Africa is home to some of the most corrupt governments in the world. According to the Transparency International Corruption Perception Index 2017, 11 out of the 20 most corrupt countries are located on the African continent. These nations are also among some of the worst performing countries when it comes to socio-economic development.

This data suggests that the state is at least partly responsible for many of the economic and social challenges faced by Africans today. This begs the question: “Would African nations fare better if they were not restrained by the state?”

In this article, we will explore a political school of thought called anarcho-capitalism, which promotes the replacement of the state with a free-market based system that empowers citizens through self-ownership and private property and whether blockchain-driven anarcho-capitalism could provide a viable alternative model for socio-economically struggling nations in Africa.

What is Anarcho-Capitalism?

Anarcho-capitalism, also referred to as libertarian anarchy or free-market anarchism, is a political philosophy that advocates the elimination of the centralised state in favour of individual sovereignty and free markets.

Anarcho-capitalists believe that in the absence of statute societies self-regulate through what is referred to as spontaneous order – an order which emerges as a result of the voluntary activities of individuals and not one that is created by a government.

In an anarcho-capitalist society, instead of having government-run public sector institutions such as law enforcement and courts that are funded by taxation, these services would be operated by privately-funded businesses who are chosen by consumers in the open market. This, in turn, should create a more efficient economy with better services.

Legal disputes would be resolved using tort and contract law through dispute resolution organisations as opposed to through punishment determined by political monopolies, which tend to become corrupted.

As opposed to the public image of anarchy, which often associates this political concept to chaos and lawlessness, anarcho-capitalism is based on the non-aggression principle (NAP). In simple terms, the non-aggression principle states that you should not assert aggression towards others or their property as this is deemed unethical.

Anarchism is also often linked to left-wing political schools of thought such as socialism and communism. However, while there is a large anarcho-communist community, not all anarchists are opposed to private ownership of property and free-market economics. In fact, the anarcho-capitalist movement has been growing in recent years in places like the United States and Europe due to the dissatisfaction with the performance of recent and current governments.

The term “anarcho-capitalism” was coined by Murray Rothbard, an American economist, historian and political theorist, in the 20th century. Rothbard believed that:

“Capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism.”

Anarchism in Africa

Africa is not foreign to anarchist societies. Author Sam Mbah and I. E. Igariwey suggest in their book, ‘African Anarchism: The History of a Movement’, that many traditional African societies were built on anarchic elements and lacked state-like hierarchies.

“To a greater or lesser extent, all of […] traditional African societies manifested “anarchic elements” which, upon close examination, lend credence to the historical truism that governments have not always existed. They are but a recent phenomenon and are, therefore, not inevitable in human society. While some “anarchic” features of traditional African societies existed largely in past stages of development, some of them persist and remain pronounced to this day.”

“What this means is that the ideals underlying anarchism may not be so new in the African context. What is new is the concept of anarchism as a social movement or ideology. Anarchy as an abstraction may indeed be remote to Africans, but it is not at all unknown as a way of life. This is not fully appreciated because there is not as yet a systematic body of anarchist thought that is peculiarly African in origin,” the authors wrote.

How a Blockchain-Powered “Decentralised Economy” Could Disintermediate the State

The power of decentralised applications (DApps) and the new “decentralised economy” lies in the disintermediation of central authority. This does not only apply to businesses who act as intermediaries (such as financial institutions for financial transactions for example) but can also apply to public sector institutions.

Through the adoption of decentralised services, many centrally governed services that governments (aim to) provide could be largely replaced. The issuance of identities, business lending, asset and land ownership, startup funding, legally binding smart contracts, a direct peer-to-peer sharing economy, and decentralised digital currencies are among the possibilities that blockchain technology could provide to disintermediate many of the state’s functions.

The issuance of digital identities could be performed using a blockchain-powered database that does not require a centrally governed authority to oversee it. Instead, individuals could create their identities on the platform, and third parties who may require information on the individual could access it with the individual’s permission.

Business lending, as well as startup funding, which is often conducted through government grants or investment schemes, could be run by the private sector using blockchain solutions instead. Business lending, for example, could be performed on a peer-to-peer lending basis where investors lend to businesses directly without an intermediary taking a cut. Startup funding, on the other hand, could be conducted through initial coin offerings or security token offerings.

Asset and land ownership and transfers could be conducted on blockchain-based platforms for all stakeholders to view in a transparent and immutable manner. This way, there would be no need for public sector officials to become involved in the process and fees – and the potential for corruption – would thus be reduced.

Contractual agreements between businesses and individuals could be coded into immutable self-executing smart contracts, which would reduce the need for centrally-governed courtroom interventions in the matters between individuals and businesses. Moreover, the widespread adoption and societal implementation of smart contracts could drastically reduce the need for laws and bureaucratic legislation.

A true peer-to-peer sharing economy could also be created using blockchain technology, which could replace many public sector services with private sector solutions such as specialised healthcare or transport services, for example.

Furthermore, decentralised digital currencies such as bitcoin would eliminate the need for a central bank to meddle in the monetary affairs of a country and could empower citizens to “be their own bank” as opposed to relying on financial intermediaries to conduct their financial affairs.

Could Blockchain-Powered Anarcho-Capitalism Work in Africa?

It is difficult to know with any degree of certainty whether socio-economically struggling African nations would benefit from introducing blockchain-driven anarcho-capitalism as there have been little to no anarcho-capitalist societies to date.

According to freeblr, anarcho-capitalist societies have existed in the past, most notably in Celtic Ireland from 650 to 1650 and in the Icelandic Commonwealth from 930 to 1263. However, as these historical instances of anarcho-capitalism date back several hundred years it is difficult to determine whether these societies were truly 100 percent stateless and capitalist, and how well these societies functioned.

Anarcho-capitalism thus remains largely a political ideal and theoretical model that stands untested in modern history. This makes it difficult to judge whether an anarcho-capitalist society would flourish in countries that have suffered under corrupt governments.

In theory, however, anarcho-capitalism has the potential to create more wealth for a larger number of people in a society where it would be introduced. If you take away the state and its restrictive regulations, crony capitalism, and taxation, entrepreneurship and innovation could thrive while workers would be able to take home their entire paycheck as opposed to giving a share to their politicians.

The economy, in an anarcho-capitalist society, would become more efficient as private companies would have to compete to offer the best possible products and services that the consumer can then choose from. That would mean lower prices, higher quality products, and better services than in the current state of the economy.

Interestingly, one could argue that a high degree of economic and entrepreneurial freedom already exists in most African nations due to its thriving informal sectors that stay mostly untouched by government rules and regulations. Vendors in poor areas, for example, are often able to sell their goods wherever they please without government interference and taxation is only sporadically enforced in many African slums. This would suggest that anarcho-capitalism can be found in pockets of Africa’s society today.

The lack of effective state-led policing in many African nations would also feed into this argument as punishment for crimes is often enacted by local communities themselves as a form of self-governing, which could be considered as quasi-dispute resolution organisations.

In light of Africa’s experience with anarchy in many of its traditional societies, the lack of state-control in many of the poorer parts of the continent, and African citizens’ general distrust of governments and their institutions would suggest that the continent may be fertile ground for anarcho-capitalism. Through the widespread adoption of decentralised blockchain solutions, many of the government’s functions could be disintermediated and would thus become redundant, which would also feed into the argument that anarcho-capitalism could potential thrive in Africa.

Whether struggling African nations would be better off through the adoption of a free-market economy without government interference will remain unknown until the first libertarian society that embraces anarcho-capitalist ideals comes to fruition on African soil.

Unfortunately, due to corrupt government officials and the omnipresent corporate cronyism found all over Africa, it would be an uphill battle for the brave souls who attempt to create a free society based on the non-aggression principle, individual liberty, and personal financial sovereignty.