An Objectivist Refutation of Anarcho-Capitalism (Market Anarchy)

Free Market Revolution

A work discussing Ayn Rand’s morality in relation to the fight for freedom. This book is not the source of this essay.

[Note: A summary of this essay appears at the end. But please read the whole essay before criticizing.]

Many people who consider themselves libertarians also consider themselves “anarcho-capitalists.” (AnCaps) They don’t believe there should be a government with a monopoly over the use of retaliatory force in a given geographic area. Yet Ayn Rand’s philosophy of Objectivism advocates for such a monopoly government. AnCaps believe that Objectivism is misguided, because they hold there is a contradiction between advocating for the Non-Aggression Principle (NAP) and advocating for a governmental monopoly that is prepared to use force to exclude competitors.

This essay will show how Objectivism is right, and there is no contradiction between upholding the Non-Initiation of Force Principle (NIFP) and advocating for a monopoly government. It will show that a certain kind of governmental monopoly is necessary for the protection of people’s individual rights; that is, the protection of people from initiatory and unjust coercion. I think you’ll find that an Objectivist critique of anarcho-capitalism is rather different from other criticisms of anarcho-capitalism and anarchism.

We Currently Live Under Market Anarchy and the “Market in Force” Has Failed: Now What?  [Permalink]

So what is “market anarchy?” At the most basic level, what market anarchists think they are advocating for is to “let the market decide” what sorts of measures are taken for the retaliatory use of force against aggressors. In other words, they think they are advocating for unrestrained individual choice in the use of force. They think that, if only individual choice were “freed from a state,” the result would be smaller, Private Defense Agencies (PDAs) and/or private Dispute Resolution Organizations (DROs).

But if “market anarchy” means “unrestrained individual choice in the use of force,” then there is literally nothing that any individual–or any private defense agency–could do that would stop a condition of market anarchy from prevailing. The unlimited discretion in the use of force that AnCaps assign to each individual client of a defense agency, also applies to the individuals that compose the defense agency. So people can choose to have a defense agency that permits the mutilation of babies’ genitals, the killing of children for “dishonoring” their families, that punishes theft by dismemberment or death, that preemptively kills suspicious neighbors, and this is all covered under the label “market anarchy.” Similarly, any defense agency can collect taxes, coercively regulate business, arbitrarily abduct its clients to walled compounds, restrict sales of guns, conduct wars of aggression and crush other defense agencies, all under the label of “market anarchy.”

So, actually, the entire world is in a state of market anarchy, by the above definition. Those AnCaps in the territory of the USA are entirely free to form their own defense agencies and compete for clients with the giant, bloated defense agency that is the US Federal Government. The “market in force,” which is “unrestrained individual choice in the use of force,” has produced this behemoth. Defined this way, the AnCap “free market” has chosen a coercive state as its defense agency. And it should be plainly obvious to any reasonable AnCap that, in this current market, start-up defense agencies cannot hope to compete with the US Government. Humans started stateless, then got into tribal wars with each other, and later formed states as their DROs that startups can’t possibly compete with. Where were the anarchic “market forces” that were supposed to prevent this from happening the first time? This is a “market failure” at its most spectacular.

So, if we accept the above–that a “free market” in force can be maintained like free markets in other goods and services, where people are free to choose whatever they want in that sphere–then here’s the contradiction: AnCaps claim to want to let the market decide how force is used, yet when the market chooses a monopoly state, that choice is allegedly not consistent with anarcho-capitalism.

In practice, what AnCaps are really advocating for is their own normative, moral imposition on the choices of the market. They are advocating that the market in force shouldn’t choose a single defense agency with the powers of today’s nation-states.

So my first major point is that both anarcho-capitalism and Objectivist laissez-faire capitalism are in the same boat, in this one sense: They are both advocating for what governmental system people ought to adopt. They are both advocating for what people should choose, and neither actually says to every individual, “choose whatever you want,” (i.e. a simple “let the market decide.”) Thus, neither ideology can escape the necessity of convincing large numbers of people of the truth of its normative, moral foundation, in order to produce the kind of governance each wants.

A Brief Correction to Anarcho-Capitalist Concepts: The NAP and PDAs  [Permalink]

AnCaps, along with other libertarians, speak of the Non-Aggression Principle as one of the primary principles on which the market should behave. Yet “Non-Aggression” is not a good wording for what libertarians have in mind. “Aggression” implies that hostility accompanies one’s use of force. Yet many coercive programs that today’s nation-states engage in are not generally held to be hostile in intent. Almost all of them (especially ones like Social Security) are held to be enforced for people’s own good. Even if the program is actually destructive to people’s well-being, many statists’ intent would seem to be non-hostile. (When you force your cat to get a rabies shot, are you aggressing against your cat? No, because you are doing it, not out of hostility, but out of concern for his safety.)

But it is the initiation of force, regardless of intent, that is destructive to mankind and is to be avoided. Thus, Objectivism holds the Non-Initiation of Force Principle (NIFP) as a part of its morality. This is what a genuine proponent of liberty should advocate.

So-called Private Defense Agencies (PDAs), whether they are associated with insurance companies or not, do not engage purely in immediate self-defense, under typical AnCap theory. They are not simply like private security as it stands now: They are also empowered to engage in coercive retaliation for damage suffered, after the fact.

This moral/legal empowerment to use force in the absence of an immediate threat is precisely what defines government. Government is not defined by the legal collection of taxes: many governments do not collect taxes from everyone under their jurisdiction, and an Objectivist Ideal Government (OIG) would collect taxes from no one. (See: How to Show That Taxation is Robbery.) Taxation is only one form of the use of non-emergency force.

Therefore, what AnCaps call PDAs, I will refer to as Private Governmental Agencies (PGAs). (1)

What Should a Governmental Agency Be Like?  [Permalink]

As we have seen, to advocate for any change from the status quo, AnCaps are already committed to a normative position on what sort of governmental system people should adopt. Not just any governmental system chosen by people is proper. By what standard are we to judge what makes a good governmental agency? By what is best for human life and happiness. This is presumably the reason any honest and decent AnCap would advocate for his system over fascism or socialism: Because he holds his system to be better for human life in general–and specifically, his own.

Just as nation-states vary in how conducive they are to human life, so PGAs would vary. So let’s look at what we would want a PGA to do and not do. Would we want a PGA to allow the arbitrary mutilation or killing of children? No, we would want the PGA to ban and punish this as an act of violent force against an innocent. (2) Would we want it to protect a vacant lot that someone just bought so that he can start building a hotel on it in six months? Yes, people need to be able to own raw materials and fallow land so they can plan ahead and create valuable things with them. Would we want PGAs that protected people’s claims to vast swaths of land that they have not bought from others and have no practical way of using? No, that’s destructive to the ability of others to build, travel and create. Do we want PGAs to forcibly collect money from us when we haven’t contracted with them? No, that’s robbery, and is destructive to people’s wealth and well-being. Would we want some PGAs to abide by Biblical laws and punish homosexual activity by stoning to death? No, that’s a violation of the NIFP and very destructive to many people’s well-being.

Now, of special relevance to my case for monopoly government: Would we want a PGA to arrest someone on suspicion of having stolen thirty dollars, convict him on weak evidence, then cut off his right hand as punishment? Clearly not. One of the principles of proper criminal justice is proportional punishment. If a gross over-punishment is carried out for a small initiation of force by an individual, the excess punishment effectively becomes an initiation of force. Even if a person really did steal your wallet, going to that person’s house and punishing him by shooting him in the face is murder.

A similar issue occurs when someone is convicted in a court that has no initial presumption of innocence, or otherwise discards good, objective standards of evidence. No one can be sure that the court actually imposed retaliation on the right person. Such a court is a coercive threat to every peaceful and innocent person who might be tried there.

In short, we want a PGA that adheres to the NIFP in regard to adults, abides by objective rules of evidence in trials, has definitions and rules regarding property that are conducive to human life, and protects children (who are not yet fully independent, rational agents) from abuse and intentional starvation by their parents.

There’s No Contradiction Between the NIFP and Monopoly Government  [Permalink]

Now an Objectivist Ideal Government meets all of these criteria for a government conducive to human life. Regarding adults, it does nothing that is not absolutely necessary for the protection of people from initiations of coercion (or equivalents, such as over-retaliation, or irrational property claims), and it does not even collect compulsory taxes.

So the OIG is, by definition, exactly what a governmental agency should be. No one has any rational justification for choosing a government significantly different than the OIG. Indeed, any governance that differs significantly from the OIG is effectively an initiation of force against someone, and is destructive to human life.

Thus, given that the society has an OIG, when someone sets up his own governmental agency, in defiance of the policies of the current government, he is effectively threatening to initiate force against others. As with any such credible threat–say someone pointing a gun at your head–this is itself equivalent to an initiation of force, and should be dealt with as such by the government.

So, in this context, the NIFP is upheld by the government protecting its monopoly.

But now, what if the government is close to an OIG, but is not perfect? What if it has some minor bad law, or a court makes an error? Can we now say that this gives people the right to disregard the current government completely and start their own? No, because if people had a right to unilaterally disregard an essentially good government to form a slightly better one, then they would also have the right to unilaterally disregard the government to form a much worse one.

To have a personal right to do something is to be at moral liberty to do it in whatever way you wish, rational or irrational. (3) Thus, the personal “right” to form your own governmental agency means the “right” to do it irrationally. But an irrational governmental agency is one that effectively initiates force and violates people’s rights. And there can be no such thing as “a right to violate others’ rights.”

Individuals have a right of retaliation against those who coerce them–in the sense that genuine retaliation is morally proper–but this right is not a personal right. It is a right that must be delegated to a third-party government, because the individual does not have a right to retaliate irrationally, non-objectively, or in any arbitrary way he chooses.

If we take the perspective of a government official, who always strives to protect citizens’ rights and honestly believes that the government for which he works is ideal, then we can see that he must take any attempt to arrest, punish or otherwise coerce people outside the government’s supervision as an attempt to violate the principles of ideal government. Since the government’s mission is to protect all individual rights in its jurisdiction, since it allows private arbitrators under its supervision when they act in accordance with proper principles, (see Footnote 4) and since the government will only allow punishment when its officials can be satisfied that a case has gone through the proper procedures to ensure the objectivity of the verdict, the government official must take attempts to use force on people outside government supervision as attempts to circumvent proper governmental principles and objectivity, and hence to subvert the government’s mission of protecting rights, (i.e. to enable the violation of rights.)

If someone is dissatisfied with a law or the result of a trial under a near-OIG, he cannot properly start his own government. What he can do is speak, persuade, reason with others, advocate for an OIG. He can attempt to persuade voters to change the law, or courts to overturn the verdict. If he is right, then he has reality on his side and his argument should ultimately be persuasive in a culture that is capable of generating such a good government. (If it isn’t, then that’s a shame, but there is nothing more he can do. This problem of persuasion is not unique to an OIG, but would apply in a much worse form to PGAs: There, persuasion would be the only thing that prevents bloody civil wars.) (4)

The Coercive Injustice of a Compromise on Rights  [Permalink]

An essential characteristic of “AnCap-friendly” PGAs, is that they are willing to compromise with other PGAs that have different laws. If they didn’t do this, then they would be attempting to act as a monopoly government. From the AnCap perspective, they would be acting “aggressively” by attempting to deprive someone of his choice of PGA. So, to not compromise, but to attack over a difference in law is–to an AnCap–a violation of the NAP and therefore wrong.

Yet if one agency has laws that properly implement the NIFP / human rights, and another does not, a compromise between them is almost invariably going to involve an initiation of force against someone and a violation of his rights.

For example, when Dave attempts to sue his neighbor, Rob, for theft of his intellectual property, (copyright violation) Rob’s PGA responds that it doesn’t recognize intellectual property. (The PGA agrees with Rob’s own opinion.) In an internal dispute, Dave’s PGA would have awarded 10,000 grams silver in damages (12% royalties on what was sold) and would have halted sales by Rob. Rob’s PGA would have dismissed the case and allowed sales without any royalties. To avoid war, a compromise is reached, in which Rob is required to pay Dave 5,000 grams silver, but can continue selling Dave’s books without further royalties.

Both Dave and Rob are angry at the compromise and each wishes that the other were represented by his own PGA. A significant injustice was done to whomever it was that had the PGA that was right. In fact, either way, one of them used the PGAs to initiate coercion against the other and rob him of his rightful property: if Dave’s PGA was right, Rob should have been stopped from selling more books. If Rob’s PGA was right, Rob should never have had to pay 5,000 grams silver in damages.

Another example: A married, Deist man commits adultery with a married, Muslim woman. The man’s PGA does not punish people for adultery, beyond whatever may be stipulated in the marriage contract. The woman’s PGA is one for devout Muslims who believe in the Iranian version of Sharia law. The penalty that that PGA imposes for adultery is death by stoning for both the man and woman. The woman in this case is executed by stoning, but a compromise has to be struck for the man, in order to avoid war. The punishment that is brokered for him is 100 lashes with a whip, (the Islamic penalty for fornication among the unmarried.)

The PGAs are now responsible for a violent act initiated against a man who was involved in a consensual relationship with a woman, did not initiate force against anyone, and who did not consent to Islamic law. (5)

There is no moral basis for preferring compromises of people’s genuine rights over uncompromised protection of those rights. Compromises like those above are destructive to human life and flourishing, and so do not have a place in an ideal system of governance.

Weak PGAs Can’t Compete With Strong Ones, Regardless of Merit  [Permalink]

The preceding discussion assumes that all PGAs will be “AnCap-friendly” and compromise in their dealings with other PGAs. But in reality, there would be a strong economic incentive for some PGAs not to accept lawsuits or criminal cases from some other PGAs.

If two PGAs are comparable in power, then it is perhaps plausible that they could compromise with each other, since each is a real threat to the other. The above criticism of compromises on rights would then apply. But if the two PGAs involved in a dispute are significantly mismatched in size or power, then the stronger agency has an economic incentive to refuse cases from the weaker agency.

Let’s suppose we have two PGAs, a strong one with many wealthy clients called “Wolfhound,” and a weak one with a smaller number of poorer clients, “Underdog.” If it came to war between Wolfhound and Underdog, Underdog would be wiped out and Wolfhound would hardly notice the cost. Now Wolfhound wants to maximize its profits, and so would like to cater to its highest-paying clients and become a monopoly. A great way to advance both of these goals would be to refuse all cases from Underdog and its clients against Wolfhound’s own clients.

The first thing this would do is satisfy the desires of Wolfhound’s clients who would like to be threatened and inconvenienced by lawsuits and trials as little as possible. The second thing this would do is to make staying with Underdog a very unattractive option for its clients. If they have no recognized rights against the large number of Wolfhound’s clients who live among them, while Wolfhound can intimidate their agency into recognizing its cases against them, then they are going to be very dissatisfied with Underdog. They will have no good options except to move far away, or join Wolfhound. “Join us,” says Wolfhound, “and you will have at least some rights against all of our clients.”

It is not hard to imagine that, even within Wolfhound’s membership, there would be tiers of “rights” that would depend on how much one pays. You could have Gold, Silver and Bronze plans. If you pay more, you get better protection and advantages in Wolfhound’s internal court system.

Due to the ability of a stronger PGA to use force to wipe out a weaker competitor, (or credibly threaten to do so) free-market competition on the quality/price of service will not function between the two firms. Since any new PGA will start out small and relatively weak, there will be no possibility of entrepreneurial improvement in governmental services. Only those PGAs that gained the allegiance of a large fraction of people soon after the dissolution of the state would have a good chance of surviving for a significant length of time. Also, every time one of the major competitors loses a lot of market share and power to the others, (whether through the clients’ choices or through war) it will be permanently pushed out of business. Over time, this will tend to reduce the number of PGAs in a given geographic area to one: a governmental monopoly that distributes “rights” according to how much clients pay it.

The free-market principles that allow small companies to compete with large ones do not apply to a market in the use of force. This is because a free market, as such, presupposes that force has been properly banned from the realm of trade and competition. But AnCap PGAs are empowered to use force against clients and against one another, since they have no higher-level agency enforcing a ban on force among them.

Indeed, as I will show later, there are other ways in which free-market principles don’t apply to competition between PGAs. The principles of free-market economics do not apply to anarchy, in general.

The Difference Between Retaliatory Force and Production  [Permalink]

So, if a competitive free market is conducive to human life in the sphere of production and trade, why is it antithetical to human life in the realm of force and government?

Well, as indicated at the end of the previous section, a free market–as a genuine concept–means a market in which the initiation of force has already been legally banned and is consistently, objectively punished. So a free market presupposes that all government within its boundaries runs homogeneously as an OIG, (effectively a monopoly government.) So it’s actually meaningless to talk about a “free market in the application of force.”

But we can still ask why the unilateral, irrational use of force should be banned, while the unilateral, irrational, (non-coercive) conducting of business should not be banned.

The answer lies in the unique destructiveness of initiatory force. (This includes non-objective “retaliatory” force.) If an oil company manager decides not to hire a man to work for the company, the man is still free to move elsewhere, speak to others, look for other jobs, start his own company, etc. But if a PGA imprisons this same man, he is rendered unable to move out of the area, speak to others, or contact another PGA or DRO. That one act of imprisonment has completely crippled him, stopped his life cold, and made him thoroughly dependent on others for his rescue.

In the realm of value production, innovation is critical, and people must be free to act on their own, independent judgment. This freedom necessarily includes the freedom to act irrationally in this same sphere. The penalty for such non-coercive irrationality is overwhelmingly borne by the irrational person himself.

But innovation is not critical to the effective use of force. While it can certainly improve the use of force, such innovation is not necessarily the deciding factor in a contest of force. (Greater numbers or bigger guns can win some battles.) Nor is such innovation the main engine of the improvement of human life. Unlike production, force doesn’t create value; it only destroys value, or protects it from other force.

Moreover, in the case of force, the irrationality of one person can be crippling or deadly to another. The immediate penalty of coercive irrationality is frequently not borne by the person being irrational, but by an innocent bystander.

To the extent that such coercive irrationality is allowed to go unpunished, human life and well-being in the society is destroyed.

How Constitutional, Republican Government Promotes Objectivity and Hinders Corruption  [Permalink]

AnCaps naturally sense that objectivity in a dispute requires a third party to arbitrate, which is why they think the market ought to choose third-party DROs or PGAs to settle disputes, rather than personal duels, (as it sometimes chose in the Renaissance and Enlightenment.) Yet they don’t trust a state to perform this function properly, because “positions of power attract power-lusters,” and “a lack of competition breeds corruption and stagnation,” and “a state always grows,” and so on.

But what AnCaps tend to ignore or downplay is the fact that a proper, constitutional, republican state has many mechanisms built into it that do dramatically hinder power-lusters and corruption. No proper government can survive a 200-plus-year philosophical assault, like the US has endured, unscathed. But, given a substantially more rational and liberty-loving culture, a properly constructed state can stay free from corruption and from creeping totalitarianism.

Indeed, the stability of a well-constructed state is evidenced by how long it has taken the US to reach its current level of statism, and by how well certain liberties have endured, such as freedom of speech. The US is still moderately high on the relative scale of liberty, despite the fact that it is one of the world’s oldest republics. Further, the Constitution and Bill of Rights have holes and vagaries in them that would be removed in an OIG’s constitution. So one could expect an OIG to be even more stable.

Among the most obvious of these corruption-hindering mechanisms is the election, recall and impeachment of officials. Most officials must be elected by a popular vote, and in this process, their backgrounds, philosophies and characters are vetted by a large number of people, with the aid of news media. Bad behavior in office can be countered with recall elections or impeachment.

No such process would occur with the owners of PGAs. People may try to investigate the background of the officials of a PGA/DRO before hiring them, but because they would start with a small number of clients, yet would have to have enough firepower to do their job, those officials would have access to a good deal of coercive power before they were vetted by many people, let alone large segments of the news media. The owners of private companies are also not subject to recall by their clients. Clients can attempt to fire the company, but the company has a greater coercive power than the client, so a corrupt company can blockade or imprison the individual and prevent him from hiring anyone else.

The safeguard of election procedures and other government rules in a proper state lies in the checks, balances and broad distribution of powers. For example, as originally conceived, the Senate, House of Representatives, Supreme Court and President all have separate, but interwoven powers. They must all individually abide by the rules that govern their power, or face legal proceedings against them by the other branches of government. In a relatively rational society, this system does remarkably well at suppressing arbitrariness, power lust and corruption. (This is not to say that this system can’t possibly be improved.) It is in each official’s self-interest, vis-à-vis keeping his job, freedom and reputation, to abide by the rules of the government.

PGAs, working on the model of other private companies, would have a hierarchy with few or no checks on the president’s power. For a given company, power would be distributed over a handful of individuals that could become corrupt relatively easily. AnCaps generally count on checks between PGAs to keep them all in line. But these “competitive” checks are ultimately based, not on a commonly accepted state law and institutional framework, but on the threat of a costly civil war. In other words, PGAs would check each other in the same way the Crips check the Bloods.

Finally, a proper state has a constitution that delineates the proper functions of the government and proscribes violations of individual rights. This clearly sets out the rules of the government and the rights it is to respect for all to see. Everyone in the country can check to see if their elected officials are abiding by these rules and rights. The existence of the constitution as a set, written document also ensures that the onus of persuasion is on those who want to deviate from established governmental practices. This is a force for stability in the government. If the constitution recognizes the proper rights and establishes the proper procedures, as in an OIG, then it is also a force for purity and beneficence in the government.

An AnCap Thought Experiment Gone Awry  [Permalink]

So let’s say that anarcho-capitalism is accepted by most people in a country like the US and the republican form of government is eliminated. Some people start PGAs, other people hire them, and these PGAs and their clients roam freely, going about their business. We’ll assume that the majority of these PGAs are run by good people who want to profit in the long run by providing good protection for their clients and by running according to decent, objective laws. We’ll assume that they take cases from weaker, good PGAs, against their apparent economic interests. And we’ll assume that they are very reluctant to go to war, because, as AnCaps typically reason, “war is expensive and destructive.”

Now, there are still some people in the society with the malevolent intent to coerce others. What are these people going to do? Well, they are going to flock to the PGAs, because they are power-mongers and that is where the power is. (This is the typical AnCap reasoning for why a state becomes corrupt: because corrupt people go where the guns are.) So let’s assume that most PGAs manage to keep the bad guys out of their organizations through various screening procedures. (This is a generous and not insignificant assumption, and, I think, rather dubious. But let’s go with it.)

But, of course, there is nothing to stop the bad guys from forming their own PGA. So they start their own PGA. They keep it honest for a while, get clients, and build a secret compound somewhere remote. Since they are a relatively small PGA without a long and established reputation, they don’t charge a whole lot and get clients on the lower end of the income spectrum.

Then, at an appointed time in the middle of the night, they have their security guards abduct their clients and take them to their secret compound to work as slaves. No outsiders know exactly where this compound is. The slaves work at factories producing weapons to be used by the PGA, and goods to be sold by an associated front company, thus funding and supporting the bad PGA.

Now let’s say, after some time, one of the enslaved clients manages to escape and tell a good PGA the approximate location of the compound and asks for a rescue attempt. The PGA tells him that, for one thing, those people aren’t their clients and couldn’t afford to become their clients; second, “war is expensive and destructive”; and third, that those people are basically hostages and might be killed in the rescue attempt, anyway. Thus, the PGA decides it is not in its business interests to attempt a rescue.

The bad PGA, growing and still free to move about due to the lack of state boundaries, starts conducting raids against individual houses at the outskirts of an area largely dominated by another PGA. Sometimes, it comes in with an overwhelming, targeted force to abduct the people in that house, then slips away. Or, more often, it operates by subterfuge, luring people with business deals, tricking them into making themselves vulnerable.

Now the friends and families of the abductees petition their PGA to take action. “These are your clients!” they cry, “Your job is to protect them! We will pay extra to have them returned alive.” The PGA responds that “war is expensive and destructive” and that, “While they were our clients, they are not a very significant percentage of our clients, and the enemy has grown and it may have them in multiple places we don’t know about, and when we attempt to rescue them, they may be killed and be worthless to any of us, and the money you are offering is unlikely to cover our expenses. Furthermore, what is to prevent this same scenario from playing out again and again? We must look to our long-term interests and the safety of the majority of our clients,” they say.

The PGA holds a meeting, then comes out and says to its clients, “We will build a wall and ditch, establish checkpoints on the border, deploy anti-aircraft guns, and prevent the bad PGA from snatching people. We will monitor what goes on around the wall to prevent abductions by stealth and trickery. Our clients will finally be free of the constant fear of being abducted, so long as they stay within the wall. Inside the wall, people will not have to go around constantly armed or accompanied by armed guards. Outside the wall, neither you, nor our personnel are safe. A few of our guards can be overwhelmed by a larger force of the bad PGA. So we won’t let our guards leave our territory. If you decide to go, you’re pretty much on your own.”

The bad PGA will eventually grow enough to where it can kick any residual personnel of other PGAs out of its area of dominance and build its own wall around its own slave-state.

So, from this society of PGAs, we see a natural evolution into two states: one basically good, and the other basically bad. (6)

Here again, we see that free-market principles do not apply to PGAs competing in a state of anarchy. Their ability to use force against their “clients” and one another without punishment by an ultimate, objective arbiter puts them outside the scope of a free market.

Another part of the lesson here is that a major part of the effective application of force against people is control of their movement. This holds true whether the force is legitimate or illegitimate. When you cannot kill all the bad guys, you have to control their movement. This can take the form of prisons or national borders. (This is also why gangs fight over “turf.”) When governmental agencies don’t have monopoly control over a territory, they cannot be very effective at protecting their clients.

The people in the good state are glad of their extra safety and their ability to move freely about, without so many armed guards–within the walls, that is.

Another thing that most of the people in the new, good state would be glad of, is that they no longer have to compromise on what they regard as just and proper when settling disputes with others around them. Many of them used to have neighbors that had different DROs/PGAs, with rights-violating laws, or a bad definition of property.

Conclusion  [Permalink]

If you are someone who wants to eliminate the initiation of force from human life as much as possible, then you should be advocating for an Objectivist ideal government. This is a state that has a monopoly on the use of retaliatory force in a certain geographic area, but does not initiate force and does not collect taxes (only voluntary donations, fees, etc.) It is a government that accepts no compromises in the protection of individual rights.

AnCaps are already advocating for others to accept a normative moral principle: the Non-Initiation of Force Principle. But this principle is NOT self-evident. It is not self-evident that people can’t achieve good, life-promoting results by forcing other people to do certain things. And more: if someone doesn’t accept that the morally good is the life of the individual, but thinks it is self-sacrifice for others, then his idea of “the good” can be achieved by force: It can be achieved by forcing people to do their “moral duty” and sacrifice for others.

The only way to consistently and effectively argue for the NIFP, for property rights, and for a coercion-free society, is to argue for the Objectivist morality of life and rational self-interest. This is the morality that holds that each individual’s independent judgment, free from coercion by others, is the only way to achieve good things.

For more on this, I recommend Craig Biddle’s talk: “Ayn Rand’s Theory of Rights”, and the books, Capitalism: The Unknown Ideal by Ayn Rand, and Free Market Revolution: How Ayn Rand’s Ideas Can End Big Government by Yaron Brook and Don Watkins. (7)

I also recommend my essay, Why Moral Theory is Needed in the Fight for Liberty, Not Just Economics and the Non-Aggression Principle.

Summary  [Permalink]

  • Government is defined by its moral/legal empowerment to use force in the absence of an immediate threat to someone’s life, limb, or property. So AnCaps generally advocate for private, non-taxing governments.
  • AnCaps appear to be advocating to “let the market decide” how governmental force is used. But the “market” has chosen coercive, tax-levying states for governments, again and again. Since the “market forces” of anarchy didn’t prevent states from forming the first time, why should we believe they would inevitably do so now?
  • What AnCaps are really advocating is for their own normative, moral constraints to be imposed on the market for government; specifically, the Non-Aggression Principle (or, more correctly, the Non-Initiation of Force Principle (NIFP)), and a certain theory of private property.
  • Thus, AnCaps are attempting to persuade people of moral principles for the sake of proper government, just like Objectivists are. (Objectivists are advocates for a certain type of state that collects no taxes.)
  • But if a proper, legitimate governmental system must be based on a moral principle (the NIFP) then there can be no justification for deviating from that moral principle.
  • An Objectivist ideal government is precisely the system that implements the NIFP as rigorously as possible.So rebellion against it in favor of a substantially different system is equivalent to the threat to initiate force against others.
  • Minor disagreements with the government on issues of judicial procedure and the like may be covered by the use of private binding arbitration that both parties contractually agree to. These decisions, if not obviously wrong, are simply “rubber stamped” and enforced by the government, as is done now. Private guards and investigators may legally be hired to cover perceived deficiencies in the effectiveness of one’s police protection.
  • “Proper, non-monopolistic,” inter-PGA law enforcement requires compromises between different law systems. This often means compromises between different views of what people’s rights are. If one PGA is right about their client’s rights, then a compromise with a PGA that does not have that same view will necessarily make the final judgment wrong. A wrong judgment in a legal case is the effective equivalent of an initiation of force: wrongful, coercive punishment, or the theft of someone’s rightful property. (A failure to compromise–whether the compromise is through arbitration, or by simply not retaliating for violations of its clients’ rights–is generally seen by AnCaps as “aggressive” and “monopolistic,” because it violates the individual’s alleged “free choice” of PGA.)
  • No one is ever morally justified in preferring compromises on rights over the consistent, uncompromised protection of individual rights. No one has a right to engage in such compromises, because they effectively initiate force. So the “free, personal choice” of one’s governmental agency is not a human right.
  • In reality, such compromises are only likely to happen between PGAs of comparable power. Large, strong PGAs have strong economic incentive to refuse civil and criminal cases coming from small and weak PGAs. Doing so satisfies their clients and serves to freeze the smaller competitors out of the market. Over time, the trend would be toward a single PGA in each geographic area that distributes “rights” according to how much clients pay.
  • The above point shows that free-market principles do not apply to anarchy. A free market is one where force has already been banned by an ultimate, objective arbiter. AnCap PGAs have not been so banned from initiating force against their clients–or each other–in the process of their competition for dominance.
  • A constitutional, democratic republic is capable of suppressing arbitrariness, corruption and cronyism, so long as a slight majority of people understand the moral principles behind the Objectivist ideal government. This is done through the mechanisms of electoral vetting of candidates, the separation of powers, and adherence to a rights-guarding, written constitution as the government’s default course.
  • The private governmental agencies (PGAs) of an AnCap society have no such mechanisms for suppressing power-mongers in their ranks. Corrupt people may start or take control of such agencies, start civil wars, abduct people, enslave people and create general havoc. (The poor, who can’t afford a good PGA, would be especially vulnerable.) The natural tendency for such a society will be for it to balkanize into a few different states, when people demand safety from the kidnappings of rogue PGAs, and freedom from compromises of their rights.
  • Therefore, only a government, that has laws that represent a correct view of rights, whose judgments are objective and uncompromised, can truly prevent the initiation of force. This is a single, monopoly government: the Objectivist ideal government.
  • To bring such a rights-protecting government about, people should advocate for the moral principles that support it: the Objectivist morality.


(1) There seem to be a few AnCaps who think that private defense agencies shouldn’t coercively retaliate for force, after the fact, if the attacking party never signed a contract with the victim. I refute this idea of anarcho-capitalism here: A Reddit Discussion of Anarcho-Capitalism.

(2) The Non-Initiation of Force Principle, like all non-axiomatic principles, is contextual. That is, it is only morally valid (human life-promoting) in the context of adults interacting with each other. It does not apply in its general form to the parent-child relationship, since a child is, by fundamental nature, not a fully independent agent, capable of supporting his own life by his own rational thought. Children should have some governmental protections that adults do not, and should not have some governmental protections that adults do have, with respect to their parents.

(3) By “moral liberty,” I mean that no one may morally stop you by force. In a free market, you are at moral liberty to conduct non-coercive production and trade however you wish, even if you do it irrationally. That is, you have a right to freely engage in such production and trade.

(4) There are actually many situations under a proper government where a minority can alter procedural rules for themselves, through contracts. I think that private, binding arbitration agreements (so long as they were not signed under duress) are properly recognized by the government. The government then proceeds to enforce whatever reasonable, prescribed civil judgment was reached. (I don’t think that the government would enforce really outrageous punishments that are clearly, objectively wrong.) This sort of thing is actually done now in the US.

Also, if someone is unhappy with the amount of police protection he or his property gets, he can hire private guards and/or private investigators. Again, this is legal in the US now.

(5) In For a New Liberty, Murray Rothbard seems to think that a condition of proper market anarchy would mean that there would be a libertarian “legal code which would be generally accepted, and which the courts would pledge themselves to follow,” seemingly bypassing the problem of compromises with rights-violating laws. (pp. 227-228) But this would mean a set of laws holding an unalterable monopoly over the society. Yet this monopoly is to be maintained by a set of competing, private courts and enforced by competing private governmental agencies.

A free market in production/trade means that people are free to do things differently than others with their own company or property, and to not participate when they judge appropriate. Yet Rothbard seems to think that, absent the state, people in a given area will magically all agree on what laws there should be, or will magically have their own agencies enforce the same monopoly law.

One of the examples he gives to support the idea of uniform, stateless law is the Medieval European merchant law. (pp. 228-229) All indications are that this form of law was not optimally objective or just. It was based on “traditional principles” and the judge’s feelings, not on fundamental principles. It was frequently biased by local influences, and this indicates that it could never really be properly enforced, apart from or against states. But it was often agreed to because it was quick and because it took the merchants’ practices and needs into account.

What we are looking for in the basic laws/judicial procedures of a society is optimal objectivity and justice, in which force is never initiated by means of non-objective “retaliation.” But if merchants or other groups want special procedural rules or standards of evidence for themselves, they can agree to it by signing binding arbitration agreements among themselves, as mentioned in (4). This could reproduce an arbitration system that is quick and responsive, like merchant law, for civil matters.

(6) The bad, slave society will tend to become less and less efficient at production, and will tend to destroy all of its long-term inhabitants as people. So it will tend to decay and weaken in the long term. But the “long term” will come much too late for a great many people, and you will have tremendous human loss.

(7) Acknowledgments: Reddit user PipingHotSoup for helping inspire the “No Contradiction Between the NIFP and Monopoly Government” part. (Ironically, PipingHotSoup is, as far as I can tell, an AnCap.) Reddit user KodoKB for his comments that inspired me to emphasize the problem of compromises on issues of rights.

[Edited: 12-29-13: Moved and added to the section “The Coercive Injustice of a Compromise on Rights.” Updated summary accordingly.

2-20-14: Added the section “Weak PGAs Can’t Compete With Strong Ones, Regardless of Merit” and updated summary accordingly.

5-24-14: Added elaboration and emphasis on the fact that free-market principles don’t apply to anarchy.

10-12-14: Added clarification to sixth paragraph.

10-4-15: Added eighth paragraph under “There’s No Contradiction Between the NIFP and Monopoly Government”

6-14-16: Added “Defined this way…” to the fourth sentence of the fifth paragraph.]


Related Posts:

A Reddit Discussion of Anarcho-Capitalism (Market Anarchy)

How to Show That Taxation is Robbery

Wealth is Created by Action Based on Rational Thought

Why Healthcare in the US is So Expensive, and What Can Be Done About It

The Nature of the Morality of Rational Egoism: Short Notes


18 thoughts on “An Objectivist Refutation of Anarcho-Capitalism (Market Anarchy)

  1. You got the definition of government wrong. It is the “monopoly on the initiation of force”. The idea of a monopoly on retaliatory force is beyond bizarre and is not a definition used by anybody except you. It implies that I should not be able to defend myself in a fight or defend somebody being raped. Surely you don’t actually believe that.

    The question for you is whether you believe there should be an organization with a monopoly on the initiation of violence/coercion/theft?

    Your understanding of market anarchy is also totally wrong, and is a strawman. I urge you to learn about anarchist theory *before* forming your opinion. But that doesn’t really matter given the first mistake.

    • The idea of a monopoly on retaliatory force is beyond bizarre and is not a definition used by anybody except you. It implies that I should not be able to defend myself in a fight or defend somebody being raped.

      You’re wrong here. Look up “retaliate.” Retaliation is not the same thing as self-defense. Aside from the implications of the term, “retaliatory,” I make it very clear, later in the essay, that I mean that the use of force without an immediate threat, with moral/legal legitimacy, is what defines government. A government’s monopoly over this sort of force does not include self-defense (or other-defense) from an immediate threat.

      You got the definition of government wrong. It is the “monopoly on the initiation of force”.

      What would you call an agency that collects no taxes, has laws that only implement individual rights (consistent with Non-Initiation of Force Principle) and, in the name of uncompromising, objective retaliation for violations of those rights, permits no other (after-the-fact) coercion-using agencies to operate in its claimed jurisdiction?

      Your understanding of market anarchy is also totally wrong, and is a strawman.

      I recommend actually reading the whole essay before making that judgment, especially since you were wrong in your interpretation of the first paragraph.

      • It is interesting to note that you resort to “look up the definition of …” rather than simply stating what the definition is that you are using. I often find that misunderstandings are driven by divergent definitions.

    • “The idea of a monopoly on retaliatory force is beyond bizarre and is not a definition used by anybody except you.”

      No, this is the objectivist view of a proper government. It doesn’t mean that you can’t defend yourself, but rather that the degree and manner with which you defend yourself can be regulated. It also means that the use of retaliation can be regulated as well.

      In many ways, the ancaps and objectivists are talking past each other. The anarchists want a society without aggression, and the objectivists do as well. What most anarchists fail to see is that a governing body which regulates the use of defensive force, retaliatory force, preventative force, and the definition of property, does not violate the NAP.

  2. There is no objective standard for exactly how much retaliatory force is just. In that case the only clear-cut “right” and “wrong” is the NIFP: the NIFP makes rational economic calculation possible and thus brings prosperity. It is “right” from a utilitarian POV. Once someone violates, NIFP, there is no objective standard to determine how much punishment is “just”. In some cultures capital punishment is wrong even for murder case, while in other cultures chopping off hands is good enough punishment for stealing. So who should decide that? Elected representatives? Why? What moral quality do they have? Why do you assume that the people running your Objectivist government will be just and accountable (despite enjoying a monopoly) while people running the PDAs will be unjust and unaccountable? Simply calling a government “Objectivist” or laying down some kind of Constitution will not make the people running such a government morally superior. The judgment in any case is decided by precedent. In a new case, the judge will have to make a new judgment but will try to be as just as possible in order to attract more business. A judge that favors a rich person against a poor person will favor a richer person against the same rich man. Such judges will lose reputation and business. (this is how British common law evolved). The merchant law is another proof that no monopolistic “final say” is needed. Private appeals courts would limit the number of appeals they would allow in order to economize on their time and resources. Ultimately, if something is “Objective” (I prefer the phrase “inter-personally subjectively ascertainable”), it does not need the stamp of a monopoly. It would be manifestly just/unjust. Such judgment would change from time/location and in cases of inter-cultural disputes there WILL be some compromise but there is nothing inherently wrong about it. NIFP is the only objective principle. Beyond that, the question of punishment is a matter of “legal theory”. Punishments serve social utility: they create a sense of fear against criminal indulgence. I submit that private agencies would best cater to this social need (for the same reason privatization is good for food, education, roads, etc.). Ultimately we cannot get around the need for people to understand and desire liberty. When that happens, what is the need for some “Objective” monopoly to have the “final say” in all matters?

    //Over time, the trend would be toward a single PGA in each geographic area that distributes “rights” according to how much clients pay.// Not if there is a free market in arms, including defense equipment. A flourishing weapons market will make monopolies on force unfeasible. Besides, (in the above quote) you’re unwittingly describing the State and justifying it in the same breath! LOL!

    • There is no objective standard for exactly how much retaliatory force is just. … NIFP is the only objective principle. Beyond that, the question of punishment is a matter of “legal theory”.

      If punishment cannot be assessed objectively, but is culturally subjective, then what is there to base any legal theory on? “Proper” punishment would just be a matter of the whims of the majority in a culture. One would only need to (and only be able to) conduct an opinion poll of citizens to determine punishments.

      The fact is that there are objective facts and principles one can look to to determine punishments: We can determine how much damage a crime has done to the life of the victim–not exactly, but approximately–and we can rank crimes ordinally from least damaging to most damaging. The punishments for crimes should do no less damage to the perpetrator than was done to the victim, and should be ranked in the same order as the crimes they punish. As far as extra, deterrent punishment, I’m not a specialist in objective law and haven’t come up with an exact amount, but I’d say that it should be no more than 100% of damage done.

      Why do you assume that the people running your Objectivist government will be just and accountable (despite enjoying a monopoly)…?

      Because of the systemic mechanisms I discuss in the section of the essay titled, “How Constitutional, Republican Government Promotes Objectivity and Hinders Corruption.

      …while people running the PDAs will be unjust and unaccountable?

      I don’t assume that they will start out with the intention of being unjust and unaccountable. But I think it’s likely they will end up being so, because of the economic incentives I discuss in “Weak PGAs Can’t Compete With Strong Ones, Regardless of Merit.”

      Such [unjust] judges will lose reputation and business. (this is how British common law evolved).

      I have seen no evidence that Britain was ever producing and improving NIFP-based law under a state of anarchy, as envisioned by AnCaps. As far as I’m aware, in any given locality, in peacetime, there was only one recognized, ultimate legal authority.

      I submit that private agencies would best cater to this social need (for the same reason privatization is good for food, education, roads, etc.).

      Since you made this comment, I have edited the essay to clarify exactly why this is wrong. E.g.: “Here again, we see that free-market principles do not apply to PGAs competing in a state of anarchy. Their ability to use force against their ‘clients’ and one another without punishment by an ultimate, objective arbiter puts them outside the scope of a free market.”

      The merchant law is another proof that no monopolistic “final say” is needed.

      I address merchant law briefly in Footnote 5. Please refer to that for my response.

  3. I am an objectivist and was really disappointed here. I was hoping for some logic for why an objectivist government is not an initiation of force. Your argument is that it is a NECESSARY initiation of force I’m the overall, ends-based analysis….but that’s just the same old collectivist thinking. I accept objectivist ethics. Initiation of force is always immoral.

    • I hope to make it simpler, but I apologize if this doesn’t do it.

      What the Non-Aggression Principle rejects is the initiation of force as specifically defined as someone first using force against another party, or their property. So the principle depends upon a prior definition of property. Additionally, the non-aggression principle says nothing about the defensive use of force, the retalitatory use of force, or the preventative use of force. So a government can exist which does not commit aggression, but which still exists to define and govern how people are to use defensive force, retaliatory force, and preventative force; and such a government can establish definitions for property. None of this is an initiation of force, and none of this violates the non-aggression principle — because setting standards for property and these other types of use of force, actually serves to ‘define’ aggression.

    • I was hoping for some logic for why an objectivist government is not an initiation of force. Your argument is that it is a NECESSARY initiation of force…

      This is clearly NOT what I’m arguing. I am arguing that an Objectivist government does not initiate force.

      I quote from my essay: “Thus, given that the society has an OIG, when someone sets up his own governmental agency, in defiance of the policies of the current government, he is effectively threatening to initiate force against others. As with any such credible threat–say someone pointing a gun at your head–this is itself equivalent to an initiation of force, and should be dealt with as such by the government.

      “So, in this context, the NIFP is upheld by the government protecting its monopoly.

  4. The most comprehensive rebuttal of the idea of DROs and their like I have seen on the web. I no longer consider myself an anarchocapitalist. The weight of the argument is undeniable.

    • I’m glad to hear you see and accept my points in the essay. It’s such a rare thing, especially on the internet, to have someone say that you convinced them of anything significant–more so that you convinced them to make a fundamental change to their political philosophy.

      Thank you very much for your comment.


      • Many anarchists haven’t thought it through. To argue for anarchy is to argue for the end of what currently is, without arguing for what one actually desires. Most anarchists don’t know that there is a difference between Rothbardian anarchy and Friedman’s anarchy.

        So I, too, have been winning arguments on the internet, which is totally unusual. Whereas most arguments end with “Go to Hell!”, “No, You go to hell!” or “I guess we’ll have to agree to disagree;” my arguments on this topic end with silence.

        Anarchy is not the perfect state of liberty. The perfect state of liberty is a society which will protect my Rights, and the rights of everyone who don’t even bother to think about Rights. There is nothing inherently wrong with monopoly. Aggression is the problem; and what we should seek is Universal Non-Aggressive Governance.

  5. I’m new to Objectivism. What I do not understand is the word “rationality” in some cases. How is it not rational to have a government that violates the non initiation of force principle? For example when I am poor and rather get fed than work? Or I work, earn a lot but want to be rich? I do not see how that is not rational in the sense of my own interests.

    • The reason that I have not answered this yet is that it is somewhat off the topic of the essay, and so not a high priority response. I will consider answering this comment soon, if I can see evidence that you are still around and will see it. Please reply to this comment if you would like an answer, and I’ll try to get to it.

  6. “The AnCap “free market” has chosen a coercive state as its defense agency.”

    I see you are relying on the religious mythology of the statist as well as AnCap religions, using the reification fallacy to support your argument. Postulating the existence of unseen invisible entities which cannot be objectively proven to exist and an agent principle relationship between these two entities.

    Can you link to/show me a picture of either the agent (the “coercive state”) or the principle (the free market). Or do I just have to have faith to “see” them?

    “…Boyer suggests culturally-widespread beliefs in “supernatural agents” (e.g., gods, ancestors, spirits, and witches) result from agent detection: the intuitive modular process of assuming intervention by conscious agents, regardless of whether they are present. “When we see branches moving in a tree or when we hear an unexpected sound behind us, we immediately infer that some agent is the cause of this salient event. We can do that without any specific description of what the agent actually is.”[1] Boyer cites E. E. Evans-Pritchard’s classic Zande story about a termite-infested roof collapsing.”

    How is your theory of this “agent” “the state” who serves this metaphysical “entity” called “the market” as its “master” different from religious agent detection?

  7. Pingback: Obiektywistyczne odrzucenie anarchokapitalizmu -

  8. Pingback: Anarchokapitalizm vs Obiektywizm (z Jakubem Wiśniewskim)

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s