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Other Ideologies: Anarcho-Capitalism (Part One)

Updated: Dec 15, 2020

By Max Lindh

If one is willing to concede that the free market is better at running heavy industries, manufacture consumer goods, and even provide better choices in welfare, than state planning might about, then why would it be any different in the areas of fire brigades, policing, armed forces, and yes, indeed, even the building and maintenance of roads? That is the question posed by anarcho-capitalism.

No doubt that to most people the question would seem absurd, outright ludicrous (after all, if it were it would not be chronicled in this series), and so one might be tempted to dismiss the ideology asking that question outright as not worthy of attention. But to do so one would be making a mistake! Ideologies never exist in vacuum: they influence one another, their ideas trickle down, and up, and in strange directions. Up until just two years ago, successive social democratic Indian governments had structured national economic development according to Five Year Plans, just because once, back in the 1920s, Stalin in Moscow decided that this was the best way to pursue Socialism in One Country. Allegedly, neoconservatism’s calls for boots on the ground and democratization of foreign countries owes more to Trotskyite calls for World Revolution than it does to Wilsonian liberal interventionism. So too, anarcho-capitalism has had, and continues to have, an influence on political discourse, and the world which we inhabit.

The man behind the ideology

Though anarcho-capitalism draws from many different and seemingly disparate traditions, it is nonetheless fair to say that any introduction ought to start with Murray Rothbard, the man who originally brought about the synthesis and gave it its foundation. Born in the Bronx in New York in 1926 to Polish and Russian Jewish immigrant parents, and growing up during the Great Depression, one might have imagined that a person with young Murray’s background would have grown up to be a radical left-winger of some sort, and indeed, he had uncles and aunts who were open, outspoken, card-carrying members of the Communist Party. Nevertheless, Murray took after his father, who had come to embrace the American tradition of rugged individualism, and by the time he was attending Columbia University in the early 1940s, Rothbard identified as a Republican, aligning himself with the “Old Right” of the party. This faction, associated mainly with laissez-faire capitalism in economic and isolationism in foreign policy, were by many people, even some Republicans, considered to have been thoroughly discredited by this point - first by the Great Depression, and then again by the Second World War. A man who would spend his life as something of a professional contrarian, there can be no doubt that Rothbard must have felt himself right at home in a political camp seen by many as fighting for a lost cause.

Taxation is Robbery

Rothbard's journey to greater radicalism began in 1947 when Rothbard came across a pamphlet entitled Taxation Is Robbery by Frank Chodorov. Frank Chodorov was a man who thought himself a Georgist. IBut whereas some Georgists tend to emphasize the benevolence of a single tax on land, Chodorov had come to focus on the evils of any tax that is not a single tax on land. The pamphlet was to have a deep impact on the young Rothbard, and he proceeded to devour further works Eventually he came across a pamphlet criticizing rent control published by the Foundation of Economic Education, and Rothbard decided to seek them out, and join up.

He might have been a little bit disappointed. The FEE had been founded just a few years prior, and as of yet had less than a dozen members and occupied just two rooms in a Manhattan office building. Still, Rothbard eagerly joined, and it was through the FEE that Rothbard came into contact with the man who would influence and shape his thinking the most: Ludwig von Mises.

The Austrian School

Ludwig von Mises was the grand old man of a heterodox tradition of economic thought that carries the name of the Austrian School. It had originated with Carl Menger and his Subjective Theory of Value in the late 19th century, and its proponents’ had a near unanimous support for laissez-faire capitalism. Mises himself possessed the dubious distinction of having served as an economic adviser to the government of Engelbert Dollfuss. When the Nazis had begun rolling their tanks out across Europe, Mises, who was of Jewish extraction, had found fit to depart the continent, and was now living out his life in New York as an expat. His great accomplishment, his work on the economic calculation problem in socialist economies, was long behind him. He was now spending his days lecturing at New York University and holding informal after-dinner seminars.

And now Murray Rothbard was to come under his spell.

Rothbard began attending Mises’ seminars, worked his way through the Austrian’s magnum opus Human Action, becoming a great devotee of Mises’ particular approach to economics which he called praxeology, and began writing his own doctoral thesis (this time in economics) analysing the Panic of 1819 through the lens of the Austrian School tradition. And this love was more than returned, as Mises was only happy to make Rothbard his protégé and become his mentor. Rothbard would join in the after-dinner seminars at Childs Restaurant, and he was introduced to Mises’ circle of friends, which included, among others Ayn Rand - more on her later.

In 1952, the William Volker Fund approached Rothbard. They were hoping that he might be willing to produce a textbook on Austrian economics for them, and while he was working on it, they would provide him with a $6,000 annual stipend. , Rothbard leapt at the idea and buried himself in work. Over the next ten years, he was to produce what would be his own magnum opus - and it was to rival his mentor’s in both scope and size. Man, Economy and State came in at just over 1,500 pages. This was not a book that was ever going to attract much, if any, attention from mainstream scholars and academics, but its sheer magnitude and span, coupled with Mises’ own glowing reviews of the book, established Murray Rothbard as an authority par excellence in the small circles in which he moved.

The Libertarian Manifesto

During this time, Rothbard's own particular doctrine began to take shape. Naturally, the Austrian School of Economics and laissez-faire capitalism formed the backbone. The theory of natural rights as enunciated by John Locke and Thomas Paine were another key ingredient. Then there were of course the great 19th century English liberal theorists and writers, like Lord Acton and Herbert Spencer, but also more obscure ones, like Auberon Herbert who had developed a political philosophy dubbed voluntarism. There was also the American individualist anarchist tradition, “unterrified Jeffersonianism”, of the abolitionist lawyer and activist Lysander Spooner and the editor and journalist Benjamin Tucker. All of this added to, mixed with, and blended in with Mises’s own fundamentally 19th century-style classical liberalism to create what Rothbard would interchangably call libertarianism or anarcho-capitalism. And so, Murray Rothbard became a man with a vision: the privatization of nation-state itself!

He wrote a book, a Communist Manifesto to accompany the Das Kapital that was his Man, Economy, and State, a shorter book that would eventually be published in 1973 entitled For a New Liberty: The Libertarian Manifesto. In it, he outlined his ideology point by point, and made clear how he saw himself and his worldview as merely the continuation of the radical liberal tradition.

Rothbard starts from a single central axiom, and then expands to derive and elaborate all the rest. This axiom is that of non-aggression: “no man or group of men may aggress against the personal property of anyone else.”

From this all the rest follows.

Taxation is theft, and state compulsion is slavery. He goes over and applies his particular approach to almost every topic under the sun, from civil liberties (all drugs should be legalized) to monetary policy (the gold standard and Austrian economics) to how the welfare state should be structured (to the extent that non-existence can be called a structure), how foreign policy should be conducted, there’s even a chapter on conservation and ecology.

Streets and roads should be constructed and owned privately, and the police should similarly be a private service, recruited by and paid for individuals and voluntary associations seeking protection. He ends with a brief sketch of a strategy towards achieving his libertarian vision by gradual means, amusingly saying that libertarians have a lot to learn from the (failures of) Marxists on that point. Ending on an optimistic note, he proclaims liberty, at the very least as he interprets the word, in the end will win.

Murray Rothbard himself, though, had no illusions that he was the leader of something about to become a mass movement. In the early seventies when his acolyte Walter Block asked him how libertarians there were in the world of the same mould as him, Rothbard is to have shrugged and mused “I dunno. Twenty-five?” It did not help either that Rothbard soon got involved in a schism in the free-marketeer community in New York, thanks to his falling-out with Ayn Rand.

The infamous Ayn Rand had already published the two novels that were to make her famous, The Fountainhead and Atlas Shrugged, and had now retired from fiction to focus on her particular philosophical system she dubbed Objectivism. She had managed to inspire a small following, but as she was growing older and finding herself at the centre of a circle whose members seemed willing to treat her every word as Gospel, Ayn Rand was becoming increasingly puritanical in her worldview and intolerant of deviation. Rothbard's initial good relationship with Rand inevitably fell apart, Rand denouncing Rothbard and his followers as a gang of “right-wing hippies”.

Whatever you may think of Ayn Rand, one cannot deny that it was an inspired choice of label when you consider what happened when Murray Rothbard decided to try his hand at electoral politics.

With perhaps "twenty five" libertarian believers in the entire world, an ideology framed around both anarchism and capitalism (leaving not much role for the State itself), Murray Rothbard was going to have to come up with a way to take his ideas to the electors...


Part Two, with what happened when Rothbard's anarcho-capitalism met the public (and how), coming next time



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