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<title>G.3 Is "anarcho"-capitalism a new form of individualist anarchism?</title>

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<h1>G.3 Is "anarcho"-capitalism a new form of individualist anarchism?</h1>
<p>
No. As Carole Pateman once pointed out, <i>"[t]here has always been a strong radical 
individualist tradition in the USA. Its adherents have been divided between those 
who drew anarchist, egalitarian conclusions, and those who reduced political 
life to the capitalist economy writ large, to a series of exchanges between 
unequally situated individuals."</i> [<b>The Problem of Political Obligation</b>, 
p. 205] What right-"libertarians" and "anarcho"-capitalists do is to confuse these 
two traditions, ignoring fundamental aspects of individualist anarchism in order
to do so. Thus anarchist Peter Sabatini:
</p><p><blockquote>
<i>"in those rare moments when [Murray] Rothbard (or any other [right-wing] 
Libertarian) does draw upon individualist anarchism, he is always highly
selective about what he pulls out. Most of the doctrine's core principles,
being decidedly anti-Libertarianism, are conveniently ignored, and so what
remains is shrill anti-statism conjoined to a vacuous freedom in hackneyed
defence of capitalism. In sum, the 'anarchy' of Libertarianism reduces to 
a liberal fraud."</i> [<b>Libertarianism: Bogus Anarchy</b>]
</blockquote>
</p><p>
As class struggle anarchist Benjamin Franks notes individualist anarchism <i>"has 
similarities with, but is not identical to, anarcho-capitalism."</i> [<b>Rebel 
Alliances</b>, p. 44] For Colin Ward, while the <i>"mainstream"</i> of anarchist
propaganda <i>"has been <b>anarchist-communism</b>"</i> there are <i>"several 
traditions of <b>individualist anarchism</b>"</i>, including that associated
with Max Stirner and <i>"a remarkable series of 19th-century American figures"</i>
who <i>"differed from free-market liberals in their absolute mistrust of American 
capitalism, and in their emphasis on mutualism."</i> Ward was careful to note that 
by the <i>"late 20th century the word 'libertarian' . . . was appropriated by a 
new group of American thinkers"</i> and so <i>"it is necessary to examine the
modern individualist 'libertarian' response from the standpoint of the anarchist
tradition."</i> It was found to be wanting, for while Rothbard was <i>"the most aware 
of the actual anarchist tradition among the anarcho-capitalist apologists"</i> he may 
have been <i>"aware of a tradition, but he is singularly unaware of the old proverb 
that freedom for the pike means death for the minnow."</i> The individualist anarchists 
were <i>"busy social inventors exploring the potential of autonomy."</i> The 
<i>"American 'libertarians' of the 20th century are academics rather than social
activists, and their inventiveness seems to be limited to providing an ideology for 
untrammelled market capitalism."</i> [<b>Anarchism: A Short Introduction</b>, pp. 2-3, 
p. 62, p. 67, and p. 69]
</p><p>
In this section we will sketch these differences between the genuine libertarian 
ideas of Individualist Anarchism and the bogus "anarchism" of right-"libertarian" 
ideology. This discussion builds upon our general critique of "anarcho"-capitalism 
we presented in <a href="secFcon.html">section F</a>. However, here we will 
concentrate on presenting individualist anarchist analysis of "anarcho"-capitalist 
positions rather than, as before, mostly social anarchist ones (although, of course, 
there are significant overlaps and similarities). In this way, we can show the 
fundamental differences between the two theories for while there are often great 
differences between specific individualist anarchist thinkers all share a vision 
of a free society distinctly at odds with the capitalism of their time as well as 
the "pure" system of economic textbooks and right-"libertarian" dreams (which, 
ironically, so often reflects the 19th century capitalism the individualist 
anarchists were fighting).
</p><p>
First it should be noted that 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 and his comrades. However, the founder of "anarcho"-capitalism, 
Murray Rothbard, refused that label for, while <i>"strongly tempted,"</i> he could 
not do so because <i>"Spooner and Tucker have in a sense pre-empted that name for
their doctrine and that from that doctrine I have certain differences."</i> Somewhat 
incredibly Rothbard argued that on the whole politically <i>"these differences are 
minor,"</i> economically <i>"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."</i> [<i>"The Spooner-Tucker Doctrine: An Economist's 
View"</i>, pp. 5-15, <b>Journal of Libertarian Studies</b>, vol. 20, no. 1, p. 7] 
</p><p>
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 <b>substantially</b> 
different political regimes. In other words, politics is not isolated from economics. 
As anarchist David Wieck put it, Rothbard <i>"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."</i> 
[<b>Anarchist Justice</b>, p. 227]
</p><p>
Unsurprisingly, the political differences he highlights <b>are</b> significant,
namely <i>"the role of law and the jury system"</i> and <i>"the land question."</i>
The former difference relates to the fact that the individualist anarchists 
<i>"allow[ed] each individual free-market court, and more specifically, each 
free-market jury, totally free rein over judicial decision."</i> 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, <i>"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."</i> [<b>Op. Cit.</b>, pp. 7-8] Of course, the 
fact that <i>"lawyers"</i> and <i>"jurists"</i> 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, as we indicated in <a href="secF6.html#secf61">section F.6.1</a>, 
Rothbard wanted laws to be made by judges, lawyers, jurists and other "libertarian" 
experts rather than jury judged and driven. In other words, to exclude the general 
population from any say in the law and how it changes. This hardly a <i>"minor"</i> 
difference! It is like a supporter of the state saying that it is a <i>"minor"</i> 
difference if you favour a dictatorship rather than a democratically elected 
government. As Tucker argued, <i>"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 
<b>just</b> in proportion to its flexibility, instead of now in proportion to 
its rigidity."</i> [<b>The Individualist Anarchists</b>, 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 <b>democratic</b> and evolutionary while Rothbard's is autocratic 
and fossilised. 
</p><p>
This is particularly the case if you are proposing an economic system which is 
based on inequalities of wealth, power and influence and the means of accumulating 
more. As we note in <a href="secG3.html#secg33">section G.3.3</a>, one of  
individualist anarchists that remained pointed this out and opposed Rothbard's
arguments. As such, while Rothbard may have subscribed to a system of competing 
defence companies like Tucker, he expected them to operate in a substantially 
different legal system, enforcing different (capitalist) property rights and 
within a radically different socio-economic system. These differences are hardly
<i>"minor"</i>. As such, to claim that "anarcho"-capitalism is simply individualist
anarchism with "Austrian" economics shows an utter lack of understanding of what 
individualist anarchism stood and aimed for.
</p><p>
On the land question, Rothbard opposed the individualist position of <i>"occupancy 
and use"</i> as it <i>"would automatically abolish all rent payments for land."</i> 
Which was precisely <b>why</b> the individualist anarchists advocated it! In a 
predominantly rural economy, as was the case during most of the 19th century in 
America, 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 
the numbers forced onto the labour market (which, as we note in 
<a href="secF8.html#secf85">section F.8.5</a>, was the rationale for the state
enforcing the land monopoly in the first place). He bemoans that landlords
cannot charge rent on their <i>"justly-acquired private property"</i>
without noticing that is begging the question as anarchists deny that this is 
<i>"justly-acquired"</i> land in the first place. Unsurprising, Rothbard considered 
<i>"the proper theory of justice in landed property can be found in John Locke"</i>, 
ignoring the awkward fact that the first self-proclaimed anarchist book was written 
<b>precisely</b> to refute that kind of theory and expose its anti-libertarian 
implications. His argument simply shows how far from anarchism his ideology is. 
For Rothbard, it goes without saying that the landlord's <i>"freedom of contract"</i> 
tops the worker's freedom to control their own work and live and, of course, their 
right to life. [<b>Op. Cit.</b>, p. 8 and p. 9] 
</p><p>
For anarchists, <i>"the land is indispensable to our existence, consequently a common 
thing, consequently insusceptible of appropriation."</i> [Proudhon, <b>What is Property?</b>, 
p. 107] Tucker looked forward to a time when capitalist property rights in land
were ended and <i>"the Anarchistic view that occupancy and use should condition 
and limit landholding becomes the prevailing view."</i> This <i>"does not simply 
mean the freeing of unoccupied land. It means the freeing of all land not occupied 
<b>by the owner</b>"</i> and <i>"tenants would not be forced to pay you rent, nor 
would you be allowed to seize their property. The Anarchic associations would look 
upon your tenants very much as they would look upon your guests."</i> [<b>The 
Individualist Anarchists</b>, p. 159, p. 155 and p. 162] The ramifications of this
position on land use are significant. At its most basic, what counts as force and 
coercion, and so state intervention, are fundamentally different due to the differing 
conceptions of property held by Tucker and Rothbard. If we apply, for example, the 
individualist anarchist position on land to the workplace, we would treat the workers 
in a factory as the rightful owners, on the basis of occupation and use; at the same 
time, we could treat the share owners and capitalists as aggressors for attempting to 
force their representatives as managers on those actually occupying and using the 
premises. The same applies to the landlord against the tenant farmer. Equally, the 
outcome of such differing property systems will be radically different -- in terms 
of inequalities of wealth and so power (with having others working for them, it is
unlikely that would-be capitalists or landlords would get rich). Rather than a 
<i>"minor"</i> difference, the question of land use fundamentally changes the nature 
of the society built upon it and whether it counts as genuinely libertarian or not.
</p><p>
Tucke was well aware of the implications of such differences. Supporting a scheme like 
Rothbard's meant <i>"departing from Anarchistic ground,"</i> it was <i>"Archism"</i> 
and, as he stressed in reply to one supporter of such property rights, it opened the 
door to other authoritarian positions: <i>"Archism in one point is taking him to 
Archism is another. Soon, if he is logical, he will be an Archist in all respects."</i> 
It was a <i>"fundamentally foolish"</i> position, because it <i>"starts with a basic 
proposition that must be looked upon by all consistent Anarchists as obvious 
nonsense."</i> <i>"What follows from this?"</i> asked Tucker. <i>"Evidently that 
a man may go to a piece of vacant land and fence it off; that he may then go to 
a second piece and fence that off; then to a third, and fence that off; then to 
a fourth, a fifth, a hundredth, a thousandth, fencing them all off; that, unable 
to fence off himself as many as he wishes, he may hire other men to do the fencing 
for him; and that then he may stand back and bar all other men from using these 
lands, or admit them as tenants at such rental as he may choose to extract."</i> 
It was <i>"a theory of landed property which all Anarchists agree in viewing as 
a denial of equal liberty."</i> It is <i>"utterly inconsistent with the 
Anarchistic doctrine of occupancy and use as the limit of property in land."</i>
[<b>Liberty</b>, No. 180, p. 4 and p. 6] This was because of the dangers to
liberty capitalist property rights in land implied:
</p><p><blockquote>
<i>"I put the right of occupancy and use above the right of contract . . . 
principally by my interest in the right of contract. Without such a preference 
the theory of occupancy and use is utterly untenable; without it . . . it would 
be possible for an individual to acquire, and hold simultaneously, virtual 
titles to innumerable parcels of land, by the merest show of labour performed 
thereon . . . [This would lead to] the virtual ownership of the entire world by 
a small fraction of its inhabitants . . . [which would see] the right of contract, 
if not destroyed absolutely, would surely be impaired in an intolerable degree."</i> 
[<b>Op. Cit.</b>, no. 350, p. 4]
</blockquote></p><p>
Clearly a position which Rothbard had no sympathy for, unlike landlords. Strange,
though, that Rothbard did not consider the obvious liberty destroying effects of 
the monopolisation of land and natural resources as <i>"rational grounds"</i> for
opposing landlords but, then, as we noted in <a href="secF1.html">section F.1</a>
when it came to private property Rothbard simply could not see its state-like
qualities -- even when he pointed them out himself! For Rothbard, the individualist 
anarchist position involved a <i>"hobbling of land sites or of optimum use of land 
ownership and cultivation and such arbitrary misallocation of land injures all of 
society."</i> [Rothbard, <b>Op. Cit.</b>, p. 9] Obviously, those subject to the
arbitrary authority of landlords and pay them rent are not part of <i>"society"</i>
and it is a strange coincidence that the interests of landlords just happen to
coincide so completely with that of <i>"all of society"</i> (including their tenants?).
And it would be churlish to remind Rothbard's readers that, as a methodological 
individualist, he was meant to think that there is no such thing as <i>"society"</i> 
-- just individuals. And in terms of these individuals, he clearly favoured the 
landlords over their tenants and justifies this by appealing, like any crude 
collectivist, to an abstraction (<i>"society"</i>) to which the tenants must sacrifice 
themselves and their liberty. Tucker would not have been impressed.
</p><p>
For Rothbard, the nineteenth century saw <i>"the establishment in North America 
of a truly libertarian land system."</i> [<b>The Ethics of Liberty</b>, p. 73] 
In contrast, the Individualist Anarchists attacked that land system as the 
<i>"land monopoly"</i> and looked forward to a time when <i>"the libertarian 
principle to the tenure of land"</i> was actually applied [Tucker, <b>Liberty</b>, 
no. 350, p. 5] So given the central place that "occupancy and use" lies in individualist 
anarchism, it was extremely patronising for Rothbard to assert that <i>"it seems . . . 
a complete violation of the Spooner-Tucker 'law of equal liberty' to prevent the 
legitimate owner from selling his land to someone else."</i> [<i>"The Spooner-Tucker 
Doctrine: An Economist's View"</i>, <b>Op. Cit.</b>, p. 9]
Particularly as Tucker had explicitly addressed this issue and indicated the 
logical and common sense basis for this so-called "violation" of their principles.
Thus "occupancy and use" was <i>"the libertarian principle to the tenure of land"</i>
because it stopped a class of all powerful landlords developing, ensuring a real
equality of opportunity and liberty rather than the formal "liberty" associated
with capitalism which, in practice, means selling your liberty to the rich.
<p></p>
Somewhat ironically, Rothbard bemoaned that it <i>"seems to be a highly unfortunate 
trait of libertarian and quasi-libertarian groups to spend the bulk of their time 
and energy emphasising their most fallacious or unlibertarian points."</i> 
[<b>Op. Cit.</b>, p. 14] He pointed to the followers of Henry George and their 
opposition to the current land holding system and the monetary views of the 
individualist anarchists as examples (see <a href="secG3.html#secg36">section G.3.6</a> 
for a critique of Rothbard's position on mutual banking). Of course, both groups would 
reply that Rothbard's positions were, in fact, both fallacious and unlibertarian in 
nature. As, indeed, did Tucker decades before Rothbard proclaimed his private statism 
a form of "anarchism." Yarros' critique of those who praised capitalism but ignored 
the state imposed restrictions that limited choice within it seems as applicable to 
Rothbard as it did Herbert Spencer:
</p><p><blockquote><i>
"A system is voluntary when it is voluntary all round . . . not when certain 
transactions, regarded from certain points of view, appear Voluntary. Are the 
circumstances which compel the labourer to accept unfair terms law-created,
artificial, and subversive of equal liberty? That is the question, and an 
affirmative answer to it is tantamount to an admission that the present 
system is not voluntary in the true sense."</i> [<b>Liberty</b>, no. 184, p. 2]
</blockquote></p><p>
So while "anarcho"-capitalists like Walter Block speculate on how starving families 
renting their children to wealthy paedophiles is acceptable <i>"on libertarian 
grounds"</i> it is doubtful that any individualist anarchist would be so blas 
about such an evil. [<i>"Libertarianism vs. Objectivism: A Response to Peter Schwartz,"</i> 
pp. 39-62, <b>Reason Papers</b>, Vol. 26, Summer 2003, p. 20] Tucker, for example, 
was well aware that liberty without equality was little more than a bad joke.
<i>"If,"</i> he argued, <i>"after the achievement of all industrial freedoms, 
economic rent should prove to be the cause of such inequalities in comfort that 
an effective majority found themselves at the point of starvation, they would 
undoubtedly cry, 'Liberty be damned!' and proceed to even up; and I think that 
at that stage of the game they would be great fools if they didn't. From this 
it will be seen that I am no[t] . . . a  stickler for absolute equal liberty 
under all circumstances."</i> Needless to say, he considered this outcome as
unlikely and was keen to <i>"[t]ry freedom first."</i> [<b>Liberty</b>, no. 267, 
p. 2 and p. 3]
</p><p>
The real question is why Rothbard considered this a <b>political</b> difference 
rather than an economic one. Unfortunately, he did not explain. Perhaps because 
of the underlying <b>socialist</b> 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 propertarian 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 <b>and</b> 
those who used it? As we noted in <a href="secF1.html">section F.1</a>, this is 
the conclusion that Rothbard does draw. As such, there <b>is</b> a political 
aspect to this difference, namely the difference between a libertarian social 
system and one rooted in authority.
</p><p>
Ultimately, <i>"the expropriation of the mass of the people from the soil forms 
the basis of the capitalist mode of production."</i> [Marx, <b>Capital</b>, vol. 1, 
p. 934] For there are <i>"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."</i> In the second case, government 
is <i>"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."</i> [Malatesta, <b>Anarchy</b>, p. 21] Privatising the 
coercive functions of said government hardly makes much difference.
</p><p>
As such, Rothbard was right to distance himself from the term individualist 
anarchism. It is a shame he did not do the same with anarchism as well!
</p><p>

<h2><a name="secg31">G.3.1 Is "anarcho"-capitalism American anarchism?</a></h2>
<p>
Unlike Rothbard, some "anarcho"-capitalists are more than happy to proclaim 
themselves "individualist anarchists" and so suggest that their notions are
identical, or nearly so, with the likes of Tucker, Ingalls and Labadie. As
part of this, they tend to stress that individualist anarchism is uniquely
American, an indigenous form of anarchism unlike social anarchism. To do so,
however, means ignoring not only the many European influences on individualist
anarchism itself (most notably, Proudhon) but also downplaying the realities
of American capitalism which quickly made social anarchism the dominant form
of Anarchism in America. Ironically, such a position is deeply contradictory
as "anarcho"-capitalism itself is most heavily influenced by a European 
ideology, namely "Austrian" economics, which has lead its proponents to reject 
key aspects of the indigenous American anarchist tradition.
<p></p>
For example, "anarcho"-capitalist Wendy McElroy does this in a short essay provoked
by the Seattle protests in 1999. While Canadian, her rampant American nationalism 
is at odds with the internationalism of the individualist anarchists, stating that 
after property destruction in Seattle which placed American anarchists back in the
media social anarchism <i>"is not American anarchism. Individualist anarchism, 
the indigenous form of the political philosophy, stands in rigorous opposition 
to attacking the person or property of individuals."</i> Like an ideological 
protectionist, she argued that <i>"Left [sic!] anarchism (socialist and communist) 
are foreign imports that flooded the country like cheap goods during the 19th 
century."</i> [<b>Anarchism: Two Kinds</b>] Apparently Albert and Lucy Parsons 
were un-Americans, as was Voltairine de Cleyre who turned from individualist to
communist anarchism. And best not mention the social conditions in America 
which quickly made communist-anarchism predominant in the movement or that
individualist anarchists like Tucker proudly proclaimed their ideas socialist!
</p><p>
She argued that <i>"[m]any of these anarchists (especially those escaping 
Russia) introduced lamentable traits into American radicalism"</i> such as 
<i>"propaganda by deed"</i> as well as a class analysis which <i>"divided society 
into economic classes that were at war with each other."</i> Taking the issue
of <i>"propaganda by the deed"</i> first, it should be noted that use of violence
against person or property was hardly alien to American traditions. The Boston
Tea Party was just as <i>"lamentable"</i> an attack on <i>"property of individuals"</i>
as the window breaking at Seattle while the revolution and revolutionary war 
were hardly fought using pacifist methods or respecting the <i>"person or 
property of individuals"</i> who supported imperialist Britain. Similarly, the 
struggle against slavery was not conducted purely by means Quakers would have
supported (John Brown springs to mind), nor was (to use just one example) Shay's 
rebellion. So <i>"attacking the person or property of individuals"</i> was hardly 
alien to American radicalism and so was definitely <b>not</b> imported by <i>"foreign"</i> 
anarchists.
</p><p>
Of course, anarchism in American became associated with terrorism (or <i>"propaganda
by the deed"</i>) due to the Haymarket events of 1886 and Berkman's assassination
attempt against Frick during the Homestead strike. Significantly, McElroy makes
no mention of the substantial state and employer violence which provoked many
anarchists to advocate violence in self-defence. For example, the great strike 
of 1877 saw the police opened fire on strikers on July 25th, killing five and 
injuring many more. <i>"For several days, meetings of workmen were broken
up by the police, who again and again interfered with the rights of free speech
and assembly."</i> The <b>Chicago Times</b> called for the use of hand grenades
against strikers and state troops were called in, killing a dozen strikers.
<i>"In two days of fighting, between 25 and 50 civilians had been killed,
some 200 seriously injured, and between 300 and 400 arrested. Not a single
policeman or soldier had lost his life."</i> This context explains why many
workers, including those in reformist trade unions as well as anarchist groups
like the IWPA, turned to armed self-defence ("violence"). The Haymarket meeting 
itself was organised in response to the police firing on strikers and killing at 
least two. The Haymarket bomb was thrown after the police tried to break-up 
a peaceful meeting by force: <i>"It is clear then that . . . it was the police 
and not the anarchists who were the perpetrators of the violence at the Haymarket."</i> 
All but one of the deaths and most of the injuries were caused by the police firing 
indiscriminately in the panic after the explosion. [Paul Avrich, <b>The Maymarket
Tragedy</b>, pp. 32-4, p. 189, p. 210, and pp. 208-9] As for Berkman's assassination
attempt, this was provoked by the employer's Pinkerton police opening fire on
strikers, killing and wounding many. [Emma Goldman, <b>Living My Life</b>, vol. 1, 
p. 86]
</p><p>
In other words, it was <b>not</b> foreign anarchists or alien ideas which
associated anarchism with violence but, rather, the reality of American
capitalism. As historian Eugenia C. Delamotte puts it, <i>"the view that 
anarchism stood for violence . . . spread rapidly in the mainstream press 
from the 1870s"</i> because of <i>"the use of violence against strikers and 
demonstrators in the labour agitation that marked these decades -- struggles 
for the eight-hour day, better wages, and the right to unionise, for example. 
Police, militia, and private security guards harassed, intimidated, bludgeoned, 
and shot workers routinely in conflicts that were just as routinely portrayed in 
the media as worker violence rather than state violence; labour activists were 
also subject to brutal attacks, threats of lynching, and many other forms 
of physical assault and intimidation . . . the question of how to respond 
to such violence became a critical issue in the 1870s, with the upswelling 
of labour agitation and attempts to suppress it violently."</i> [<b>Voltairine 
de Cleyre and the Revolution 
of the Mind</b>, pp. 51-2] 
</p><p>
Joseph Labadie, it should be noted, thought the <i>"Beastly police"</i> got what they 
deserved at Haymarket as they had attempted to break up a peaceful public meeting 
and such people should <i>"go at the peril of their lives. If it is necessary to use 
dynamite to protect the rights of free meeting, free press and free speech, then the 
sooner we learn its manufacture and use . . . the better it will be for the toilers 
of the world."</i> The radical paper he was involved in, the <b>Labor Leaf</b>, had 
previously argued that <i>"should trouble come, the capitalists will use the regular 
army and militia to shoot down those who are not satisfied. It won't be so if the 
people are equally ready."</i> Even reformist unions were arming themselves to protect 
themselves, with many workers applauding their attempts to organise union militias. 
As worker put it, <i>"[w]ith union men well armed and accustomed to military tactics, 
we could keep Pinkerton's men at a distance . . . Employers would think twice, too, 
before they attempted to use troops against us . . . Every union ought to have its 
company of sharpshooters."</i> [quoted by Richard Jules Oestreicher, <b>Solidarity 
and Fragmentation</b>, p. 200 and p. 135]
</p><p>
While the violent rhetoric of the Chicago anarchists was used at their trial and
is remembered (in part because enemies of anarchism take great glee in repeating it), 
the state and employer violence which provoked it has been forgotten or ignored. 
Unless this is mentioned, a seriously distorted picture of both communist-anarchism 
<b>and</b> capitalism are created. It is significant, of course, that while the 
<b>words</b> of the Martyrs are taken as evidence of anarchism's violent nature, 
the actual violence (up to and including murder) against strikers by state and 
private police apparently tells us nothing about the nature of the state or 
capitalist system (Ward Churchill presents an excellent summary such activities in 
his article <i>"From the Pinkertons to the PATRIOT Act: The Trajectory of Political 
Policing in the United States, 1870 to the Present"</i> [<b>CR: The New Centennial 
Review</b>, Vol. 4, No. 1,  pp.  1-72]).
</p><p>
So, as can be seen, McElroy distorts the context of anarchist violence by utterly 
ignoring the far worse capitalist violence which provoked it. Like more obvious
statists, she demonises the resistance to the oppressed while ignoring that of
the oppressor. Equally, it should also be noted Tucker rejected violent methods 
to end class oppression not out of principle, but rather strategy as there 
<i>"was no doubt in his mind as to the righteousness of resistance to oppression 
by recourse to violence, but his concern now was with its expedience . . . he was 
absolutely convinced that the desired social revolution would be possible only 
through the utility of peaceful propaganda and passive resistance."</i> [James J. 
Martin, <b>Men Against the State</b>, p. 225] For Tucker <i>"as long as freedom 
of speech and of the press is not struck down, there should be no resort to 
physical force in the struggle against oppression."</i> [quoted by Morgan 
Edwards, <i>"Neither Bombs Nor Ballots: Liberty & the Strategy of Anarchism"</i>, 
pp. 65-91, <b>Benjamin R. Tucker and the Champions of Liberty</b>, Coughlin, 
Hamilton and Sullivan (eds.), p. 67] Nor should we forget that Spooner's rhetoric 
could be as blood-thirsty as Johann Most's at times and that American individualist
anarchist Dyer Lum was an advocate of insurrection.
</p><p>
As far as class analysis does, which <i>"divided society into economic classes 
that were at war with each other"</i>, it can be seen that the "left" anarchists
were simply acknowledging the reality of the situation -- as did, it must be
stressed, the individualist anarchists. As we noted in <a href="secG1.html">section G.1</a>,
the individualist anarchists were well aware that there was a class war going 
on, one in which the capitalist class used the state to ensure its position (the 
individualist anarchist <i>"knows very well that the present State is an historical 
development, that it is simply the tool of the property-owning class; he knows that 
primitive accumulation began through robbery bold and daring, and that the freebooters 
then organised the State in its present form for their own self-preservation."</i>
[A.H. Simpson, <b>The Individualist Anarchists</b>, p. 92]). Thus workers had a
right to a genuinely free market for <i>"[i]f the man with labour to sell has not
this free market, then his liberty is violated and his property virtually taken
from him. Now, such a market has constantly been denied . . . to labourers of the
entire civilised world. And the men who have denied it are . . . Capitalists . . .
[who] have placed and kept on the statue-books all sorts of prohibitions and
taxes designed to limit and effective in limiting the number of bidders for the
labour of those who have labour to sell."</i> [<b>Instead of a Book</b>, p. 454]
For Joshua King Ingalls, <i>"[i]n any question as between the worker and the holder 
of privilege, [the state] is certain to throw itself into the scale with the latter, 
for it is itself the source of privilege, the creator of class rule."</i> [quoted
by Bowman N. Hall, <i>"Joshua K. Ingalls, American Individualist: Land Reformer, 
Opponent of Henry George and Advocate of Land Leasing, Now an Established 
Mode,"</i> pp. 383-96, <b>American Journal of Economics and Sociology</b>, Vol. 39,
No. 4, p. 292] Ultimately, the state was <i>"a police force to regulate the people 
in the interests of the plutocracy."</i> [Ingalls, quoted by Martin, <b>Op. Cit.</b>, 
p. 152] 
</p><p>
Discussing Henry Frick, manager of the Homestead steelworkers who was shot by 
Berkman for using violence against striking workers, Tucker noted that Frick 
did not <i>"aspire, as I do, to live in a society of mutually helpful equals"</i> but 
rather it was <i>"his determination to live in luxury produced by the toil and 
suffering of men whose necks are under his heel. He has deliberately chosen
to live on terms of hostility with the greater part of the human race."</i> While 
opposing Berkman's act, Tucker believed that he was <i>"a man with whom I have 
much in common, -- much more at any rate than with such a man as Frick."</i> 
Berkman <i>"would like to live on terms of equality with his fellows, doing his 
share of work for not more than his share of pay."</i> [<b>The Individualist
Anarchists</b>, pp. 307-8] Clearly, Tucker was well aware of the class struggle
and why, while not supporting such actions, violence occurred when fighting it.
</p><p>
As Victor Yarros summarised, for the individualist anarchists the <i>"State is 
the servant of the robbers, and it exists chiefly to prevent the expropriation 
of the robbers and the restoration of a free and fair field for legitimate 
competition and wholesome, effective voluntary cooperation."</i> [<i>"Philosophical 
Anarchism: Its Rise, Decline, and Eclipse"</i>, pp. 470-483, <b>The American Journal 
of Sociology</b>, vol. 41, no. 4, p. 475] For "anarcho"-capitalists, the state 
exploits all classes subject to it (perhaps the rich most, by means of taxation 
to fund welfare programmes and legal support for union rights and strikes).
</p><p>
So when McElroy states that, <i>"Individualist anarchism rejects the State because 
it is the institutionalisation of force against peaceful individuals"</i>, she is 
only partly correct. While it may be true for "anarcho"-capitalism, it fails to note 
that for the individualist anarchists the modern state was the institutionalisation 
of force by the capitalist class to deny the working class a free market. The 
individualist anarchists, in other words, like social anarchists also rejected the 
state because it imposed certain class monopolies and class legislation which 
ensured the exploitation of labour by capital -- a significant omission on McElroy's
part. <i>"Can it be soberly pretended for a moment that the State . . . is purely 
a defensive institution?"</i> asked Tucker. <i>"Surely not . . . you will find that 
a good nine-tenths of existing legislation serves . . . either to prescribe the 
individual's personal habits, or, worse still, to create and sustain commercial, 
industrial, financial, and proprietary monopolies which deprive labour of a large 
part of the reward that it would receive in a perfectly free market."</i> [Tucker, 
<b>Instead of a Book</b>, pp. 25-6] In fact:
<blockquote></p><p>
<i>"As long as a portion of the products of labour are appropriated for the payment 
of fat salaries to useless officials and big dividends to idle stockholders, labour 
is entitled to consider itself defrauded, and all just men will sympathise with its 
protest."</i> [Tucker, <b>Liberty</b>, no. 19, p. 1]
</blockquote></p><p>
It goes without saying that almost all "anarcho"-capitalists follow Rothbard in
being totally opposed to labour unions, strikes and other forms of working class
protest. As such, the individualist anarchists, just as much as the "left" anarchists
McElroy is so keen to disassociate them from, argued that <i>"[t]hose who made 
a profit from buying or selling were class criminals and their customers or 
employees were class victims. It did not matter if the exchanges were voluntary 
ones. Thus, left anarchists hated the free market as deeply as they hated the 
State."</i> [McElroy, <b>Op. Cit.</b>] Yet, as any individualist anarchist of the 
time would have told her, the "free market" did not exist because the capitalist 
class used the state to oppress the working class and reduce the options 
available to choose from so allowing the exploitation of labour to occur. 
Class analysis, in other words, was not limited to <i>"foreign"</i> anarchism, 
nor was the notion that making a profit was a form of exploitation (usury). 
As Tucker continually stressed: <i>"Liberty will abolish interest; it will 
abolish profit; it will abolish monopolistic rent; it will abolish taxation;
it will abolish the exploitation of labour."</i> [<b>The Individualist Anarchists</b>, 
p. 157] 
</p><p>
It should also be noted that the "left" anarchist opposition to the 
individualist anarchist "free market" is due to an analysis which argues that 
it will not, in fact, result in the anarchist aim of ending exploitation nor 
will it maximise individual freedom (see <a href="secG4.html">section G.4</a>). 
We do not "hate" the free market, rather we love individual liberty and seek 
the best kind of society to ensure free people. By concentrating on markets 
being free, "anarcho"-capitalism ensures that it is wilfully blind to the
freedom-destroying similarities between capitalist property and the state 
(as we discussed in <a href="secF1.html">section F.1</a>). An analysis which
many individualist anarchists recognised, with the likes of Dyer Lum seeing 
that replacing the authority of the state with that of the boss was no great 
improvement in terms of freedom and so advocating co-operative workplaces
to abolish wage slavery. Equally, in terms of land ownership the individualist
anarchists opposed any voluntary exchanges which violated <i>"occupancy and
use"</i> and so they, so, <i>"hated the free market as deeply as they hated the
State."</i> Or, more correctly, they recognised that voluntary exchanges
can result in concentrations of wealth and so power which made a mockery
of individual freedom. In other words, that while the market may be free
the individuals within it would not be. 
</p><p>
McElroy partly admits this, saying that <i>"the two schools of anarchism had enough 
in common to shake hands when they first met. To some degree, they spoke a mutual 
language. For example, they both reviled the State and denounced capitalism. But, 
by the latter, individualist anarchists meant 'state-capitalism' the alliance of 
government and business."</i> Yet this <i>"alliance of government and business"</i> 
has been the only kind of capitalism that has ever existed. They were well aware
that such an alliance made the capitalist system what it was, i.e., a system
based on the exploitation of labour. William Bailie, in an article entitled
<i>"The Rule of the Monopolists"</i> simply repeated the standard socialist 
analysis of the state when he talked about the <i>"gigantic monopolies, which 
control not only our industry, but all the machinery of the State, -- legislative, 
judicial, executive, -- together with school, college, press, and pulpit."</i> 
Thus the <i>"preponderance in the number of injunctions against striking, boycotting,
and agitating, compared with the number against locking-out, blacklisting,
and the employment of armed mercenaries."</i> The courts could not ensure justice
because of the <i>"subserviency of the judiciary to the capitalist class . . . and
the nature of the reward in store for the accommodating judge."</i> Government <i>"is 
the instrument by means of which the monopolist maintains his supremacy"</i> as
the law-makers <i>"enact what he desires; the judiciary interprets his will; the 
executive is his submissive agent; the military arm exists in reality to defend 
<b>his</b> country, protect <b>his</b> property, and suppress <b>his</b> enemies, 
the workers on strike."</i> Ultimately, <i>"when the producer no longer obeys the 
State, his economic master will have lost his power."</i> [<b>Liberty</b>, no. 368, 
p. 4 and p. 5] Little wonder, then, that the individualist anarchists thought that
the end of the state and the class monopolies it enforces would produce a radically
different society rather than one essentially similar to the current one but without 
taxes. Their support for the "free market" implied the end of capitalism and its 
replacement with a new social system, one which would end the exploitation of labour.
</p><p>
She herself admits, in a roundabout way, that "anarcho"-capitalism is 
significantly different that individualist anarchism. <i>"The schism between 
the two forms of anarchism has deepened with time,"</i> she asserts. This was 
<i>"[l]argely due to the path breaking work of Murray Rothbard"</i> and so, unlike 
genuine individualist anarchism, the new <i>"individualist anarchism"</i> (i.e., 
"anarcho"-capitalism) <i>"is no longer inherently suspicious of profit-making 
practices, such as charging interest. Indeed, it embraces the free market as 
the voluntary vehicle of economic exchange"</i> (does this mean that the old
version of it did not, in fact, embrace <i>"the free market"</i> after all?) 
This is because it <i>"draws increasingly upon the work of Austrian economists 
such as Mises and Hayek"</i> and so <i>"it draws increasingly farther away from 
left anarchism"</i> and, she fails to note, the likes of Warren and Tucker. As 
such, it would be churlish to note that "Austrian" economics was even more of a 
<i>"foreign import"</i> much at odds with American anarchist traditions as
communist anarchism, but we will! After all, Rothbard's support of usury 
(interest, rent and profit) would be unlikely to find much support from 
someone who looked forward to the development of <i>"an attitude of hostility 
to usury, in any form, which will ultimately cause any person who charges more 
than cost for any product to be regarded very much as we now regard a pickpocket."</i> 
[Tucker, <b>The Individualist Anarchists</b>, p. 155] Nor, as noted above, would 
Rothbard's support for an <i>"Archist"</i> (capitalist) land ownership system 
have won him anything but dismissal nor would his judge, jurist and lawyer 
driven political system have been seen as anything other than rule by the 
few rather than rule by none.
</p><p>
Ultimately, it is a case of influences and the kind of socio-political analysis
and aims it inspires. Unsurprisingly, the main influences in individualist anarchism
came from social movements and protests. Thus poverty-stricken farmers and labour 
unions seeking monetary and land reform to ease their position and subservience 
to capital all plainly played their part in shaping the theory, as did the Single-Tax 
ideas of Henry George and the radical critiques of capitalism provided by Proudhon 
and Marx. In contrast, "anarcho"-capitalism's major (indeed, predominant) influence 
is "Austrian" economists, an ideology developed (in part) to provide intellectual 
support against such movements and their proposals for reform. As we will discuss
in the <a href="secG3.html#secg32">next section</a>, this explains the quite
fundamental differences between the two systems for all the attempts of 
"anarcho"-capitalists to appropriate the legacy of the likes of Tucker. 

<h2><a name="secg32">G.3.2 What are the differences between "anarcho"-capitalism and individualist anarchism?</a></h2>
<p>
The key differences between individualist anarchism and "anarcho"-capitalism derive 
from the fact the former were socialists while the latter embrace capitalism with 
unqualified enthusiasm. Unsurprisingly, this leans to radically different analyses, 
conclusions and strategies. It also expresses itself in the vision of the free 
society expected from their respective systems. Such differences, we stress, all 
ultimately flow from fact that the individualist anarchists were/are socialists 
while the likes of Rothbard are wholeheartedly supporters of capitalism.
</p><p>
As scholar Frank H. Brooks notes, <i>"the individualist anarchists hoped to achieve 
socialism by removing the obstacles to individual liberty in the economic realm."</i> 
This involved making equality of opportunity a reality rather than mere rhetoric by 
ending capitalist property rights in land and ensuring access to credit to set-up in 
business for themselves. So while supporting a market economy <i>"they were also advocates 
of socialism and critics of industrial capitalism, positions that make them less useful 
as ideological tools of a resurgent capitalism."</i> [<b>The Individualist Anarchists</b>, 
p. 111] Perhaps unsurprisingly, most right-"libertarians" get round this problem by hiding 
or downplaying this awkward fact. Yet it remains essential for understanding both 
individualist anarchism and why "anarcho"-capitalism is not a form of anarchism. 
</p><p>
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 as in 19th century America). This means that they 
totally reject 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 Tucker when he argued that <i>"<b>[w]hoever</b> 
contributes to production is alone entitled. <b>What</b> has no rights that 
<b>who</b> is bound to respect. <b>What</b> is a thing. <b>Who</b> 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."</i> [quoted by 
Wm. Gary Kline, <b>The Individualist Anarchists</b>, p. 73] 
</p><p>
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 <b>What is Property?</b> and 
argue that <i>"property is theft"</i> as well as <i>"despotism"</i>. 
Rothbard, as noted in the <a href="secF1.html">section F.1</a>, rejected 
this perspective.
</p><p>
As these ideas are an <b>essential</b> 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 <i>"<b>Liberty</b> 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."</i> [quoted by Eunice Schuster,
<b>Native American Anarchism</b>, p. 140] Tucker indicates here that anarchism has 
specific economic <b>and</b> 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 <i>"<b>Liberty</b> insists on Socialism. . . --  true Socialism, 
Anarchistic Socialism: the prevalence on earth of Liberty, Equality, and 
Solidarity"</i> he knew exactly what he was saying and meant it wholeheartedly. 
[<b>Instead of a Book</b>, p. 363] 
So because "anarcho"-capitalists embrace capitalism and reject socialism, they 
cannot be considered anarchists or part of the anarchist tradition.
</p><p>
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 and "anarcho"-capitalism
does not make the former a forerunner of the latter. 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 noted, 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 <b>not</b> the defining characteristic of socialism. As such, it 
<b>is</b> possible to be a market socialist (and many socialist are) as 
"markets" and "property" do not equate to capitalism as we proved in 
sections <a href="secG1.html#secg11">G.1.1</a> and 
<a href="secG1.html#secg12">G.1.2</a> respectively.
</p><p>
One apparent area of overlap between individualist anarchism and 
"anarcho"-capitalism is the issue of wage labour. As we noted in 
<a href="secG1.html#secg13">section G.1.3</a>, unlike social anarchists, 
some individualist anarchists were not consistently against it. However, 
this similarity is more apparent than real as the individualist
anarchists 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 and so
it would not be an exploitative arrangement. Needless to say, social anarchists
think this is unlikely to be the case and, as we discuss in 
<a href="secG4.html#secg41">section G.4.1</a>, individualist anarchist support 
for wage labour is in contradiction to many of the stated basic 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. 
</p><p>
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 
(if inconsistent) school of anarchism. 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 between anarchists). Thus we find
Tucker criticising Henry George by noting that he was <i>"enough of an economist to 
be very well aware that, whether it has land or not, labour which can get no capital 
-- that is, which is oppressed by capital -- cannot, without accepting the alternative 
of starvation, refuse to reproduce capital for the capitalists."</i> Abolition of the 
money monopoly will increase wages, so allowing workers to <i>"steadily lay up money, 
with which he can buy tools to compete with his employer or to till his bit of land 
with comfort and advantage. In short, he will be an independent man, receiving
what he produces or an equivalent thereof. How to make this the lot of all men is 
the labour question. Free land will not solve it. Free money, supplemented by free 
land, will."</i> [<b>Liberty</b>, no. 99 , p. 4 and p. 5] Sadly, Rothbard failed
to reach George's level of understanding (at least as regards his beloved capitalism).
</p><p>
Which  brings us another source of disagreement, namely on the effects of state
intervention and what to do about it. 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 <i>"primitive accumulation"</i> in favour of the pre-capitalist 
forms of property and society it was destroying.
</p><p>
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:
</p><p><blockquote>
<i>"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."</i> [Max Nettlau, <b>A Short History of Anarchism</b>, p. 39]
</blockquote></p><p>
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 staying
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. 
</p><p>
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":
</p><p><blockquote>
<i>"[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 <b>all</b> 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). . . . 
</p><p>
"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."</i>
[quoted by Carl Watner, <i>"The English Individualists As They Appear In 
Liberty,"</i> pp. 191-211, <b>Benjamin R. Tucker and the Champions of Liberty</b>, 
Coughlin, Hamilton and Sullivan (eds.), pp. 199-200]
</blockquote></p><p>
It could be argued, in reply, that some "anarcho"-capitalists do argue that stolen
property should be returned to its rightful owners and, as a result, do sometimes
argue for land reform (namely, the seizing of land by peasants from their feudal
landlords). However, this position is, at best, a pale shadow of the individualist
anarchist position or, at worse, simply rhetoric. As leading "anarcho"-capitalist 
Walter Block pointed out:
</p><p><blockquote><i>
"While this aspect of libertarian theory sounds very radical, in practice
it is less so. This is because the claimant always needs proof. Possession
is nine tenths of the law, and to overcome the presumption that property is
now in the hands of its rightful owners required that an evidentiary burden
by overcome. The further back in history was the initial act of aggression
(not only because written evidence is less likely to be available), the 
less likely it is that there can be proof of it."</i> [<b>Op. Cit.</b>, 
pp. 54-5]
</blockquote></p><p>
Somewhat ironically, Block appears to support land reform in Third World 
countries in spite of the fact that the native peoples have no evidence to 
show that they are the rightful owners of the land they work. Nor does he 
bother himself to wonder about the wider social impact of such theft, namely 
in the capital that was funded using it. If the land was stolen, then so 
was its products and so was any capital bought with the profits made from such 
goods. But, as he says, this aspect of right-"libertarian" ideology <i>"sounds 
very radical"</i> but <i>"in practice it is less so."</i> Apparently, theft 
<b>is</b> property! Not to mention that nine tenths of property is currently 
possessed (i.e., used) not by its "rightful owners" but rather those who 
by economic necessity have to work for them. This is a situation the law was 
designed to protect, including (apparently) a so-called "libertarian" one.
</p><p>
This wider impact is key. As we indicated in <a href="secF8.html">section F.8</a>,
state coercion (particularly in the form of the land monopoly) was essential
in the development of capitalism. By restricting access to land, working class
people had little option but to seek work from landlords and capitalists. Thus
the stolen land ensured that workers were exploited by the landlord and the
capitalist and so the exploitation of the land monopoly was spread throughout
the economy, with the resulting exploited labour being used to ensure that 
capital accumulated. For Rothbard, unlike the individualist anarchists, the 
land monopoly had limited impact and can be considered separately from the
rise of capitalism:
</p><p><blockquote><i>
"the emergence of wage-labour was an enormous boon for many thousands of poor 
workers and saved them from starvation. If there is no wage labour, as there 
was not in most production before the Industrial Revolution, then each worker 
must have enough money to purchase his own capital and tools. One of the great 
things about the emergence of the factory system and wage labour is that poor 
workers did not have to purchase their own capital equipment; this could be 
left to the capitalists."</i> [<b>Konkin on Libertarian Strategy</b>]
</p><p></blockquote>
Except, of course, <b>before</b> the industrial revolution almost all 
workers did, in fact, have their own capital and tools. The rise 
of capitalism was based on what the exclusion of working people from 
the land by means of the land monopoly. Farmers were barred, by the
state, from utilising the land of the aristocracy while their access
to the commons was stripped from them by the imposition of capitalist
property rights by the state. Thus Rothbard is right, in a sense. 
The emergence of wage-labour was based on the fact that workers had
to purchase access to the land from those who monopolised it by means
of state action -- which was precisely what the individualist anarchists
opposed. Wage labour, after all, first developed <b>on the land</b> not with 
the rise of the factory system. Even Rothbard, we hope, would not have been so
crass as to say that landlordism was an enormous boon for those poor workers
as it saved them from starvation for, after all, one of the great things
about landlordism is that poor workers did not have to purchase their own
land; that could be left to the landlords.
</p><p>
The landless workers, therefore, had little option but to seek work from
those who monopolised the land. Over time, increasing numbers found work
in industry where employers happily took advantage of the effects of the
land monopoly to extract as much work for as little pay as possible. The
profits of both landlord and capitalist exploitation were then used to
accumulate capital, reducing the bargaining power of the landless workers 
even more as it became increasingly difficult to set-up in business due
to natural barriers to competition. It should also be stressed that once 
forced onto the labour market, the proletariat found itself subjected to 
numerous state laws which prevented their free association (for example, the 
banning of unions and strikes as conspiracies) as well as their ability to 
purchase their own capital and tools. Needless to say, the individualist 
anarchists recognised this and considered the ability of workers to be able 
to purchase their own capital and tools as an essential reform and, consequently, 
fought against the money monopoly. They reasoned, quite rightly, that this was a
system of class privilege designed to keep workers in a position of dependency 
on the landlords and capitalists, which (in turn) allowed exploitation to occur.
This was also the position of many workers, who rather than consider capitalism 
a boon, organised to defend their freedom and to resist exploitation -- and the 
state complied with the wishes of the capitalists and broke that resistance. 
</p><p>
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 <b>whole</b> capitalist class (<i>"If, then, the capitalist, by 
abolishing the free market, compels other men to procure their tools and 
advantages of him on less favourable terms than they could get before, while 
it may be better for them to come to his terms than to go without the capital, 
does he not deduct from their earnings?"</i> [Tucker, <b>Liberty</b>, no. 109,
p. 4]). Rothbard, at best, acknowledges that <b>some</b> sections of big business 
benefit from the current system and so fails to have a comprehensive 
understanding of the dynamics of capitalism as a <b>system</b> (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. 
</p><p>
Then there is the issue of strategy, with Rothbard insisting on <i>"political
action,"</i> namely voting for the Libertarian Party (or least non-"libertarian"
party). <i>"I see no other conceivable strategy for the achievement of liberty 
than political action,"</i> he stated. Like Marxists, voting was seen as the
means of achieving the abolition of the state, as <i>"a militant and abolitionist 
[Libertarian Party] in control of Congress could wipe out all the [non-'libertarian']
laws overnight . . . No other strategy for liberty can work."</i> [<b>Op. Cit.</b>] 
The individualist anarchists, like other anarchists, rejected such arguments as 
incompatible with genuine libertarian principles. As Tucker put it, voting could 
not be libertarian as it would make the voter <i>"an accomplice in aggression."</i>
[<b>The Individualist Anarchists</b>, p. 305]
</p><p>
Rothbard's position indicates an interesting paradox. Rothbard wholeheartedly 
supported <i>"political action"</i> as the only means of achieving the end
of the state. Marxists (when not excommunicating anarchism from the socialist 
movement) often argue that they agree with the anarchists on the ends (abolition 
of the state) but only differed on the means (i.e., political action over direct 
action). Obviously, no one calls Marx an anarchist and this is precisely because 
he aimed to use political action to achieve the abolition of the state. Yet, 
for some reason, Rothbard's <b>identical</b> position on tactics makes some 
call him an anarchist. So, given Rothbard's argument that the state must be 
seized first by a political party by means of <i>"political action"</i> in 
order to achieve his end, the question must be raised why he is considered 
an anarchist at all. Marx and Engels, like Lenin, all made identical arguments 
against anarchism, namely that political action was essential so that the 
Socialist Party could seize state power and implement the necessary changes 
to ensure that the state withered away. No one has ever considered them 
anarchists in spite of the common aim of ending the state yet many consider 
Rothbard to be an anarchist despite advocating the same methods as the Marxists. 
As we noted in <a href="secF8.html">section F.8</a>, a better term for 
"anarcho"-capitalism could be "Marxist-capitalism" and Rothbard's argument 
for "political action" confirms that suggestion. 
</p><p>
Needless to say, other strategies favoured by many individualists anarchists were
rejected by "anarcho"-capitalists. Unlike Tucker, Lum and others, Rothbard was
totally opposed to trade unions and strikes, viewing unions as coercive institutions
which could not survive under genuine capitalism (given the powers of property
owners and the inequalities of such a society, he may well have been right in 
thinking workers would be unable to successfully defend their basic freedoms
against their masters but that is another issue). The individualist anarchists 
were far more supportive. Henry Cohen, for example, considered the union as a 
<i>"voluntary association formed for the mutual benefit of its members, using 
the boycott and other passive weapons in its fight against capitalism and the 
State."</i> This was <i>"very near the Anarchist idea."</i> Some individualists 
were more critical of unions than others. One, A.H. Simpson, argued that the 
trade unions <i>"are as despotic and arbitrary as any other organisation, and 
no more Anarchistic than the Pullman or Carnegie companies."</i> In other words, 
the unions were to be opposed because they were like capitalist corporations! 
[<b>The Individualist Anarchists</b>, p. 285 and p. 288] For Tucker, as we
note in <a href="secG5.html">section G.5</a>, unions were <i>"a movement for 
self-government on the part of the people"</i> and it was <i>"in supplanting"</i> 
the state <i>"by an intelligent and self-governing socialism that the trades 
unions develop their chief significance."</i> [<b>Liberty</b>, no. 22, p. 3]
</p><p>
So the claims that "anarcho"-capitalism is a new form of individualist anarchism 
can only be done on the basis of completely ignoring the actual history of 
capitalism as well as ignoring the history, social context, arguments, aims 
and spirit of individualist anarchism. This is only convincing if the actual
ideas and aims of individualist anarchism are unknown or ignored and focus is
placed on certain words used (like "markets" and "property") rather than the 
specific meanings provided to them by its supporters. Sadly, this extremely 
superficial analysis is all too common -- particularly in academic circles and, 
of course, in right-"libertarian" ones.
</p><p>
Finally, it may be objected that "anarcho"-capitalism is a diverse, if small, 
collection of individuals and some of them are closer to individualist anarchism
than others. Which is, of course, true (just as some Marxists are closer to 
social anarchism than others). A few of them do reject the notion than hundreds 
of years of state-capitalist intervention has had little impact on the evolution 
of the economy and argue that a genuinely free economy would see the end of 
the current form of property rights and non-labour income as well as the 
self-employment and co-operatives becoming the dominant form of workplace 
organisation (the latter depends on the former, of course, for without the 
necessary social preconditions a preference for self-employment will remain 
precisely that). As Individualist Anarchist Shawn Wilbur put, there is a difference 
between those "anarcho"-capitalists who are ideologues for capitalism first and 
foremost and the minority who are closer to traditional anarchist aspirations. 
If the latter manage to jettison the baggage they have inherited from "Austrian" 
economics as well as the likes of Murray Rothbard and realise that they are, in 
fact, free market socialists and <b>not</b> in favour of capitalism then few 
anarchists would hold their past against them any more than they would a state 
socialist or left-liberal who realised the error of their ways. Until they do,
though, few anarchists would accept them as anarchists.
 
<h2><a name="secg33">G.3.3 What about "anarcho"-capitalists' support of "defence associations"?</a></h2>
<p>
It would be fair to say that "anarcho"-capitalist interest in individualist anarchism 
rests on their argument that, to quote Tucker, <i>"defense is a service, like any other 
service"</i>, and that such a service could and should be provided by private agencies 
paid for like any other commodity on the market. [<b>Liberty</b>, no. 104, p. 4] 
Therefore:
</p><p><blockquote><i>
"Anarchism means no government, but it does not mean no laws and no coercion. This 
may seem paradoxical, but the paradox vanishes when the Anarchist definition of 
government is kept in view. Anarchists oppose government, not because they disbelieve 
in punishment of crime and resistance to aggression, but because they disbelieve in 
compulsory protection. Protection and taxation without consent is itself invasion; 
hence Anarchism favours a system of voluntary taxation and protection."</i> 
[<b>Op. Cit.</b>, no. 212, p. 2]
</blockquote></p><p>
While most of the rest of the theory is ignored or dismissed as being the product
of "bad" economics, this position is considered the key link between the two
schools of thought. However, it is not enough to say that both the individualist
anarchists and "anarcho"-capitalists support a market in protection, you need to
look at what forms of property are being defended and the kind of society within
which it is done. Change the social context, change the kinds of property which
are being defended and you change the nature of the society in question. In other
words, defending capitalist property rights within an unequal society is radically 
different in terms of individual liberty than defending socialistic property rights
within an equal society -- just as a market economy based on artisan, peasant and
co-operative production is fundamentally different to one based on huge corporations
and the bulk of the population being wage slaves. Only the most superficial analysis
would suggest that they are the same and label both as being "capitalist" in nature.
</p><p>
It should, therefore, not be forgotten that the individualist anarchists advocated 
a system rooted in individual possession of land and tools plus the free exchange 
of the products of labour between self-employed people or wage workers who receive
the full equivalent of their product. This means that they supported the idea of 
a market in "defence associations" to ensure that the fruits of an individual's 
labour would not be stolen by others. Again, the social context of individualist 
anarchism -- namely, an egalitarian economy without exploitation of labour (see 
<a href="secG3.html#secg34">section G.3.4</a>) -- is crucial for understanding these 
proposals. However, as in their treatment of Tucker's support for contract 
theory, "anarcho"-capitalists remove the individualist anarchists' ideas about 
free-market defence associations and courts from the social context in which 
they were proposed, using those ideas in an attempt to turn the individualists 
into defenders of capitalism.
</p><p>
As indicated in <a href="secG1.html#secg14">section G.1.4</a>, the social context in 
question was one in which an economy of artisans and peasant farmers was being 
replaced by a state-backed capitalism. This context is crucial for understanding 
the idea of the "defence associations" that Tucker suggested. For what he proposed 
was clearly <b>not</b> the defence of capitalist property relations. This can be 
seen, for example, in his comments on land use. Thus: 
</p><p><blockquote>
<i>"'The land for the people' . . . means the protection by . . . voluntary
associations for the maintenance of justice . . . of all people who desire
to cultivate land in possession of whatever land they personally cultivate 
. . . and the positive refusal of the protecting power to lend its aid to the 
collection of any rent, whatsoever."</i> [<b>Instead of a Book</b>, p. 299]
</blockquote></p><p>
There is no mention here of protecting <b>capitalist</b> farming, i.e.
employing wage labour; rather, there is explicit mention that only land
being used for <b>personal</b> cultivation -- thus <b>without</b> employing wage
labour -- would be defended. In other words, the defence association would
defend <i>"occupancy and use"</i> (which is a clear break with capitalist property 
rights) and not the domination of the landlord over society or those who
use the land the landlord claims to own. This means that certain contracts
were not considered valid within individualist anarchism even if they were
voluntarily agreed to by the parties involved and so would not be enforceable
by the "defence associations." As Tucker put it:
</p><p><blockquote><i>
"A man cannot be allowed, merely by putting labour, to the limit of his capacity and 
beyond the limit of his personal use, into material of which there is a limited 
supply and the use of which is essential to the existence of other men, to withhold 
that material from other men's use; and any contract based upon or involving such 
withholding is lacking in sanctity or legitimacy as a contract to deliver stolen 
goods."</i> [<b>Liberty</b>, No. 321, p. 4]
</p><p></blockquote>
Refusal to pay rent on land is a key aspect of Tucker's thought, and it is
significant that he explicitly rejects the idea that a defence association
can be used to collect it. In addition, as a means towards anarchy, Tucker
suggests <i>"inducing the people to steadily refuse the payment of rent and
taxes."</i> [<b>Instead of a Book</b>, p. 299] It is hard to imagine that a 
landowner influenced by Murray Rothbard or David Friedman would support such 
an arrangement or a "defence association" that supported it. As such, the 
individualist anarchist system would impose restrictions on the market 
from an "anarcho"-capitalist perspective. Equally, from an individualist
anarchist perspective, "anarcho"-capitalism would be enforcing a key class
monopoly by force and so would simply be another kind of state. As Tucker
put it in reply to the proto-right-"libertarian" Auberon Herbert:
</p><p><blockquote><i>
"It is true that Anarchists . . . do, in a sense, propose to get rid of 
ground-rent by force. That is to say, if landlords should try to evict 
occupants, the Anarchists advice the occupants to combine to maintain 
their ground by force . . . But it is also true that the Individualists 
. . . propose to get rid of theft by force . . . The Anarchists justify 
the use of machinery (local juries, etc.) to adjust the property question 
involved in rent just as the Individualists justify similar machinery to 
adjust the property question involved in theft."</i> [<b>Op. Cit.</b>, 
no. 172, p. 7]
</blockquote></p><p>
It comes as no surprise to discover that Tucker translated Proudhon's 
<b>What is Property?</b> and subscribed to its conclusion that <i>"property 
is robbery"</i>!
</p><p>
This opposition to the <i>"land monopoly"</i> was, like all the various 
economic proposals made by the individualist anarchists, designed to 
eliminate the vast differences in wealth accruing from the <i>"usury"</i> 
of industrial capitalists, bankers, and landlords. For example, Josiah 
Warren <i>"proposed like Robert Owen an exchange of notes based on labour 
time . . . He wanted to establish an 'equitable commerce' in which all 
goods are exchanged for their cost of production . . . In this way profit 
and interest would be eradicated and a highly egalitarian order would 
emerge."</i> [Peter Marshall, <b>Demanding the Impossible</b>, p. 385] Given
that the Warrenites considered that both workers and managers would receive 
equal payment for equal hours worked (the manager may, in fact earn less 
if it were concluded that their work was less unpleasant than that done on
the shopfloor), the end of a parasitic class of wealthy capitalists was 
inevitable.
</p><p>
In the case of Benjamin Tucker, he was a firm adherent of socialist economic
analysis, believing that a free market and interest-free credit would 
reduce prices to the cost of production and increase demand for labour 
to the point where workers would receive the full value of their labour. 
In addition, recognising that gold was a rare commodity, he rejected a
gold-backed money supply in favour of a land-backed one, as land with
<i>"permanent improvements on"</i> it is <i>"an excellent basis for currency."</i>
[<b>Instead of a Book</b>, p. 198] Given that much of the population at the
time worked on their own land, such a money system would have ensured easy 
credit secured by land. Mutualism replaced the gold standard (which, by its 
very nature would produce an oligarchy of banks) with money backed by other,
more available, commodities. 
</p><p>
Such a system, the individualist anarchists argued, would be unlikely to 
reproduce the massive inequalities of wealth associated with capitalism
and have a dynamic utterly different to that system. They did not consider
the state as some alien body grafted onto capitalism which could be removed
and replaced with "defence associations" leaving the rest of society more
or less the same. Rather, they saw the state as being an essential aspect
of capitalism, defending key class monopolies and restricting freedom for
the working class. By abolishing the state, they automatically abolished 
these class monopolies and so capitalism. In other words, they had political
<b>and</b> economic goals and ignoring the second cannot help but produce
<b>different</b> results. As Voltairine de Cleyre put it in her individualist
days, Anarchism <i>"means not only the denial of authority, not only a 
new economy, but a revision of the principles of morality. It means the
development of the individual as well as the assertion of the individual."</i>
[<b>The Voltairine de Cleyre Reader</b>, p. 9] 
</p><p>
Right-"libertarians" reject all of this, the social context of Tucker's ideas 
on "defence associations." They do not aim for a <i>"new economy"</i>, but simply 
the existing one without a public state. They have no critique of capitalist
property rights nor any understanding of how such rights can produce economic
power and limit individual freedom. In fact, they attack what they consider 
the "bad economics" of the individualists without realising it is <b>precisely</b> 
these "bad" (i.e. anti-capitalist) economics which will minimise, if not
totally eliminate, any potential threat to freedom associated with "defence
associations." Without the accumulations of wealth inevitable when workers' 
do not receive the full product of their labour, it is unlikely that a 
"defence association" would act like the private police forces American
capitalists utilised to break unions and strikes both in Tucker's time and
now. Unless this social context exists, any defence associations will soon
become mini-states, serving to enrich the elite few by protecting the
usury they gain from, and their power and control (i.e. government) over, 
those who toil. In other words, the "defence associations" of Tucker and 
Spooner would not be private states, enforcing the power of capitalists 
and landlords upon wage workers. Instead, they would be like insurance 
companies, protecting possessions against theft (as opposed to protecting 
capitalist theft from the dispossessed as would be the case in 
"anarcho"-capitalism -- an important difference lost on the private 
staters). Where social anarchists disagree with individualist anarchists
is on whether a market system will actually produce such equality, 
particularly one without workers' self-management replacing the authority 
inherent in the capitalist-labourer social relationship. As we discuss
in <a href="secG4.html">section G.4</a>, without the equality and the 
egalitarian relationships of co-operative and artisan production there 
would be a tendency for capitalism and private statism to erode anarchy.
</p><p>
In addition, the emphasis given by Tucker and Lysander Spooner to the
place of juries in a free society is equally important for understanding
how their ideas about defence associations fit into a non-capitalist
scheme. For by emphasising the importance of trial by jury, they knock 
an important leg from under the private statism associated with
"anarcho"-capitalism. Unlike a wealthy judge, a jury made up mainly of
fellow workers would be more inclined to give verdicts in favour of
workers struggling against bosses or of peasants being forced off their
land by immoral, but legal, means. As Lysander Spooner argued in 1852, 
<i>"[i]f a jury have not the right to judge between the government and 
those who disobey its laws, and resist its oppressions, the government 
is absolute, and the people, legally speaking, are slaves. Like many other 
slaves they may have sufficient courage and strength to keep their masters 
somewhat in check; but they are nevertheless known to the law only as 
slaves."</i> [<b>Trial by Jury</b>] It is hardly surprising that Rothbard
rejects this in favour of a legal system determined and interpreted by 
lawyers, judges and jurists. Indeed, as we noted in 
<a href="secF6.html#secf61">section F.6.1</a>, Rothbard explicitly 
rejected the idea that juries should be able to judge the law as well
as the facts of a case under his system. Spooner would have had no problem 
recognising that replacing government imposed laws with those made by judges, 
jurists and lawyers would hardly change the situation much. Nor would he 
have been too surprised at the results of a free market in laws in a society
with substantial inequalities in income and wealth.
</p><p>
Individualist Anarchist Laurance Labadie, the son of Tucker associate 
Joseph Labadie, argued in response to Rothbard as follows:
</p><p><blockquote>
<i>"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 . . .
</p><p>
"But when Mr. Rothbard quibbles about the jurisprudential ideas of 
Spooner and Tucker, and at the same time upholds <b>presumably in his 
courts</b> 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."</i> [quoted by Mildred J. 
Loomis and Mark A. Sullivan, <i>"Laurance Labadie: Keeper Of The Flame"</i>,
pp. 116-30, <b>Benjamin R. Tucker and the Champions of Liberty</b>, 
Coughlin, Hamilton and Sullivan (eds.), p. 124]
</blockquote></p><p>
As we argued in detail in <a href="secF6.html">section F.6</a>, a market for
"defence associations" within an unequal system based on extensive wage
labour would simply be a system of private states, enforcing the authority
of the property owner over those who use but do not own their property. 
Such an outcome can only be avoided within an egalitarian society where
wage-labour is minimised, if not abolished totally, in favour of 
self-employment (whether individually or co-operatively). In other 
words, the kind of social context which the individualist anarchists 
explicitly or implicitly assumed and aimed for. By focusing selectively 
on a few individualist proposals taken out of their social context, 
Rothbard and other "anarcho"-capitalists have turned the libertarianism 
of the individualist anarchists into yet another ideological weapon in 
the hands of (private) statism and capitalism. 
</p><p>
When faced with the actual visions of a good society proposed by such people 
as Tucker and Spooner, "anarcho"-capitalists tend to dismiss them as irrelevant. 
They argue that it does not matter what Tucker or Spooner thought would emerge 
from the application of their system, it is the fact they advocated the "free 
market", "private property" and "defence associations" that counts. In response 
anarchists note three things. Firstly, individualist anarchists generally held 
radically different concepts of what a "free market" and "private property" 
would be in their system and so the tasks of any "defence association" would
be radically different. As such, anarchists argue that "anarcho"-capitalists 
simply look at the words people use rather than what they meant by them and
the social context in which they are used. Secondly, it seems a strange form 
of support to rubbish the desired goals of people you claim to follow. If 
someone claimed to be a Marxist while, at the same time, arguing that Marx 
was wrong about socialism people would be justified in questioning their use 
of that label. Thirdly, and most importantly, no one advocates a means which 
would not result in their desired ends. If Tucker and Spooner did not think 
their system would result in their goals they would have either changed their 
goals or changed their method. As noted in <a href="secG1.html#secg11">section G.1.1</a>,
Tucker explicitly argued that concentrations of wealth under capitalism had 
reached such levels that his system of free competition would not end it.
Clearly, then, outcomes were important to individualist anarchists.
</p><p>
The lack of commonality can also be seen from the right-"libertarian" response 
to Kevin Carson's excellent <b>Studies in Mutualist Political Economy</b>, 
an impressive modern restatement of the ideas of Tucker and other individualist 
anarchists. Leading "anarcho"-capitalist Walter Block dismissed <i>"Marxists 
like Carson"</i> and labelled him <i>"a supposed anarchist"</i> who on many 
issues <i>"is out there, way, way out there in some sort of Marxist never-never 
land."</i> [<i>"Kevin Carson as Dr. Jeryll and Mr. Hyde"</i>, pp. 35-46, 
<b>Journal of Libertarian Studies</b>, vol. 20, no. 1, p. 40, p. 43 and p. 45]
Another right-"libertarian", George Reisman, concurred stated that for the most 
part <i>"Carson is a Marxist"</i>, while arguing that <i>"the 'individualist' 
anarchist shows himself to be quite the collectivist, attributing to the average 
person qualities of independent thought and judgement that are found only in 
exceptional individuals."</i> Carson's <i>"views on the nature of ownership 
give full support to the conception of anarchy . . . as being nothing but chaos."</i> 
Overall, <i>"Carson is essentially a Marxist and his book filled with ignorant 
Marxist diatribes against capitalism."</i> [<i>"Freedom is Slavery: Laissez-Faire 
capitalism is government intervention"</i>, <b>Op. Cit.</b>, pp. 47-86, p. 47, 
p. 55, p. 61 and p. 84] Needless to say, all the issues which Block and Geisman 
take umbridge at can be found in the works of individualist anarchists like Tucker 
(Carson's excellent dissection of these remarkably ignorant diatribes is well 
worth reading [<i>"Carson's Rejoinders"</i>, pp. 97-136, <b>Op. Cit.</b>]).
</p><p>
So the notion that a joint support for a market in "defence services" can
allow the social and theoretical differences between "anarcho"-capitalism
and individualist anarchism to be ignored is just nonsense. This can best 
be seen from the fate of any individualist anarchist defence association 
within "anarcho"-capitalism. As it would not subscribe to Rothbard's 
preferred system of property rights it would be in violation of the 
<i>"general libertarian law code"</i> drawn up and implemented by 
right-"libertarian" jurists, judges and lawyers. This would, by definition, 
make such an association <i>"outlaw"</i> when it defended tenants against 
attempts to extract rents from them or to evict them from the land or 
buildings they used but did not own. As it is a judge-run system, no jury
would be able to judge the law as well as the crime, so isolating the
capitalist and landlord class from popular opposition. Thus the ironic 
situation arises that the <i><b>"Benjamin Tucker defence association"</b></i> 
would be declared an outlaw organisation under "anarcho"-capitalism and driven 
out of business (i.e., destroyed) as it broke the land monopoly which the law 
monopoly enforces. Even more ironically, such an organisation would survive 
in an communist anarchist society (assuming it could find enough demand to 
make it worthwhile). 
</p><p>
If the world had had the misfortune of having "anarcho"-capitalism imposed on 
it in the nineteenth century, individualist anarchists like Warren, Tucker, 
Labadie, Ingalls and Lum would have joined Proudhon, Bakunin, Kropotkin, 
Parsons and Goldman in prison for practising <i>"occupancy and use"</i> in 
direct violation of the <i>"general libertarian law code."</i> That it
was private police, private courts and private prisons which were enforcing
such a regime would not have been considered that much of an improvement.
</p><p>
Unsurprisingly, Victor Yarros explicitly distanced himself from those <i>"want liberty 
to still further crush and oppress the people; liberty to enjoy their plunder without 
fear of the State's interfering with them . . . liberty to summarily deal with 
impudent tenants who refuse to pay tribute for the privilege of living and working 
on the soil."</i> [<b>Liberty</b>, no. 102, p. 4] He would have had little problem
recognising "anarcho"-capitalism as being a supporter of <i>"that particular kind 
of freedom which the <b>bourgeoisie</b> favours, and which is championed by the 
<b>bourgeoisie's</b> loyal servants, [but] will never prove fascinating to the 
disinherited and oppressed."</i> [<b>Op. Cit.</b>, no. 93, p. 4]

<h2><a name="secg34">G.3.4 Why is individualist anarchist support for equality important?</a></h2> 
<p>
Another another key difference between genuine individualist anarchism and
"anarcho"-capitalism is the former's support for equality and the latter's a 
lack of concern for it. 
<p></p>
In stark contrast to anarchists of all schools, inequality is not seen to be 
a problem with "anarcho"-capitalists (see <a href="secF3.html">section F.3</a>). 
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 argued in <a href="secC9.html">section C.9</a>, 
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 
Tucker eventually recognised as occurring with the development of trusts within 
capitalism -- see <a href="secG1.html#secg11">section G.1.1</a>). 
</p><p>
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) <i>"the 
condition of servants"</i> (see sections <a href="secF2.html">F.2</a> and 
<a href="secF3.html#secf31">F.3.1</a> 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 <b>are</b> 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 Spooner argued, 
inequality lead to many social evils:
</p><p><blockquote><i>
"Extremes of difference, in their pecuniary circumstances, divide society into 
castes; set up barriers to personal acquaintance; prevent or suppress sympathy; 
give to different individuals a widely different experience, and thus become the 
fertile source of alienation, contempt, envy, hatred, and wrong. But give to 
each man all the fruits of his own labour, and a comparative equality with others 
in his pecuniary condition, and caste is broken down; education is given more 
equally to all; and the object is promoted of placing each on a social level 
with all: of introducing each to the acquaintance of all; and of giving to each 
the greatest amount of that experience, which, being common to all, enables 
him to sympathise with all, and insures to himself the sympathy of all. And thus 
the social virtues of mankind would be greatly increased."</i> [<b>Poverty: Its
Illegal Causes and Legal Cure</b>, pp. 46-7]
</blockquote></p><p>
Because of the evil effects of inequality on freedom, both social 
and individualist anarchists desire 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 <i>"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."</i> [<b>The Individualist Anarchists: A critique
of liberalism</b>, p. 102]
</p><p>
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 
<b>not</b> take away wealth from the rich. An important point which 
"anarcho"-capitalism fails to understand or appreciate.
</p><p>
The Individualist Anarchists assumed that exploitation of labour would be non-existent
in their system, so a general equality would prevail and so economic power would not 
undermine liberty. Remove this underlying assumption, assume that profits could be made 
and capital accumulated, assume that land can be monopolised by landlords (as the 
"anarcho"-capitalists do) and a radically different society is produced. One in which
economic power means that the vast majority have to sell themselves to get access to 
the means of life and are exploited by those who own them in the process. A condition 
of "free markets" may exist, but as Tucker argued in 1911, it would not be anarchism. 
The <b><i>deus ex machina</i></b> of invisible hands takes a beating in the age of 
monopolies.
</p><p>
So 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. Hence the importance of
individualist anarchist support for equality. Without it, genuine freedom would 
not exist for the many and "anarchy" would simply be private statism enforcing
rule by the rich.

<h2><a name="secg35">G.3.5 Would individualist anarchists have accepted "Austrian" economics?</a></h2> 
<p>
One of the great myths perpetrated by "anarcho"-capitalists is the notion that
"anarcho"-capitalism is simply individualist anarchism plus "Austrian" economics.
Nothing could be further from the truth, as is clear once the individualist
anarchist positions on capitalist property rights, exploitation and equality 
are understood. Combine this with their vision of a free society as well as the 
social and political environment they were part of and the ridiculous  nature of 
such claims become obvious.
<p></p>
At its most basic, Individualist anarchism was rooted in socialist economic
analysis as would be expected of a self-proclaimed socialist theory and movement.
The "anarcho"-capitalists, in a roundabout way, recognise this with Rothbard 
dismissing the economic fallacies of individualist anarchism in favour of 
"Austrian" economics. <i>"There is,"</i> he stated, <i>"in the body of thought 
known as 'Austrian economics,' a scientific [sic!] explanation of the workings 
of the free market . . . which individualist anarchists could easily incorporate 
into their so political and social <b>Weltanshauung</b>. But to do this, they must 
throw out the worthless excess baggage of money-crankism and reconsider the nature 
and justification of the economic categories of interest, rent and profit."</i> 
Yet Rothbard's assertion is nonsense, given that the individualist anarchists 
were well aware of various justifications for exploitation expounded by the
defenders of capitalism and rejected everyone. He himself noted that the
<i>"individualist anarchists were exposed to critiques of their economic fallacies; 
but, unfortunately, the lesson, despite the weakness of Tucker's replies, did not 
take."</i> [<i>"The Spooner-Tucker Doctrine: An Economist's View"</i>, <b>Op. Cit.</b>, 
p. 14] As such, it seems like extremely wishful thinking that the likes of Tucker
would have rushed to embrace an economic ideology whose basic aim has always been
to refute the claims of socialism and defend capitalism from attacks on it.
</p><p>
Nor can it be suggested that the individualist anarchists were ignorant of the
developments within bourgeois economics which the "Austrian" school was part of.
Both Tucker and Yarros, for example, attacked marginal productivity theory as 
advocated by John B. Clark. [<b>Liberty</b>, no. 305] Tucker critiqued another
anarchist for once being an <i>"Anarchistic socialist, standing squarely upon the 
principles of Liberty and Equity"</i> but then <i>"abandon[ing] Equity by
repudiating the Socialistic theory of value and adopting one which differs but 
little, if any, from that held by the ordinary economist."</i> [<b>Op. Cit.</b>, 
no. 80, p. 4] So the likes of Tucker were well aware of the so-called marginalist
revolution and rejected it.
</p><p>
Somewhat ironically, a key founders of "Austrian" economics was quoted favourably
in <b>Liberty</b> but only with regards to his devastating critique of existing
theories of interest and profit. Hugo Bilgram asked a defender of interest whether 
he had <i>"ever read Volume 1 of Bhm-Bawerk's 'Capital and Interest'"</i> for in 
this volume <i>"the fructification theory is . . . completely refuted."</i> Bilgram,
needless to say, did not support Bhm-Bawerk's defence of usury, instead arguing 
that restrictions in the amount of money forced people to pay for its use and 
<i>"[t]his, and nothing else, [causes] the interest accruing to capital, regarding 
which the modern economists are doing their utmost to find a theory that will not
expose the system of industrial piracy of today."</i> He did not exclude Bhm-Bawerk's
theory from his conclusion that <i>"since every one of these pet theories is based 
on some fallacy, [economists] cannot agree upon any one."</i> The abolition of the 
money monopoly  will <i>"abolish the power of capital to appropriate a net profit."</i>
[<b>Op. Cit.</b>, no. 282, p. 11] Tucker himself noted that Bhm-Bawerk <i>"has 
refuted all these ancient apologies for interest -- productivity of capital, 
abstinence, etc."</i> [<b>Op. Cit.</b>, no. 287, p. 5] <b>Liberty</b> also 
published a synopsis of Francis Tandy's <b>Voluntary Socialism</b>, whose chapter 
6 was <i>"devoted to an analysis of value according to the marginal utility value 
of Bhm-Bawerk. It also deals with the Marxian theory of surplus value, showing 
that all our economic ills are due to the existence of that surplus value."</i> 
[<b>Op. Cit.</b>, no. 334, p. 5] Clearly, then, the individualist anarchists were
aware of the "Austrian" tradition and only embraced its critique of previous
defences of non-labour incomes.
</p><p>
We have already critiqued the "time preference" justification for interest in
<a href="secC2.html#secc27">section C.2.7</a> so will not go into it in much
detail here. Rothbard argued that it <i>"should be remembered by radicals that, 
if they wanted to, all workers could refuse to work for wages and instead form 
their own producers' co-operatives and wait for years for their pay until the 
producers are sold to the consumers; the fact that they do not do so, shows the
enormous advantage of the capital investment, wage-paying system as a means
of allowing workers to earn money far in advance of the sale of their products."</i>
And how, Professor Rothbard, are these workers to live during the years they 
wait until their products are sold? The reason why workers do not work for 
themselves has nothing to do with "time preference" but their lack of resources, 
their <b>class</b> position. Showing how capitalist ideology clouds the mind, 
Rothbard asserted that interest (<i>"in the shape of 'long-run' profit"</i>) 
would still exist in a <i>"world in which everyone invested his own money and 
nobody loaned or borrowed."</i> [<b>Op. Cit.</b>, p. 12] Presumably, this means 
that the self-employed worker who invests her own money into her own farm pays 
herself interest payments just as her labour income is, presumably, the "profits" 
from which this "interest" payment is deducted along with the "rent" for access 
to the land she owns!
</p><p>
So it seems extremely unlikely that the individualist anarchists would have 
considered "Austrian" economics as anything other than an attempt to justify
exploitation and capitalism, like the other theories they spent so much time 
refuting. They would quickly have noted that "time preference", like the
"waiting"/"abstinence" justifications for interest, is based on taking the 
current class system for granted and ignoring the economic pressures which shape 
individual decisions. In Tucker's words (when he critiqued Henry George's argument 
that interest is related to time) <i>"increase which is purely the work of time 
bears a price only because of monopoly."</i> The notion that "time" produced 
profit or interest was one Tucker was well aware of, and refuted on many 
occasions. He argued that it was class monopoly, restrictions on banking, 
which caused interest and <i>"where there is no monopoly there will be little 
or no interest."</i> If someone <i>"is to be rewarded for his mere time, what 
will reward him save [another]'s labour? There is no escape from this dilemma. 
The proposition that the man who for time spent in idleness receives the product 
of time employed in labour is a parasite upon the body industrial is one which 
. . . [its supporters] can never successfully dispute with men who understand 
the rudiments of political economy."</i> [<b>Liberty</b>, no. 109, p. 4 and p. 5]
For Joshua King Ingalls, <i>"abstinence"</i> (or the ability to <i>"wait,"</i> as 
it was renamed in the late nineteenth century) was <i>"a term with which our 
cowardly moral scientists and political economists attempt to conjure up a 
spirit that will justify the greed of our land and money systems; by a casuistry 
similar to that which once would have justified human slavery."</i> [<i>"Labor, 
Wages, And Capital. Division Of Profits Scientifically Considered,"</i> <b>Brittan's 
Quarterly Journal</b>, I (1873), pp. 66-79] 
</p><p>
What of the economic justification for that other great evil for individualist
anarchists, rent? Rothbard attacked Adam Smith comment that landlords were 
monopolists who demanded rent for nature's produce and like to reap where they 
never sowed. As he put it, Smith showed <i>"no hint of recognition here that 
the landlord performs the vital function of allocating the land to its most 
productive use."</i> [<b>An Austrian Perspective on the History of Economic 
Thought</b>, vol. 1, p. 456] Yet, as Smith was well aware, it is the farmer 
who has to feed himself and pay rent who decides how best to use the land, 
not the landlord. All the landlord does is decide whether to throw the farmer 
off the land when a more profitable business opportunity arrives (as in, 
say, during the Highland clearances) or that it is more "productive" to 
export food while local people starve (as in, say, the great Irish famine).
It was precisely this kind of arbitrary power which the individualist
anarchists opposed. As John Beverley Robinson put it, the <i>"land owner
gives nothing whatever, but permission to you to live and work on his land. 
He does not give his product in exchange for yours. He did not produce the 
land. He obtained a title at law to it; that is, a privilege to keep everybody 
off his land until they paid him his price. He is well called the lord of the 
land -- the landlord!"</i> [<b>Patterns of Anarchy</b>, p. 271]
</p><p>
Significantly, while Rothbard attacked Henry George's scheme for land
nationalisation as being a tax on property owners and stopping rent 
playing the role "Austrian" economic theory assigns it, the individualist
anarchists opposed it because, at best, it would not end landlordism or,
at worse, turn the state into the only landlord. In an unequal society,
leasing land from the state <i>"would greatly enhance the power of capitalism
to engross the control of the land, since it would relieve it of the 
necessity of applying large amounts in purchasing land which it could
secure the same control of by lease . . . It would greatly augment and
promote the reign of the capitalism and displace the independent worker
who now cultivates his own acres, but who would be then unable to compete
with organised capital . . . and would be compelled to give up his 
holding and sink into the ranks of the proletariat."</i> [Joshua King Ingalls,
Bowman N. Hall, <i>"Joshua K. Ingalls, American Individualist: Land Reformer, 
Opponent of Henry George and Advocate of Land Leasing, Now an Established 
Mode"</i>, pp. 383-96, <b>American Journal of Economics and Sociology</b>, 
Vol. 39, No. 4, p. 394]
</p><p>
Given Tucker's opposition to rent, interest and profit is should go without 
saying that he rejected the neo-classical and "Austrian" notion that a workers'
wages equalled the "marginal product," i.e. its contribution to the production 
process (see <a href="secC2.html">section C.2</a> for a critique of this position). 
Basing himself on the socialist critique of classical economics developed by 
Proudhon and Marx, he argued that non-labour income was usury and would be driven 
to zero in a genuinely free market. As such, any notion that Tucker thought that 
workers in a "free market" are paid according to their marginal product is simply
wrong and any claim otherwise shows a utter ignorance of the subject matter. 
Individualist anarchists like Tucker strongly believed that a truly free 
(i.e. non-capitalist) market would ensure that the worker would receive the 
<i>"full product"</i> of his or her labour. Nevertheless, in order to claim 
Tucker as a proto-"anarcho"-capitalist, "anarcho"-capitalists may argue that 
capitalism pays the "market price" of labour power, and that this price <b>does</b> 
reflect the <i>"full product"</i> (or value) of the worker's labour. As Tucker 
was a socialist, we doubt that he would have agreed with the "anarcho"-capitalist 
argument that market price of labour reflected the value it produced. He, like 
the other individualist anarchists, was well aware that labour produces the 
"surplus value" which was appropriated in the name of interest, rent and profit. 
In other words, he very forcibly rejected the idea that the market price of labour reflects the 
value of that labour, considering <i>"the natural wage of labour is its product"</i> 
and <i>"that this wage, or product, is the only just source of income."</i> 
[<b>Instead of a Book</b>, p. 6]
</p><p>
<b>Liberty</b> also favourably quoted a supporter of the silver coinage, General 
Francis A. Walker, and his arguments in favour of ending the gold standard.
It praised his argument as <i>"far more sound and rational than that of the 
supercilios, narrow, bigoted monomentallists."</i> Walker attacked those 
<i>"economists of the <b>a priori</b> school, who treat all things industrial 
as if they were in a state of flux, ready to be poured indifferently into any 
kind of mould or pattern."</i> These economists <i>"are always on hand with the 
answer that industrial society will 'readjust' itself to the new conditions"</i> 
and <i>"it would not matter if wages were at any time unduly depressed by 
combinations of employers, inasmuch as the excess of profits resulting would
infallibly become capital, and as such, constitute an additional demand for 
labour . . . It has been the teaching of the economists of this sort which has 
so deeply discredited political economy with the labouring men on the one hand, 
and with practical business men on the other."</i> The <i>"greatest part of the 
evil of a diminishing money supply is wrought through the discouragement of 
enterprise."</i> [<b>Liberty</b>, no. 287, p. 11] Given that the "Austrian"
school takes the <b>a priori</b> methodology to ridiculous extremes and is 
always on hand to defend <i>"excess of profits"</i>, <i>"combinations of
employers"</i> and the gold standard we can surmise Tucker's reaction to
Rothbard's pet economic ideology.
</p><p>
Somewhat ironically, give Rothbard's attempts to inflict bourgeois economics
along with lots of other capitalist ideology onto individualist anarchism, 
Kropotkin noted that supporters of <i>"individualist anarchism . . . soon 
realise that the individualisation they so highly praise is not attainable 
by individual efforts, and . . . [some] abandon the ranks of the anarchists, 
and are driven into the liberal individualism of the classical economists."</i> 
[<b>Anarchism</b>, p. 297] "Anarcho"-capitalists confuse the ending place of 
<b>ex</b>-anarchists with their starting point. As can be seen from their 
attempt to co-opt the likes of Spooner and Tucker, this confusion only 
appears persuasive by ignoring the bulk of their ideas as well as rewriting 
the history of anarchism. 
</p><p>
So it can, we think, be save to assume that Tucker and other individualist anarchists 
would have little problem in refuting Rothbard's economic fallacies as well as his 
goldbug notions (which seem to be a form of the money monopoly in another form) and 
support for the land monopoly. Significantly, modern individualist anarchists like
Kevin Carson have felt no need to embrace "Austrian" economics and retain their 
socialist analysis while, at the same time, making telling criticisms of Rothbard's
favourite economic ideology and the apologetics for "actually existing" capitalism
its supporters too often indulge in (Carson calls this <i>"vulgar libertarianism"</i>,
wherein right-"libertarians" forget that the current economuy is far from their 
stated ideal when it is a case of defending corporations or the wealthy). 

<h2><a name="secg36">G.3.6 Would mutual banking simply cause inflation?</a></h2> 
<p>
One of the arguments against Individualist and mutualist anarchism, and mutual 
banking in general, is that it would just produce accelerating inflation. The 
argument is that by providing credit without interest, more and more money
would be pumped into the economy. This would lead to more and more money 
chasing a given set of goods, so leading to price rises and inflation.
</p><p>
Rothbard, for example, dismissed individualist anarchist ideas on mutual 
banking as being <i>"totally fallacious monetary views."</i> He based his
critique on "Austrian" economics and its notion of <i>"time preference"</i>
(see <a href="secC2.html#secc27">section C.2.7</a> for a critique of this
position). Mutual banking would artificially lower the interest rate by 
generating credit, Rothbard argued, with the new money only benefiting those 
who initially get it. This process "exploits" those further down the line in 
the form accelerating inflation. As more and more money was be pumped into 
the economy, it would lead to more and more money chasing a given set of 
goods, so leading to price rises and inflation. To prove this, Rothbard
repeated Hume's argument that <i>"if everybody magically woke up one morning 
with the quantity of money in his possession doubled"</i> then prices would 
simply doubled. [<i>"The Spooner-Tucker Doctrine: An Economist's View"</i>, 
<b>Journal of Libertarian Studies</b>, vol. 20, no. 1, p. 14 and p. 10] 
</p><p>
However, Rothbard is assuming that the amount of goods and services are 
fixed. This is just wrong and shows a real lack of understanding of how 
money works in a real economy. This is shown by the lack of agency in his 
example, the money just "appears" by magic (perhaps by means of a laissez-fairy?). 
Milton Friedman made the same mistake, although he used the more up to date
example of government helicopters dropping bank notes. As post-Keynesian
economist Nicholas Kaldor pointed out with regards to Friedman's position,
the <i>"transmission mechanism from money to income remained a 'black box'
-- he could not explain it, and he did not attempt to explain it either.
When it came to the question of <b>how</b> the authorities increase the
supply of bank notes in circulation he answered that they are scattered
over populated areas by means of a helicopter -- though he did not go into
the ultimate consequences of such an aerial Santa Claus."</i> [<b>The Scourge 
of Monetarism</b>, p. 28]
</p><p>
Friedman's and Rothbard's analysis betrays a lack of understanding of economics 
and money. This is unsurprising as it comes to us via neo-classical economics. In 
neo-classical economics inflation is always a monetary phenomena -- too much 
money chasing too few goods. Milton Friedman's Monetarism was the logical 
conclusion of this perspective and although "Austrian" economics is extremely
critical of Monetarism it does, however, share many of the same assumptions and 
fallacies (as Hayek's one-time follower Nicholas Kaldor noted, key parts of 
Friedman's doctrine are <i>"closely reminiscent of the Austrian school of the 
twenties and the early thirties"</i> although it <i>"misses some of the subtleties 
of the Hayekian transmission mechanism and of the money-induced distortions in 
the 'structure of production.'"</i> [<b>The Essential Kaldor</b>, pp. 476-7]). 
We can reject this argument on numerous points. 
</p><p>
Firstly, the claim that inflation is always and everywhere a monetary phenomena
has been empirically refuted -- often using Friedman's own data and attempts
to apply his dogma in real life. As we noted in <a href="secC8.html#secc83">section C.8.3</a>,
the growth of the money supply and inflation have no fixed relationship, with 
money supply increasing while inflation falling. As such, <i>"the claim that 
inflation is always and everywhere caused by increases in the money supply, 
and that the rate of inflation bears a stable, predictable relationship to 
increases in the money supply is ridiculous."</i> [Paul Ormerod, <b>The Death 
of Economics</b>, p. 96] This means that the assumption that increasing the
money supply by generating credit will always simply result in inflation 
cannot be supported by the empirical evidence we have. As Kaldor stressed,
the <i>"the 'first-round effects' of the helicopter operation could be 
anything, depending on where the scatter occurred . . . there is no reason 
to suppose that the ultimate effect on the amount of money in circulation
or on incomes would bear any close relation to the initial injections."</i>
[<b>The Scourge of Monetarism</b>, p. 29] 
</p><p>
Secondly, even if we ignore the empirical record (as "Austrian" economics tends
to do when faced with inconvenient facts) the "logical" argument used to explain 
the theory that increases in money will increase prices is flawed. Defenders of 
this argument usually present mental exercises to prove their case (as in Hume and 
Friedman). Needless to say, such an argument is spurious in the extreme simply 
because money does not enter the economy in this fashion. It is generated to 
meet specific demands for money and is so, generally, used productively. In 
other words, money creation is a function of the demand for credit, which is a 
function of the needs of the economy (i.e. it is endogenous) and <b>not</b> 
determined by the central bank injecting it into the system (i.e. it is 
<b>not</b> exogenous). And this indicates why the argument that mutual banking 
would produce inflation is flawed. It does not take into account the fact that 
money will be used to generate <b><i>new</i></b> goods and services. 
</p><p>
As leading Post-Keynesian economist Paul Davidson argued, the notion that 
<i>"inflation is always and everywhere a monetary phenomenon"</i> (to use 
Friedman's expression) is <i>"ultimately based on the old homily
that inflation is merely 'too many dollars chasing too few goods.'"</i> 
Davidson notes that <i>"[t]his 'too many dollars clich is usually 
illustrated by employing a two-island parable. Imagine a hypothetical 
island where the only available goods are 10 apples and the money 
supply consists of, say, 10 $1 bills. If all the dollars are used to 
purchase the apples, the price per apple will be $1. For comparison, 
assume that on a second island there are 20 $1 bills and only 10 apples. 
All other things being equal, the price will be $2 per apple. Ergo, 
inflation occurs whenever the money supply is excessive relative to 
the available goods."</i> The similarities with Rothbard's argument 
are clear. So are its flaws as <i>"no explanation is given as to why 
the money supply was greater on the second island. Nor is it admitted 
that, if the increase in the money supply is associated with entrepreneurs 
borrowing 'real bills' from banks to finance an increase in payrolls 
necessary to harvest, say, 30 additional apples so that the $20 chases 
40 apples, then the price will be only $0.50 per apple. If a case of 
'real bills' finance occurs, then an increase in the money supply is 
not associated with higher prices but with greater output."</i> 
[<b>Controversies in Post Keynesian Economics</b>, p. 100] Davidson
is unknowingly echoing Tucker (<i>"It is the especial claim of free 
banking that it will increase production . . . If free banking were 
only a picayanish attempt to distribute more equitably the small amount 
of wealth now produced, I would not waste a moment's energy on it."</i>
[<b>Liberty</b>, no. 193, p. 3]).
</p><p>
This, in reply to the claims of neo-classical economics, indicates why 
mutual banking would not increase inflation. Like the neo-classical
position, Rothbard's viewpoint is static in nature and does not understand 
how a real economy works. Needless to say, he (like Friedman) did not 
discuss how the new money gets into circulation. Perhaps, like Hume, it 
was a case of the money fairy (laissez-fairy?) placing the money into 
people's wallets. Maybe it was a case, like Friedman, of government 
(black?) helicopters dropping it from the skies. Rothbard did not expound 
on the mechanism by which money would be created or placed into circulation, 
rather it just appears one day out of the blue and starts chasing a given 
amount of goods. However, the individualist anarchists and mutualists did 
not think in such bizarre (typically, economist) ways. Rather than think 
that mutual banks would hand out cash willy-nilly to passing strangers, 
they realistically considered the role of the banks to be one of evaluating 
useful investment opportunities (i.e., ones which would be likely to succeed). 
As such, the role of credit would be to <b>increase</b> the number of goods 
and services in circulation along with money, so ensuring that inflation is
not generated (assuming that it is caused by the money supply, of course).
As one Individualist Anarchist put it, <i>"[i]n the absence of such 
restrictions [on money and credit], imagine the rapid growth of wealth,
and the equity in its distribution, that would result."</i> [John Beverley 
Robinson, <b>The Individualist Anarchists</b>, p. 144] Thus Tucker:
</p><p><blockquote><i>
"A is a farmer owning a farm. He mortgages his farm to a bank for $1,000, 
giving the bank a mortgage note for that sum and receiving in exchange the 
bank's notes for the same sum, which are secured by the mortgage. With the 
bank-notes A buys farming tools of B. The next day B uses the notes to buy 
of C the materials used in the manufacture of tools. The day after, C in 
turn pays them to D in exchange for something he needs. At the end of a 
year, after a constant succession of exchanges, the notes are in the hands 
of Z, a dealer in farm produce. He pays them to A, who gives in return 
$1,000 worth of farm products which he has raised during the year. Then 
A carries the notes to the bank, receives in exchange for them his mortgage 
note, and the bank cancels the mortgage. Now, in this whole circle of 
transactions, has there been any lending of capital? If so, who was the 
lender? If not, who is entitled to interest?"</i> [<b>Instead of a Book</b>,  
p. 198]
</blockquote></p><p>
Obviously, in a real economy, as Rothbard admits <i>"inflation of the 
money supply takes place a step at a time and that the first beneficiaries,
the people who get the new money first, gain at the expense of the people
unfortunate enough to come last in line."</i> This process is <i>"plunder and
exploitation"</i> as the <i>"prices of things they [those last in line] have to 
buy shooting up before the new injection [of money] filters down to them."</i>
[<b>Op. Cit.</b>, p. 11] Yet this expansion of the initial example, again, 
assumes that there is no increase in goods and services in the economy, that 
the <i>"first beneficiaries"</i> do nothing with the money bar simply buying 
more of the existing goods and services. It further assumes that this existing 
supply of goods and services is unchangeable, that firms do not have inventories 
of goods and sufficient slack to meet unexpected increases in demand. In reality, 
of course, a mutual bank would be funding productive investments and any firm 
will respond to increasing demand by increasing production as their inventories 
start to decline. In effect, Rothbard's analysis is just as static and unrealistic 
as the notion of money suddenly appearing overnight in people's wallets. Perhaps
unsurprisingly Rothbard compared the credit generation of banks to the act of
counterfeiters so showing his utter lack of awareness of how banks work in 
a credit-money (i.e., real) economy.
</p><p>
The "Austrian" theory of the business cycle is rooted in the notion that banks 
artificially lower the rate of interest by providing more credit than their 
savings and specie reverses warrant. Even in terms of pure logic, such an 
analysis is flawed as it cannot reasonably be asserted that all "malinvestment" 
is caused by credit expansion as capitalists and investors make unwise 
decisions all the time, irrespective of the supply of credit. Thus it is 
simply false to assert, as Rothbard did, that the <i>"process of inflation, 
as carried out in the real [sic!] world"</i> is based on <i>"new money"</i> 
entered the market by means of <i>"the loan market"</i> but <i>"this fall is 
strictly temporary, and the market soon restores the rate to its proper level."</i> 
A crash, according to Rothbard, is the process of restoring the rate of interest
to its <i>"proper"</i> level yet a crash can occur even if the interest rate is
at that rate, assuming that the banks can discover this equilibrium rate and have 
an incentive to do so (as we discussed in <a href="secC8.html">section C.8</a> 
both are unlikely). Ultimately, credit expansion fails under capitalism because 
it runs into the contradictions within the capitalist economy, the need for
capitalists, financiers and landlords to make profits via exploiting labour. As 
interest rates increase, capitalists have to service their rising debts putting 
pressure on their profit margins and so raising the number of bankruptcies. In an 
economy without non-labour income, the individualist anarchists argued, this 
process is undercut if not eliminated. 
</p><p>
So expanding this from the world of fictional government helicopters
and money fairies, we can see why Rothbard is wrong. Mutual banks operate 
on the basis of providing loans to people to set up or expand business, 
either as individuals or as co-operatives. When they provide a loan, 
in other words, they <b>increase</b> the amount of goods and services in 
the economy. Similarly, they do not simply increase the money supply
to reduce interest rates. Rather, they reduce interest rates to increase
the demand for money in order to increase the productive activity in 
an economy. By producing new goods and services, inflation is kept at
bay. Would increased demand for goods by the new firms create inflation? 
Only if every firm was operating at maximum output, which would be a highly
unlikely occurrence in reality (unlike in economic textbooks).
</p><p>
So what, then does case inflation? Inflation, rather than being the result 
of monetary factors, is, in fact, a result of profit levels and the dynamic 
of the class struggle. In this most anarchists agree with post-Keynesian 
economics which views inflation as <i>"a symptom of an on-going struggle 
over income distribution by the exertion of market power."</i> [Paul Davidson, 
<b>Op. Cit.</b>, p. 102] As workers' market power increases via fuller 
employment, their organisation, militancy and solidarity increases so
eroding profits as workers keep more of the value they produce. Capitalists 
try and maintain their profits by rising prices, thus generating inflation 
(i.e. general price rises). Rather than accept the judgement of market 
forces in the form of lower profits, capitalists use their control over 
industry and market power of their firms to maintain their profit levels 
at the expense of the consumer (i.e., the workers and their families).
</p><p>
In this sense, mutual banks <b>could</b> contribute to inflation -- by 
reducing unemployment by providing the credit needed for workers to 
start their own businesses and co-operatives, workers' power would 
increase and so reduce the power of managers to extract more work for 
a given wage and give workers a better economic environment to ask for 
better wages and conditions. This was, it should be stressed, a key 
reason why the individualist anarchists supported mutual banking:
</p><p><blockquote><i>
"people who are now deterred from going into business by the ruinously high
rates which they must pay for capital with which to start and carry on
business will find their difficulties removed . . . This facility of 
acquiring capital will give an unheard of impetus to business, and
consequently create an unprecedented demand for labour -- a demand which
will always be in excess of the supply, directly to the contrary of the
present condition of the labour market . . . Labour will then be in a
position to dictate its wages."</i> [Tucker, <b>The Individualist 
Anarchists</b>, pp. 84-5]
</blockquote></p><p>
And, it must also be stressed, this was a key reason why the capitalist
class turned against Keynesian full employment policies in the 1970s 
(see <a href="secC8.html#secc83">section C.8.3</a>). Lower interest
rates and demand management by the state lead precisely to the outcome
predicted by the likes of Tucker, namely an increase in working class 
power in the labour market as a result of a lowering of unemployment to 
unprecedented levels. This, however, lead to rising prices as capitalists 
tried to maintain their profits by passing on wage increases rather than 
take the cut in profits indicated by economic forces. This could also 
occur if mutual banking took off and, in this sense, mutual banking
could produce inflation. However, such an argument against the scheme 
requires the neo-classical and "Austrian" economist to acknowledge that 
capitalism cannot produce full employment and that the labour market must 
always be skewed in favour of the capitalist to keep it working, to maintain 
the inequality of bargaining power between worker and capitalist. In 
other words, that capitalism needs unemployment to exist and so cannot 
produce an efficient and humane allocation of resources.
</p><p>
By supplying working people with money which is used to create
productive co-operatives and demand for their products, mutual banks 
increase the amount of goods and services in circulation as it increases 
the money supply. Combined with the elimination of profit, rent and 
interest, inflationary pressures are effectively undercut (it makes 
much more sense to talk of a interest/rent/profits-prices spiral rather 
than a wages-prices spiral when discussing inflation). Only in the 
context of the ridiculous examples presented by neo-classical and 
"Austrian" economics does increasing the money supply result in rising
inflation. Indeed, the "sound economic" view, in which if the various 
money-substitutes are in a fixed and constant proportion to "real money" 
(i.e. gold or silver) then inflation would not exist, ignores the history 
of money and the nature of the banking system. It overlooks the fact 
that the emergence of bank notes, fractional reserve banking and credit 
was a spontaneous process, not planned or imposed by the state, but rather 
came from the profit needs of capitalist banks which, in turn, reflected 
the real needs of the economy (<i>"The truth is that, as the exchanges of 
the world increased, and the time came when there was not enough gold and 
silver to effect these exchanges, so . . . people had to resort to paper 
promises."</i> [John Beverley Robinson, <b>Op. Cit.</b>, p. 139]). What <b>was</b> 
imposed by the state, however, was the imposition of legal tender, the 
use of specie and a money monopoly (<i>"attempt after attempt has been made 
to introduce credit money outside of government and national bank channels, 
and the promptness of the suppression has always been proportional to the 
success of the attempt."</i> [Tucker, <b>Liberty</b>, no. 193, p. 3]).
</p><p>
Given that the money supply is endogenous in nature, any attempt to control 
the money supply will fail. Rather than control the money supply, which 
would be impossible, the state would have to use interest rates. To reduce 
the demand for money, interest rates would be raised higher and higher, 
causing a deep recession as business cannot maintain their debt payments 
and go bankrupt. This would cause unemployment to rise, weakening workers'
bargaining power and skewing the economy back towards the bosses and profits 
-- so making working people pay for capitalism's crisis. Which, essentially, 
is what the Thatcher and Reagan governments did in the early 1980s. Finding 
it impossible to control the money supply, they raised interest rates to 
dampen down the demand for credit, which provoked a deep recession. Faced 
with massive unemployment, workers' market power decreased and their bosses 
increased, causing a shift in power and income towards capital.
</p><p>
So, obviously, in a capitalist economy the increasing of credit is a source
of instability. While not causing the business cycle, it does increase
its magnitude. As the boom gathers strength, banks want to make money
and increase credit by lowering interest rates below what they should
be to match savings. Capitalists rush to invest, so soaking up some of
the unemployment which always marks capitalism. The lack of unemployment
as a disciplinary tool is why the boom turns to bust, not the increased
investment. Given that in a mutualist system, profits, interest and rent
do not exist then erosion of profits which marks the top of a boom would
not be applicable. If prices drop, then labour income drops. Thus a 
mutualist society need not fear inflation. As Kaldor argued with regard
to the current system, <i>"under a 'credit-money' system . . . unwanted or 
excess amounts of money <b>could never come into existence</b>; it is the 
increase in the value of transactions . . . which calls forth an increase 
in the 'money supply' (whether in the form of bank balances or notes in 
circulation) as a result of the net increase in the value of working capital 
at the various stages of production and distribution."</i> [<b>Op. Cit.</b>, 
p. 46] The gold standard cannot do what a well-run credit-currency can do, 
namely tailor the money supply to the economy's demand for money. The problem 
in the nineteenth century was that a capitalist credit-money economy was built 
upon a commodity-money base, with predictably bad results.
</p><p>
Would this be any different under Rothbard's system? Probably not.
For Rothbard, each bank would have 100% reserve of gold with a law
passed that defined fractional reserve banking as fraud. How would this
affect mutual banks? Rothbard argued that attempts to create mutual banks 
or other non-gold based banking systems would be allowed under his system. 
Yet, how does this fit into his repeated call for a 100% gold standard 
for banks? Why would a mutual bank be excluded from a law on banking?
Is there a difference between a mutual bank issuing credit on the basis
of a secured loan rather than gold and a normal bank doing so? Needless 
to say, Rothbard never did address the fact that the customers of the 
banks <b>know</b> that they practised fractional reserve banking and still 
did business with them. Nor did he wonder why no enterprising banker 
exploited a market niche by advertising a 100% reserve policy. He simply
assumed that the general public subscribed to his gold-bug prejudices
and so would not frequent mutual banks. As for other banks, the full
might of the law would be used to stop them practising the same policies
and freedoms he allowed for mutual ones. So rather than give people
the freedom to choose whether to save with a fractional reserve bank
or not, Rothbard simply outlawed that option. Would a regime inspired 
by Rothbard's goldbug dogmas really allow mutual banks to operate when it
refuses other banks the freedom to issue credit and money on the same
basis? It seems illogical for that to be the case and so would such a
regime not, in fact, simply be a new form of the money monopoly Tucker 
and his colleagues spent so much time combating? One thing is sure, though,
even a 100% gold standard will not stop credit expansion as firms and
banks would find ways around the law and it is doubtful that private
defence firms would be in a position to enforce it.
</p><p>
Once we understand the absurd examples used to refute mutual banking plus
the real reasons for inflation (i.e., <i>"a symptom of a struggle over the 
distribution of income."</i> [Davidson, <b>Op. Cit.</b>, p. 89]) and how
credit-money actually works, it becomes clear that the case against mutual
banking is far from clear. Somewhat ironically, the post-Keynesian school
of economics provides a firm understanding of how a real credit system 
works compared to Rothbard's logical deductions from imaginary events 
based on propositions which are, at root, identical with Walrasian general 
equilibrium theory (an analysis "Austrians" tend to dismiss). It may be
ironic, but not unsurprising as Keynes praised Proudhon's follower Silvio 
Gesell in <b>The General Theory</b> (also see Dudley Dillard's essay 
<i>"Keynes and Proudhon"</i> [<b>The Journal of Economic History</b>, 
vol. 2, No. 1, pp. 63-76]). Libertarian Marxist Paul Mattick noted Keynes 
debt to Proudhon, and although Keynes did not subscribe to Proudhon's desire 
to use free credit to fund <i>"independent producers and workers' syndicates"</i> 
as a means create an economic system <i>"without exploitation"</i> he did 
share the Frenchman's <i>"attack upon the payment of interest"</i> and wish
to see the end of the rentier. [<b>Marx and Keynes</b>, p. 5 and p. 6]
</p><p>
Undoubtedly, given the "Austrian" hatred of Keynes and his economics 
(inspired, in part, by the defeat inflicted on Hayek's business cycle 
theory in the 1930s by the Keynesians) this will simply confirm their 
opinion that the Individualist Anarchists did not have a sound economic 
analysis! As Rothbard noted, the individualist anarchist position was 
<i>"simply pushing to its logical conclusion a fallacy adopted widely 
by preclassical and by current Keynesian writers."</i> [<b>Op. Cit.</b>, 
p. 10] However, Keynes was trying to analyse the economy as it is rather 
than deducing logically desired conclusions from the appropriate assumptions 
needed to confirm the prejudices of the assumer (like Rothbard). In this, 
he did share the same method if not exactly the same conclusions as the 
Individualist Anarchists and Mutualists.
</p><p>
Needless to say, social anarchists do not agree that mutual banking can
reform capitalism away. As we discuss in <a href="secG4.html">section G.4</a>,
this is due to many factors, including the nature barriers to competition
capital accumulation creates. However, this critique is based on the real
economy and does not reflect Rothbard's abstract theorising based on 
pre-scientific methodology. While other anarchists may reject certain
aspects of Tucker's ideas on money, we are well aware, as one commentator noted, 
that his <i>"position regarding the State and money monopoly derived 
from his Socialist convictions"</i> where socialism <i>"referred to an intent 
to fundamentally reorganise the societal systems so as to return the full 
product of labour to the labourers."</i> [Don Werkheiser, <i>"Benjamin R. 
Tucker: Champion of Free Money"</i>, pp. 212-221, <b>Benjamin R. Tucker 
and the Champions of Liberty</b>, Coughlin, Hamilton and Sullivan (eds.), 
p. 212]</p>

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