiction to 
the second." [Op. Cit., p. 701 and p. 710-2]

Godwin, unlike classical liberals, saw the need to "point 
out the evils of accumulated property," arguing that the
the "spirit of oppression, the spirit of servility, and the 
spirit of fraud . . . are the immediate growth of the 
established administration of property. They are alike hostile 
to intellectual and moral improvement." Like the socialists
he inspired, Godwin argued that "it is to be considered that 
this injustice, the unequal distribution of property, the 
grasping and selfish spirit of individuals, is to be regarded 
as one of the original sources of government, and, as it rises 
in its excesses, is continually demanding and necessitating new 
injustice, new penalties and new slavery." He stressed, "let it 
never be forgotten that accumulated property is usurpation."
[Op. Cit., p. 732, pp. 717-8, and p. 718]

Godwin argued against the current system of property and in favour 
of "the justice of an equal distribution of the good things of 
life." This would be based on "[e]quality of conditions, or, 
in other words, an equal admission to the means of improvement 
and pleasure" as this "is a law rigorously enjoined upon mankind 
by the voice of justice." [Op. Cit., p. 725 and p. 736] Thus his 
anarchist ideas were applied to private property, noting like 
subsequent anarchists that economic inequality resulted in the 
loss of liberty for the many and, consequently, an anarchist 
society would see a radical change in property and property rights.
As Kropotkin noted, Godwin "stated in 1793 in a quite definite
form the political and economic principle of Anarchism."
Little wonder he, like so many others, argued that Godwin was "the 
first theoriser of Socialism without government -- that is to 
say, of Anarchism." [_Environment and Evolution_, p. 62 and p. 26]
For Kropotkin, anarchism was by definition not restricted to
purely political issues but also attacked economic hierarchy,
inequality and injustice. As Peter Marshall confirms, "Godwin's
economics, like his politics, are an extension of his ethics."
[_Demanding the Impossible_, p. 210]

Godwin's theory of property is significant because it reflected 
what was to become standard nineteenth century socialist thought 
on the matter. In Britain, his ideas influenced Robert Owen and, 
as a result, the early socialist movement in that country. His
analysis of property, as noted, predated Proudhon's classic 
anarchist analysis. As such, to state, as Hart did, that Godwin 
simply "concluded that the state was an evil which had to be 
reduced in power if not eliminated completely" while not noting 
his analysis of property gives a radically false presentation 
of his ideas. [Hart, Op. Cit., p. 265] However, it does fit 
into his flawed assertion that anarchism is purely concerned 
with the state. Any evidence to the contrary is simply ignored.

7.1 Are competing governments anarchism?

No, of course not. Yet according to "anarcho"-capitalism, it is.
This can be seen from the ideas of Gustave de Molinari.

Hart is on firmer ground when he argues that the 19th century 
French economist Gustave de Molinari is the true founder of 
"anarcho"-capitalism. With Molinari, he argues, "the two different 
currents of anarchist thought converged: he combined the political 
anarchism of Burke and Godwin with the nascent economic anarchism 
of Adam Smith and Say to create a new forms of anarchism" that 
has been called "anarcho-capitalism, or free market anarchism." 
[Op. Cit., p. 269] Of course, Godwin (like other anarchists) did 
not limit his anarchism purely to "political" issues and so he
discussed "economic anarchism" as well in his critique of private
property (as Proudhon also did later). As such, to artificially 
split anarchism into political and economic spheres is both 
historically and logically flawed. While some dictionaries
limit "anarchism" to opposition to the state, anarchists did 
and do not.

The key problem for Hart is that Molinari refused to call himself 
an anarchist. He did not even oppose government, as Hart himself 
notes Molinari proposed a system of insurance companies to 
provide defence of property and "called these insurance companies 
'governments' even though they did not have a monopoly within a 
given geographical area." As Hart notes, Molinari was the sole 
defender of such free-market justice at the time in France. 
[David M. Hart, "Gustave de Molinari and the Anti-statist Liberal 
Tradition: Part II",  pp. 399-434,_Journal of Libertarian Studies_, 
vol. V, no. 4, p. 415 and p. 411] Molinari was clear that he wanted 
"a regime of free government, "counterpoising "monopolist or communist 
governments" to "free governments." This would lead to "freedom of 
government" rather than its abolition (not freedom *from* government). 
For Molinarie the future would not bring "the suppression of the
state which is the dream of the anarchists . . . It will bring the
diffusion of the state within society. That is . . . 'a free state
in a free society.'" [quoted by Hart, Op. Cit., p. 429, p. 411 and 
p. 422] As such, Molinari can hardly be considered an anarchist,
even if "anarchist" is limited to purely being against government.

Moreover, in another sense Molinari was in favour of the state.
As we discuss in section 6, these companies would have a monopoly
within a given geographical area -- they have to in order to
enforce the property owner's power over those who use, but do 
not own, the property in question.  The key contradiction can be 
seen in Molinari's advocating of company towns, privately owned 
communities (his term was a "proprietary company"). Instead of 
taxes, people would pay rent and the "administration of the 
community would be either left in the hands of the company itself 
or handled special organisations set up for this purpose." Within
such a regime "those with the most property had proportionally the 
greater say in matters which affected the community." If the poor 
objected then they could simply leave. [Op. Cit., pp. 421-2 and
p. 422] 

Given this, the idea that Molinari was an anarchist in any form can
be dismissed. His system was based on privatising government, not
abolishing it (as he himself admitted). This would be different from
the current system, of course, as landlords and capitalists would be
hiring force directly to enforce their decisions rather than relying 
on a state which they control indirectly. This system, as we proved
in section 6, would not be anarchist as can be seen from American 
history. There capitalists and landlords created their own private 
police forces and armies, which regularly attacked and murdered union 
organisers and strikers. As an example, there is Henry Ford's Service 
Department (private police force):

"In 1932 a hunger march of the unemployed was planned to march up 
to the gates of the Ford plant at Dearborn. . . The machine guns 
of the Dearborn police and the Ford Motor Company's Service Department 
killed [four] and wounded over a score of others. . . Ford was 
fundamentally and entirely opposed to trade unions. The idea of 
working men questioning his prerogatives as an owner was outrageous
. . . [T]he River Rouge plant. . . was dominated by the autocratic 
regime of Bennett's service men. Bennett . . organise[d] and train[ed] 
the three and a half thousand private policemen employed by Ford. His 
task was to maintain discipline amongst the work force, protect Ford's 
property [and power], and prevent unionisation. . . Frank Murphy, 
the mayor of Detroit, claimed that 'Henry Ford employs some of the 
worst gangsters in our city.' The claim was well based. Ford's 
Service Department policed the gates of his plants, infiltrated 
emergent groups of union activists, posed as workers to spy on 
men on the line. . . Under this tyranny the Ford worker had no 
security, no rights. So much so that any information about the 
state of things within the plant could only be freely obtained 
from ex-Ford workers." [Huw Beynon, _Working for Ford_, pp. 29-30] 

The private police attacked women workers handing out pro-union handbills 
and gave them "a severe beating." At Kansas and Dallas "similar beatings 
were handed out to the union men." This use of private police to control 
the work force was not unique. General Motors "spent one million dollars 
on espionage, employing fourteen detective agencies and two hundred spies 
at one time [between 1933 and 1936]. The Pinkerton Detective Agency found 
anti-unionism its most lucrative activity." [Op. Cit., p. 34 and p. 32] 
We must also note that the Pinkerton's had been selling their private 
police services for decades before the 1930s. For over 60 years the 
Pinkerton Detective Agency had "specialised in providing spies, agent 
provocateurs, and private armed forces for employers combating labour 
organisations." By 1892 it "had provided its services for management 
in seventy major labour disputes, and its 2 000 active agents and 30 000 
reserves totalled more than the standing army of the nation." [Jeremy 
Brecher, _Strike!_, p. 55] With this force available, little wonder 
unions found it so hard to survive in the USA. 

Only an "anarcho"-capitalist would deny that this is a private government,
employing private police to enforce private power. Given that unions could 
be considered as "defence" agencies for workers, this suggests a picture 
of how "anarcho"-capitalism may work in practice radically different from
the pictures painted by its advocates. The reason is simple, it does not
ignore inequality and subjects economics to an anarchist analysis. Little
wonder, then, that Proudhon stressed that it "becomes necessary for the
workers to form themselves into democratic societies, with equal conditions
for all members, on pain of a relapse into feudalism." Anarchism, in 
other words, would see "[c]apitalistic and proprietary exploitation 
stopped everywhere, the wage system abolished" and so "the economic 
organisation [would] replac[e] the governmental and military system."
[_The General Idea of the Revolution_, p. 227 and p. 281] Clearly, the
idea that Proudhon shared the same political goal as Molinari is a joke. 
He would have dismissed such a system as little more than an updated form 
of feudalism in which the property owner is sovereign and the workers 
subjects (see section B.4 for more details).

Unsurprisingly, Molinari (unlike the individualist anarchists) attacked 
the jury system, arguing that its obliged people to "perform the duties 
of judges. This is pure communism." People would "judge according to the 
colour of their opinions, than according to justice." [quoted by Hart, 
Op. Cit., p. 409] As the jury system used amateurs (i.e. ordinary people) 
rather than full-time professionals it could not be relied upon to defend 
the power and property rights of the rich. As we noted in section 1.4,
Rothbard criticised the individualist anarchists for supporting juries
for essentially the same reasons. 

But, as is clear from Hart's account, Molinari had little concern 
that working class people should have a say in their own lives beyond 
consuming goods. His perspective can be seen from his lament about 
those "collonies where slavery has been abolished without the compulsory 
labour being replaced with an equivalent quantity of free [sic!] labour 
[i.e., wage labour], there has occurred the opposite of what happens 
everyday before our eyes. Simple workers have been seen to exploit 
in their turn the industrial *entrepreneurs,* demanding from them 
wages which bear absolutely no relation to the legitimate share in 
the product which they ought to receive. The planters were unable 
to obtain for their sugar a sufficient price to cover the increase 
in wages, and were obliged to furnish the extra amount, at first 
out of their profits, and then out of their very capital. A
considerable number of planters have been ruined as a result . . . 
It is doubtless better that these accumulations of capital should be
destroyed than that generations of men should perish [Marx: 'how
generous of M. Molinari'] but would it not be better if both survived?" 
[quoted by Karl Marx, _Capital_, vol. 1, p. 937f] 

So workers exploiting capital is the "opposite of what happens everyday 
before our eyes"? In other words, it is normal that entrepreneurs 
"exploit" workers under capitalism? Similarly, what is a "legitimate 
share" which workers "ought to receive"? Surely that is determined by 
the eternal laws of supply and demand and not what the capitalists (or 
Molinari) thinks is right? And those poor former slave drivers, they 
really do deserve our sympathy. What horrors they face from the 
impositions subjected upon them by their ex-chattels -- they had to 
reduce their profits! How dare their ex-slaves refuse to obey them 
in return for what their ex-owners think was their "legitimate share 
in the produce"! How "simple" these workers are, not understanding 
the sacrifices their former masters suffer nor appreciating how much 
more difficult it is for their ex-masters to create "the product" 
without the whip and the branding iron to aid them! As Marx so 
rightly comments: "And what, if you please, is this 'legitimate
share', which, according to [Molinari's] own admission, the capitalist 
in Europe daily neglects to pay? Over yonder, in the colonies, where the 
workers are so 'simple' as to 'exploit' the capitalist, M. Molinari 
feels a powerful itch to use police methods to set on the right road 
that law of supply and demand which works automatically everywhere 
else." [Op. Cit., p. 937f]

An added difficulty in arguing that Molinari was an anarchist is that he 
was a contemporary of Proudhon, the first self-declared anarchist, and lived 
in a country with a vigorous anarchist movement. Surely if he was really 
an anarchist, he would have proclaimed his kinship with Proudhon and joined 
in the wider movement. He did not, as Hart notes as regards Proudhon:

"their differences in economic theory were considerable, and it is probably 
for this reason that Molinari refused to call himself an anarchist in spite 
of their many similarities in political theory. Molinari refused to accept 
the socialist economic ideas of Proudhon . . . in Molinari's mind, the term 
'anarchist' was intimately linked with socialist and statist economic views." 
[Op. Cit., p. 415]

Yet Proudhon's economic views, like Godwin's, flowed from his anarchist 
analysis and principles. They cannot be arbitrarily separated as Hart 
suggests. So while arguing that "Molinari was just as much an anarchist 
as Proudhon," Hart forgets the key issue. Proudhon was aware that private 
property ensured that the proletarian did not exercise "self-government" 
during working hours, i.e. was not a self-governing individual. As for 
Hart claiming that Proudhon had "statist economic views" it simply shows 
how far an "anarcho"-capitalist perspective is from genuine anarchism. 
Proudhon's economic analysis, his critique of private property and 
capitalism, flowed from his anarchism and was an integral aspect of it.

To restrict anarchism purely to opposition to the state, Hart is 
impoverishing anarchist theory and denying its history. Given
that anarchism was born from a critique of private property as well 
as government, this shows the false nature of Hart's claim that 
"Molinari was the first to develop a theory of free-market, 
proprietary anarchism that extended the laws of the market and 
a rigorous defence of property to its logical extreme." [Op. Cit., 
p. 415 and p. 416] Hart shows how far from anarchism Molinari was 
as Proudhon had turned his anarchist analysis to property, showing 
that "defence of property" lead to the oppression of the many by
the few in social relationships identical to those which mark 
the state. Moreover, Proudhon, argued the state would always be
required to defend such social relations. Privatising it would
hardly be a step forward.

Unsurprisingly, Proudhon dismissed the idea that the laissez faire 
capitalists shared his goals. "The school of Say," Proudhon argued,
was "the chief focus of counter-revolution next to the Jesuits"
and "has for ten years past seemed to exist only to protect and 
applaud the execrable work of the monopolists of money and necessities, 
deepening more and more the obscurity of a science naturally difficult 
and full of complications." Much the same can be said of "anarcho"-
capitalists, incidentally. For Proudhon, "the disciples of Malthus and 
of Say, who oppose with all their might any intervention of the State 
in matters commercial or industrial, do not fail to avail themselves 
of this seemingly liberal attitude, and to show themselves more 
revolutionary than the Revolution. More than one honest searcher 
has been deceived thereby." However, this apparent "anti-statist" 
attitude of supporters of capitalism is false as pure free market 
capitalism cannot solve the social question, which arises because 
of capitalism itself. As such, it was impossible to abolish the
state under capitalism. Thus "this inaction of Power in economic 
matters was the foundation of government. What need should we have 
of a political organisation, if Power once permitted us to enjoy 
economic order?" Instead of capitalism, Proudhon advocated the 
"constitution of Value," the "organisation of credit," the 
elimination of interest, the "establishment of workingmen's 
associations" and "the use of a just price." [_The General Idea 
of the Revolution, p. 225, p. 226 and p. 233]

Clearly, then, the claims that Molinari was an anarchist fail as
he, unlike his followers, were aware of what anarchism actually
stood for. Hart, in his own way, acknowledges this:

"In spite of his protestations to the contrary, Molinari should
be considered an anarchist thinker. His attack on the state's
monopoly of defence must surely warrant the description of
anarchism. His reluctance to accept this label stemmed from the
fact that the socialists had used it first to describe a form
of non-statist society which Molinari definitely opposed. Like
many original thinkers, Molinari had to use the concepts developed
by others to describe his theories. In his case, he had come to
the same political conclusions as the communist anarchists although
he had been working within the liberal tradition, and it is 
therefore not surprising that the terms used by the two schools 
were not compatible. It would not be until the latter half of the 
twentieth century that radical, free-trade liberals would use the
word 'anarchist' to describe their beliefs." [Op. Cit., p. 416]

It should be noted that Proudhon was *not* a communist-anarchist,
but the point remains. The aims of anarchism were recognised by
Molinari as being inconsistent with his ideology. Consequently,
he (rightly) refused the label. If only his self-proclaimed 
followers in the "latter half of the twentieth century" did the 
same anarchists would not have to bother with them! 

As such, it seems ironic that the founder of "anarcho"-capitalism 
should have come to the same conclusion as modern day anarchists 
on the subject of whether his ideas are a form of anarchism or not!

7.2 Is government compatible with anarchism?

Of course not, but ironically this is the conclusion arrived at
by Hart's analyst of the British "voluntaryists," particularly 
Auberon Herbert. Voluntaryism was a fringe part of the right-wing
individualist movement inspired by Herbert Spencer, a spokesman 
for free market capitalism in the later half of the nineteenth 
century. As with Molinari, there is a problem with presenting 
this ideology as anarchist, namely that its leading light, 
Herbert, explicitly rejected the label "anarchist." 

Herbert was clearly aware of individualist anarchism and distanced
himself from it. He argued that such a system would be "pandemonium." 
He thought that people should "not direct our attacks - as the 
anarchists do - *against all government*, against government in 
itself" but "only against the overgrown, the exaggerated, the 
insolent, unreasonable and indefensible forms of government, which 
are found everywhere today." Government should be "strictly limited 
to its legitimate duties in defence of self-ownership and individual 
rights." He stressed that "we are governmentalists . . . formally 
constituted by the nation, employing in this matter of force the 
majority method." Moreover, Herbert knew of, and rejected, 
individualist anarchism, considering it to be "founded on a fatal 
mistake." [_Essay X: The Principles Of Voluntaryism And Free Life_] 
As such, claims that he was an anarchist or "anarcho"-capitalist 
cannot be justified. 

Hart is aware of this slight problem, quoting Herbert's claim that 
he aimed for "regularly constituted government, generally accepted by
all citizens for the protection of the individual." [quoted by Hart, 
Op. Cit., p. 86] Like Molinari, Herbert was aware that anarchism 
was a form of socialism and that the political aims could not be 
artificially separated from its economic and social aims. As such, 
he was right *not* to call his ideas anarchism as it would result 
in confusion (particularly as anarchism was a much larger movement 
than his). As Hart acknowledges, "Herbert faced the same problems that 
Molinari had with labelling his philosophy. Like Molinari, he rejected 
the term 'anarchism,' which he associated with the socialism of Proudhon 
and . . . terrorism." While "quite tolerant" of individualist anarchism, 
he thought they "were mistaken in their rejections of 'government.'" 
However, Hart knows better than Herbert about his own ideas, arguing 
that his ideology "is in fact a new form of anarchism, since the most 
important aspect of the modern state, the monopoly of the use of force 
in a given area, is rejected in no uncertain terms by both men." [Op.
Cit., p. 86] He does mention that Benjamin Tucker called Herbert a
"true anarchist in everything but name," but Tucker denied that
Kropotkin was an anarchist suggesting that he was hardly a reliable
guide. [quoted by Hart, Op. Cit., p. 87] As it stands, it seems that
Tucker was mistaken in his evaluation of Herbert's politics.

Economically, Herbert was not an anarchist, arguing that the state
should protect Lockean property rights. Of course, Hart may argue
that these economic differences are not relevant to the issue of 
Herbert's anarchism but that is simply to repeat the claim that 
anarchism is simply concerned with government, a claim which is 
hard to support. This position cannot be maintained, given that
both Herbert and Molinari defended the right of capitalists and 
landlords to force their employees and tenants to follow their 
orders. Their "governments" existed to defend the capitalist from 
rebellious workers, to break unions, strikes and occupations. In 
other words, they were a monopoly of the use of force in a given 
area to enforce the monopoly of power in a given area (namely, the 
wishes of the property owner). While they may have argued that this
was "defence of liberty," in reality it is defence of power and
authority.

What about if we just look at the political aspects of his ideas? 
Did Herbert actually advocate anarchism? No, far from it. He clearly
demanded a minimal state based on voluntary taxation. The state 
would not use force of any kind, "except for purposes of restraining 
force." He argued that in his system, while "the state should compel 
no services and exact no payments by force," it "should be free to 
conduct many useful undertakings . . . in competition with all voluntary 
agencies . . . in dependence on voluntary payments." [Herbert, Op. Cit.] 
As such, "the state" would remain and unless he is using the term "state" 
in some highly unusual way, it is clear that he means a system 
where individuals live under a single elected government as their 
common law maker, judge and defender within a given territory. 

This becomes clearer once we look at how the state would be organised.
In his essay "A Politician in Sight of Haven," Herbert does discuss
the franchise, stating it would be limited to those who paid a
voluntary "income tax," anyone "paying it would have the right 
to vote; those who did not pay it would be -- as is just -- 
without the franchise. There would be no other tax." The law 
would be strictly limited, of course, and the "government . . .
must confine itself simply to the defense of life and property, 
whether as regards internal or external defense." In other words,
Herbert was a minimal statist, with his government elected by a
majority of those who choose to pay their income tax and funded
by that (and by any other voluntary taxes they decided to pay).
Whether individuals and companies could hire their own private 
police in such a regime is irrelevant in determining whether it 
is an anarchy.

This can be best seen by comparing Herbert with Ayn Rand. No one 
would ever claim Rand was an anarchist, yet her ideas were extremely 
similar to Herbert's. Like Herbert, Rand supported laissez-faire 
capitalism and was against the "initiation of force." Like Herbert,
she extended this principle to favour a government funded by voluntary 
means ["Government Financing in a Free Society," _The Virtue of 
Selfishness_, pp. 116-20] Moreover, like Herbert, she explicitly 
denied being an anarchist and, again like Herbert, thought the idea 
of competing defence agencies ("governments") would result in chaos. 
The similarities with Herbert are clear, yet no "anarcho"-capitalist 
would claim that Rand was an anarchist, yet they do claim that Herbert 
was. 

This position is, of course, deeply illogical and flows from the 
non-anarchist nature of "anarcho"-capitalism. Perhaps unsurprisingly, 
when Rothbard discusses the ideas of the "voluntaryists" he fails to 
address the key issue of who determines the laws being enforced in 
society. For Rothbard, the key issue is *who* is enforcing the law, 
not where that law comes from (as long, of course, as it is a law 
code he approves of). The implications of this is significant, as 
it implies that "anarchism" need not be opposed to either the state 
nor government! This can be clearly seen from Rothbard's analysis of 
voluntary taxation.
 
Rothbard, correctly, notes that Herbert advocated voluntary taxation as 
the means of funding a state whose basic role was to enforce Lockean
property rights. For Rothbard, the key issue was *not* who determines
the law but who enforces it. For Rothbard, it should be privatised 
police and courts and he suggests that the "voluntary taxationists 
have never attempted to answer this problem; they have rather stubbornly 
assumed that no one would set up a competing defence agency within a 
State's territorial limits." If the state *did* bar such firms, then 
that system is not a genuine free market. However, "if the government 
*did* permit free competition in defence service, there would soon no 
longer be a central government over the territory. Defence agencies, 
police and judicial, would compete with one another in the same 
uncoerced manner as the producers of any other service on the market." 
[_Power and Market_, p. 122 and p. 123] 

However, this misses the point totally. The key issue that Rothbard 
ignores is who determines the laws which these private "defence" agencies 
would enforce. If the laws are determined by a central government, then
the fact that citizen's can hire private police and attend private courts
does not stop the regime being statist. We can safely assume Rand, for
example, would have had no problem with companies providing private security 
guards or the hiring of private detectives within the context of her 
minimal state. Ironically, Rothbard stresses the need for such a monopoly 
legal system:

"While 'the government' would cease to exist, the same cannot be said for 
a constitution or a rule of law, which, in fact, would take on in the free 
society a far more important function than at present. For the freely 
competing judicial agencies would have to be guided by a body of absolute 
law to enable them to distinguish objectively between defence and invasion. 
This law, embodying elaborations upon the basic injunction to defend person 
and property from acts of invasion, would be codified in the basic legal code. 
Failure to establish such a code of law would tend to break down the free 
market, for then defence against invasion could not be adequately achieved."
[Op. Cit., p. 123-4]

So if you violate the "absolute law" defending (absolute) property rights
then you would be in trouble. The problem now lies in determining who sets 
that law. Rothbard is silent on how his system of monopoly laws are determined 
or specified. The "voluntaryists" did propose a solution, namely a central 
government elected by the majority of those who voluntarily decided to pay 
an income tax. In the words of Herbert: 

"We agree that there must be a central agency to deal with crime - an 
agency that defends the liberty of all men, and employs force against 
the uses of force; but my central agency rests upon voluntary support, 
whilst Mr. Levy's central agency rests on compulsory support." [quoted 
by Carl Watner, "The English Individualists As They Appear In Liberty," 
pp. 191-211, _Benjamin R. Tucker and the Champions of Liberty_, p. 194]

And all Rothbard is concerned over private cops would exist or not! This
lack of concern over the existence of the state and government flows from 
the strange fact that "anarcho"-capitalists commonly use the term "anarchism" 
to refer to any philosophy that opposes all forms of initiatory coercion. 
Notice that government does not play a part in this definition, thus 
Rothbard can analyse Herbert's politics without commenting on who 
determines the law his private "defence" agencies enforce. For Rothbard,
"an anarchist society" is defined "as one where there is no legal possibility 
for coercive aggression against the person and property of any individual." He 
then moved onto the state, defining that as an "institution which possesses 
one or both (almost always both) of the following properties: (1) it acquires 
its income by the physical coercion known as 'taxation'; and (2) it acquires 
and usually obtains a coerced monopoly of the provision of defence service 
(police and courts) over a given territorial area." ["Society without a State", 
in _Nomos XIX_, Pennock and Chapman (eds.)., p. 192]

This is highly unusual definition of "anarchism," given that it utterly fails to
mention or define government. This, perhaps, is understandable as any attempt
to define it in terms of "monopoly of decision-making power" results in showing
that capitalism is statist (see section 1 for a summary). The key issue here 
is the term "legal possibility." That suggestions a system of laws which 
determine what is "coercive aggression" and what constitutes what is and what 
is not legitimate "property." Herbert is considered by "anarcho"-capitalists as 
one of them. Which brings us to a strange conclusion, that for 
"anarcho"-capitalists you can have a system of "anarchism" in which there is 
a government and state -- as long  as the state does not impose taxation nor 
stop private police forces from operating! 

As Rothbard argues "if a government based on voluntary taxation permits free 
competition, the result will be the purely free-market system . . . The previous 
government would now simply be one competing defence agency among many on the 
market." [_Power and Market_, p. 124] That the government is specifying what 
is and is not legal does not seem to bother him or even cross his mind. Why 
should it, when the existence of government is irrelevant to his definition 
of anarchism and the state? That private police are enforcing a monopoly law 
determined by the government seems hardly a step in the right direction nor 
can it be considered as anarchism. Perhaps this is unsurprising, for under
his system there would be "a basic, common Law Code" which "all would have to 
abide by" as well as "some way of resolving disputes that will gain a majority
consensus in society . . . whose decision will be accepted by the great
majority of the public." ["Society without a State," Op. Cit., p. 205]

At least Herbert is clear that this would be a government system, unlike 
Rothbard who assumes a monopoly law but seems to think that this is not a 
government or a state. As David Wieck argued, this is illogical for 
according to Rothbard "all 'would have to' conform to the same legal 
code" and this can only be achieved by means of "the forceful action 
of adherents to the code against those who flout it" and so "in his 
system *there would stand over against every individual the legal authority
of all the others.* An individual who did not recognise private property as 
legitimate would surely perceive this as a tyranny of law, a tyranny of the 
majority or of the most powerful -- in short, a hydra-headed state. If the 
law code is itself unitary, then this multiple state might be said to have 
properly a single head -- the law . . . But it looks as though one might 
still call this 'a state,' under Rothbard's definition, by satisfying *de 
facto* one of his pair of sufficient conditions: 'It asserts and usually 
obtains a coerced monopoly of provision of defence service (police and
courts) over a given territorial area' . . .  Hobbes's individual sovereign 
would seem to have become many sovereigns -- with but one law, however, and 
in truth, therefore, a single sovereign in Hobbes's more important sense of 
the latter term. One might better, and less confusingly, call this a 
libertarian state than an anarchy." ["Anarchist Justice", in _Nomos XIX_, 
Pennock and Chapman (eds.)., pp. 216-7]

The obvious recipients of the coercion of the new state would be those who
rejected the authority of their bosses and landlords, those who reject the 
Lockean property rights Rothbard and Herbert hold dear. In such cases, the
rebels and any "defence agency" (like, say, a union) which defended them 
would be driven out of business as it violated the law of the land. How 
this is different from a state banning competing agencies is hard to 
determine. This is a "difficulty" argues Wieck, which "results from the 
attachment of a principle of private property, and of unrestricted 
accumulation of wealth, to the principle of individual liberty. This 
increases sharply the possibility that many reasonable people who respect 
their fellow men and women will find themselves outside the law because 
of dissent from a property interpretation of liberty." Similarly, there is 
the economic results of capitalism. "One can imagine," Wieck continues, 
"that those who lose out badly in the free competition of Rothbard's economic 
system, perhaps a considerable number, might regard the legal authority as an 
alien power, state for them, based on violence, and might be quite unmoved by
the fact that, just as under nineteenth century capitalism, a principle of 
liberty was the justification for it all." [Op. Cit., p. 217 and pp. 217-8]

7.3 Can there be a "right-wing" anarchism?

Hart, of course, mentions the individualist anarchists, calling Tucker's 
ideas "*laissez faire* liberalism." [Op. Cit., p. 87] However, Tucker
called his ideas "socialism" and presented a left-wing critique of most
aspects of liberalism, particularly its Lockean based private property
rights. Tucker based much of his ideas on property on Proudhon, so if
Hart dismisses the latter as a socialist then this must apply to the
former. Given that he notes that there are "two main kinds of anarchist
thought," namely "communist anarchism which denies the right of an
individual to seek profit, charge rent or interest and to own property"
and a "'right-wing' proprietary anarchism, which vigorously defends 
these rights" then Tucker, like Godwin, would have to be placed in the
"left-wing" camp. ["Gustave de Molinari and the Anti-statist Liberal 
Tradition: Part II", Op. Cit., p. 427] Tucker, after all, argued that 
he aimed for the end of profit, interest and rent and attacked private 
property in land and housing beyond "occupancy and use." 

As can be seen, Hart's account of the history of "anti-state" liberalism
is flawed. Godwin is included only by ignoring his views on property,
views which in many ways reflects the later "socialist" (i.e. 
anarchist) analysis of Proudhon. He then discusses a few individuals
who were alone in their opinions even within extreme free market right
and all of whom knew of anarchism and explicitly rejected the name for
their respective ideologies. In fact, they preferred the term "government"
to describe their systems which, on the face of it, would be hard to
reconcile with the usual "anarcho"-capitalist definition of anarchism
as being "no government." Hart's discussion of individualist anarchism
is equally flawed, failing to discuss their economic views (just as
well, as its links to "left-wing" anarchism would be obvious).

However, the similarities of Molinari's views with what later became 
known as "anarcho"-capitalism are clear. Hart notes that with Molinari's 
death in 1912, "liberal anti-statism virtually disappeared until it was 
rediscovered by the economist Murray Rothbard in the late 1950's" 
["Gustave de Molinari and the Anti-statist Liberal Tradition: Part 
III", Op. Cit., p. 88] While this fringe is somewhat bigger than 
previously, the fact remains that the ideas expounded by Rothbard
are just as alien to the anarchist tradition as Molinari's. It 
is a shame that Rothbard, like his predecessors, did not call
his ideology something other than anarchism. Not only would it have
been more accurate, it would also have lead to much less confusion
and no need to write this section of the FAQ! As it stands, the
only reason why "anarcho"-capitalism is considered a form of "anarchism" 
by some is because one person (Rothbard) decided to steal the
name of a well established and widespread political and social theory
and movement and apply it to an ideology with little, if anything,
in common with it.

As Hart inadvertently shows, it is not a firm base to build a claim.
That anyone can consider "anarcho"-capitalism as anarchist simply 
flows from a lack of knowledge about anarchism. As numerous anarchists
have argued. For example, "Rothbard's conjunction of anarchism with 
capitalism," according to David Wieck, "results in a conception that is 
entirely outside the mainstream of anarchist theoretical writings or social 
movements . . . this conjunction is a self-contradiction." He stressed that 
"the main traditions of anarchism are entirely different. These traditions, 
and theoretical writings associated with them, express the perspectives and 
the aspirations, and also, sometimes, the rage, of the oppressed people in 
human society: not only those economically oppressed, although the major 
anarchist movements have been mainly movements of workers and peasants, 
but also those oppressed by power in all those social dimensions . . . 
including of course that of political power expressed in the state." In 
other words, "anarchism represents . .  . a moral commitment (Rothbard's 
anarchism I take to be diametrically opposite)." ["Anarchist Justice", 
libertarian state than an anarchy." ["Anarchist Justice", in _Nomos XIX_, 
Pennock and Chapman (eds.), p. 215, p. 229 and p. 234] 

It is a shame that some academics consider only the word Rothbard uses
as relevant rather than the content and its relation to anarchist theory
and history. If they did, they would soon realise that the expressed
opposition of so many anarchists to "anarcho"-capitalism is something
which cannot be ignored or dismissed. In other words, a "right-wing"
anarchist cannot and does not exist, no matter how often they use that
word to describe their ideology. As Bob Black put it, "a right-wing 
anarchist is just a minarchist who'd abolish the state to his own 
satisfaction by calling it something else . . . They don't denounce what 
the state does, they just object to who's doing it." [_Libertarian as 
Conservative_]

The reason is simple. Anarchist economics and politics cannot be artificially
separated, they are linked. Godwin and Proudhon did not stop their 
analysis at the state. They extended it the social relationships produced
by inequality of wealth, i.e. economic power as well as political power.
To see why, we need only consult Rothbard's work. As noted in the last
section, for Rothbard the key issue with the "voluntary taxationists"
was not who determined the "body of absolute law" but rather who enforced 
it. In his discussion, he argued that a democratic "defence agency" is 
at a disadvantage in his "free market" system. As he put it:

"It would, in fact, be competing at a severe disadvantage, having been 
established on the principle of 'democratic voting.' Looked at as a 
market phenomenon, 'democratic voting' (one vote per person) is simply 
the method of the consumer 'co-operative.' Empirically, it has been 
demonstrated time and again that co-operatives cannot compete successfully 
against stock-owned companies, especially when both are equal before the 
law. There is no reason to believe that co-operatives for defence would 
be any more efficient. Hence, we may expect the old co-operative government 
to 'wither away' through loss of customers on the market, while joint-stock 
(i.e., corporate) defence agencies would become the prevailing market form."

Notice how he assumes that both a co-operative and corporation would be
"equal before the law." But who determines that law? Obviously *not* a
democratically elected government, as the idea of "one person, one vote"
in determining the common law all are subject to is "inefficient." Nor does
he think, like the individualist anarchists, that the law would be judged
by juries along with the facts. As we note in section 1.4, he rejects
that in favour of it being determined by "Libertarian lawyers and jurists."
Thus the law is unchangeable by ordinary people and enforced by private
defence agencies hired to protect the liberty and property of the owning
class. In the case of a capitalist economy, this means defending the
power of landlords and capitalists against rebel tenants and workers.

This means that Rothbard's "common Law Code" will be determined, interpreted,
enforced and amended by corporations based on the will of the majority of 
shareholders, i.e. the rich. That hardly seems likely to produce equality 
before the law. As he argues in a footnote:

"There is a strong *a priori* reason for believing that corporations will be 
superior to co-operatives in any given situation. For if each owner receives 
only one vote regardless of how much money he has invested in a project 
(and earnings are divided in the same way), there is no incentive to invest 
more than the next man; in fact, every incentive is the other way. This 
hampering of investment militates strongly against the co-operative form."

So *if* the law is determined by the defence agencies and courts then it
will be determined by those who have invested most in these companies. As
it is unlikely that the rich will invest in defence firms which do not 
support their property rights, power, profits and definition of property
rights, it is clear that agencies which favour the wealthy will survive
on the market. The idea that market demand will counter this class rule
seems unlikely, given Rothbard's own argument. After all, in order to 
compete successfully you need more than demand, you need source of 
investment. If co-operative defence agencies do form, they will be at
a market disadvantage due to lack of investment. As argued in section
J.5.12, even though co-operatives are more efficient than capitalist 
firms lack of investment (caused by the lack of control by capitalists
Rothbard notes) stops them replacing wage slavery. Thus capitalist wealth 
and power inhibits the spread of freedom in production. If we apply his 
own argument to Rothbard's system, we suggest that the market in "defence" 
will also stop the spread of more libertarian associations thanks to 
capitalist power and wealth. In other words, like any market, Rothbard's
"defence" market will simply reflect the interests of the elite, not
the masses.

Moreover, we can expect any democratic defence agency (like a union) to
support, say, striking workers or squatting tenants, to be crushed. This
is because, as Rothbard stresses, *all* "defence" firms would be expected 
to apply the "common" law, as written by "Libertarian lawyers and jurists." 
If they did not they would quickly be labelled "outlaw" agencies and crushed 
by the others. Ironically, Tucker would join Bakunin and Kropotkin in an 
"anarchist" court accused to violating "anarchist" law by practising and 
advocating "occupancy and use" rather than the approved Rothbardian property 
rights. Even if these democratic "defence" agencies could survive and not
be driven out of the market by a combination of lack of investment and
violence due to their "outlaw" status, there is another problem. As we
discussed in section 1, landlords and capitalists have a monopoly of
decision making power over their property. As such, they can simply refuse 
to recognise any democratic agency as a legitimate defence association and 
use the same tactics perfected against unions to ensure that it does not 
gain a foothold in their domain (see section 6 for more details).

Clearly, then, a "right-wing" anarchism is impossible as any system based
on capitalist property rights will simply be an oligarchy run by and for
the wealthy. As Rothbard notes, any defence agency based on democratic
principles will not survive in the "market" for defence simply because it
does not allow the wealthy to control it and its decisions. Little 
wonder Proudhon argued that laissez-faire capitalism meant "the victory 
of the strong over the weak, of those who own property over those who own 
nothing." [quoted by Peter Marshall, _Demanding the Impossible_, p. 259]

8 What role did the state take in the creation of capitalism?

If the "anarcho"-capitalist is to claim with any plausibility that "real"
capitalism is non-statist or that it can exist without a state, it must
be shown that capitalism evolved naturally, in opposition to state
intervention. However, in reality, the opposite is the case. Capitalism
was born from state intervention and, in the words of Kropotkin, "the State
. . . and capitalism . . . developed side by side, mutually supporting and
re-enforcing each other." [_Kropotkin's Revolutionary Pamphlets_, p. 181]

Numerous writers have made this point. For example, in Karl Polanyi's
flawed masterpiece _The Great Transformation_ we read that "the road to 
the free market was opened and kept open by an enormous increase in
continuous, centrally organised and controlled interventionism" by the
state [p. 140]. This intervention took many forms -- for example, state
support during "mercantilism," which allowed the "manufactures" (i.e.
industry) to survive and develop, enclosures of common land, and so forth.
In addition, the slave trade, the invasion and brutal conquest of the
Americas and other "primitive" nations, and the looting of gold, slaves,
and raw materials from abroad also enriched the European economy, giving
the development of capitalism an added boost. Thus Kropotkin:

"The history of the genesis of capital has already been told by socialists
many times. They have described how it was born of war and pillage, of
slavery and serfdom, of modern fraud and exploitation. They have shown
how it is nourished by the blood of the worker, and how little by little
it has conquered the whole world." [Op. Cit., p. 207]

Or, if Kropotkin seems too committed to be fair, we have John Stuart Mill's 
statement that:

"The social arrangements of modern Europe commenced from a distribution
of property which was the result, not of just partition, or acquisition
by industry, but of conquest and violence. . . " [_Principles of Political
Economy_, p. 15]

Therefore, when supporters of "libertarian" capitalism say they are 
against the "initiation of force," they mean only *new* initiations 
of force; for the system they support was born from numerous initiations 
of force in the past. And, as can be seen from the history of the last 
100 years, it also requires state intervention to keep it going (section 
D.1, "Why does  state intervention occur?," addresses this point in some 
detail). Indeed, many thinkers have argued that it was precisely this
state support and coercion (particularly the separation of people from
the land) that played the *key* role in allowing capitalism to develop 
rather than the theory that "previous savings" did so. As the noted
German thinker Franz Oppenheimer argued, "the concept of a 'primitive
accumulation,' or an original store of wealth, in land and in movable
property, brought about by means of purely economic forces" while 
"seem[ing] quite plausible" is in fact "utterly mistaken; it is a
'fairly tale,' or it is a class theory used to justify the privileges
of the upper classes." [_The State_, pp. 5-6]

This thesis will be discussed in the following sections. It is, of course,
ironic to hear right-wing libertarians sing the praises of a capitalism
that never existed and urge its adoption by all nations, in spite of the
historical evidence suggesting that only state intervention made
capitalist economies viable -- even in that Mecca of "free enterprise,"
the United States. As Noam Chomsky argues, "who but a lunatic could have
opposed the development of a textile industry in New England in the early
nineteenth century, when British textile production was so much more 
efficient that half the New England industrial sector would have gone 
bankrupt without very high protective tariffs, thus terminating industrial
development in the United States? Or the high tariffs that radically
undermined economic efficiency to allow the United States to develop steel
and other manufacturing capacities? Or the gross distortions of the
market that created modern electronics?" [_World Orders, Old and New_,
p. 168]. To claim, therefore, that "mercantilism" is not capitalism
makes little sense. Without mercantilism, "proper" capitalism would never
have developed, and any attempt to divorce a social system from its roots
is ahistoric and makes a mockery of critical thought.

Similarly, it is somewhat ironic when "anarcho"-capitalists and right
libertarians claim that they support the freedom of individuals to 
choose how to live. After all, the working class was not given *that*
particular choice when capitalism was developing. Indeed, their right 
to choose their own way of life was constantly violated and denied. So 
to claim that *now* (after capitalism has been created) we get the 
chance to try and live as we like is insulting in the extreme. The 
available options we have are not independent of the society we live 
in and are decisively shaped by the past. To claim we are "free" to 
live as we like (within the laws of capitalism) is basically to argue 
that we are able to "buy" the freedom that every individual is due from 
those who have stolen it from us in the first place! 

Needless to say, some right-libertarians recognise that the state played 
a massive role in encouraging industrialisation (more correct to say 
"proletarianisation" as it created a working class which did not own
the tools they used, although we stress that this process started on 
the land and not in industry). So they contrast "bad" business people 
(who took state aid) and "good" ones. Thus Rothbard's comment that 
Marxists have "made no particular distinction between 'bourgeoisie' 
who made use of the state, and bourgeoisie who acted on the free 
market." [_The Ethics of Liberty_, p. 72]

But such an argument is nonsense as it ignores the fact that the "free 
market" is a network (and defined by the state by the property rights 
it enforces). For example, the owners of the American steel and other 
companies who grew rich and their companies big behind protectionist 
walls are obviously "bad" bourgeoisie. But are the bourgeoisie who supplied 
the steel companies with coal, machinery, food, "defence" and so on not also 
benefiting from state action? And the suppliers of the luxury goods to the 
wealthy steel company owners, did they not benefit from state action? Or the 
suppliers of commodities to the workers that laboured in the steel factories 
that the tariffs made possible, did they not benefit? And the suppliers to 
these suppliers? And the suppliers to these suppliers? Did not the users of
technology first introduced into industry by companies protected by state 
orders also not benefit? Did not the capitalists who had a large and landless
working class to select from benefit from the "land monopoly" even though
they may not have, unlike other capitalists, directly advocated it? It 
increased the pool of wage labour for *all* capitalists and increased their
bargaining position/power in the labour market at the expense of the working
class. In other words, such a policy helped maintain capitalist market power, 
irrespective of whether individual capitalists encouraged politicians to 
vote to create/maintain it. And, similarly, *all* capitalists benefited 
from the changes in common law to recognise and protect capitalist private 
property and rights that the state enforced during the 19th century (see 
section B.2.5). 

It appears that, for Rothbard, the collusion between state and business
is the fault, not of capitalism, but of particular capitalists. The system
is pure; only individuals are corrupt. But, for anarchists, the origins
of the modern state-capitalist system lies not in the individual qualities
of capitalists as such but in the dynamic and evolution of capitalism itself 
-- a complex interaction of class interest, class struggle, social defence
against the destructive actions of the market, individual qualities and
so forth. In other words, Rothbard's claims are flawed -- they fail to 
understand capitalism as a *system* and its dynamic nature.

Indeed, if we look at the role of the state in creating capitalism we
could be tempted to rename "anarcho"-capitalism "marxian-capitalism". 
This is because, given the historical evidence, a political theory 
can be developed by which the "dictatorship of the bourgeoisie" is
created and that this capitalist state "withers away" into anarchy.
That this means rejecting the economic and social ideas of Marxism
and their replacement by their direct opposite should not mean that
we should reject the idea (after all, that is what "anarcho"-capitalism
has done to Individualist Anarchism!). But we doubt that many 
"anarcho"-capitalists will accept such a name change (even though 
this would reflect their politics far better; after all they do not 
object to past initiations of force, just current ones and many do
seem to think that the modern state *will* wither away due to market
forces).

But this is beside the point. The fact remains that state action was
required to create and maintain capitalism. Without state support it
is doubtful that capitalism would have developed at all.

So, when the right suggests that "we" be "left alone," what they mean by
"we" comes into clear focus when we consider how capitalism developed.
Artisans and peasants were only "left alone" to starve, and the working
classes of industrial capitalism were only "left alone" outside work and
for only as long as they respected the rules of their "betters." As for
the other side of the class divide, they desire to be "left alone" to
exercise their power over others, as we will see. That modern "capitalism"
is, in effect, a kind of "corporate mercantilism," with states providing
the conditions that allow corporations to flourish (e.g. tax breaks, 
subsidies, bailouts, anti-labour laws, etc.) says more about the statist 
roots of capitalism than the ideologically correct definition of capitalism 
used by its supporters.

8.1 What social forces lay behind the rise of capitalism?

Capitalist society is a relatively recent development. As Murray Bookchin 
points out, for a "long era, perhaps spanning more than five centuries," 
capitalism "coexisted with feudal and simple commodity relationships"
in Europe. He argues that this period "simply cannot be treated as 
'transitional' without reading back the present into the past." [_From 
Urbanisation to Cities_, p. 179] In other words, capitalism was not
a inevitable outcome of "history" or social evolution.

He goes on to note that capitalism existed "with growing significance
in the mixed economy of the West from the fourteenth century up to the
seventeenth" but that it "literally exploded into being in Europe, 
particularly England, during the eighteenth and especially nineteenth
centuries." [Op. Cit., p. 181] The question arises, what lay behind 
this "growing significance"? Did capitalism "explode" due to its 
inherently more efficient nature or where there other, non-economic, 
forces at work? As we will show, it was most definitely the later one --
capitalism was born not from economic forces but from the political 
actions of the social elites which its usury enriched. Unlike artisan
(simple commodity) production, wage labour generates inequalities 
and wealth for the few and so will be selected, protected and encouraged
by those who control the state in their own economic and social interests.

The development of capitalism in Europe was favoured by two social elites, 
the rising capitalist class within the degenerating medieval cities and 
the absolutist state. The medieval city was "thoroughly changed by the
gradual increase in the power of commercial capital, due primarily to
foreign trade. . . By this the inner unity of the commune was loosened,
giving place to a growing caste system and leading necessarily to a
progressive inequality of social interests. The privileged minorities
pressed ever more definitely towards a centralisation of the political
forces of the community. . . Mercantilism in the perishing city republics
led logically to a demand for larger economic units [i.e. to nationalise
the market]; and by this the desire for stronger political forms was
greatly strengthened. . . . Thus the city gradually became a small
state, paving the way for the coming national state." [Rudolf Rocker,
_Nationalism and Culture_, p. 94]

The rising economic power of the proto-capitalists conflicted with that of
the feudal lords, which meant that the former required help to consolidate
their position. That aid came in the form of the monarchical state. With
the force of absolutism behind it, capital could start the process of
increasing its power and influence by expanding the "market" through
state action. 
 
As far as the absolutist state was concerned, it "was dependent upon the
help of these new economic forces, and vice versa. . . ." "The absolutist
state," Rocker argues, "whose coffers the expansion of commerce filled. . ., 
at first furthered the plans of commercial capital. Its armies and fleets . . .
contributed to the expansion of industrial production because they
demanded a number of things for whose large-scale production the shops 
of small tradesmen were no longer adapted. Thus gradually arose the
so-called manufactures, the forerunners of the later large industries." 
[Op. Cit., p. 117-8]
 
Some of the most important state actions from the standpoint of early
industry were the so-called Enclosure Acts, by which the "commons" -- the
free farmland shared communally by the peasants in most rural villages --
was "enclosed" or incorporated into the estates of various landlords as
private property (see section 8.3). This ensured a pool of landless
workers who had no option but to sell their labour to capitalists. Indeed,
the widespread independence caused by the possession of the majority of
households of land caused the rising class of merchants to complain
"that men who should work as wage-labourers cling to the soil, and in
the naughtiness of their hearts prefer independence as squatters to
employment by a master." [R.H Tawney, cited by Allan Elgar in _The 
Apostles of Greed_, p. 12]

In addition, other forms of state aid ensured that capitalist firms got
a head start, so ensuring their dominance over other forms of work (such
as co-operatives). A major way of creating a pool of resources that
could be used for investment was the use of mercantilist policies which
used protectionist measures to enrich capitalists and landlords at the
expense of consumers and their workers. For example, one of most common 
complaints of early capitalists was that workers could not turn up to 
work regularly. Once they had worked a few days, they disappeared as
they had earned enough money to live on. With higher prices for food, 
caused by protectionist measures, workers had to work longer and harder 
and so became accustomed to factory labour. In addition, mercantilism
allowed native industry to develop by barring foreign competition and
so allowed industrialists to reap excess profits which they could then
use to increase their investments. In the words of Marian-socialist 
economic historian Maurice Dobbs:

"In short, the Mercantile System was a system of State-regulated exploitation 
through trade which played a highly important rule in the adolescence of 
capitalist industry: it was essentially the economic policy of an age of 
primitive accumulation." [_Studies in Capitalism Development_, p. 209]

As Rocker summarises, "when abolutism had victoriously overcome all 
opposition to national unification, but its furthering of mercantilism 
and economic monopoly it gave the whole social evolution a direction 
which could only lead to capitalism." [Op. Cit., pp. 116-7]

This process of state aid in capitalist development was also seen in the
United States of America. As Edward Herman points out, the "level of 
government involvement in business in the United States from the late 
eighteenth century to the present has followed a U-shaped pattern: There 
was extensive government intervention in the pre-Civil War period (major 
subsidies, joint ventures with active government participation and direct 
government production), then a quasi-laissez faire period between the 
Civil War and the end of the nineteenth century [a period marked by 
"the aggressive use of tariff protection" and state supported railway 
construction, a key factor in capitalist expansion in the USA], followed 
by a gradual upswing of government intervention in the twentieth century, 
which accelerated after 1930." [_Corporate Control, Corporate Power_, 
p. 162]

Such intervention ensured that income was transferred from workers to
capitalists. Under state protection, America industrialised by forcing
the consumer to enrich the capitalists and increase their capital stock.
"According to one study, of the tariff had been removed in the 1830s 
'about half the industrial sector of New England would have been 
bankrupted' . . . the tariff became a near-permanent political 
institution representing government assistance to manufacturing. It 
kept price levels from being driven down by foreign competition and
thereby shifted the distribution of income in favour of owners of 
industrial property to the disadvantage of workers and customers." 
[Richard B. Du Boff, _Accumulation and Power_, p. 56]

This protection was essential, for as Du Boff notes, the "end of the 
European wars in 1814 . . . reopened the United States to a flood of 
British imports that drove many American competitors out of business. 
Large portions of the newly expanded manufacturing base were wiped out, 
bringing a decade of near-stagnation." Unsurprisingly, the "era of
protectionism began in 1816, with northern agitation for higher
tariffs. . . " [Op. Cit., p. 14, p. 55]

Combined with ready repression of the labour movement and government 
"homesteading" acts (see section 8.5), tariffs were the American
equivalent of mercantilism (which, after all, was above all else a
policy of protectionism, i.e. the use of government to stimulate
the growth of native industry). Only once America was at the top
of the economic pile did it renounce state intervention (just as
Britain did, we must note). 

This is *not* to suggest that government aid was limited to tariffs.
The state played a key role in the development of industry and 
manufacturing. As John Zerzan notes, the "role of the State is 
tellingly reflected by the fact that the 'armoury system' now rivals
the older 'American system of manufactures' term as the more
accurate to describe the new system of production methods" developed
in the early 1800s. [_Elements of Refusal_, p. 100] Moreover, the
"lead in technological innovation [during the US Industrial 
Revolution] came in armaments where assured government orders 
justified high fixed-cost investments in special-pursue machinery
and managerial personnel. Indeed, some of the pioneering effects
occurred in government-owned armouries." [William Lazonick, _Competitive
Advantage on the Shop Floor_, p. 218] The government also "actively 
furthered this process [of "commercial revolution"] with public
works in transportation and communication." [Richard B. Du Boff,
Op. Cit., p. 15]

In addition to this "physical" aid, "state government provided critical
help, with devices like the chartered corporation" [Ibid.] and,
as we noted in section B.2.5, changes in the legal system which 
favoured capitalist interests over the rest of society.

Interestingly, there was increasing inequality between 1840 and 1860 in
the USA This coincided with the victory of wage labour and industrial
capitalism -- the 1820s "constituted a watershed in U.S. life. By
the end of that decade . . .industrialism assured its decisive American
victory, by the end of the 1830s all of its cardinal features were
definitely present." [John Zerzan, Op. Cit., p. 99] This is unsurprising,
for as we have argued many times, the capitalist market tends to 
increase, not reduce, inequalities between individuals and classes.
Little wonder the Individualist Anarchists at the time denounced the
way that property had been transformed into "a power [with which] to 
accumulate an income" (to use the words of J.K. Ingalls).

Over all, as Paul Ormerod puts it, the "advice to follow pure free-market
polices seems . . . to be contrary to the lessons of virtually the whole
of economic history since the Industrial Revolution . . . every country
which has moved into . . . strong sustained growth . . . has done so
in outright violation of pure, free-market principles." "The model of 
entrepreneurial activity in the product market, with judicious state 
support plus repression in the labour market, seems to be a good model 
of economic development."  [_The Death of Economics_, p. 63]

Thus the social forces at work creating capitalism was a combination of
capitalist activity and state action. But without the support of the
state, it is doubtful that capitalist activity would have been enough
to generate the initial accumulation required to start the economic
ball rolling. Hence the necessity of Mercantilism in Europe and its
modified cousin of state aid, tariffs and "homestead acts" in America.

8.2 What was the social context of the statement "laissez-faire?"

The honeymoon of interests between the early capitalists and autocratic
kings did not last long. "This selfsame monarchy, which for weighty
reasons sought to further the aims of commercial capital and was. . .
itself aided in its development by capital, grew at last into a 
crippling obstacle to any further development of European industry." 
[Rudolf Rocker, _Nationalism and Culture_, p. 117] 

This is the social context of the expression "laissez-faire" -- a 
system which has outgrown the supports that protected it in its 
early stages of growth. Just as children eventually rebel against 
the protection and rules of their parents, so the capitalists rebelled
against the over-bearing support of the absolutist state. Mercantilist
policies favoured some industries and harmed the growth of industrial
capitalism in others. The rules and regulations imposed upon those
it did favour reduced the flexibility of capitalists to changing 
environments. As Rocker argues, "no matter how the abolutist state 
strove, in its own interest, to meety the demands of commerce, it
still put on industry countless fetters which became gradually
more and more oppressive . . . [it] became an unbearable burden . . .
which paralysed all economic and social life." [Op. Cit., p. 119] 
All in all, mercantilism became more of a hindrance than a help 
and so had to be replaced. With the growth of economic and
social power by the capitalist class, this replacement was 
made easier.

Errico Malatesta notes, "[t]he development of production, the vast expansion 
of commerce, the immeasurable power assumed by money . . . have guaranteed
this supremacy [of economic power over the political power] to the
capitalist class which, no longer content with enjoying the support of
the government, demanded that government arise from its own ranks. A
government which owed its origin to the right of conquest . . . though
subject by existing circumstances to the capitalist class, went on
maintaining a proud and contemptuous attitude towards its now wealthy
former slaves, and had pretensions to independence of domination. That 
government was indeed the defender, the property owners' gendarme, but
the kind of gendarmes who think they are somebody, and behave in an
arrogant manner towards the people they have to escort and defend, when
they don't rob or kill them at the next street corner; and the capitalist
class got rid of it . . . [and replaced it] by a government [and state] . . .
at all times under its control and specifically organised to defend that
class against any possible demands by the disinherited." [_Anarchy_, 
pp. 19-20]

Malatesta here indicates the true meaning of "leave us alone," or
"laissez-faire." The *absolutist* state (not "the state" per se) began 
to interfere with capitalists' profit-making activities and authority, 
so they determined that it had to go -- as happened, for example, in the
English, French and American revolutions. However, in other ways, state
intervention in society was encouraged and applauded by capitalists. "It
is ironic that the main protagonists of the State, in its political and
administrative authority, were the middle-class Utilitarians, on the other
side of whose Statist banner were inscribed the doctrines of economic
Laissez Faire" [E.P. Thompson, _The Making of the English Working Class_, 
p. 90]. Capitalists simply wanted *capitalist* states to replace
monarchical states, so that heads of government would follow state
economic policies regarded by capitalists as beneficial to their 
class as a whole. And as development economist Lance Taylor argues:

"In the long run, there are no laissez-faire transitions to modern
economic growth. The state has always intervened to create a capitalist
class, and then it has to regulate the capitalist class, and then the
state has to worry about being taken over by the capitalist class,
but the state has always been there." [quoted by Noam Chomsky, _Year
501_, p. 104]

In order to attack mercantilism, the early capitalists had to ignore
the successful impact of its policies in developing industry and
a "store of wealth" for future economic activity. As William Lazonick
points out, "the political purpose of [Adam Smith's] the _Wealth of 
Nations_ was to attack the mercantilist institutions that the British
economy had built up over the previous two hundred years. . . In
his attack on these institutions, Smith might have asked why the
extent of the world market available to Britain in the late eighteenth
century was *so uniquely under British control.* If Smith had
asked this 'big question,' he might have been forced to grant credit
for [it] . . . to the very mercantilist institutions he was 
attacking . . ." Moreover, he "might have recognised the integral
relation between economic and political power in the rise of Britain
to international dominance." Overall, "[w]hate the British advocates
of laissez-faire neglected to talk about was the role that a system
of national power had played in creating conditions for Britain to
embark on its dynamic development path . . . They did not bother to
ask how Britain had attained th[e] position [of 'workshop of the
world'], while they conveniently ignored the on going system of
national power - the British Empire -- that . . . continued to
support Britain's position." [_Business Organisation and the Myth 
of the Market Economy_, p. 2, p. 3, p.5]

Similar comments are applicable to American supporters of laissez
faire who fail to notice that the "traditional" American support for 
world-wide free trade is quite a recent phenomenon. It started only 
at the end of the Second World War (although, of course, *within*
America military Keynesian policies were utilised). While American 
industry was developing, the country had no time for laissez-faire. 
After it had grown strong, the United States began preaching laissez-faire 
to the rest of the world -- and began to kid itself about its own 
history, believing its slogans about laissez-faire as the secret of 
its success. In addition to the tariff, nineteenth-century America 
went in heavily for industrial planning--occasionally under that name 
but more often in the name of national defence. The military was the
excuse for what is today termed rebuilding infrastructure, picking 
winners, promoting research, and co-ordinating industrial growth (as 
it still is, we should add). 

As Richard B. Du Boff points out, the "anti-state" backlash of the 
1840s onwards in America was highly selective, as the general
opinion was that "[h]enceforth, if governments wished to subsidise
private business operations, there would be no objection. But if
public power were to be used to control business actions or if
the public sector were to undertake economic initiatives on its
own, it would run up against the determined opposition of private
capital." [_Accumulation and Power_, p. 26] In other words, the 
state could aid capitalists indirectly (via tariffs, land policy,
repression of the labour movement, infrastructure subsidy and so 
on) and it would "leave them alone" to oppress and exploit workers,
exploit consumers, build their industrial empires and so forth.

So, the expression "laissez-faire" dates from the period when 
capitalists were objecting to the restrictions that helped create
them in the first place. It has little to do with freedom as such and 
far more to do with the needs of capitalist power and profits (as Murray
Bookchin argues, it is an error to depict this "revolutionary era and its
democratic aspirations as 'bourgeois,' an imagery that makes capitalism
a system more committed to freedom, or even ordinary civil liberties,
than it was historically" [_From Urbanisation to Cities_, p. 180f]). 
Takis Fotopoules, in his essay "The Nation-state and the Market", 
indicates that the social forces at work in "freeing" the market 
did not represent a "natural" evolution towards freedom:

"Contrary to what liberals and Marxists assert, marketisation of the
economy was not just an evolutionary process, following the expansion of
trade under mercantilism . . . modern [i.e. capitalist] markets did not
evolve out of local markets and/or markets for foreign goods . . . the
nation-state, which was just emerging at the end of the Middle Ages,
played a crucial role creating the conditions for the 'nationalisation' 
of the market . . . and . . . by freeing the market [i.e. the rich and
proto-capitalists] from effective social control." [_Society and Nature_,
Vol. 3, pp. 44-45]

The "freeing" of the market thus means freeing those who "own" most of 
the market (i.e. the wealthy elite) from "effective social control," but
the rest of society was not as lucky. Peter Kropotkin makes a similar point
in _Modern Science and Anarchism_, "[w]hile giving the capitalist any
degree of free scope to amass his wealth at the expense of the helpless
labourers, the government has *nowhere* and *never*. . .afforded the
labourers the opportunity 'to do as they pleased'." [_Kropotkin's
Revolutionary Pamphlets_, p. 182]

The one essential form of support the "Libertarian" right wants the state 
(or "defence" firms) to provide capitalism is the enforcement of property 
rights -- the right of property owners to "do as they like" on their own 
property, which can have obvious and extensive social impacts. What 
"libertarian" capitalists object to is attempts by others -- workers, 
society as a whole, the state, etc. -- to interfere with the authority 
of bosses. That this is just the defence of privilege and power (and 
*not* freedom) has been discussed in section B and elsewhere in 
section F, so we will not repeat ourselves here.

Samuel Johnson once observed that "we hear the loudest *yelps* for 
liberty among the drivers of Negroes." Our modern "libertarian" 
capitalist drivers of wage-slaves are yelping for exactly the
same kind of "liberty." [Johnson quoted in Noam Chomsky, _Year 501_, 
p. 141] 

8.3 What other forms did state intervention in creating capitalism take?

Beyond being a paymaster for new forms of production and social relations
and defending the owners' power, the state intervened economically in
other ways as well. As we noted in section B.2.5, the state played a key
role in transforming the law codes of society in a capitalistic fashion,
ignoring custom and common law to do so. Similarly, the use of tariffs 
and the granting of monopolies to companies played an important role
in accumulating capital at the expense of working people, as did the
breaking of unions and strikes by force. 

However, one of the most blatant of these acts was the enclosure of 
common land. In Britain, by means of the Enclosure Acts, land that 
had been freely used by poor peasants for farming their small family 
plots was claimed by large landlords as private property. As E.P. Thompson
notes, "Parliament and law imposed capitalist definitions to exclusive
property in land" [_Customs in Common_, p. 163]. Property rights, which
exclusively favoured the rich, replaced the use rights and free agreement
that had governed peasant's use of the commons. Unlike use rights, which
rest in the individual, property rights require state intervention to
create and maintain.

This stealing of the land should not be under estimated. Without land, 
you cannot live and have to sell your liberty to others. This places
those with capital at an advantage, which will tend to increase,
rather than decrease, the inequalities in society (and so place the
landless workers at an increasing disadvantage over time). This
process can be seen from early stages of capitalism. With the 
enclosure of the land, an agricultural workforce was created which
had to travel where the work was. This influx of landless ex-peasants 
into the towns ensured that the traditional guild system crumbled 
and was transformed into capitalistic industry with bosses and wage 
slaves rather than master craftsmen and their journeymen. Hence the 
enclosure of land played a key role, for "it is clear that economic 
inequalities are unlikely to create a division of society into an 
employing master class and a subject wage-earning class, unless 
access to the mans of production, including land, is by some means 
or another barred to a substantial section of the community." 
[Maurice Dobbs, _Studies in Capitalist Development_, p. 253]

The importance of access to land is summarised by this limerick 
by the followers of Henry George (a 19th century writer who argued
for a "single tax" and the nationalisation of land). The Georgites 
got their basic argument on the importance of land down these few, 
excellent lines:

		A college economist planned
		To live without access to land
		He would have succeeded
		But found that he needed
		Food, shelter and somewhere to stand.

Thus the Individualist (and other) anarchists' concern over the
"land monopoly" of which the Enclosure Acts were but one part. 
The land monopoly, to use Tucker's words, "consists in the 
enforcement by government of land titles which do not rest upon
personal occupancy and cultivation." [_The Anarchist Reader_,
p. 150] It is important to remember that wage labour first 
developed on the land and it was the protection of land titles
of landlords and nobility, combined with enclosure, that meant
people could not just work their own land. 

In other words, the circumstances so created by enclosing the land 
and enforcing property rights to large estates ensured that capitalists
did not have to point a gun at workers head to get them to work long hours 
in authoritarian, dehumanising conditions. In such circumstances,
when the majority are dispossessed and face the threat of starvation, 
poverty, homelessness and so on, "initiation of force" is *not required.*
But guns *were* required to enforce the system of private property that 
created the labour market in the first place, to enforce the enclosure 
of common land and protect the estates of the nobility and wealthy.

In addition to increasing the availability of land on the market, the
enclosures also had the effect of destroying working-class independence.
Through these Acts, innumerable peasants were excluded from access to
their former means of livelihood, forcing them to migrate to the cities 
to seek work in the newly emerging factories of the budding capitalist 
class, who were thus provided with a ready source of cheap labour. The
capitalists, of course, did not describe the results this way, but
attempted to obfuscate the issue with their usual rhetoric about
civilisation and progress. Thus John Bellers, a 17th-century supporter
of enclosures, claimed that commons were "a hindrance to Industry, and .
. . Nurseries of Idleness and Insolence." The "forests and great Commons
make the Poor that are upon them too much like the *indians.*" [quoted by
Thompson, Op. Cit., p. 163] Elsewhere Thompson argues that the commons
"were now seen as a dangerous centre of indiscipline . . . Ideology was
added to self-interest. It became a matter of public-spirited policy
for gentlemen to remove cottagers from the commons, reduce his labourers
to dependence . . ." [_The Making of the English Working Class_, 
pp. 242-3]

The commons gave working-class people a degree of independence which
allowed them to be "insolent" to their betters. This had to be stopped,
as it undermined to the very roots of authority relationships within
society. The commons *increased* freedom for ordinary people and made
them less willing to follow orders and accept wage labour. The reference
to "Indians" is important, as the independence and freedom of Native
Americans is well documented. The common feature of both cultures was
communal ownership of the means of production and free access to it
(usufruct). This is discussed further in section I.7 (Won't Libertarian 
Socialism destroy individuality?)

As the early American economist Edward Wakefield noted in 1833, "where
land is cheap and all are free, where every one who so pleases can easily
obtain a piece of land for himself, not only is labour dear, as respects
the labourer's share of the product, but the difficulty is to obtain
combined labour at any price." [_England and America_, quoted by 
Jeremy Brecher and Tim Costello, _Commonsense for Hard Times_, 
p. 24]

The enclosure of the commons (in whatever form it took -- see section
8.5 for the US equivalent) solved both problems -- the high cost of
labour, and the freedom and dignity of the worker. The enclosures
perfectly illustrate the principle that capitalism requires a state to
ensure that the majority of people do not have free access to any means
of livelihood and so must sell themselves to capitalists in order to
survive. There is no doubt that if the state had "left alone" the European 
peasantry, allowing them to continue their collective farming practices
("collective farming" because, as Kropotkin shows in _Mutual Aid_, the
peasants not only shared the land but much of the farm labour as well), 
capitalism could not have taken hold (see _Mutual Aid_, pp. 184-189, 
for more on the European enclosures). As Kropotkin notes, "[i]nstances
of commoners themselves dividing their lands were rare, everywhere the
State coerced them to enforce the division, or simply favoured the
private appropriation of their lands" by the nobles and wealthy. 
[_Mutual Aid_, p. 188]

Thus Kropotkin's statement that "to speak of the natural death of the 
village community [or the commons] in virtue of economical law is as
grim a joke as to speak of the natural death of soldiers slaughtered
on a battlefield." [Op. Cit., p. 189]

Like the more recent case of fascist Chile, "free market" capitalism was
imposed on the majority of society by an elite using the authoritarian
state. This was recognised by Adam Smith when he opposed state
intervention in _The Wealth of Nations_. In Smith's day, the government
was openly and unashamedly an instrument of wealth owners. Less than 
10 per cent of British men (and no women) had the right to vote. When 
Smith opposed state interference, he was opposing the imposition of
wealth owners' interests on everybody else (and, of course, how "liberal",
nevermind "libertarian", is a political system in which the many follow 
the rules and laws set-down in the so-called interests of all by the 
few? As history shows, any minority given, or who take, such power *will* 
abuse it in their own interests). Today, the situation is reversed, with 
neo-liberals and right libertarians opposing state interference in the 
economy (e.g. regulation of Big Business) so as to prevent the public 
from having even a minor impact on the power or interests of the elite. 

The fact that "free market" capitalism always requires introduction by an
authoritarian state should make all honest "Libertarians" ask: How "free"
is the "free market"? And why, when it is introduced, do the rich get
richer and the poor poorer? This was the case in Chile (see Section
C.11). For the poverty associated with the rise of capitalism in England
200 years ago, E.P. Thompson's _The Making of the English Working Class_
provides a detailed discussion. Howard Zinn's _A People's History of the
United States_ describes the poverty associated with 19th-century US
capitalism.

8.4 Aren't the enclosures a socialist myth?

The short answer is no, they are not. While a lot of historical analysis 
has been spent in trying to deny the extent and impact of the enclosures,
the simple fact is (in the words of noted historian E.P. Thompson) 
enclosure "was a plain enough case of class robbery, played according
to the fair rules of property and law laid down by a parliament of
property-owners and lawyers." [_The Making of the English Working 
Class_, pp. 237-8]

The enclosures were one of the ways that the "land monopoly" was created.
The land monopoly was used to refer to capitalist property rights and 
ownership of land by (among others) the Individualist Anarchists. Instead
of an "occupancy and use" regime advocated by anarchists, the land monopoly
allowed a few to bar the many from the land -- so creating a class of 
people with nothing to sell but their labour. While this monopoly is less
important these days in developed nations (few people know how to farm) 
it was essential as a means of consolidating capitalism. Given the choice,
most people preferred to become independent farmers rather than wage workers
(see next section).

However, the importance of the enclosure movement is downplayed by 
supporters of capitalism. Little wonder, for it is something of an
embarrassment for them to acknowledge that the creation of capitalism
was somewhat less than "immaculate" -- after all, capitalism is portrayed
as an almost ideal society of freedom. To find out that an idol has
feet of clay and that we are still living with the impact of its 
origins is something pro-capitalists must deny. So *is* the enclosures
a socialist myth? Most claims that it is flow from the work of the
historian J.D. Chambers' famous essay "Enclosures and the Labour Supply
in the Industrial Revolution." [_Economic History Review_, 2nd series,
no. 5, August 1953] In this essay, Chambers attempts to refute Karl
Marx's account of the enclosures and the role it played in what Marx
called "primitive accumulation."

We cannot be expected to provide an extensive account of the debate
that has raged over this issue. All we can do is provide a summary 
of the work of William Lazonick who presented an excellent reply to
those who claim that the enclosures were an unimportant historical
event. We are drawing upon his summary of his excellent essay "Karl
Marx and Enclosures in England" [_Review of Radical Political Economy_,
no. 6, Summer, 1974] which can be found in his books _Competitive
Advantage on the Shop Floor_ and _Business Organisation and the Myth 
of the Market Economy_. There are three main claims against the socialist
account of the enclosures. We will cover each in turn.

Firstly, it is often claimed that the enclosures drove the uprooted 
cottager and small peasant into industry. However, this was never
claimed. It is correct that the agricultural revolution associated
with the enclosures *increased* the demand for farm labour as claimed
by Chambers and others. And this is the whole point - enclosures 
created a pool of dispossessed labourers who had to sell their 
time/liberty to survive. The "critical transformation was not the
level of agricultural employment before and after enclosure but
the changes in employment relations caused by the reorganisation
of landholdings and the reallocation of access to land." [_Competitive
Advantage on the Shop Floor_, p. 30] Thus the key feature of the
enclosures was that it created a supply for farm labour, a supply
that had no choice but to work for another. This would drive down
wages and increase demand. Moreover, freed from the land, these 
workers could later move to the towns in search for better work.

Secondly, it is argued that the number of small farm owners increased,
or at least did not greatly decline, and so the enclosure movement was
unimportant. Again, this misses the point. Small farm owners can still
employ wage workers (i.e. become capitalist farmers as opposed to
"yeomen" -- independent peasant proprietor). As Lazonick notes, "[i]t
is true that after 1750 some petty proprietors continued to occupy
and work their own land. But in a world of capitalist agriculture,
the yeomanry no longer played an important role in determining the
course of capitalist agriculture. As a social class that could 
influence the evolution of British economy society, the yeomanry
had disappeared." [Op. Cit., p. 32]

Thirdly, it is often claimed that it was population growth, rather than 
enclosures, that caused the supply of wage workers. So was population
growth more important that enclosures? Maurice Dobbs argues that "the 
centuries in which a proletariat was most rapidly recruited were apt to 
be those of slow rather than of rapid natural increase of population,
and the paucity or plenitude of a labour reserve in different countries
was not correlated with comparable difference in their rates of 
population-growth." [_Studies in Capitalist Development_, p. 223] 
Moreover, the population argument ignores the question of whether 
the changes in society caused by enclosures and the rise of capitalism 
have an impact on the observed trends towards earlier marriage and 
larger families after 1750. Lazonick argues that "[t]here is reason 
to believe that they did." [Op. Cit., p. 33] Also, of course, the use 
of child labour in the factories created an economic incentive to have 
more children, an incentive created by the developing capitalist system. 
Overall, Lazonick notes that "[t]o argue that population growth created 
the industrial labour supply is to ignore these momentous social 
transformations" associated with the rise of capitalism. [_Business 
Organisation and the Myth of the Market Economy_, p. 273]

In other words, there is good reason to think that the enclosures, far
from being some kind of socialist myth, in fact played a key role in
the development of capitalism. As Lazonick himself notes, "Chambers
misunderstood" "the argument concerning the 'institutional creation'
of a proletarianised (i.e. landless) workforce. Indeed, Chamber's
own evidence and logic tend to support the Marxian [and anarchist!]
argument, when it is properly understood." [Op. Cit., p. 273]

8.5 What about the lack of enclosures in the Americas?

The enclosure movement was but one way of creating the "land monopoly"
which ensured the creation of a working class. The circumstances facing 
the ruling class in the Americas were distinctly different than in 
the Old World and so the "land monopoly" took a different form there. 
In the Americas, enclosures were unimportant as customary land rights 
did not really exist. Here the problem was that (after the original 
users of the land were eliminated, of course) there were vast tracks 
of land available for people to use. 

Unsurprisingly, there was a movement towards independent farming and 
this pushed up the price of labour, by reducing the supply. Capitalists
found it difficult to find workers willing to work for them at wages
low enough to provide them with sufficient profits. It was due the
difficulty in finding cheap enough labour that capitalists in America
turned to slavery. All things being equal, wage labour *is* more
productive than slavery. But in early America all things were *not*
equal. Having access to cheap (indeed, free) land meant that working
people had a choice, and few desired to become wage slaves. Because 
of this, capitalists turned to slavery in the South and the "land
monopoly" in the North and West. 

This was because, in the words of Maurice Dobbs, it "became clear to
those who wished to reproduce capitalist relations of production in 
the new country that the foundation-stone of their endeavour must be
the restriction of land-ownership to a minority and the exclusion of
the majority from any share in [productive] property." [_Studies in
Capitalist Development_, pp. 221-2] As one radical historian puts
it, "[w]hen land is 'free' or 'cheap'. as it was in different regions 
of the United States before the 1830s, there was no compulsion for 
farmers to introduce labour-saving technology. As a result, 
'independent household production' . . . hindered the development 
of capitalism . . . [by] allowing large portions of the population 
to escape wage labour." [Charlie Post, "The 'Agricultural Revolution' 
in the United States", pp. 216-228, _Science and Society_, vol. 61, 
no. 2, p. 221]

It was precisely this option (i.e. of independent production) that
had to be destroyed in order for capitalist industry to develop. 
The state had to violate the holy laws of "supply and demand"
by controlling the access to land in order to ensure the normal
workings of "supply and demand" in the labour market (i.e. that 
the bargaining position on the labour market favoured employer 
over employee). Once this situation became the typical one (i.e.
when the option of self-employment was effectively eliminated)
a (protectionist based) "laissez-faire" approach could be adopted 
and state action used only to protect private property from the 
actions of the dispossessed.

So how was this transformation of land ownership achieved?

Instead of allowing settlers to appropriate their own farms as was
the case before the 1830s, the state stepped in once the army had 
cleared out the original users. Its first major role was to enforce 
legal rights of property on unused land. Land stolen from the Native 
Americans was sold at auction to the highest bidders, namely speculators, 
who then sold it on to farmers. This process started right "after
the revolution, [when] huge sections of land were bought up by rich
speculators" and their claims supported by the law [Howard Zinn, _A 
People's History of the United States_, p. 125] Thus land which should
have been free was sold to land-hungry farmers and the few enriched
themselves at the expense of the many. Not only did this increase
inequality within society, it also encouraged the development of wage
labour -- having to pay for land would have ensured that many immigrants 
remained on the East Coast until they had enough money. Thus a pool of 
people with little option but to sell their labour was increased due to 
state protection of unoccupied land. That the land usually ended up in 
the hands of farmers did not (could not) countermand the shift in class
forces that this policy created.

This was also the essential role of the various "Homesteading Acts" and, 
in general, the "Federal land law in the 19th century provided for the 
sale of most of the public domain at public auction to the higher bidder 
. . . Actual settlers were forced to buy land from speculators, at 
prices considerably above the federal minimal price" (which few people 
could afford anyway) [Charlie Post, Op. Cit., p. 222]. Little wonder 
the Individualist Anarchists supported an "occupancy and use" system 
of land ownership as a key way of stopping capitalist and landlord
usury as well as the development of capitalism itself.

This change in the appropriation of land had significant effects on
agriculture and the desirability of taking up farming for immigrants.
As Post notes, "[w]hen the social conditions for obtaining and maintaining
possession of land change, as they did in the midwest between 1830 and 
1840, pursuing the goal of preserving [family ownership and control] . . .
produced very different results. In order to pay growing mortgages, 
debts and taxes, family farmers were compelled to specialise production
toward cash crops and to market more and more of their output." 
[Op. Cit., p. 221-2]

So, in order to pay for land which was formerly free, farmers got 
themselves into debt and increasingly turned to the market to pay it
off. Thus, the "Federal land system, by transforming land into a commodity
and stimulating land speculation, made the midwestern farmers dependent
upon markets for the continual possession of their farms." [Charlie
Post, Op. Cit., p. 223] Once on the market, farmers had to invest in
new machinery and this also got them into debt. In the face of a bad 
harvest or market glut, they could not repay their loans and their 
farms had to be sold to so do so. By 1880, 25% of all farms were 
rented by tenants, and the numbers kept rising. 

This means that Murray Rothbard's comments that "once the land was 
purchased by the settler, the injustice disappeared" are nonsense -- the 
injustice was transmitted to other parts of society and this, along 
with the legacy of the original injustice, lived on and helped transform 
society towards capitalism [_The Ethics of Liberty_, p. 73]. In 
addition, his comments about "the establishment in North America 
of a truly libertarian land system" would be one the Individualist 
Anarchists would have seriously disagreed with! [Ibid.]

Thus state action, in restricting free access to the land, ensured that 
workers were dependent on wage labour. In addition, the  "transformation 
of social property relations in northern agriculture set the stage for 
the 'agricultural revolution' of the 1840s and 1850s . . . [R]ising 
debts and taxes forced midwestern family farmers to compete as 
commodity producers in order to maintain their land-holding . . . 
The transformation . . . was the central precondition for the 
development of industrial capitalism in the United States." 
[Charlie Post, Ibid., p. 226]

In addition to seizing the land and distributing it in such a way
as to benefit capitalist industry, the "government played its part 
in helping the bankers and hurting the farmers; it kept the amount 
of money - based in the gold supply - steady while the population
rose, so there was less and less money in circulation. The farmer 
had to pay off his debts in dollars that were harder to get. The 
bankers, getting loans back, were getting dollars worth more than 
when they loaned them out - a kind of interest on top of interest. 
That was why . . . farmers' movements [like the Individualist 
Anarchists, we must add] . . . [talked about] putting more money 
in circulation." [Howard Zinn, Op. Cit., p. 278]

Overall, therefore, state action ensured the transformation of
America from a society of independent workers to a capitalist one.
By creating and enforcing the "land monopoly" (of which state
ownership of unoccupied land and its enforcement of landlord
rights were the most important) the state ensured that the 
balance of class forces tipped in favour of the capitalist
class. By removing the option of farming your own land, the
US government created its own form of enclosure and the creation
of a landless workforce with little option but to sell its 
liberty on the "free market". This, combined with protectionism,
ensured the transformation of American society from a pre-capitalist
one into a capitalist one. They was nothing "natural" about it.

Little wonder the Individualist Anarchist J.K. Ingalls attacked
the "land monopoly" in the following words:

"The earth, with its vast resources of mineral wealth, its spontaneous
productions and its fertile soil, the free gift of God and the common
patrimony of mankind, has for long centuries been held in the grasp of
one set of oppressors by right of conquest or right of discovery; and
it is now held by another, through the right of purchase from them.
All of man's natural possessions . . . have been claimed as property;
nor has man himself escaped the insatiate jaws of greed. The invasion
of his rights and possessions has resulted . . . in clothing property
with a power to accumulate an income." [quoted by James Martin, _Men 
Against the State_, p. 142]

8.6 How did working people view the rise of capitalism?

The best example of how hated capitalism was can be seen by the rise 
and spread of the socialist movement, in all its many forms, across the
world. It is no coincidence that the development of capitalism also saw
the rise of socialist theories. However, in order to fully understand how 
different capitalism was from previous economic systems, we will consider 
early capitalism in the US, which for many "Libertarians" is *the* example 
of the "capitalism-equals-freedom" argument.

Early America was pervaded by artisan production -- individual ownership
of the means of production. Unlike capitalism, this system is *not*
marked by the separation of the worker from the means of life. Most
people did not have to work for another, and so did not. As Jeremy
Brecher notes, in 1831 the "great majority of Americans were farmers
working their own land, primarily for their own needs. Most of the rest
were self-employed artisans, merchants, traders, and professionals. 
Other classes - employees and industrialists in the North, slaves and
planters in the South - were relatively small. The great majority of
Americans were independent and free from anybody's command." [_Strike!_,
p. xxi] These conditions created the high cost of combined (wage) 
labour which ensured the practice of slavery existed.

However, toward the middle of the 19th century the economy began to 
change. Capitalism began to be imported into American society as the 
infrastructure was improved, which allowed markets for manufactured 
goods to grow. Soon, due to (state-supported) capitalist competition, 
artisan production was replaced by wage labour. Thus "evolved" modern 
capitalism. Many workers understood, resented, and opposed their 
increasing subjugation to their employers ("the masters", to use Adam 
Smith's expression), which could not be reconciled with the principles 
of freedom and economic independence that had marked American life and 
sunk deeply into mass consciousness during the days of the early economy. 
In 1854, for example, a group of skilled piano makers wrote that "the day 
is far distant when they [wage earners] will so far forget what is due to 
manhood as to glory in a system forced upon them by their necessity and in 
opposition to their feelings of independence and self-respect. May the 
piano trade be spared such exhibitions of the degrading power of the day 
[wage] system." [quoted by Brecher and Costello, _Common Sense for Hard 
Times_, p. 26]

Clearly the working class did not consider working for a daily wage, in
contrast to working for themselves and selling their own product, to be 
a step forward for liberty or individual dignity. The difference between 
selling the product of one's labour and selling one's labour (i.e.
oneself) was seen and condemned ("[w]hen the producer . . . sold his
product, he retained himself. But when he came to sell his labour, he
sold himself . . . the extension [of wage labour] to the skilled
worker was regarded by him as a symbol of a deeper change" [Norman
Ware, _The Industrial Worker, 1840-1860_, p. xiv]). Indeed, one group
of workers argued that they were "slaves in the strictest sense of
the word" as they had "to toil from the rising of the sun to the going
down of the same for our masters - aye, masters, and for our daily
bread" [Quoted by Ware, Op. Cit., p. 42] and another argued that "the
factory system contains in itself the elements of slavery, we think
no sound reasoning can deny, and everyday continues to add power to 
its incorporate sovereignty, while the sovereignty of the working
people decreases in the same degree." [quoted by Brecher and Costello,
Op. Cit., p. 29]

Almost as soon as there were wage workers, there were strikes, machine
breaking, riots, unions and many other forms of resistance. John Zerzan's 
argument that there was a "relentless assault on the worker's historical 
rights to free time, self-education, craftsmanship, and play was at 
the heart of the rise of the factory system" is extremely accurate 
[_Elements of Refusal_, p. 105]. And it was an assault that workers 
resisted with all their might. In response to being subjected to the
"law of value," workers rebelled and tried to organise themselves to 
fight the powers that be and to replace the system with a co-operative 
one. As the printer's union argued, "[we] regard such an organisation 
[a union] not only as an agent of immediate relief, but also as an 
essential to the ultimate destruction of those unnatural relations at 
present subsisting between the interests of the employing and the 
employed classes. . . .[W]hen labour determines to sell itself no
longer to speculators, but to become its own employer, to own and 
enjoy itself and the fruit thereof, the necessity for scales of 
prices will have passed away and labour will be forever rescued 
from the control of the capitalist." [quoted by Brecher and Costello, 
Op. Cit., pp. 27-28]

Little wonder, then, why wage labourers considered capitalism as a 
form of "slavery" and why the term "wage slavery" became so popular 
in the anarchist movement. It was just reflecting the feelings of those
who experienced the wages system at first hand and joined the socialist
and anarchist movements. As labour historian Norman Ware notes, the 
"term 'wage slave' had a much better standing in the forties [of the 
19th century] than it has today. It was not then regarded as an empty
shibboleth of the soap-box orator. This would suggest that it has
suffered only the normal degradation of language, has become a *cliche*,
not that it is a grossly misleading characterisation." [Op. Cit., p. xvf]

These responses of workers to the experience of wage labour is important
to show that capitalism is by no means "natural." The fact is the first
generation of workers tried to avoid wage labour is at all possible as
they hated the restrictions of freedom it imposed upon them. They were
perfectly aware that wage labour was wage slavery -- that they were
decidedly *unfree* during working hours and subjected to the will of
another. While many working people now are accustomed to wage labour
(while often hating their job) the actual process of resistance to
the development of capitalism indicates well its inherently authoritarian
nature. Only once other options were closed off and capitalists given 
an edge in the "free" market by state action did people accept and 
become accustomed to wage labour. 

Opposition to wage labour and factory fascism was/is widespread and seems
to occur wherever it is encountered. "Research has shown", summarises
William Lazonick, "that the 'free-born Englishman' of the eighteenth
century - even those who, by force of circumstance, had to submit to
agricultural wage labour - tenaciously resisted entry into the
capitalist workshop." [_Business Organisation and the Myth of the 
Market Economy_, p. 37] British workers shared the dislike of wage
labour of their American cousins. A "Member of the Builders' Union"
in the 1830s argued that the trade unions "will not only strike
for less work, and more wages, but will ultimately *abolish wages,*
become their own masters and work for each other; labour and capital
will no longer be separate but will be indissolubly joined together
in the hands of workmen and work-women." [quoted by Geoffrey Ostergaard,
_The Tradition of Workers' Control_, p. 133] This is unsurprising,
for as Ostergaard notes, "the workers then, who had not been swallowed
up whole by the industrial revolution, could make critical comparisons
between the factory system and what preceded it." [Op. Cit., p. 134]
While wage slavery may seem "natural" today, the first generation of
wage labourers saw the transformation of the social relationships they
experienced in work, from a situation in which they controlled their
own work (and so themselves) to one in which *others* controlled them,
and they did not like it. However, while many modern workers instinctively
hate wage labour and having bosses, without the awareness of some other
method of working, many put up with it as "inevitable." The first 
generation of wage labourers had the awareness of something else
(although, of course, a flawed something else) and this gave then
a deep insight into the nature of capitalism and produced a deeply
radical response to it and its authoritarian structures.

Far from being a "natural" development, then, capitalism was imposed on 
a society of free and independent people by state action. Those workers
alive at the time viewed it as "unnatural relations" and organised to
overcome it. These feelings and hopes still exist, and will continue to
exist until such time as we organise and "abolish the wage system" (to
quote the IWW preamble) and the state that supports it.

8.7 Why is the history of capitalism important?

Simply because it provides us with an understanding of whether that system
is "natural" and whether it can be considered as just and free. If the
system was created by violence, state action and other unjust means then
the apparent "freedom" which we currently face within it is a fraud, a
fraud masking unnecessary and harmful relations of domination, oppression
and exploitation. Moreover, by seeing how capitalist relationships were
viewed by the first generation of wage slaves reminds us that just because
many people have adjusted to this regime and consider it as normal (or
even natural) it is nothing of the kind.

Murray Rothbard is well aware of the importance of history. He considered
the "moral indignation" of socialism arises from the argument "that the 
capitalists have stolen the rightful property of the workers, and therefore
that existing titles to accumulated capital are unjust." He argues that 
given "this hypothesis, the remainder of the impetus for both Marxism and 
anarchosyndicalism follow quote logically." [_The Ethics of Liberty_, 
p. 52]

So some right-libertarians are aware that the current property owners
have benefited extensively from violence and state action in the past.
Murray Rothbard argues (in _The Ethics of Liberty_, p. 57) that if the 
just owners cannot be found for a property, then the property simply 
becomes again unowned and will belong to the first person to appropriate 
and utilise it. If the current owners are not the actual criminals then 
there is no reason at all to dispossess them of their property; if the 
just owners cannot be found then they may keep the property as the 
first people to use it (of course, those who own capital and those who
use it are usually different people, but we will ignore this obvious
point).

Thus, since all original owners and the originally dispossessed are long 
dead nearly all current title owners are in just possession of their 
property except for recently stolen property. The principle is simple, 
dispossess the criminals, restore property to the dispossessed if they 
can be found otherwise leave titles where they are (as Native American
tribes owned the land *collectively* this could have an interesting effect 
on such a policy in the USA. Obviously tribes that were wiped out need
not apply, but would such right-libertarian policy recognise such 
collective, non-capitalist ownership claims? We doubt it, but we could
be wrong -- the Libertarian Party Manifesto states that their "just"
property rights will be restored. And who defines "just"? And given 
that unclaimed federal land will be given to Native Americans, its
seems pretty likely that the *original* land will be left alone).

Of course, that this instantly gives an advantage to the wealthy on the
new "pure" market is not mentioned. The large corporations that, via
state protection and support, built their empires and industrial base
will still be in an excellent position to continue to dominate the 
market. Wealthy land owners, benefiting from the effects of state
taxation and rents caused by the "land monopoly" on farmstead failures,
will keep their property. The rich will have a great initial advantage
and this may be more than enough to maintain them in there place. After
all, exchanges between worker and owner tend to reinforce existing 
inequalities, *not* reduce them (and as the owners can move their
capital elsewhere or import new, lower waged, workers from across the
world, its likely to stay that way).

So Rothbard's "solution" to the problem of past force seems to be 
(essentially) a justification of existing property titles and not 
a serious attempt to understand or correct past initiations of force 
that have shaped society into a capitalist one and still shape it today. 
The end result of his theory is to leave things pretty much as they are, 
for the past criminals are dead and so are their victims. 

However, what Rothbard fails to note is that the *results* of this state 
action and coercion are still with us. He totally fails to consider
that the theft of productive wealth has a greater impact on society
than the theft itself. The theft of *productive* wealth shapes 
society in so many ways that *all* suffer from it (including current
generations). This (the externalities generated by theft) cannot be
easily undone by individualistic "solutions". 

Let us take an example somewhat more useful that the one Rothbard uses
(namely, a stolen watch). A watch cannot really be used to generate 
wealth (although if I steal a watch, sell it and buy a winning lottery 
ticket, does that mean I can keep the prize after returning the money
value of your watch to you? Without the initial theft, I would not have
won the prize but obviously the prize money far exceeds the amount
stolen. Is the prize money mine?). Let us take a tool of production
rather than a watch.

Let assume a ship sinks and 50 people get washed ashore on an island. One
woman has foresight to take a knife from the ship and falls unconscious
on the beach. A man comes along and steals her knife. When the woman 
awakes she cannot remember if she had managed to bring the knife ashore 
with her or not. The man maintains that he brought it with him and no one
else saw anything. The survivors decide to split the island equally 
between them and work it separately, exchanging goods via barter. 

However, the man with the knife has the advantage and soon carves 
himself a house and fields from the wilderness. Seeing that they need
the knife and the tools created by the knife to go beyond mere existing, 
some of the other survivors hire themselves to the knife owner. Soon 
he is running a surplus of goods, including houses and equipment which
he decides to hire out to others. This surplus is then used to tempt 
more and more of the other islanders to work for him, exchanging their 
land in return for the goods he provides. Soon he owns the whole island 
and never has to work again. His hut is well stocked and extremely 
luxurious. His workers face the option of following his orders or 
being fired (i.e. expelled from the island and so back into the water 
and certain death). Later, he dies and leaves his knife to his son. 
The woman whose knife it originally was had died long before, childless.

Note that the theft did not involve taking any land. All had equal access
to it. It was the initial theft of the knife which provided the man with
market power, an edge which allowed him to offer the others a choice
between working by themselves or working for him. By working for him
they did "benefit" in terms of increased material wealth (and also
made the thief better off) but the accumulate impact of unequal 
exchanges turned them into the effective slaves of the thief.

Now, would it *really* be enough to turn the knife over to the whoever
happened to be using it once the theft was discovered (perhaps the 
thief made a death-bed confession). Even if the woman who had originally
taken it from the ship been alive, would the return of the knife *really*
make up for the years of work the survivors had put in enriching the
the thief or the "voluntary exchanges" which had resulted in the thief 
owning all the island? The equipment people use, the houses they life
in and the food they eat are all the product of many hours of collective
work. Does this mean that the transformation of nature which the knife
allowed remain in the hands of the descendants of the thief or become
the collective property of all? Would dividing it equally between all
be fair? Not everyone worked equally hard to produce it. So we have a
problem -- the result of the initial theft is far greater than the 
theft considered in isolation due to the productive nature of what was
stolen.

In other words, what Rothbard ignores in his attempt to undermine 
anarchist use of history is that when the property stolen is of a 
productive nature, the accumulative effect of its use is such as to 
affect all of society. Productive assets produce *new* property, *new*
values, create a *new* balance of class forces, *new* income and wealth
inequalities and so on. This is because of the *dynamic* nature of
production and human life. When the theft is such that it creates 
accumulative effects after the initial act, it is hardly enough to say 
that it does not really matter any more. If a nobleman invests in a 
capitalist firm with the tribute he extracted from his peasants, then 
(once the firm starts doing well) sells the land to the peasants and 
uses that money to expand his capitalist holdings, does that *really* 
make everything all right? Does not the crime transmit with the cash? 
After all, the factory would not exist without the prior exploitation 
of the peasants.

In the case of actually existing capitalism, born as it was of extensive 
coercive acts, the resultant of these acts have come to shape the *whole* 
society. For example, the theft of common land (plus the enforcement of 
property rights -- the land monopoly -- to vast estates owned by the 
aristocracy) ensured that working people had no option to sell their 
labour to the capitalists (rural or urban). The terms of these contracts 
reflected the weak position of the workers and so capitalists extracted 
surplus value from workers and used it to consolidate their market 
position and economic power. Similarly, the effect of mercantilist 
policies (and protectionism) was to enrich the capitalists at the 
expense of workers and allow them to build industrial empires. 

The accumulative effect of these acts of violation of a "free" market 
was to create a class society wherein most people "consent" to be 
wage slaves and enrich the few. While those who suffered the impositions 
are long gone and the results of the specific acts have multiplied and 
magnified  well beyond their initial form. And we are still living with 
them. In other words, the initial acts of coercion have been transmitted
and transformed by collective activity (wage labour) into society-wide 
affects.

Rothbard argues in the situation where the descendants (or others) of 
those who initially tilled the soil and their aggressors ("or those who 
purchased their claims") still extract "tribute from the modern tillers" 
that this is a case of "*continuing* aggression against the true owners." 
This means that "the land titles should be transferred to the peasants, 
without compensation to the monopoly landlords." [Op. Cit., p. 65] But
what he fails to note is that the extracted "tribute" could have been
used to invest in industry and transform society. Why ignore what the
"tribute" has been used for? Does stolen property not remain stolen 
property after it has been transferred to another? And if the stolen
property is used to create a society in which one class has to sell
their liberty to another, then surely any surplus coming from those
exchanges are also stolen (as it was generated directly and indirectly
by the theft).

Yes, anarchist agree with Rothbard -- peasants should take the land they
use but which is owned by another. But this logic can equally be applied to 
capitalism. Workers are still living with the effects of past initiations 
of force and capitalists still extract "tribute" from workers due to
the unequal bargaining powers within the labour market that this has
created. The labour market, after all, was created by state action 
(directly or indirectly) and is maintained by state action (to protect 
property rights and new initiations of force by working people). The 
accumulative effects of stealing productive resources as been to 
increase the economic power of one class compared to another. As the 
victims of these past abuses are long gone and attempts to find their 
descendants meaningless (because of the generalised effects the 
thefts in question), anarchists feel we are justified in demanding 
the "expropriation of the expropriators". 

Due to Rothbard's failure to understand the dynamic and generalising 
effects that result from the theft of productive resources (i.e. externalities
that occur from coercion of one person against a specific set of others) and 
the creation of a labour market, his attempt to refute anarchist analysis
of the history of "actually existing capitalism" also fails. Society is
the product of collective activity and should belong to us all (although
whether and how we divide it up is another question).

9 Is Medieval Iceland an example of "anarcho"-capitalism working in
    practice?

Ironically, medieval Iceland is a good example of why "anarcho"-capitalism
will *not* work, degenerating into de facto rule by the rich. It should be
pointed out first that Iceland, nearly 1,000 years ago, was not a capitalistic
system. In fact, like most cultures claimed by "anarcho"-capitalists as
examples of their "utopia," it was a communal, not individualistic, society,
based on artisan production, with extensive communal institutions as well as 
individual "ownership" (i.e. use) and a form of social self-administration, 
the *thing* -- both local and Iceland-wide -- which can be considered a 
"primitive" form of the anarchist communal assembly.

As William Ian Miller points out "[p]eople of a communitarian nature. . .
have reason to be attracted [to Medieval Iceland]. . . the limited role
of lordship, the active participation of large numbers of free people . . .
in decision making within and without the homestead. The economy barely 
knew the existence of markets. Social relations preceded economic 
relations. The nexus of household, kin, Thing, even enmity, more than the
nexus of cash, bound people to each other. The lack of extensive economic 
differentiation supported a weakly differentiated class system . . . [and
material] deprivations were more evenly distributed than they would be
once state institutions also had to be maintained." [_Bloodtaking and 
Peacemaking: Feud, Law and Society in Saga Iceland_, p. 306]

At this time Iceland "remained entirely rural. There were no towns, not 
even villages, and early Iceland participated only marginally in the active 
trade of Viking Age Scandinavia." There was a "diminished level of 
stratification, which emerged from the first phase of social and economic 
development, lent an appearance of egalitarianism - social stratification 
was restrained and political hierarchy limited." [Jesse Byock, _Viking Age 
Iceland_, p. 2] That such a society could be classed as "capitalist" or
even considered a model for an advanced industrial society is staggering.

Kropotkin in _Mutual Aid_ indicates that Norse society, from which the
settlers in Iceland came, had various "mutual aid" institutions, including
communal land ownership (based around what he called the "village community")
and the *thing* (see also Kropotkin's _The State: Its Historic Role_ for a
discussion of the "village community"). It is reasonable to think that
the first settlers in Iceland would have brought such institutions with
them and Iceland did indeed have its equivalent of the commune or "village 
community," the *Hreppar*, which developed early in the country's history. 
Like the early local assemblies, it is not much discussed in the Sagas but 
is mentioned in the law book, the Gr g s, and was composed of a minimum of
twenty farms and had a five member commission. The Hreppar was self-governing
and, among other things, was responsible for seeing that orphans and the 
poor within the area were fed and housed. The Hreppar also served as a 
property insurance agency and assisted in case of fire and losses due to 
diseased livestock.

In addition, as in most pre-capitalist societies, there were "commons",
common land available for use by all.  During the summer, "common lands 
and pastures in the highlands, often called *almenning*, were used by 
the region's farmers for grazing." This increased the independence of 
the population from the wealthy as these "public lands offered opportunities 
for enterprising individuals to increase their store of provisions and to 
find saleable merchandise." [Jesse Byock, Op. Cit., p. 47 and p. 48] 

Thus Icelandic society had a network of solidarity, based upon communal 
life:

"The status of farmers as free agents was reinforced by the presence of 
communal units called *hreppar* (sing. *hreppr*) . . . these [were] 
geographically defined associations of landowners. . . the *hreppr* 
were self-governing . . . .[and] guided by a five-member steering 
committee . . . As early as the 900s, the whole country seems to have 
been divided into *hreppar* . . . *Hreppar* provided a blanket of
local security, allowing the landowning farmers a measure of 
independence to participate in the choices of political life . . .

"Through copoperation among their members, *hreppar* organised and 
controlled summer grazing lands, organised communal labour, and 
provided an immediate local forum for settling disputes. Crucially, 
they provided fire and livestock insurance for local farmers. . . 
[They also] saw to the feeding and housing of local orphans, and 
administered poor relief to people who were recognised as inhabitants 
of their area. People who could not provide for themselves were 
assigned to member farms, which took turns in providing for them."
[Byock, Op. Cit., pp. 137-8]

In practice this meant that "each commune was a mutual insurance 
company, or a miniature welfare state. And membership in the commune 
was not voluntary. Each farmer had to belong to the commune in which 
his farm was located and to contribute to its needs." [Gissurarson, 
quoted by Birgit T. Runolfsson Solvason, _Ordered Anarchy, State and 
Rent-Seeking: The Icelandic Commonwealth, 930-1262_] The Icelandic 
Commonwealth did not allow farmers *not* to join its communes and
"[o]nce attached to the local *hreppr*, a farm's affliation could 
not be changed." However, they did play a key role in keeping the 
society free as the *hreppr* "was essentially non-political and 
addressed subsistence and economic security needs. Its presence 
freed farmers from depending on an overclass to provide comparable 
services or corresponding security measures." [Byock, Op. Cit., p. 138]

Therefore, the Icelandic Commonwealth can hardly be claimed in any 
significant way as an example of "anarcho"-capitalism in practice. This 
can also be seen from the early economy, where prices were subject to popular 
judgement at the *skuldaping* ("payment-thing") *not* supply and demand.
[Kirsten Hastrup, _Culture and History in Medieval Iceland_, p. 125]
Indeed, with its communal price setting system in local assemblies, the
early Icelandic commonwealth was more similar to Guild Socialism (which
was based upon guild's negotiating "just prices" for goods and services)
than capitalism. Therefore Miller correctly argues that it would be wrong 
to impose capitalist ideas and assumptions onto Icelandic society:

"Inevitably the attempt was made to add early Iceland to the number of
regions that socialised people in nuclear families within simple
households. . . what the sources tell us about the shape of Icelandic
householding must compel a different conclusion." [Op. Cit., p. 112]

In other words, Kropotkin's analysis of communal society is far closer
to the reality of Medieval Iceland than "anarcho"-capitalist attempts 
to turn it into a some kind of capitalist utopia. 

However, the communal nature of Icelandic society also co-existed (as 
in most such cultures) with hierarchical institutions, including some with 
capitalistic elements, namely private property and "private states" around
the local *godar.* The godar were local chiefs who also took the role of 
religious leaders. As the _Encyclopaedia Britannica_ explains, "a kind of
local government was evolved [in Iceland] by which the people of a
district who had most dealings together formed groups under the leadership
of the most important or influential man in the district" (the godi). 
The godi "acted as judge and mediator" and "took a lead in communal
activities" such as building places of worship. These "local assemblies.
. . are heard of before the establishment of the althing" (the national
thing). This althing led to co-operation between the local assemblies.

Thus Icelandic society had different elements, one based on the local 
chiefs and communal organisations. Society was marked by inequalities
as "[a]mong the landed there were differences in wealth and prominence.
Distinct cleavages existed between landowners and landless people and 
between free men and slaves." This meant it was "marked by aspects of 
statelessness and egalitarianism as well as elements of social hierarchy 
. . . Although Iceland was not a democratic system, proto-democratic 
tendencies existed." [Byock, Op. Cit., p. 64 and p. 65] The Icelandic
social system was designed to reduce the power of the wealthy by 
enhancing communal institutions:

"The society . . . was based on a system of decentralised self-government 
. . . The Viking Age settlers began by establishing local things, or 
assemblies, which had been the major forum for meetings of freemen 
and aristocrats in the old Scandinavian and Germanic social order. . . 
They [the Icelanders] excluded overlords with coercive power and 
expended the mandate of the assembly to fill the full spectrum of 
the interests of the landed free farmers. The changes transformed a 
Scandinavian decision-making body that mediated between freemen and 
overlords into an Icelandic self-contained governmental system without 
overlords. At the core of Icelandic government was the Althing, a 
national assembly of freemen." [Byock, Op. Cit., p. 75]

Therefore we see communal self-management in a basic form, *plus* 
co-operation between communities as well. These communistic, 
mutual-aid features exist in many non-capitalist cultures and are 
often essential for ensuring the people's continued freedom within 
those cultures (section B.2.5 on why the wealthy undermine these 
popular "folk-motes" in favour of centralisation). Usually, the 
existence of private property (and so inequality) soon led to the 
destruction of communal forms of self-management (with participation 
by all male members of the community as in Iceland), which are replaced 
by the rule of the rich.

While such developments are a commonplace in most "primitive" cultures, 
the Icelandic case has an unusual feature which explains the interest 
it provokes in "anarcho"-capitalist circles. This feature was that
individuals could seek protection from any godi. As the _Encyclopaedia
Britannica_ puts it, "the extent of the godord [chieftancy] was not fixed
by territorial boundaries. Those who were dissatisfied with their chief
could attach themselves to another godi. . . As a result rivalry arose
between the godar [chiefs]; as may be seen from the Icelandic Sagas." 
This was because, while there were "a central legislature and uniform, 
country-wide judicial and legal systems," people would seek the 
protection of any godi, providing payment in return. [Byock, Op. Cit., 
p. 2] These godi, in effect, would be subject to "market forces," as 
dissatisfied individuals could affiliate themselves to other godi. This 
system, however, had an obvious (and fatal) flaw. As the _Encyclopaedia 
Britannica_ points out:

"The position of the godi could be bought and sold, as well as inherited;
consequently, with the passing of time, the godord for large areas of the
country became concentrated in the hands of one man or a few men. This was
the principal weakness of the old form of government: it led to a struggle
of power and was the chief reason for the ending of the commonwealth and 
for the country's submission to the King of Norway."

It was the existence of these hierarchical elements in Icelandic society 
that explain its fall from anarchistic to statist society. As Kropotkin 
argued "from chieftainship sprang on the one hand the State and on the 
other *private* property." [_Act for Yourselves_, p. 85] Kropotkin's 
insight that chieftainship is a transitional system has been confirmed 
by anthropologists studying "primitive" societies. They have come to the 
conclusion that societies made up of chieftainships or chiefdoms are 
not states: "Chiefdoms are neither stateless nor state societies in the 
fullest sense of either term: they are on the borderline between the two. 
Having emerged out of stateless systems, they give the impression of being
on their way to centralised states and exhibit characteristics of both." 
[Y. Cohen quoted by Birgit T. Runolfsson Solvason, Op. Cit.] Since the 
Commonwealth was made up of chiefdoms, this explains the contradictory
nature of the society - it was in the process of transition, from anarchy
to statism, from a communal economy to one based on private property.

The *political* transition within Icelandic society went hand in hand with
an *economic* transition (both tendencies being mutually reinforcing).
Initially, when Iceland was settled, large-scale farming based on extended
households with kinsmen was the dominant economic mode. This semi-communal
mode of production changed as the land was divided up (mostly through
inheritance claims) between the 10th and 11th centuries. This new economic
system based upon individual *possession* and artisan production was then
slowly displaced by tenant farming, in which the farmer worked for a
landlord, starting in the late 11th century. This economic system (based 
on tenant farming, i.e. capitalistic production) ensured that 
"great variants of property and power emerged." [Kirsten Hastrup, _Culture 
and History in Medieval Iceland_, pp. 172-173] 

So significant changes in society started to occur in the eleventh century, 
as "slavery all but ceased. Tenant farming . . . took [its] place." Iceland 
was moving from an economy based on *possession* to one based on *private 
property* and so "the renting of land was a widely established practice by 
the late eleventh century . . . the status of the *godar* must have been 
connected with landownership and rents." This lead to increasing oligarchy 
and so the mid- to late-twelfth century was "characterised by the appearance 
of a new elite, the big chieftains who are called storgodar . . . [who] 
struggled from the 1220s to the 1260s to win what had earlier been 
unobtainable for Icelandic leaders, the prize of overlordship or 
centralised executive authority." [Byock, Op. Cit., p. 269 and pp. 3-4] 

During this evolution in ownership patterns and the concentration of wealth 
and power into the hands of a few, we should note that the godi's and wealthy
landowners' attitude to profit making also changed, with market values 
starting to replace those associated with honour, kin, and so on. Social 
relations became replaced by economic relations and the nexus of household, 
kin and Thing was replaced by the nexus of cash and profit. The rise of 
capitalistic social relationships in production and values within society
was also reflected in exchange, with the local marketplace, with its
pricing "subject to popular judgement" being "subsumed under central
markets." [Hastrup, Op. Cit., p. 225]

With a form of wage labour (tenant farming) being dominant within society, 
it is not surprising that great differences in wealth started to appear. 
Also, as protection did not come free, it is not surprising that a godi 
tended to become rich also (in Kropotkin's words, "the individual 
accumulation of wealth and power"). Powerful godi would be useful for 
wealthy landowners when disputes over land and rent appeared, and wealthy 
landowners would be useful for a godi looking for income. Concentrations 
of wealth, in other words, produce concentrations of social and political 
power (and vice versa) --  "power always follows wealth." [Kropotkin,
_Mutual Aid_, p. 131]

The transformation of *possession* into *property* and the resulting rise
of hired labour was a *key* element in the accumulation of wealth and power,
and the corresponding decline in liberty among the farmers. Moreover, with
hired labour springs dependency -- the worker is now dependent on good 
relations with their landlord in order to have access to the land they need.
With such reductions in the independence of part of Icelandic society, the
undermining of self-management in the various Things was also likely as 
labourers could not vote freely as they could be subject to sanctions from 
their landlord for voting the "wrong" way ("The courts were less likely to 
base judgements on the evidence than to adjust decisions to satisfy the 
honour and resources of powerful individuals." [Byock, Op. Cit., p. 185]).
Thus hierarchy within the economy would spread into the rest of society, 
and in particular its social institutions, reinforcing the effects of the 
accumulation of wealth and power.

The resulting classification of Icelandic society played a key role in its 
move from relative equality and anarchy to a class society and statism. 
As Millar points out:

"as long as the social organisation of the economy did not allow for
people to maintain retinues, the basic egalitarian assumptions of the
honour system. . . were reflected reasonably well in reality. . . the
mentality of hierarchy never fully extricated itself from the egalitarian 
ethos of a frontier society created and recreated by juridically equal
farmers. Much of the egalitarian ethic maintained itself even though it
accorded less and less with economic realities. . . by the end of the
commonwealth period certain assumptions about class privilege and
expectations of deference were already well enough established to have
become part of the lexicon of self-congratulation and self-justification."
[Op. Cit., pp. 33-4]

This process in turn accelerated the destruction of communal life and the 
emergence of statism, focused around the godord. In effect, the godi and
wealthy farmers became rulers of the country. Political changes simply
reflected economic changes from a communalistic, anarchistic society to 
a statist, propertarian one. Ironically, this process was a natural 
aspect of the system of competing chiefs recommended by 
"anarcho"-capitalists:

"In the twelfth and thirteenth centuries Icelandic society experienced 
changes in the balance of power. As part of the evolution to a more 
stratified social order, the number of chieftains diminished and the power 
of the remaining leaders grew. By the thirteenth century six large families 
had come to monopolise the control and ownership of many of the original 
chieftaincies." [Byock, Op. Cit., p. 341]

These families were called *storgodar* and they "gained control over whole 
regions." This process was not imposed, as "the rise in social complexity 
was evolutionary rather than revolutionary . . . they simply moved up the 
ladder." This political change reflected economic processes, for "[a]t 
the same time other social transformations were at work. In conjunction 
with the development of the *storgadar* elite, the most successful among 
the *baendr* [farmers] also moved up a rung on the social ladder, being 
'big farmers' or *Storbaendr*" [Op. Cit., p. 342] Unsurprisingly, it was 
the rich farmers who initiated the final step towards normal statism 
and by the 1250s the *storbaendr* and their followers had grown weary 
of the *storgodar* and their quarrels. In the end they accepted the 
King of Norway's offer to become part if his kingdom.

The obvious conclusion is that as long as Iceland was not capitalistic,
it was anarchic and as it became more capitalistic, it became more statist. 

This process, wherein the concentration of wealth leads to the destruction
of communal life and so the anarchistic aspects of a given society, can be
seen elsewhere, for example, in the history of the United States after the
Revolution or in the degeneration of the free cities of Medieval Europe.
Peter Kropotkin, in his classic work _Mutual Aid_, documents this process
in some detail, in many cultures and time periods. However, that this 
process occurred in a society which is used by "anarcho"-capitalists as an
example of their system in action reinforces the anarchist analysis of the
statist nature of "anarcho"-capitalism and the deep flaws in its theory,
as discussed in section 6.

As Miller argues, "[i]t is not the have-nots, after all, who invented the
state. The first steps toward state formation in Iceland were made by 
churchmen. . . and by the big men content with imitating Norwegian 
royal style. Early state formation, I would guess, tended to involve
redistributions, not from rich to poor, but from poor to rich, from
weak to strong." [Op. Cit., p. 306]

The "anarcho"-capitalist argument that Iceland was an example of 
their ideology working in practice is derived from the work of
David Friedman. Friedman is less gun-ho than many of his followers,
arguing in _The Machinery of Freedom_, that Iceland only had some 
features of an "anarcho"-capitalist society and these provide some 
evidence in support of his ideology. How a pre-capitalist society
can provide any evidence to support an ideology aimed at an 
advanced industrial and urban economy is hard to say as the 
institutions of that society cannot be artificially separated
from its social base. Ironically, though, it does present some
evidence against "anarcho"-capitalism precisely because of the
rise of capitalistic elements within it.

David Friedman is aware of how the Icelandic Republic degenerated and its
causes. He states in a footnote in his 1979 essay "Private Creation and 
Enforcement of Law: A Historical Case" that the "question of why the system
eventually broke down is both interesting and difficult. I believe that two 
of the proximate causes were increased concentration of wealth, and hence 
power, and the introduction into Iceland of a foreign ideology -- kingship.
The former meant that in many areas all or most of the godord were held by 
one family and the latter that by the end of the Sturlung period the
chieftains were no longer fighting over the traditional quarrels of who 
owed what to whom, but over who should eventually rule Iceland. The
ultimate reasons for those changes are beyond the scope of this paper."

However, from an anarchist point of view, the "foreign" ideology of kingship
would be the *product* of changing socio-economic conditions that were
expressed in the increasing concentration of wealth and not its cause.
After all, the settlers of Iceland were well aware of the "ideology" of 
kingship for the 300 years during which the Republic existed. As Byock 
notes, Iceland "inherited the tradition and the vocabulary of statehood 
from its European origins . . . On the mainland, kings were enlarging their 
authority at the expense of the traditional rights of free farmers. The 
emigrants to Iceland were well aware of this process . . . available 
evidence does suggest that the early Icelanders knew quite well what 
they did not want. In particular they were collectively opposed to the 
centralising aspects of a state." [Op. Cit., p. 64-6] Unless some kind
of collective and cultural amnesia occurred, the notion of a "foreign
ideology" causing the degeneration is hard to accept. Moreover, only
the concentration of wealth allowed would-be Kings the opportunity to
develop and act and the creation of boss-worker social relationships on
the land made the poor subject to, and familiar with, the concept of
authority. Such familiarity would spread into all aspects of life and,
combined with the existence of "prosperous" (and so powerful) godi to
enforce the appropriate servile responses, ensured the end of the relative 
equality that fostered Iceland's anarchistic tendencies in the first place.

In addition, as private property is a monopoly of rulership over a given 
area, the conflict between chieftains for power was, at its most basic, a 
conflict of who would *own* Iceland, and so rule it. The attempt to ignore 
the facts that private property creates rulership (i.e. a monopoly of 
government over a given area) and that monarchies are privately owned 
states does Friedman's case no good. In other words, the system of private
property has a built in tendency to produce both the ideology and fact of 
Kingship - the power structures implied by Kingship are reflected in the 
social relations which are produced by private property.

Friedman is also aware that an "objection [to his system] is that the rich 
(or powerful) could commit crimes with impunity, since nobody would be able
to enforce judgement against them. Where power is sufficiently concentrated
this might be true; this was one of the problems which led to the eventual
breakdown of the Icelandic legal system in the thirteenth century. But so
long as power was reasonably dispersed, as it seem to have been for the
first two centuries after the system was established, this was a less
serious problem." [Op. Cit.]

Which is quite ironic. Firstly, because the first two centuries of Icelandic
society was marked by *non-capitalist* economic relations (communal pricing
and family/individual possession of land). Only when capitalistic social
relationships developed (hired labour and property replacing possession 
and market values replacing social ones) in the 12th century did power
become concentrated, leading to the breakdown of the system in the 13th
century. Secondly, because Friedman is claiming that "anarcho"-capitalism 
will only work if there is an approximate equality within society! But this 
state of affairs is one most "anarcho"-capitalists claim is impossible
and undesirable!

They claim there will *always* be rich and poor. But inequality in wealth 
will also become inequality of power. When "actually existing" capitalism 
has become more free market the rich have got richer and the poor poorer. 
Apparently, according to the "anarcho"-capitalists, in an even "purer" 
capitalism this process will be reversed! It is ironic that an ideology 
that denounces egalitarianism as a revolt against nature implicitly 
requires an egalitarian society in order to work.

In reality, wealth concentration is a fact of life in *any* system based 
upon hierarchy and private property. Friedman is aware of the reasons why 
"anarcho"-capitalism will become rule by the rich but prefers to believe 
that "pure" capitalism will produce an egalitarian society! In the case of 
the commonwealth of Iceland this did not happen - the rise in private 
property was accompanied by a rise in inequality and this lead to the
breakdown of the Republic into statism.

In short, Medieval Iceland nicely illustrates David Weick's comments (as
quoted in section 6.3) that "when private wealth is uncontrolled, then 
a police-judicial complex enjoying a clientele of wealthy corporations 
whose motto is self-interest is hardly an innocuous social force controllable
by the possibility of forming or affiliating with competing 'companies.'"
This is to say that "free market" justice soon results in rule by the rich, 
and being able to affiliate with "competing" "defence companies" is 
insufficient to stop or change that process.

This is simply because any defence-judicial system does not exist in a 
social vacuum. The concentration of wealth -- a natural process under
the "free market" (particularly one marked by private property and wage
labour) -- has an impact on the surrounding society. Private property,
i.e. monopolisation of the means of production, allows the monopolists to
become a ruling elite by exploiting, and so accumulating vastly more
wealth than, the workers. This elite then uses its wealth to control the
coercive mechanisms of society (military, police, "private security
forces," etc.), which it employs to protect its monopoly and thus its
ability to accumulate ever more wealth and power. Thus, private property,
far from increasing the freedom of the individual, has always been the
necessary precondition for the rise of the state and rule by the rich.
Medieval Iceland is a classic example of this process at work.

10 Would laissez-faire capitalism be stable?

Unsurprisingly, right-libertarians combine their support for "absolute
property rights" with a whole-hearted support for laissez-faire capitalism.
In such a system (which they maintain, to quote Ayn Rand, is an "unknown
ideal") everything would be private property and there would be few (if
any) restrictions on "voluntary exchanges." "Anarcho"-capitalists are
the most extreme of defenders of pure capitalism, urging that the state
itself be privatised and no voluntary exchange made illegal (for example,
children would be considered the property of their parents and it would
be morally right to turn them into child prostitutes -- the child has
the option of leaving home if they object).

As there have been no example of "pure" capitalism it is difficult to
say whether their claims about are true (for a discussion of a close
approximation see the section 10.3). This section of the FAQ is an 
attempt to discover whether such a system would be stable or whether
it would be subject to the usual booms and slumps. Before starting we
should note that there is some disagreement within the right-libertarian
camp itself on this subject (although instead of stability they usually
refer to "equilibrium" -- which is an economics term meaning that all
of a societies resources are fully utilised).

In general terms, most right-Libertarians' reject the concept of
equilibrium as such and instead stress that the economy is inherently
a dynamic (this is a key aspect of the Austrian school of economics).
Such a position is correct, of course, as such noted socialists as
Karl Marx and Michal Kalecki and capitalist economists as Keynes 
recognised long ago. There seems to be two main schools of thought 
on the nature of disequilibrium. One, inspired by von Mises, maintains
that the actions of the entrepreneur/capitalist results in the market
co-ordinating supply and demand and another, inspired by Joseph 
Schumpeter, who question whether markets co-ordinate because 
entrepreneurs are constantly innovating and creating new markets, 
products and techniques.

Of course both actions happen and we suspect that the differences in
the two approaches are not important. The important thing to remember
is that "anarcho"-capitalists and right-libertarians in general reject
the notion of equilibrium -- but when discussing their utopia they 
do not actually indicate this! For example, most "anarcho"-capitalists
will maintain that the existence of government (and/or unions) causes 
unemployment by either stopping capitalists investing in new lines
of industry or forcing up the price of labour above its market clearing
level (by, perhaps, restricting immigration, minimum wages, taxing 
profits). Thus, we are assured, the worker will be better off in
"pure" capitalism because of the unprecedented demand for labour 
it will create. However, full employment of labour is an equilibrium
in economic terms and that, remember, is impossible due to the
dynamic nature of the system. When pressed, they will usually admit
there will be periods of unemployment as the market adjusts or that
full unemployment actually means under a certain percentage of 
unemployment. Thus, if you (rightly) reject the notion of equilibrium
you also reject the idea of full employment and so the labour market
becomes a buyers market and labour is at a massive disadvantage.

The right-libertarian case is based upon logical deduction, and the
premises required to show that laissez-faire will be stable are somewhat
incredible. If banks do not set the wrong interest rate, if companies
do not extend too much trade credit, if workers are willing to accept
(real wage related) pay cuts, if workers altruistically do not abuse their
market power in a fully employed society, if interest rates provide
the correct information, if capitalists predict the future relatively
well, if banks and companies do not suffer from isolation paradoxes,
then, perhaps, laissez-faire will be stable. 

So, will laissez-faire capitalism be stable? Let us see by analysing 
the assumptions of right-libertarianism -- namely that there will be
full employment and that a system of private banks will stop the
business cycle. We will start on the banking system first (in section
10.1) followed by the effects of the labour market on economic stability
(in section 10.2). Then we will indicate, using the example of 19th
century America, that actually existing ("impure") laissez-faire was
very unstable.

Explaining booms and busts by state action plays an ideological convenience
as it exonerates market processes as the source of instability within
capitalism. We hope to indicate in the next two sections why the business 
cycle is inherent in the system (see also sections C.7, C.8 and C.9).

10.1 Would privatising banking make capitalism stable?

It is claimed that the existence of the state (or, for minimal statists,
government policy) is the cause of the business cycle (recurring economic
booms and slumps). This is because the government either sets interest
rates too low or expands the money supply (usually by easing credit 
restrictions and lending rates, sometimes by just printing fiat money).
This artificially increases investment as capitalists take advantage of
the artificially low interest rates. The real balance between savings and
investment is broken, leading to over-investment, a drop in the
rate of profit and so a slump (which is quite socialist in a way, as
many socialists also see over-investment as the key to understanding
the business cycle, although they obviously attribute the slump to
different causes -- namely the nature of capitalist production, not 
that the credit system does not play its part -- see section C.7).

In the words of Austrian Economist W. Duncan Reekie, "[t]he business
cycle is generated by monetary expansion and contraction . . . When 
new money is printed it appears as if the supply of savings has 
increased. Interest rates fall and businessmen are misled into 
borrowing additional founds to finance extra investment activity . . .
This would be of no consequence if it had been the outcome of [genuine
saving] . . . -but the change was government induced. The new money
reaches factor owners in the form of wages, rent and interest . . .
the factor owners will then spend the higher money incomes in their
existing consumption:investment proportions . . . Capital goods
industries will find their expansion has been in error and malinvestments
have been inoccured." [_Markets, Entrepreneurs and Liberty_, pp. 68-9]

In other words, there has been "wasteful mis-investment due to government
interference with the market." [Op. Cit., p. 69] In response to this
(negative) influence in the workings of the market, it is suggested 
by right-libertarians that a system of private banks should be used and 
that interest rates are set by them, via market forces. In this way an
interest rate that matches the demand and supply for savings will
be reached and the business cycle will be no more. By truly privatising
the credit market, it is hoped by the business cycle will finally stop.

Unsurprisingly, this particular argument has its weak points and in this
section of the FAQ we will try to show exactly why this theory is wrong.

Let us start with Reckie's starting point. He states that the "main problem"
of the slump is "why is there suddenly a '*cluster*' of business errors?
Businessmen and entrepreneurs are market experts (otherwise they would
not survive) and why should they all make mistakes simultaneously?" 
[Op. Cit., p. 68] It is this "cluster" of mistakes that the Austrians'
take as evidence that the business cycle comes from outside the workings
of the market (i.e. is exogenous in nature). Reekie argues that an "error
cluster only occurs when all entrepreneurs have received the wrong signals
on potential profitability, and all have received the signals simultaneously
through government interference with the money supply." [Op. Cit., p. 74] 
But is this *really* the case?

The simple fact is that groups of (rational) individuals can act in the 
same way based on the same information and this can lead to a collective
problem. For example, we do not consider it irrational that everyone in a 
building leaves it when the fire alarm goes off and that the flow of 
people can cause hold-ups at exits. Neither do we think that its unusual 
that traffic jams occur, after all those involved are all trying to get 
to work (i.e. they are reacting to the same desire). Now, is it so 
strange to think that capitalists who all see the same opportunity for
profit in a specific market decide to invest in it? Or that the aggregate 
outcome of these individually rational decisions may be irrational (i.e. 
cause a glut in the market)?

In other words, a "cluster" of business failures may come about because 
a group of capitalists, acting in isolation, over-invest in a given
market. They react to the same information (namely super profits in
market X), arrange loans, invest and produce commodities to meet demand
in that market. However, the aggregate result of these individually
rational actions is that the aggregate supply far exceeds demand, causing
a slump in that market and, perhaps, business failures. The slump in this
market (and the potential failure of some firms) has an impact on the 
companies that supplied them, the companies that are dependent on 
their employees wages/demand, the banks that supplied the credit and so
forth. The accumulative impact of this slump (or failures) on the chain of 
financial commitments of which they are but one link can be large and, 
perhaps, push an economy into general depression. Thus the claim that 
it is something external to the system that causes depression is flawed.

It could be claimed the interest rate is the problem, that it does
not accurately reflect the demand for investment or relate it to the
supply of savings. But, as we argued in section C.8, it is not at all
clear that the interest rate provides the necessary information to 
capitalists. They need investment information for their specific 
industry, but the interest rate is cross-industry. Thus capitalists in
market X do not know if the investment in market X is increasing 
and so this lack of information can easily cause "mal-investment" as 
over-investment (and so over-production) occurs. As they have no 
way of knowing what the investment decisions of their competitors are 
or now these decisions will affect an already unknown future, capitalists
may over-invest in certain markets and the net effects of this aggregate
mistake can expand throughout the whole economy and cause a general 
slump. In other words, a cluster of business failures can be accounted 
for by the workings of the market itself and *not* the (existence of) 
government. 

This is *one* possible reason for an internally generated business cycle
but that is not the only one. Another is the role of class struggle which
we discuss in the next section and yet another is the endogenous nature
of the money supply itself. This account of money (proposed strongly by,
among others, the post-Keynesian school) argues that the money supply
is a function of the demand for credit, which itself is a function of the
level of economic activity. In other words, the banking system creates
as much money as people need and any attempt to control that creation 
will cause economic problems and, perhaps, crisis (interestingly, this
analysis has strong parallels with mutualist and individualist anarchist
theories on the causes of capitalist exploitation and the business 
cycle). Money, in other words, emerges from *within* the system and 
so the right-libertarian attempt to "blame the state" is simply wrong.

Thus what is termed "credit money" (created by banks) is an essential 
part of capitalism and would exist without a system of central banks. 
This is because money is created from within the system, in response 
to the needs of capitalists. In a word, money is endogenous and credit
money an essential part of capitalism. 

Right-libertarians do not agree. Reekie argues that "[o]nce fractional 
reserve banking is introduced, however, the supply of money substitutes 
will include fiduciary media. The ingenuity of bankers, other financial 
intermediaries and the endorsement and *guaranteeing of their activities 
by governments and central banks* has ensured that the quantity of fiat 
money is immense." [Op. Cit., p. 73] 

Therefore, what "anarcho"-capitalists and other right-libertarians seem 
to be actually complaining about when they argue that "state action" creates
the business cycle by creating excess money is that the state *allows*
bankers to meet the demand for credit by creating it. This makes sense, 
for the first fallacy of this sort of claim is how could the state *force* 
bankers to expand credit by loaning more money than they have savings.
And this seems to be the normal case within capitalism -- the central 
banks accommodate bankers activity, they do not force them to do it. Alan 
Holmes, a senior vice president at the New York Federal Reserve, stated 
that:

"In the real world, banks extend credit, creating deposits in the
process, and look for the reserves later. The question then becomes 
one of whether and how the Federal Reserve will accommodate the demand 
for reserves. In the very short run, the Federal Reserve has little or 
no choice about accommodating that demand, over time, its influence 
can obviously be felt." [quoted by Doug Henwood, _Wall Street_, p. 220]

(Although we must stress that central banks are *not* passive and do have
many tools for affecting the supply of money. For example, central banks
can operate "tight" money policies which can have significant impact on
an economy and, via creating high enough interest rates, the demand for
money.)

It could be argued that because central banks exist, the state 
creates an "environment" which bankers take advantage off. By not 
being subject to "free market" pressures, bankers could be tempted to
make more loans than they would otherwise in a "pure" capitalist system
(i.e. create credit money). The question arises, would "pure" capitalism 
generate sufficient market controls to stop banks loaning in excess of 
available savings (i.e. eliminate the creation of credit money/fiduciary 
media). 

It is to this question we now turn.

As noted above, the demand for credit is generated from *within* the system
and the comments by Holmes reinforce this. Capitalists seek credit in order 
to make money and banks create it precisely because they are also seeking 
profit. What right-libertarians actually object to is the government (via
the central bank) *accommodating* this creation of credit. If only the 
banks could be forced to maintain a savings to loans ratio of one, then 
the business cycle would stop. But is this likely? Could market forces 
ensure that bankers pursue such a policy? We think not -- simply because 
the banks are profit making institutions. As post-Keynesianist Hyman Minsky 
argues, "[b]ecause bankers live in the same expectational climate as 
businessmen, profit-seeking bankers will find ways of accommodating their 
customers. . . Banks and bankers are not passive managers of money to 
lend or to invest; they are in business to maximise profits. . ." [quoted 
by L. Randall Wray, _Money and Credit in Capitalist Economies_, p. 85]

This is recognised by Reekie, in passing at least (he notes that "fiduciary 
media could still exist if bankers offered them and clients accepted them" 
[Op. Cit., p. 73]). Bankers will tend to try and accommodate their customers 
and earn as much money as possible. Thus Charles P. Kindleberger comments 
that monetary expansion "is systematic and endogenous rather than random 
and exogenous" seem to fit far better the reality of capitalism that the 
Austrian and right-libertarian viewpoint [_Manias, Panics, and Crashes_, 
p. 59] and post-Keynesian L. Randall Wray argues that "the money supply 
. . . is more obviously endogenous in the monetary systems which predate 
the development of a central bank." [Op. Cit., p. 150]

In other words, the money supply cannot be directly controlled by the 
central bank since it is determined by private decisions to enter into 
debt commitments to finance spending. Given that money is generated 
from *within* the system, can market forces ensure the non-expansion 
of credit (i.e. that the demand for loans equals the supply of savings)?
To begin to answer this question we must note that investment is 
"essentially determined by expected profitability." [Philip Arestis, 
_The Post-Keynesian Approach to Economics_, p. 103] This means 
that the actions of the banks cannot be taken in isolation from the rest 
of the economy. Money, credit and banks are an essential part of 
the capitalist system and they cannot be artificially isolated from
the expectations, pressures and influences of that system.

Let us assume that the banks desire to maintain a loans to savings 
ratio of one and try to adjust their interest rates accordingly. Firstly, 
changes in the rate of interest  "produce only a very small, if any,
movement in business investment" according to empirical evidence
[Op. Cit., pp. 82-83] and that "the demand for credit is extremely
inelastic with respect to interest rates." [L. Randall Wray, Op. Cit., 
p. 245] Thus, to keep the supply of savings in line with the demand
for loans, interest rates would have to increase greatly (indeed,
trying to control the money supply by controlling the monetary bases
in this way will only lead to very big fluctuations in interest rates). 
And increasing interest rates has a couple of paradoxical effects. 

According to economists Joseph Stiglitz and Andrew Weiss (in "Credit 
Rationing in Markets with Imperfect Knowledge", _American Economic 
Review_, no. 71, pp. 393-410) interest rates are subject to what is called the
"lemon problem" (asymmetrical information between buyer and seller). Stiglitz
and Weiss applied the "lemons problem" to the credit market and argued
(and unknowingly repeated Adam Smith) that at a given interest rate, lenders
will earn lower returns by lending to bad borrowers (because of defaults)
than to good ones. If lenders try to increase interest rates to compensate
for this risk, they may chase away good borrowers, who are unwilling to
pay a higher rate, while perversely not chasing away incompetent, criminal,
or malignantly optimistic borrowers. This means that an increase in interest
rates may actually increase the possibilities of crisis, as more loans may 
end up in the hands of defaulters. 

This gives banks a strong incentive to keep interest rates lower than 
they otherwise could be.  Moreover, "increases in interest rates make 
it more difficult for economic agents to meet their debt repayments" 
[Philip Arestis, Op. Cit., pp. 237-8] which means when interest rates 
*are* raised, defaults will increase and place pressures on the banking
system. At high enough short-term interest rates, firms find it hard to
pay their interest bills, which cause/increase cash flow problems and
so "[s]harp increases in short term interest rates . . .leads to a fall 
in the present value of gross profits after taxes (quasi-rents) that 
capital assets are expected to earn." [Hyman Minsky, _Post-Keynesian
Economic Theory_, p. 45]

In addition, "production of most investment goods is undertaken on 
order and requires time for completion. A rise in interest rates is not 
likely to cause firms to abandon projects in the process of production
. . . This does not mean . . . that investment is completely unresponsive
to interest rates. A large increase in interest rates causes a 'present
value reversal', forcing the marginal efficiency of capital to fall
below the interest rate. If the long term interest rate is also
pushed above the marginal efficiency of capital, the project may be
abandoned." [Wray, Op. Cit., pp. 172-3] In other words, investment
takes *time* and there is a lag between investment decisions and actual
fixed capital investment. So if interest rates vary during this lag
period, initially profitable investments may become white elephants.

As Michal Kalecki argued, the rate of interest must be lower than the 
rate of profit otherwise investment becomes pointless. The incentive for 
a firm to own and operate capital is dependent on the prospective rate 
of profit on that capital relative to the rate of interest at which the 
firm can borrow at. The higher the interest rate, the less promising
investment becomes.

If investment is unresponsive to all but very high interest rates (as
we indicated above), then a privatised banking system will be under 
intense pressure to keep rates low enough to maintain a boom (by, 
perhaps, creating credit above the amount available as savings). And 
if it does this, over-investment and crisis is the eventual outcome. If it 
does not do this and increases interest rates then consumption and 
investment will dry up as interest rates rise and the defaulters (honest 
and dishonest) increase and a crisis will eventually occur. 

This is because increasing interest rates may increase savings *but* 
it also reduces consumption ("high interest rates also deter both consumers 
and companies from spending, so that the domestic economy is weakened 
and unemployment rises" [Paul Ormerod, _The Death of Economics_, p. 70]). 
This means that firms can face a drop off in demand, causing them problems
and (perhaps) leading to a lack of profits, debt repayment problems and 
failure. An increase in interest rates also reduces demand for investment 
goods, which also can cause firms problems, increase unemployment and
so on. So an increase in interest rates (particularly a sharp rise) could 
reduce consumption and investment (i.e. reduce aggregate demand) and have 
a ripple effect throughout the economy which could cause a slump to occur.

In other words, interest rates and the supply and demand of savings/loans
they are meant to reflect may not necessarily move an economy towards
equilibrium (if such a concept is useful). Indeed, the workings of a
"pure" banking system without credit money may increase unemployment
as demand falls in both investment and consumption in response to
high interest rates and a general shortage of money due to lack of 
(credit) money resulting from the "tight" money regime implied by 
such a regime (i.e. the business cycle would still exist). This was
the case of the failed Monetarist experiments on the early 1980s when
central banks in America and Britain tried to pursue a "tight" money
policy. The "tight" money policy did not, in fact, control the money
supply. All it did do was increase interest rates and lead to a serious
financial crisis and a deep recession (as Wray notes, "the central
bank uses tight money polices to raise interest rates" [Op. Cit., 
p. 262]). This recession, we must note, also broke the backbone of
working class resistance and the unions in both countries due to the
high levels of unemployment it generated. As intended, we are sure.

Such an outcome would not surprise anarchists, as this was a key feature 
of the Individualist and Mutualist Anarchists' arguments against the 
"money monopoly" associated with specie money. They argued that 
the "money monopoly" created a "tight" money regime which reduced 
the demand for labour by restricting money and credit and so 
allowed the exploitation of labour (i.e. encouraged wage labour) 
and stopped the development of non-capitalist forms of production.
Thus Lysander Spooner's comments that workers need "*money capital*
to enable them to buy the raw materials upon which to bestow their
labour, the implements and machinery with which to labour . . . Unless
they get this capital, they must all either work at a disadvantage,
or not work at all. A very large portion of them, to save themselves
from starvation, have no alternative but to sell their labour to
others . . ." [_A Letter to Grover Cleveland_, p. 39] It is interesting
to note that workers *did* do well during the 1950s and 1960s under
a "liberal" money regime than they did under the "tighter" regimes of
the 1980s and 1990s.

We should also note that an extended period of boom will encourage banks 
to make loans more freely. According to Minsky's "financial instability 
model" crisis (see "The Financial Instability Hypothesis" in _Post-Keynesian
Economic Theory_ for example) is essentially caused by risky financial 
practices during periods of financial tranquillity. In other words, 
"stability is destabilising." In a period of boom, banks are happy and 
the increased profits from companies are flowing into their vaults. 
Over time, bankers note that they can use a reserve system to increase
their income and, due to the general upward swing of the economy, 
consider it safe to do so (and given that they are in competition
with other banks, they may provide loans simply because they are
afraid of losing customers to more flexible competitors). This 
increases the instability within the system (as firms increase 
their debts due to the flexibility of the banks) and produces the 
possibility of crisis if interest rates are increased (because 
the ability of business to fulfil their financial commitments 
embedded in debts deteriorates).

Even if we assume that interest rates *do* work as predicted in 
theory, it is false to maintain that there is one interest rate. This 
is not the case. "Concentration of capital leads to unequal access to 
investment funds, which obstructs further the possibility of smooth 
transitions in industrial activity. Because of their past record of 
profitability, large enterprises have higher credit ratings and easier 
access to credit facilities, and they are able to put up larger collateral
for a loan." [Michael A. Bernstein, _The Great Depression_, p. 106] As 
we noted in section C.5.1, the larger the firm, the lower the interest
rate they have to pay. Thus banks routinely lower their interest rates
to their best clients even though the future is uncertain and past 
performance cannot and does not indicate future returns. Therefore
it seems a bit strange to maintain that the interest rate will bring
savings and loans into line if there are different rates being offered.

And, of course, private banks cannot affect the underlying fundamentals 
that drive the economy -- like productivity, working class power and
political stability -- any more than central banks (although central
banks can influence the speed and gentleness of adjustment to a crisis). 

Indeed, given a period of full employment a system of private banks may 
actually speed up the coming of a slump. As we argue in the next section, 
full employment results in a profits squeeze as firms face a tight labour
market (which drives up costs) and, therefore, increased workers' power
at the point of production and in their power of exit. In a central bank 
system, capitalists can pass on these increasing costs to consumers and 
so maintain their profit margins for longer. This option is restricted
in a private banking system as banks would be less inclined to devalue
their money. This means that firms will face a profits squeeze sooner
rather than later, which will cause a slump as firms cannot make ends
meet. As Reekie notes, inflation "can temporarily reduce employment
by postponing the time when misdirected labour will be laid off" but
as Austrian's (like Monetarists) think "inflation is a monetary
phenomenon" he does not understand the real causes of inflation 
and what they imply for a "pure" capitalist system [Op. Cit., p. 67,
p. 74]. As Paul Ormerod points out "the claim that inflation is always
and everywhere purely caused by increases in the money supply, and
that there the rate of inflation bears a stable, predictable relationship
to increases in the money supply is ridiculous." And he notes that
"[i]ncreases in the rate of inflation tend to be linked to falls in
unemployment, and vice versa" which indicates its *real* causes --
namely in the balance of class power and in the class struggle.
[_The Death of Economics_, p. 96, p. 131]

Moreover, if we do take the Austrian theory of the business cycle at
face value we are drawn to conclusion that in order to finance investment
savings must be increased. But to maintain or increase the stock of 
loanable savings, inequality must be increased. This is because, 
unsurprisingly, rich people save a larger proportion of their income 
than poor people and the proportion of profits saved are higher than 
the proportion of wages. But increasing inequality (as we argued in 
section 3.1) makes a mockery of right-libertarian claims that their 
system is based on freedom or justice.

This means that the preferred banking system of "anarcho"-capitalism
implies increasing, not decreasing, inequality within society. Moreover, 
most firms (as we indicated in section C.5.1) fund their investments 
with their own savings which would make it hard for banks to loan 
these savings out as they could be withdrawn at any time. This could 
have serious implications for the economy, as banks refuse to fund 
new investment simply because of the uncertainty they face when 
accessing if their available savings can be loaned to others (after all,
they can hardly loan out the savings of a customer who is likely to
demand them at any time). And by refusing to fund new investment, a 
boom could falter and turn to slump as firms do not find the necessary 
orders to keep going.

So, would market forces create "sound banking"? The answer is probably
not. The pressures on banks to make profits come into conflict with
the need to maintain their savings to loans ration (and so the
confidence of their customers). As Wray argues, "as banks are profit
seeking firms, they find ways to increase their liabilities which
don't entail increases in reserve requirements" and "[i]f banks share
the profit expectations of prospective borrowers, they can create 
credit to allow [projects/investments] to proceed." [Op. Cit., p. 295,
p. 283] This can be seen from the historical record. As Kindleberger
notes, "the market will create new forms of money in periods of
boom to get around the limit" imposed on the money supply [Op. Cit.,
p. 63]. Trade credit is one way, for example.  Under the Monetarist 
experiments of 1980s, there was "deregulation and central bank 
constraints raised interest rates and created a moral hazard -- 
banks made increasingly risky loans to cover rising costs of issuing
liabilities. Rising competition from nonbanks and tight money 
policy forced banks to lower standards and increase rates of growth
in an attempt to 'grow their way to profitability'" [Op. Cit., p. 293]

Thus credit money ("fiduciary media") is an attempt to overcome the
scarcity of money within capitalism, particularly the scarcity of
specie money. The pressures that banks face within "actually
existing" capitalism would still be faced under "pure" capitalism.
It is likely (as Reekie acknowledges) that credit money would still
be created in response to the demands of business people (although 
not at the same level as is currently the case, we imagine). The
banks, seeking profits themselves and in competition for customers,
would be caught between maintaining the value of their business 
(i.e. their money) and the needs to maximise profits. As a boom 
develops, banks would be tempted to introduce credit money to 
maintain it as increasing the interest rate would be difficult 
and potentially dangerous (for reasons we noted above). Thus, if 
credit money is not forth coming (i.e. the banks stick to the 
Austrian claims that loans must equal savings) then the rise in 
interest rates required will generate a slump. If it is forthcoming, 
then the danger of over-investment becomes increasingly likely. 
All in all, the business cycle is part of capitalism and *not* 
caused by "external" factors like the existence of government.

As Reekie notes, to Austrians "ignorance of the future is endemic" 
[Op. Cit., p. 117] but you would be forgiven for thinking that this
is not the case when it comes to investment. An individual firm 
cannot know whether its investment project will generate the stream 
of returns necessary to meet the stream of payment commitments
undertaken to finance the project. And neither can the banks who 
fund those projects. Even *if* a bank does not get tempted into 
providing credit money in excess of savings, it cannot predict
whether other banks will do the same or whether the projects it
funds will be successful. Firms, looking for credit, may turn to
more flexible competitors (who practice reserve banking to some
degree) and the inflexible bank may see its market share and
profits decrease. After all, commercial banks "typically establish
relations with customers to reduce the uncertainty involved in
making loans. Once a bank has entered into a relationship with 
a customer, it has strong incentives to meet the demands of
that customer." [Wray, Op. Cit., p. 85]

There are example of fully privatised banks. For example, in the
United States ("which was without a central bank after 1837") "the
major banks in New York were in a bind between their roles as
profit seekers, which made them contributors to the instability
of credit, and as possessors of country deposits against whose
instability they had to guard." [Kindleberger, Op. Cit., p. 85]

In Scotland, the banks were unregulated between 1772 and 1845
but "the leading commercial banks accumulated the notes of lessor
ones, as the Second Bank of the United States did contemporaneously
in [the USA], ready to convert them to specie if they thought
they were getting out of line. They served, that is, as an 
informal controller of the money supply. For the rest, as so
often, historical evidence runs against strong theory, as
demonstrated by the country banks in England from 1745 to 1835,
wildcat banking in Michigan in the 1830s, and the latest 
experience with bank deregulation in Latin America." [Op. Cit.,
p. 82] And we should note there were a few banking "wars" during 
the period of deregulation in Scotland which forced a few of the
smaller banks to fail as the bigger ones refused their money
and that there was a major bank failure in the Ayr Bank.

Kendleberger argues that central banking "arose to impose control
on the instability of credit" and did not cause the instability
which right-libertarians maintain it does. And as we note in 
section 10.3, the USA suffered massive economic instability 
during its period without central banking. Thus, *if* credit 
money *is* the cause of the business cycle, it is likely that 
a "pure" capitalism will still suffer from it just as much as
"actually existing" capitalism (either due to high interest rates
or over-investment). 

In general, as the failed Monetarist experiments of the 1980s prove, 
trying to control the money supply is impossible. The demand for money 
is dependent on the needs of the economy and any attempt to control 
it will fail (and cause a deep depression, usually via high interest
rates). The business cycle, therefore, is an endogenous phenomenon caused 
by the normal functioning of the capitalist economic system. Austrian 
and right-libertarian claims that "slump flows boom, but for a totally 
unnecessary reason: government inspired mal-investment" [Reekie, Op. 
Cit., p. 74] are simply wrong. Over-investment *does* occur, but it 
is *not* "inspired" by the government. It is "inspired" by the banks 
need to make profits from loans and from businesses need for investment 
funds which the banks accommodate. In other words, by the nature of 
the capitalist system.

10.2 How does the labour market effect capitalism?

In many ways, the labour market is the one that affects capitalism the
most. The right-libertarian assumption (like that of mainstream economics) 
is that markets clear and, therefore, the labour market will also clear. 
As this assumption has rarely been proven to be true in actuality (i.e. 
periods of full employment within capitalism are few and far between), 
this leaves its supporters with a problem -- reality contradicts the
theory.

The theory predicts full employment but reality shows that this is not
the case. Since we are dealing with logical deductions from assumptions, 
obviously the theory cannot be wrong and so we must identify external 
factors which cause the business cycle (and so unemployment). In this
way attention is diverted away from the market and its workings -- 
after all, it is assumed that the capitalist market works -- and onto 
something else. This "something else" has been quite a few different 
things (most ridiculously, sun spots in the case of one of the founders of 
marginalist economics, William Stanley Jevons). However, these days most 
pro-free market capitalist economists and right-libertarians have now
decided it is the state.

In this section of the FAQ we will present a case that maintains that
the assumption that markets clear is false at least for one, unique,
market -- namely, the market for labour. As the fundamental assumption
underlying "free market" capitalism is false, the logically consistent
superstructure built upon comes crashing down. Part of the reason why
capitalism is unstable is due to the commodification of labour (i.e.
people) and the problems this creates. The state itself can have 
positive and negative impacts on the economy, but removing it or 
its influence will not solve the business cycle.

Why is this? Simply due to the nature of the labour market.

Anarchists have long realised that the capitalist market is based upon
inequalities and changes in power. Proudhon argued that "[t]he manufacturer
says to the labourer, 'You are as free to go elsewhere with your services
as I am to receive them. I offer you so much.' The merchant says to the
customer, 'Take it or leave it; you are master of your money, as I am
of my goods. I want so much.' Who will yield? The weaker." He, like all
anarchists, saw that domination, oppression and exploitation flow from
inequalities of market/economic power and that the "power of invasion
lies in superior strength." [_What is Property?_, p. 216, p. 215]

This applies with greatest force to the labour market. While mainstream
economics and right-libertarian variations of it refuse to acknowledge
that the capitalist market is a based upon hierarchy and power, anarchists
(and other socialists) do not share this opinion. And because they do
not share this understanding with anarchists, right-libertarians will
never be able to understand capitalism or its dynamics and development.
Thus, when it comes to the labour market, it is essential to remember
that the balance of power within it is the key to understanding the
business cycle. Thus the economy must be understood as a system of
power.

So how does the labour market effect capitalism? Let us consider a
growing economy, on that is coming out of a recession. Such a growing 
economy stimulates demand for employment and as unemployment falls, 
the costs of finding workers increase and wage and condition demands 
of existing workers intensify. As the economy is growing and labour 
is scare, the threat associated with the hardship of unemployment is 
weakened. The share of profits is squeezed and in reaction to this 
companies begin to cut costs (by reducing inventories, postponing 
investment plans and laying off workers). As a result, the economy 
moves into a downturn. Unemployment rises and wage demands are 
moderated. Eventually, this enables the share of profits first of all to 
stabilise, and then rise. Such an "interplay between profits and 
unemployment as the key determinant of business cycles" is 
"observed in the empirical data." [Paul Ormerod, _The Death 
of Economics_, p. 188]

Thus, as an economy approaches full employment the balance of power on
the labour market changes. The sack is no longer that great a threat
as people see that they can get a job elsewhere easily. Thus wages
and working conditions increase as companies try to get new (and
keep) existing employees and output is harder to maintain. In the 
words of economist William Lazonick, labour "that is able to command 
a higher price than previously because of the appearance of tighter 
labour markets is, by definition, labour that is highly mobile via 
the market. And labour that is highly mobile via the market is labour 
whose supply of effort is difficult for managers to control in the
production process. Hence, the advent of tight labour markets generally
results in more rapidly rising average costs . . .as well as upward
shifts in the average cost curve. . ." [_Business Organisation and 
the Myth of the Market Economy_, p. 106]

In other words, under conditions of full-employment "employers are
in danger of losing the upper hand." [Juliet B. Schor, _The Overworked 
American_, p. 75] Schor argues that "employers have a structural advantage
in the labour market, because there are typically more candidates ready
and willing to endure this work marathon [of long hours] than jobs
for them to fill." [p. 71] Thus the labour market is usually a buyers
market, and so the sellers have to compromise. In the end, workers
adapt to this inequality of power and instead of getting what they 
want, they want what they get.

But under full employment this changes. As we argued in section B.4.4
and section C.7, in such a situation it is the bosses who have to
start compromising. And they do not like it. As Schor notes, America
"has never experienced a sustained period of full employment. The
closest we have gotten is the late 1960s, when the overall unemployment
rate was under 4 percent for four years. But that experience does
more to prove the point than any other example. The trauma caused 
to business by those years of a tight labour market was considerable.
Since then, there has been a powerful consensus that the nation cannot 
withstand such a low rate of unemployment." [Op. Cit., pp. 75-76]

So, in other words, full employment is not good for the capitalist 
system due to the power full employment provides workers. Thus 
unemployment is a necessary requirement for a successful capitalist 
economy and not some kind of aberration in an otherwise healthy system. 
Thus "anarcho"-capitalist claims that "pure" capitalism will soon result 
in permanent full employment are false. Any moves towards full employment 
will result in a slump as capitalists see their profits squeezed from below 
by either collective class struggle or by individual mobility in the 
labour market. 

This was recognised by Individualist Anarchists like Benjamin Tucker, who 
argued that mutual banking would "give an unheard of impetus to business, 
and consequently create an unprecedented demand for labour, -- a demand 
which would always be in excess of the supply, directly contrary of the 
present condition of the labour market." [_The Anarchist Reader_, pp. 
149-150] In other words, full employment would end capitalist exploitation, 
drive non-labour income to zero and ensure the worker the full value of 
her labour -- in other words, end capitalism. Thus, for most (if not all) 
anarchists the exploitation of labour is only possible when unemployment 
exists and the supply of labour exceeds the demand for it. Any move 
towards unemployment will result in a profits squeeze and either the 
end of capitalism or an economic slump. 

Indeed, as we argued in the last section, the extended periods of 
(approximately) full employment until the 1960s had the advantage that 
any profit squeeze could (in the short run anyway) be passed onto working
class people in the shape of inflation. As prices rise, labour is made 
cheaper and profits margins supported. This option is restricted under 
a "pure" capitalism (for reasons we discussed in the last section) and 
so "pure" capitalism will be affected by full employment faster than 
"impure" capitalism.

As an economy approaches full employment, "hiring new workers suddenly 
becomes much more difficult. They are harder to find, cost more, and 
are less experiences. Such shortages are extremely costly for a firm." 
[Schor, Op. Cit., p. 75] This encourages a firm to pass on these rises 
to society in the form of price rises, so creating inflation. Workers, 
in turn, try to maintain their standard of living. "Every general 
increase in labour costs in recent years," note J. Brecher and J. 
Costello in the late 1970s, "has followed, rather than preceded, an 
increase in consumer prices. Wage increases have been the result of
workers' efforts to catch up after their incomes have already been 
eroded by inflation. Nor could it easily be otherwise. All a businessman 
has to do to raise a price . . . [is to] make an announcement. . . Wage 
rates . . . are primarily determined by contracts" and so cannot be 
easily adjusted in the short term. [_Common Sense for Bad Times_, 
p, 120]

These full employment pressures will still exist with  "pure" capitalism 
(and due to the nature of the banking system will not have the safety
value of inflation). This means that periodic profit squeezes will occur, 
due to the nature of a tight labour market and the increased power of 
workers this generates. This in turn means that a "pure" capitalism will 
be subject to periods of unemployment (as we argued in section C.9)
and so still have a business cycle. This is usually acknowledged by
right-libertarians in passing, although they seem to think that this
is purely a "short-term" problem (it seems a strange "short-term" 
problem that continually occurs).

But such an analysis is denied by right-libertarians. For them government 
action, combined with the habit of many labour unions to obtain higher 
than market wage rates for their members, creates and exacerbates mass 
unemployment. This flows from the deductive logic of much capitalist
economics. The basic assumption of capitalism is that markets clear. So 
if unemployment exists then it can only be because the price of labour 
(wages) is too high (Austrian Economist W. Duncan Reekie argues
that unemployment will "disappear provided real wages are not 
artificially high" [_Markets, Entrepreneurs and Liberty_, p. 72]). 

Thus the assumption provokes the conclusion -- unemployment is caused
by an unclearing market as markets always clear. And the cause for
this is either the state or unions. But what if the labour market 
*cannot* clear without seriously damaging the power and profits of 
capitalists? What if unemployment is required to maximise profits 
by weakening labours' bargaining position on the market and so 
maximising the capitalists power? In that case unemployment is 
caused by capitalism, not by forces external to it.

However, let us assume that the right-libertarian theory is correct.
Let us assume that unemployment is all the fault of the selfish unions
and that a job-seeker "who does not want to wait will always get a job 
in the unhampered market economy." [von Mises, _Human Action_, p. 595]

Would crushing the unions reduce unemployment? Let us assume that the
unions have been crushed and government has been abolished (or, at the
very least, become a minimum state). The aim of the capitalist class is 
to maximise their profits and to do this they invest in labour saving
machinery and otherwise attempt to increase productivity. But increasing
productivity means that the prices of goods fall and falling prices
mean increasing real wages. It is high real wages that, according to
right-libertarians, that cause unemployment. So as a reward for increasing
productivity, workers will have to have their money wages cut in order
to stop unemployment occurring! For this reason some employers might 
refrain from cutting wages in order to avoid damage to morale - potentially 
an important concern. 

Moreover, wage contracts involve *time* -- a contract will usually agree a 
certain wage for a certain period. This builds in rigidity into the market, 
wages cannot be adjusted as quickly as other commodity prices. Of course, 
it could be argued that reducing the period of the contract and/or allowing 
the wage to be adjusted could overcome this problem. However, if we reduce 
the period of the contract then workers are at a suffer disadvantage as they
will not know if they have a job tomorrow and so they will not be able to 
easily plan their future (an evil situation for anyone to be in). Moreover, 
even without formal contracts, wage renegotiation can be expensive. After 
all, it takes time to bargain (and time is money under capitalism) and wage
cutting can involve the risk of the loss of mutual good will between 
employer and employee. And would  *you* give your boss the power to 
"adjust" your wages as he/she thought was necessary? To do so would 
imply an altruistic trust in others not to abuse their power.

Thus a "pure" capitalism would be constantly seeing employment 
increase and decrease as productivity levels change. There exist 
important reasons why the labour market need not clear which revolve 
around the avoidance/delaying of wage cuts by the actions of capitalists 
themselves. Thus, given a choice between cutting wages for all workers 
and laying off some workers without cutting the wages of the remaining 
employees, it is unsurprising that capitalists usually go for the later. 
After all, the sack is an important disciplining device and firing workers 
can make the remaining employees more inclined to work harder and be 
more obedient. 

And, of course, many employers are not inclined to hire over-qualified
workers. This is because, once the economy picks up again, their worker
has a tendency to move elsewhere and so it can cost them time and money
finding a replacement and training them. This means that involuntary 
unemployment can easily occur, so reducing tendencies towards full 
employment even more. In addition, one of the assumptions of the 
standard marginalist economic model is one of decreasing returns 
to scale. This means that as employment increases, costs rise and so 
prices also rise (and so real wages fall). But in reality many industries 
have *increasing* returns to scale, which means that as production 
increases unit costs fall, prices fall and so real wages rise. Thus in 
such an economy unemployment would increase simply because 
of the nature of the production process!

Moreover, as we argued in-depth in section C.9, a cut in money wages is 
not a neutral act. A cut in money wages means a reduction in demand for
certain industries, which may have to reduce the wages of its employees
(or fire them) to make ends meet. This could produce a accumulative 
effect and actually *increase* unemployment rather than reduce it.

In addition, there are no "self-correcting" forces at work in the 
labour market which will quickly bring employment back to full levels. 
This is for a few reasons. Firstly, the supply of labour cannot be 
reduced by cutting back production as in other markets. All we can 
do is move to other areas and hope to find work there. Secondly, the 
supply of labour can sometimes adjust to wage decreases in the
wrong direction. Low wages might drive workers to offer a greater
amount of labour (i.e. longer hours) to make up for any short
fall (or to keep their job). This is usually termed the "efficiency
wage" effect. Similarly, another family member may seek employment 
in order to maintain a given standard of living. Falling wages may 
cause the number of workers seeking employment to *increase*, 
causing a full further fall in wages and so on (and this is ignoring 
the effects of lowering wages on demand discussed in section C.9).

The paradox of piece work is an important example of this effect. 
As Schor argues, "piece-rate workers were caught in a viscous
downward spiral of poverty and overwork. . . When rates were
low, they found themselves compelled to make up in extra output
what they were losing on each piece. But the extra output produced
glutted the market and drove rates down further." [Juliet C. Schor,
_The Overworked American_, p, 58] 

Thus, in the face of reducing wages, the labour market may see an
accumulative move away from (rather than towards) full employment,
The right-libertarian argument is that unemployment is caused by real 
wages being too high which in turn flows from the assumption that markets
clear. If there is unemployment, then the price of the commodity labour
is too high -- otherwise supply and demand would meet and the market
clear. But if, as we argued above, unemployment is essential to 
discipline workers then the labour market *cannot* clear except for 
short periods. If the labour market clears, profits are squeezed. Thus
the claim that unemployment is caused by "too high" real wages is false
(and as we argue in section C.9, cutting these wages will result in
deepening any slump and making recovery longer to come about).

In other words, the assumption that the labour market must clear
is false, as is any assumption that reducing wages will tend to push
the economy quickly back to full employment. The nature of wage labour 
and the "commodity" being sold (i.e. human labour/time/liberty) ensure 
that it can never be the same as others. This has important implications 
for economic theory and the claims of right-libertarians, implications
that they fail to see due to their vision of labour as a commodity
like any other.

The question arises, of course, of whether, during periods of full
employment, workers could not take advantage of their market power
and gain increased workers' control, create co-operatives and so
reform away capitalism. This was the argument of the Mutualist and
Individualist anarchists and it does have its merits. However, it 
is clear (see section J.5.12) that bosses hate to have their authority
reduced and so combat workers' control whenever they can. The logic
is simple, if workers increase their control within the workplace
the manager and bosses may soon be out of a job and (more importantly)
they may start to control the allocation of profits. Any increase
in working class militancy may provoke capitalists to stop/reduce 
investment and credit and so create the economic environment (i.e. 
increasing unemployment) necessary to undercut working class power.

In other words, a period of full unemployment is not sufficient to
reform capitalism away. Full employment (nevermind any struggle over 
workers' control) will reduce profits and if profits are reduced 
then firms find it hard to repay debts, fund investment and provide
profits for shareholders. This profits squeeze would be enough to
force capitalism into a slump and any attempts at gaining workers'
self-management in periods of high employment will help push it
over the edge (after all, workers' control without control over the
allocation of any surplus is distinctly phoney). Moreover, even if
we ignore the effects of full employment may not last due to problems
associated with over-investment (see section C.7.2), credit and interest 
rate problems (see section 10.1) and realisation/aggregate demand
disjoints. Full employment adds to the problems associated with the
capitalist business cycle and so, if class struggle and workers power
did not exist or cost problem, capitalism would still not be stable.

If equilibrium is a myth, then so is full employment. It seems 
somewhat  ironic that "anarcho"-capitalists and other right-libertarians
maintain that there will be equilibrium (full employment) in the one
market within capitalism it can never actually exist in! This is
usually quietly acknowledged by most right-libertarians, who mention
in passing that some "temporary" unemployment *will* exist in their
system -- but "temporary" unemployment is not full employment. Of course, 
you could maintain that all unemployment is "voluntary" and get round 
the problem by denying it, but that will not get us very far. 

So it is all fine and well saying that "libertarian" capitalism would be 
based upon the maxim "From each as they choose, to each as they are chosen." 
[Robert Nozick, _Anarchy, State, and Utopia_, p. 160] But if the labour 
market is such that workers have little option about what they "choose"
to give and fear that they will *not* be chosen, then they are at a 
disadvantage when compared to their bosses and so "consent" to being
treated as a resource from the capitalist can make a profit from. And 
so this will result in any "free" contract on the labour market favouring 
one party at the expense of the other -- as can be seen from "actually 
existing capitalism". 

Thus any "free exchange" on the labour market will usually *not* reflect 
the true desires of working people (and who will make all the "adjusting"
and end up wanting what they get). Only when the economy is approaching
full employment will the labour market start to reflect the true desires
of working people and their wage start to approach its full product.
And when this happens, profits are squeezed and capitalism goes into
slump and the resulting unemployment disciplines the working class and
restores profit margins. Thus full employment will be the exception
rather than the rule within capitalism (and that is a conclusion which 
the historical record indicates).

In other words, in a normally working capitalist economy any labour
contracts will not create relationships based upon freedom due to
the inequalities in power between workers and capitalists. Instead,
any contracts will be based upon domination, *not* freedom. Which 
prompts the question, how is libertarian capitalism *libertarian* if 
it erodes the liberty of a large class of people?

10.3 Was laissez-faire capitalism stable?

Firstly, we must state that a pure laissez-faire capitalist system has
not existed. This means that any evidence we present in this section
can be dismissed by right-libertarians for precisely this fact -- it
was not "pure" enough. Of course, if they were consistent, you would
expect them to shun all historical and current examples of capitalism
or activity within capitalism, but this they do not. The logic is
simple -- if X is good, then it is permissible to use it. If X is
bad, the system is not pure enough. 

However, as right-libertarians *do* use historical examples so shall
we. According to Murray Rothbard, there was "quasi-laissez-faire 
industrialisation [in] the nineteenth century" [_The Ethics of Liberty_, 
p. 264] and so we will use the example of nineteenth century America -- 
as this is usually taken as being the closest to pure laissez-faire -- 
in order to see if laissez-faire is stable or not. 

Yes, we are well aware that 19th century USA was far from laissez-faire 
-- there was a state, protectionism, government economic activity and 
so on -- but as this example has been often used by right-Libertarians' 
themselves (for example, Ayn Rand) we think that we can gain a lot from 
looking at this imperfect approximation of "pure" capitalism (and as 
we argued in section 8, it is the "quasi" aspects of the system that 
counted in industrialisation, *not* the laissez-faire ones).

So, was 19th century America stable? No, it most definitely was not.

Firstly, throughout that century there were a continual economic booms
and slumps. The last third of the 19th century (often considered 
as a heyday of private enterprise) was a period of profound instability
and anxiety. Between 1867 and 1900 there were 8 complete business
cycles. Over these 396 months, the economy expanded during 199 months
and contracted during 197. Hardly a sign of great stability (since the
end of world war II, only about a fifth of the time has spent in periods
of recession or depression, by way of comparison). Overall, the
economy went into a slump, panic or crisis in 1807, 1817, 1828,
1834, 1837, 1854, 1857, 1873, 1882, and 1893 (in addition, 1903 
and 1907 were also crisis years).

Part of this instability came from the eras banking system. "Lack of
a central banking system," writes Richard Du Boff, "until the Federal
Reserve act of 1913 made financial panics worse and business cycle
swings more severe" [_Accumulation and Power_, p. 177] It was in 
response to this instability that the Federal Reserve system was 
created; and as Doug Henwood notes "the campaign for a more rational
system of money and credit was not a movement of Wall Street vs. industry
or regional finance, but a broad movement of elite bankers and the
managers of the new corporations as well as academics and business
journalists. The emergence of the Fed was the culmination of attempts
to define a standard of value that began in the 1890s with the emergence
of the modern professionally managed corporation owned not by its managers
but dispersed public shareholders." [_Wall Street_, p. 93] Indeed, 
the Bank of England was often forced to act as lender of last resort
to the US, which had no central bank.

In the decentralised banking system of the 19th century, during panics
thousands of banks would hoard resources, so starving the system for
liquidity precisely at the moment it was most badly needed. The creation
of trusts was one way in which capitalists tried to manage the system's
instabilities (at the expense of consumers) and the corporation was a
response to the outlawing of trusts. "By internalising lots of the 
competitive system's gaps -- by bring more transactions within the same
institutional walls -- corporations greatly stabilised the economy." 
[Henwood, Op. Cit., p. 94] 

All during the hey-day of laissez faire we also find popular protests 
against the money system used, namely specie (in particular gold), which 
was considered as a hindrance to economic activity and expansion (as well 
as being a tool for the rich). The Individualist Anarchists, for example, 
considered the money monopoly (which included the use of specie as money) 
as the means by which capitalists ensured that "the labourers . . . [are] 
kept in the condition of wage labourers," and reduced "to the conditions 
of servants; and subject to all such extortions as their employers . . .
may choose to practice upon them", indeed they became the "mere tools 
and machines in the hands of their employers". With the end of this 
monopoly, "[t]he amount of money, capable of being furnished . . . 
[would assure that all would] be under no necessity to act as a servant, 
or sell his or her labour to others." [Lysander Spooner, _A Letter to 
Grover Cleveland_, p. 47, p. 39, p. 50, p. 41] In other words, a specie 
based system (as desired by many "anarcho"-capitalists) was considered
a key way of maintaining wage labour and exploitation.

Interestingly, since the end of the era of the Gold Standard (and so
commodity money) popular debate, protest and concern about money has 
disappeared. The debate and protest was in response to the *effects* of
commodity money on the economy -- with many people correctly viewing
the seriously restrictive monetary regime of the time responsible for
economic problems and crisis as well as increasing inequalities. Instead 
radicals across the political spectrum urged a more flexible regime,
one that did not cause wage slavery and crisis by reducing the amount 
of money in circulation when it could be used to expand production and 
reduce the impact of slumps. Needless to say, the Federal Reserve system 
in the USA was far from the institution these populists wanted (after all, 
it is run by and for the elite interests who desired its creation).

That the laissez-faire system was so volatile and panic-ridden suggests 
that "anarcho"-capitalist dreams of privatising everything, including 
banking, and everything will be fine are very optimistic at best (and, 
ironically, it was members of the capitalist class who lead the movement 
towards state-managed capitalism in the name of "sound money").

11 What is the myth of "Natural Law"?

Natural Law, and the related concept of Natural Rights, play an important
part in Libertarian and "anarcho"-capitalist ideology. Right-libertarians 
are not alone in claiming that their particular ideology is based on the 
"law of nature". Hitler, for one, claimed the same thing for Nazi ideology. 
So do numerous other demagogues, religious fanatics, and political 
philosophers. However, each likes to claim that only *their* "natural 
law" is the "real" one, all the others being subjective impositions. We 
will ignore these assertions (they are not arguments) and concentrate 
on explaining why natural law, in all its forms, is a myth. In addition, 
we will indicate its authoritarian implications.

Instead of such myths anarchists urge people to "work it out for themselves" 
and realise that any ethical code is subjective and not a law of nature. 
If its a good "code", then others will become convinced of it by your 
arguments and their intellect. There is no need to claim its a function 
of "man's nature"! 

The following books discuss the subject of "Natural Law" in greater depth
and are recommended for a fuller discussion of the issues raised in this
section:

Robert Anton Wilson, _Natural Law_ and L.A. Rollins, _The Myth of 
Natural Law_.

We should note that these books are written by people associated, to some 
degree, with right-libertarianism and, of course, we should point out that 
not all right-libertarians subscribe to "natural law" theories (David 
Friedman, for example, does not). However, such a position seems to be 
the minority in right-Libertarianism (Ayn Rand, Robert Nozick and Murray 
Rothbard, among others, did subscribe to it). We should also point out that
the Individualist Anarchist Lysander Spooner also subscribed to "natural 
laws" (which shows that, as we noted above, the concept is not limited to 
one particular theory or ideology). We present a short critique of Spooner's
ideas on this subject in section G.7.

Lastly, it could be maintained that it is a common "straw man" to maintain 
that supporters of Natural Law argue that their Laws are like the laws of
physics (and so are capable of stopping people's actions just as the law
of gravity automatically stops people flying from the Earth). But that is
the whole point -- using the term "Natural Law" implies that the moral
rights and laws that its supporters argue for are to be considered just
like the law of gravity (although they acknowledge, of course, that unlike
gravity, *their* "natural laws" *can be violated in nature*). Far from
saying that the rights they support are just that (i.e. rights *they* think
are good) they try to associate them with universal facts. For example,
Lysander Spooner (who, we must stress, used the concept of "Natural law"
to *oppose* the transformation of America into a capitalist society, unlike
Rand, Nozick and Rothbard who use it to defend capitalism) stated that:

"the true definition of law is, that it is a fixed, immutable, natural
principle; and not anything that man ever made, or can make, unmake, or
alter. Thus we speak of the laws of matter, and the laws of mind; of the
laws of gravitation, the laws of light, heat, and electricity. . .etc., 
etc. . . . The law of justice is just as supreme and universal in the moral
world, as these others are in the mental or physical world; and is as
unalterable as are these by any human power. And it is just as false 
and absurd to talk of anybody's having the power to abolish the law of
justice, and set up their own in its stead, as it would be to talk of
their having the power to abolish the law of gravitation, or any other
natural laws of the universe, and set up their own will in the place of
them." [_A Letter to Grover Cleveland_, p. 88]

Rothbard and other capitalist supporters of "Natural Law" make the same sort 
of claims (as we will see). Now, why, if they are aware of the fact that 
unlike gravity their "Natural Laws" can be violated, do they use the term 
at all? Benjamin Tucker said that "Natural Law" was a "religious" concept 
-- and this provides a clue. To say "Do not violate these rights, otherwise
I will get cross" does not have *quite* the same power as "Do not violate 
these rights, they are facts of natural and you are violating nature" 
(compare to "Do not violate these laws, or you will go to hell"). So to 
point out that "Natural Law" is *not* the same as the law of gravity 
(because it has to be enforced by humans) is not attacking some kind of 
"straw man" -- it is exposing the fact that these "Natural Laws" are just 
the personal prejudices of those who hold them. If they do not want then
to be exposed as such then they should call their laws what they are 
-- personal ethical laws -- rather than compare them to the facts 
of nature.

11.1 Why the term "Natural Law" in the first place?

Murray Rothbard claims that "Natural Law theory rests on the insight. . . 
that each entity has distinct and specific properties, a distinct 'nature,' 
which can be investigated by man's reason" [_For a New Liberty_, p. 25] 
and that "man has rights because they are *natural* rights. They are 
grounded in the nature of man." [_The Ethics of Liberty_, p. 155] 

To put it bluntly, this form of "analysis" was originated by Aristotle 
and has not been used by science for centuries. Science investigates by 
proposing theories and hypotheses to explain empirical observations, 
testing and refining them by experiment. In stark contrast, Rothbard 
*invents* definitions ("distinct" "natures") and then draws conclusions 
from them. Such a method was last used by the medieval Church and is 
devoid of any scientific method. It is, of course, a fiction. It
attempts to deduce the nature of a "natural" society from a priori
considerations of the "innate" nature of human beings, which just means
that the assumptions necessary to reach the desired conclusions have been 
built into the definition of "human nature." In other words, Rothbard
defines humans as having the "distinct and specific properties" that,
given his assumptions, will allow his dogma (private state capitalism) 
to be inferred as the "natural" society for humans.

Rothbard claims that "if A, B, C, etc., have differing attributes, it 
follows that they have different *natures.*" [_The Ethics of Liberty_, 
p. 9] Does this means that as every individual is unique (have different
attributes), they have different natures? Skin and hair colour are
different attributes, does this mean that red haired people have 
different natures than blondes? That black people have different natures
than white (and such a "theory" of "natural law" was used to justify slavery 
-- yes, slaves *are* human but they have "different natures" than their 
masters and so slavery is okay). Of course Rothbard aggregates "attributes" 
to species level, but why not higher? Humans are primates, does that mean 
we have the same natures are monkeys or gorillas? We are also mammals as 
well, we share many of the same attributes as whales and dogs. Do we 
have similar natures? 

But this is by the way. To continue we find that after defining certain 
"natures," Rothbard attempts to derive "Natural Rights and Laws" from 
them. However, these "Natural Laws" are quite strange, as they can be 
violated in nature! Real natural laws (like the law of gravity) *cannot* 
be violated and therefore do not need to be enforced. The "Natural Laws" 
the "Libertarian" desires to foist upon us are not like this. They need 
to be enforced by humans and the institutions they create. Hence, Libertarian 
"Natural Laws" are more akin to moral prescriptions or juridical laws. 
However, this does not stop Rothbard explicitly "plac[ing]" his "Natural 
Laws" "alongside physical or 'scientific' natural laws." [_The Ethics of 
Liberty_, p. 42]

So why do so many Libertarians use the term "Natural Law?" Simply, it gives 
them the means by which to elevate their opinions, dogmas, and prejudices to 
a metaphysical level where nobody will dare to criticise or even think about
them. The term smacks of religion, where "Natural Law" has replaced
"God's Law." The latter fiction gave the priest power over believers. 
"Natural Law" is designed to give the Libertarian ideologist power over
the people that he or she wants to rule.

How can one be against a "Natural Law" or a "Natural Right"? It is
impossible. How can one argue against gravity? If private property, 
for example, is elevated to such a level, who would dare argue against 
it? Ayn Rand listed having landlords and employers along with "the laws 
of nature." They are *not* similar: the first two are social relationships 
which have to be imposed by the state; the "laws of nature" (like gravity, 
needing food, etc.) are *facts* which do not need to be imposed. Rothbard
claims that "the natural fact is that labour service *is* indeed a 
commodity." [Op. Cit., p. 40] However, this is complete nonsense -- 
labour service as a commodity is a *social* fact, dependent on the
distribution of property within society, its social customs and so
forth. It is only "natural" in the sense that it exists within a given
society (the state is also "natural" as it also exists within nature at
a given time). But neither wage slavery or the state is "natural" in
the sense that gravity is natural or a human having two arms is. Indeed, 
workers at the dawn of capitalism, faced with selling their labour services 
to another, considered it as decidedly "unnatural" and used the term 
"wage slavery" to describe it!

Thus, where and when a "fact" appears is essential. For example, Rothbard 
claims that "[a]n apple, let fall, will drop to the ground; this we all 
observe and acknowledge to be *in the nature* of the apple." [_The Ethics 
of Liberty_, p. 9] Actually, we do not "acknowledge" anything of the kind. 
We acknowledge that the apple was subject to the force of gravity and that is 
why it fell. The same apple, "let fall" in a space ship would *not* drop
to the floor. Has the "nature" of the apple changed? No, but the situation 
it is in has. Thus any attempt to generate abstract "natures" requires 
you to ignore reality in favour of ideals.

Because of the confusion its usage creates, we are tempted to think
that the use of "Natural Law" dogma is an attempt to *stop* thinking, 
to restrict analysis, to force certain aspects of society off the 
political agenda by giving them a divine, everlasting quality.

Moreover, such an "individualist" account of the origins of rights will
always turn on a muddled distinction between individual rationality and
some vague notion of rationality associated with membership of the
human species. How are we to determine what is rational for an individual
*as and individual* and what is rational for that same individual *as a
human being*? It is hard to see that we can make such a distinction for
"[i]f I violently interfere with Murray Rothbard's freedom, this may
violate the 'natural law' of Murray Rothbard's needs, but it doesn't 
violate the 'natural law' of *my* needs." [L.A. Rollins, _The Myth of
Natural Rights_, p. 28] Both parties, after all, are human and if such
interference is, as Rothbard claims, "antihuman" then why? "If it helps
me, a human, to advance my life, then how can it be unequivocally
'antihuman'?" [L. A. Rollins, Op. Cit., p. 27] Thus "natural law" is 
contradictory as it is well within the bounds of human nature to violate 
it. 

This means that in order to support the dogma of "Natural Law," the cultists
*must* ignore reality. Ayn Rand claims that "the source of man's rights
is. . .the law of identity. A is A -- and Man is Man." But Rand (like
Rothbard) *defines* "Man" as an "entity of a specific kind -- a rational
being" [_The Virtue of Selfishness_, pp. 94-95]. Therefore she cannot
account for *irrational* human behaviours (such as those that violate 
"Natural Laws"), which are also products of our "nature." To assert that
such behaviours are not human is to assert that A can be not-A, thus
contradicting the law of identity. Her ideology cannot even meet its 
own test.

11.2 But "Natural Law" provides protection for individual rights from 
      violation by the State. Those who are against Natural Law desire 
      total rule by the state.

The second statement represents a common "Libertarian" tactic. Instead of
addressing the issues, they accuse an opponent of being a "totalitarian"
(or the less sinister "statist"). In this way, they hope to distract
attention from, and so avoid discussing, the issue at hand (while at the
same time smearing their opponent). We can therefore ignore the second
statement. 

Regarding the first, "Natural Law" has *never* stopped the rights of
individuals from being violated by the state. Such "laws" are as much use
as a chocolate fire-guard. If "Natural Rights" could protect one from the
power of the state, the Nazis would not have been able to murder six
million Jews. The only thing that stops the state from attacking people's
rights is individual (and social) power -- the ability and desire to
protect oneself and what one considers to be right and fair. As the
anarchist Rudolf Rocker pointed out, "Political [or individual] rights 
do not exist because they have been legally set down on a piece of paper, 
but only when they have become the ingrown habit of a people, and when any 
attempt to impair them will be meet with the violent resistance of the 
populace. . . .One compels respect from others when he knows how to
defend his dignity as a human being. . . .The people owe all the
political rights and privileges which we enjoy today, in greater or
lesser measure, not to the good will of their governments, but to their
own strength." [_Anarcho-Syndicalism_, p. 64]

Of course, if is there are no "Natural Rights," then the state has no 
"right" to murder you or otherwise take away what are commonly regarded as
human rights. One can object to state power without believing in "Natural
Law."

11.3 Why is "Natural Law" authoritarian?

Rights, far from being fixed, are the product of social evolution and
human action, thought and emotions. What is acceptable now may become
unacceptable in the future. Slavery, for example, was long considered
"natural." In fact, John Locke, the "father" of "Natural Rights," was
heavily involved in the slave trade. He made a fortune in violating what
is today regarded as a basic human right: not to be enslaved. Many in
Locke's day claimed that slavery was a "Natural Law." Few would say so
now. 

Thomas Jefferson indicates exactly why "Natural Law" is authoritarian
when he wrote "[s]ome men look at constitutions with sanctimonious 
reverence, and deem them like the ark of the Covenant, too sacred to be 
touched. They ascribe to the men of the preceding age a wisdom more 
than human, and suppose what they did to be beyond amendment. . .laws and 
institutions must go hand in hand with the progress of the human mind. . .
as that becomes more developed, more enlightened, as new discoveries are 
made, institutions must advance also, to keep pace with the times. . .
We might as well require a man to wear still the coat which fitted him
when a boy as civilised society to remain forever under the regimen
of their barbarous ancestors."

The "Natural Law" cult desires to stop the evolutionary process by which
new rights are recognised. Instead they wish to fix social life into
what *they* think is good and right, using a form of argument that tries
to raise their ideology above critique or thought. Such a wish is opposed
to the fundamental feature of liberty: the ability to think for oneself. 
Michael Bakunin writes "the liberty of man consists solely in this: that
he obeys natural laws because he has *himself* recognised them as such,
and not because they have been externally imposed upon him by any
extrinsic will whatever, divine or human, collective or individual."
[_Bakunin on Anarchism_, p. 227]

Thus anarchism, in contrast to the "natural law" cult, recognises that
"natural laws" (like society) are the product of individual evaluation of 
reality and social life and are, therefore, subject to change in the light 
of new information and ideas (Society "progresses slowly through the moving 
power of individual initiative" [Bakunin, _The Political Philosophy of
Bakunin_, p. 166] and so, obviously, do social rights and customs). Ethical 
or moral "laws" (which is what the "Natural Law" cult is actually about) 
is not a product of "human nature" or abstract individuals. Rather, it is 
a *social* fact, a creation of society and human interaction. In Bakunin's 
words, "moral law is not an individual but a social fact, a creation of 
society" and any "natural laws" are "inherent in the social body" (and so,
we must add, not floating abstractions existing in "man's nature"). [Ibid.,
p. 125, p. 166] 
 
The case for liberty and a free society is based on the argument that,
since every individual is unique, everyone can contribute something that
no one else has noticed or thought about. It is the free interaction of
individuals which allows them, along with society and its customs and
rights, to evolve, change and develop. "Natural Law," like the state,
tries to arrest this evolution. It replaces creative inquiry with dogma,
making people subject to yet another god, destroying critical thought with
a new rule book. 

In addition, if these "Natural Laws" are really what they are claimed 
to be, they are necessarily applicable to *all* of humanity (Rothbard
explicitly acknowledges this when he wrote that "one of the notable 
attributes of natural law" is "its applicability to all men, regardless
of time or place" [_The Ethics of Liberty_, p. 42]). In other words, 
every other law code *must* (by definition) be "against nature" and 
there exists *one* way of life (the "natural" one). The authoritarian
implications of such arrogance is clear. That the Dogma of Natural Law was 
only invented a few hundred years ago, in one part of the planet, does not 
seem to bother its advocates. Nor does the fact that for the vast majority 
of human existence, people have lived in societies which violated almost 
*all* of their so-called "Natural Laws" To take one example, before the 
late Neolithic, most societies were based on usufruct, or free access 
to communally held land and other resources (see Murray Bookchin, _The 
Ecology of Freedom_). Thus for millennia, all human beings lived in 
violation of the supposed "Natural Law" of private property -- perhaps 
the chief "law" in the "Libertarian" universe. 

If "Natural Law" did exist, then all people would have discovered these 
"true" laws years ago. To the contrary, however, the debate is still
going on, with (for example) fascists and "Libertarians" each claiming
"the laws of nature" (and socio-biology) as their own.

11.4 Does "Natural Law" actually provides protection for individual liberty?

But, it seems fair to ask, does "natural law" actually respect individuals
and their rights (i.e. liberty)? We think not. Why?

According to Rothbard, "the natural law ethic states that for man, goodness
or badness can be determined by what fulfils or thwarts what is best for
man's nature." [_The Ethics of Liberty_, p. 10] But, of course, what may 
be "good" for "man" may be decidedly *bad* for men (and women). If we 
take the example of the sole oasis in a desert (see section 4.2) then, 
according to Rothbard, the property owner having the power of life and 
death over others is "good" while, if the dispossessed revolt and refuse 
to recognise his "property", this is "bad"! In other words, Rothbard's
"natural law" is good for *some* people (namely property owners) while
it can be bad for others (namely the working class). In more general
terms, this means that a system which results in extensive hierarchy
(i.e. *archy*, power) is "good" (even though it restricts liberty for 
the many) while attempts to *remove* power (such as revolution and the
democratisation of property rights) is "bad". Somewhat strange logic,
we feel.

However such a position fails to understand *why* we consider coercion to
be wrong/unethical. Coercion is wrong because it subjects an individual 
to the will of another. It is clear that the victim of coercion is lacking 
the freedom that the philosopher Isaiah Berlin describes in the following 
terms: 

"I wish my life and decisions to depend on myself, not on external forces
of whatever kind. I wish to be an instrument of my own, not of other
men's, acts of will. I wish to be a subject, not an object; to be moved 
by reasons, by conscious purposes, which are my own, not by causes which
affect me, as it were, from outside. I wish to be somebody, not nobody; a
doer -- deciding, not being decided for, self-directed and not acted upon
by external nature or by other mean as if I were a thing, or an animal, or
a slave incapable of playing a human role, that is, of conceiving goals
and policies of my own and realising them." [_Four Essays on Liberty_, 
p. 131] 

Or, as Alan Haworth points out, "we have to view coercion as a violation
of what Berlin calls *positive* freedom." [_Anti-Libertarianism_, p. 48]

Thus, if a system results in the violation of (positive) liberty by its
very nature -- namely, subject a class of people to the will of another
class (the worker is subject to the will of their boss and is turned 
into an order-taker) -- then it is justified to end that system. Yes,
it is "coercion" is dispossess the property owner -- but "coercion" exists
only for as long as they desire to exercise power over others. In other
words, it is not domination to remove domination! And remember it is 
the domination that exists in coercion which fuels our hatred of it,
thus "coercion" to free ourselves from domination is a necessary evil
in order to stop far greater evils occurring (as, for example, in the
clear-cut case of the oasis monopoliser). 

Perhaps it will be argued that domination is only bad when it is involuntary,
which means that it is only the involuntary nature of coercion that makes
it bad, not the domination it involves. By this argument wage slavery is 
not domination as workers voluntarily agree to work for a capitalist (after
all, no one puts a gun to their heads) and any attempt to overthrow
capitalist domination is coercion and so wrong. However, this argument
ignores that fact that *circumstances* force workers to sell their liberty
and so violence on behalf of property owners is not (usually) required --
market forces ensure that physical force is purely "defensive" in nature.
And as we argued in section 2.2, even Rothbard recognised that the
economic power associated with one class of people being dispossessed
and another empowered by this fact results in relations of domination
which cannot be considered "voluntary" by any stretch of the imagination
(although, of course, Rothbard refuses to see the economic power associated
with capitalism -- when its capitalism, he cannot see the wood for the trees
-- and we are ignoring the fact that capitalism was created by extensive
use of coercion and violence -- see section 8).

Thus, "Natural law" and attempts to protect individuals rights/liberty and 
see a world in which people are free to shape their own lives are fatally 
flawed if they do not recognise that private property is incompatible with 
these goals. This is because the existence of capitalist property smuggles 
in power and so domination (the restriction of liberty, the conversion of
some into order-givers and the many into order-takers) and so Natural Law 
does not fulfil its promise that each person is free to pursue their own 
goals. The unqualified right of property will lead to the domination and 
degradation of large numbers of people (as the oasis monopoliser so
graphically illustrates).

And we stress that anarchists have no desire to harm individuals, only to 
change institutions. If a workplace is taken over by its workers, the owners 
are not harmed physically. If the oasis is taken from the monopoliser, the 
ex-monopoliser becomes like other users of the oasis (although probably 
*disliked* by others). Thus anarchists desire to treat people as fairly as 
possible and not replace one form of coercion and domination with another -- 
individuals must *never* be treated as abstractions (if they have
power over you, destroy what creates the relation of domination, *not*
the individual, in other words! And if this power can be removed without
resorting to force, so much the better -- a point which social and
individualist anarchists disagree on, namely whether capitalism can
be reformed away or not comes directly from this. As the Individualists
think it can, they oppose the use of force. Most social anarchists think
it cannot, and so support revolution).

This argument may be considered as "utilitarian" (the greatest good for
the greatest number) and so treats people not as "ends in themselves"
but as "means to an end". Thus, it could be argued, "natural law" is 
required to ensure that *all* (as opposed to some, or many, or the
majority of) individuals are free and have their rights protected. 

However, it is clear that "natural law" can easily result in a minority 
having their freedom and rights respected, while the majority are 
forced by circumstances (created by the rights/laws produced by applying
"natural law" we must note) to sell their liberty and rights in order 
to survive. If it is wrong to treat anyone as a "means to an end", 
then it is equally wrong to support a theory or economic system that 
results in people having to negate themselves in order to live. A respect 
for persons -- to treat them as ends and never as means -- is not compatible 
with private property.

The simple fact is that *there are no easy answers* -- we need to weight 
up our options and act on what we think is best. Yes, such subjectivism 
lacks the "elegance" and simplicity of "natural law" but it reflects 
real life and freedom far better. All in all, we must always remember
that what is "good" for man need not be good for people. "Natural law"
fails to do this and stands condemned.

11.5 But Natural Law was discovered, not invented!

This statement truly shows the religious nature of the Natural Law cult. 
To see why its notion of "discovery" is confused, let us consider the Law
of Gravity. Newton did not "discover" the law of gravity, he invented a
theory which explained certain observed phenomena in the physical world.
Later Einstein updated Newton's theories in ways that allowed for a better
explanation of physical reality. Thus, unlike "Natural Law," scientific
laws can be updated and changed as our knowledge changes and grows. As
we have already noted, however, "Natural Laws" cannot be updated because
they are derived from fixed definitions (Rothbard is pretty clear on this,
he states that it is "[v]ery true" that natural law is "universal, fixed and
immutable" and so are "'absolute' principles of justice" and that they are
"independent of time and place" [_The Ethics of Liberty_, p. 19]). However,
what he fails to understand is that what the "Natural Law" cultists are 
"discovering" are simply the implications of their own definitions, which 
in turn simply reflect their own prejudices and preferences. 

Since "Natural Laws" are thus "unchanging" and are said to have been
"discovered" centuries ago, it's no wonder that many of its followers look
for support in socio-biology, claiming that their "laws" are part of the
genetic structure of humanity. But socio-biology has dubious scientific
credentials for many of its claims. Also, it has authoritarian implications
*exactly* like Natural Law. Murray Bookchin rightly characterises
socio-biology as "suffocatingly rigid; it not only impedes action with the
autocracy of a genetic tyrant but it closes the door to any action that is
not biochemically defined by its own configuration. When freedom is
nothing more than the recognition of necessity. . .we discover the gene's
tyranny over the greater totality of life. . .when knowledge becomes
dogma (and few movements are more dogmatic than socio-biology) freedom is
ultimately denied." ["Socio-biology or Social Ecology", in _Which way for
the Ecology Movement?_ pp. 49 - 75, p. 60]

In conclusion the doctrine of Natural Law, far from supporting individual 
freedom, is one of its greatest enemies. By locating individual rights 
within "Man's Nature," it becomes an unchanging set of dogmas. Do we really
know enough about humanity to say what are "Natural" and universal Laws,
applicable forever? Is it not a rejection of critical thinking and thus
individual freedom to do so?

11.6 Why is the notion of "discovery" contradictory?

Ayn Rand indicates the illogical and contradictory nature of the concepts 
of "discovering" "natural law" and the "natural rights" this "discovery" 
argument creates when she stated that her theory was "objective." Her 
"Objectivist" political theory "holds that good is neither an attribute of 
'things in themselves' nor man's emotional state, but *an evaluation* of 
the facts of reality by man's consciousness according to a rational standard 
of value. . . The objective theory holds that *the good is an aspect of 
reality in relation to man* - and that it must be discovered, not invented, 
by man." [_Capitalism: The Unknown Ideal_, p. 22] 

However, this is playing with words. If something is "discovered" then it 
has always been there and so is an intrinsic part of it. If "good" *is* 
"discovered" by "man" then "good" exists independently of people -- it
is waiting to be "discovered." In other words, "good" is an attribute of 
"man as man," of "things in themselves" (in addition, such a theory also 
implies that there is just *one* possible interpretation of what is "good" 
for all humanity). This can be seen when Rand talks about her system of
"objective" values and rights.

When discussing the difference between "subjective," "intrinsic" and 
"objective" values Rand noted that "intrinsic" and "subjective" theories 
"make it possible for a man to believe what is good is independent of man's 
mind and can be achieved by physical force." [Op. Cit., p. 22] In other 
words, intrinsic and subjective values justify tyranny. However, her 
"objective" values are placed squarely in "Man's Nature" -- she states that 
"[i]ndividual rights are the means of subordinating society to moral law" 
and that "the source of man's rights is man's nature." [Op. Cit., p. 320, 
p. 322]

She argues that the "*intrinsic* theory holds that the good is inherent 
in certain things or actions, as such, regardless of their context and
consequences, regardless of any benefit or injury they may cause to the
actors and subjects involved." [Op. Cit., p. 21] According to the _Concise
Oxford Dictionary_, "intrinsic" is defined as "inherent," "essential," 
"belonging naturally" and defines "nature" as "a thing's, or person's, 
innate or essential qualities or character." In other words, if, as 
Rand maintains, man's rights *are* the product of "man's nature" then 
such rights are *intrinsic*! And if, as Rand maintains, such rights 
are the "extension of morality into the social system" then morality 
itself is also intrinsic.

Again, her ideology fails to meet its own tests -- and opens the way for
tyranny. This can be seen by her whole hearted support for wage slavery and
her total lack of concern how it, and concentrations of wealth and power, 
affect the individuals subjected to them. For, after all, what is "good" 
is "inherent" in capitalism, regardless of the context, consequences, 
benefits or injuries it may cause to the actors and subjects involved. 

The key to understanding her contradictory and illogical ideology lies in
her contradictory use of the word "man." Sometimes she uses it to describe 
individuals but usually it is used to describe the human race collectively 
("man's nature," "man's consciousness"). But "Man" does not have a 
consciousness, only individuals do. Man is an abstraction, it is individuals 
who live and think, not "Man." Such "Man worship" -- like Natural Law -- 
has all the markings of a religion.

As Max Stirner argues "liberalism is a religion because it separates my 
essence from me and sets it above me, because it exalts 'Man' to the same 
extent as any other religion does to God. . . it sets me beneath Man." 
[_The Ego and Its Own_, p. 176] Indeed, he "who is infatuated with *Man*
leaves persons out of account so far as that infatuation extends, and floats
in an ideal, sacred interest. *Man*, you see, is not a person, but an ideal,
a spook." [Op. Cit., p.79]

Rand argues that we must evaluate "the facts of reality by man's consciousness 
according to a rational standard of value" but who determines that value? 
She states that "[v]alues are not determined by fiat nor by majority vote" 
[p. 24] but, however, neither can they be determined by "man" or "man's 
consciousness" because "man" does not exist. Individuals exist and have 
consciousness and because they are unique have different values (but as we 
argued in section A.2.19, being social creatures these values are generalised 
across individuals into social, i.e. objective, values). So, the abstraction
"man" does not exist and because of this we see the healthy sight of
different individuals convincing others of their ideas and theories
by discussion, presenting facts and rational debate. This can be best
seen in scientific debate.

The aim of the scientific method is to invent theories that explain facts, 
the theories are not part of the facts but created by the individual's mind 
in order to explain those facts. Such scientific "laws" can and do change 
in light of new information and new thought. In other words, the scientific 
method is the creation of subjective theories that explain the objective 
facts. Rand's method is the opposite - she assumes "man's nature," "discovers"
what is "good" from those assumptions and draws her theories by deduction 
from that. This is the *exact* opposite of the scientific method and, as we 
noted above, comes to us straight from the Roman Catholic church.

It is the subjective revolt by individuals against what is considered 
"objective" fact or "common sense" which creates progress and develops 
ethics (what is considered "good" and "right") and society. This, in
turn, becomes "accepted fact" until the next free thinker comes along and
changes how we view the world by presenting *new* evidence, re-evaluating
old ideas and facts or exposing the evil effects associated with certain
ideas (and the social relationships they reflect) by argument, fact and
passion. Attempts to impose "an evaluation of the facts of reality by man's 
consciousness" would be a death blow to this process of critical thought, 
development and evaluation of the facts of reality by individual's 
consciousness. Human thought would be subsumed by dogma.