G. K. Chesterton once wrote, “Too much capitalism does not mean too many capitalists, but too few capitalists.” The concern that a handful of capitalists will eventually become so wealthy and powerful that they will wield complete power over the rest of society is one often raised by socialists. It’s a common criticism against libertarianism (especially anarcho-capitalism). And it’s not without merit. Employees are naturally at a disadvantage when compared to employers.

What’s to stop an employer, for example, from demanding an employee either provide sexual favors or face termination? Statists will point out that this is the reason a state is necessary but then ignore that agents of the state could, and periodically do, demand exactly that. Libertarians will point out that the employee is free to find employment elsewhere but then ignores the difficulty, especially if the employee is providing for their family, often involved in doing so. Communists will point out that such demands are irrelevant when everybody is economically equal but then ignore the necessity of a hierarchy to enforce that equality.

All three approaches to the problem result in hierarchy. In the case of statism the state wields power that is even greater than that of the employer. Under libertarianism the employer wields power over the employee. Communism, although its advocates often pretend it’s not so, requires a power over all members of society to enforce economic equality. So what’s the solution? Easy. Become an entrepreneur.

OK, it’s not necessarily easy but nothing worth doing ever is. Samuel Edward Konkin III (SEK3), in A New Libertarian Manifesto [PDF], expressed his belief that the employer-employee relationship is a holdover from feudal times and would likely disappear in a free society. Although I’m not sure if the employer-employee relationship would disappear entirely in a free society I do believe eliminating this relationship as much as possible is the most effective means of creating and maintaining a free society. The failure of statism and communism is that they look at the problems inherent in hierarchy on a societal level. Libertarianism understands that the problems inherent in hierarchy must be looked at on an individual level. Where many libertarians fall short is assuming everything stops at the non-aggression principle.

The non-aggression principle certainly allows for employer-employee relationships. But the non-aggression principle only asks if something is ethical. Just because something is ethical doesn’t mean it’s optimal. Consider a meth addict. There’s nothing unethical under the non-aggression principle in using meth. That doesn’t mean slowly killing yourself with meth is a great idea though (although that determination, ultimately, lies with the meth user). Likewise, there’s nothing wrong with being an employee but it may not necessarily be an optimal situation.

When you work for an employer you necessarily have to abide by their terms. If you don’t they can fire you. Under a state you may have some protections from an employer but you must then abide by the state’s terms. Failing to do so will likely result in even more severe consequences since the state reserves for itself the right to kidnap, cage, and even murder you. Therefore the only means of achieving true liberty is to be self-sufficient.

Self-sufficiency often brings to mind recluses living in the woods, raising their own food, and building their own shelter. This doesn’t have to be the case though. Anybody who has the means of creating enough wealth to trade for their wants and needs is self-sufficient. You don’t need to raise your own food so long as you can trade with somebody who has a surplus of food and is willing to trade it with you. As an entrepreneur you cannot be fired by a boss and you’re not reliant on a state to protect you from an egregious employer.

One might ask, what if nobody is making what you want or need? That indicates an unfulfilled market demand, which is a great opportunity for entrepreneurship. In all likelihood if you want or need something then somebody else does as well. If you have a want or need that’s unfulfilled use the opportunity to practice a little entrepreneurship.

In a stateless society where everybody is an entrepreneur the amount of hierarchy is extremely limited. To return to Chesterton’s quote, capitalism maximizes individual liberty when everybody is a capitalist. This is something SEK3 understood. And while the universe doesn’t allow for perfect solutions being and entrepreneur is certainly a better option for individual liberty than being reliant on somebody else.

We need to move the conversation away from the employer-employee relationship and towards advocating entrepreneurship.