Prior to the 21st century, anarchism was mostly considered to be a socialist doctrine, revolutionary and often violent. Anarchists were taken to be utopians, opposing any consensual formal social norms - any enforceable voluntary contract - among human beings. Anti-property and antinomian, they never amounted to much as a political movement. However, the anarchist ideas of the early luminaries did inspire a more perfect anarchism in the second half of the 20th century.

The new anarchists saw the libertarian promise of the computer revolution and the resulting altered incentives in an information age. These new anarchists jettisoned the long disproven exploitation theories of the socialists, and the hoary labor theory of value. Instead, these anarcho-capitalists and mutualists embraced private property unequivocally. Free trade had long been favored by individualist anarchists, but outright support of private property had been problematic among the the 19th century labor theorists. That last vestige of medieval “just price” doctrine had been rejected by the modern anarcho-capitalists of the 21st century. Anarchist theory had finally incorporated neo-classical economic theory, and made the necessary adjustments.

Anarchism is “a denial of authority over the individual” as Voltairine de Cleyre succinctly put it in 1901.[1] But what kind of authority is denied? Not the authority of the bootmaker.

Let us have no external legislation and no authority. The one is inseparable from the other, and both tend to create a slave society. Does it follow that I reject all authority? Perish the thought. In the matter of boots, I defer to the authority of the bootmaker. – Michael Bakunin, God and the State (1871)[2]

The kind of authority that anarchists oppose is political authority - the right to rule and the duty to obey. Anarchists, as people, can and do have other values, but as anarchists by definition they oppose only political authority.

The new capitalistic anarchists did not rediscover or reformulate the definition of anarchism - they merely applied it more consistently than the earlier self-labeled “socialist” (or “social”) anarchists. Modern anarchists have the advantage of a rational economic theory. This makes all the difference between a wooly-headed utopian faith like anarcho-socialism and a realistic social system based on empiricism and private property - anarcho-capitalism. Libertarian capitalists use the subjective theory of value, rejecting the socialists’ simplistic single-factor labor model. With the Entitlement Theory of Distributive Justice and Universal Property Norms,[3] modern anarchists had the philosophical tools to discover some wonderful things about private property. For example:

I. In a free market, property tends to devolve to society in general.

(Contrary to the socialist myth of massive accumulation.)

II. In a free market, property norms promote prosperity and liberty.

(Contrary to the socialist myths of impending worker starvation, and alleged impossibility of stateless capitalism.)

III. While equality of general moral rights (non-aggression) is fundamentally important, equality in other areas is not important enough to justify violence. Natural, voluntary inequalities and hierarchies occur.

(Contrary to utopian socialist dreams of a prevailing overall equality, and total absence of enforceable law.)

These points may seem obvious to today’s readers, but we are standing on the shoulders of earlier thinkers, and have the advantage of a much better understanding of economics. 19th century anarchist myths reflected the sentiment of the times, and had clear historical reasons.

The first unabashedly anarchist essay may have been written as satire. We’ll never know whether the young Edmund Burke was in earnest or not when he penned A Vindication of Natural Society.[4] But William Godwin treated Burke’s rant against government as if it were serious, and wrote a positive account of anarchism: An Enquiry Concerning Political Justice.[5] Neither of these took any particular economic position, the former being a critique of State, while the latter is largely about hard determinism. But this was still the 18th century, and the industrial revolution had not shaken western society yet.

David Hume and Adam Smith, seminal thinkers in classical economics, both assumed a labor theory of value. This was unfortunate, since Karl Marx took this mistake, and made it the centerpiece of his exploitation theory of economics. This became the foundation of socialist thinking. Furthermore, the early industrial revolution, although allowing more people to live, cutting the child mortality rate, and so on, seemed to produce misery and hardship due to the increased population. The industrial revolution was a huge disruption to society, and it took a while for relative stability to return. Meanwhile, governments exacerbated the problems with short-sighted perverse policies, mainly aimed at favoritism for cronies driven by the rent-seeking of rulers and their flunkies.

For these reasons, anarchists in the 19th century generally assumed that property was a decreed product of government authority. The modern point of view, utilizing a sociological perspective, is that property norms are a “natural” emergent result of human interaction. Yet anarcho-socialists, even as recently as the 20th century, generally believed that property could only occur through State action (error II above.) Just as feudal serfs couldn’t conceive of a life not bound to the lord’s land, 20th century socialists could not conceive of private property not created and enforced by a State. That notion was outside their Weltanschauung.

Josiah Warren was the first to add a “cost is the limit of price” norm to the anarchist thesis. This is a form of the labor theory of value, to be sure, but unlike European socialist forms of this dogma, the American Individualists tended to consider charging more than this proscribed amount as a vice rather than a crime. “Exploitation” is not a crime to them, but it is a vice to employ or be employed, or to be landlord or renter, or to charge interest. Warren and later American Individualists intended to outcompete the state-supported political capitalists, by engaging in free market capitalism. Of course, they didn’t call it that, since to them “capitalism” was a pejorative word meaning what today we call “corporatism.”[6]

European anarchism originally centered on Pierre Proudhon, who was the first to fearlessly call himself an anarchist. His most popular work was a piece called What is Property,[7] which utterly devastated decreed property. Proudhon looked at various justifications of decreed property, concentrating on legal traditions and history, and found them all lacking. He proposed rejecting “use and abuse” property in favor of “occupation and use” property, which he called “possession” rather than property. He observed that possession was a fact, not a law.

Contrary to what Mutualists claim, Proudhon did not give a positive argument for possession property as a norm. He did aptly refute decreed property. He did not refute or even address sticky property, that is, no-proviso Lockean property. Proudhon, unlike the next generation of libertarian thinkers such as Herbert Spencer and Peter Kropotkin, seems unaware that property can be conceived as a norm, as a type of mutual aid, as a progressive part of human society. Proudhon’s legalistic condemnation of decreed property is more of an attack on statism (what Proudhon called “governmentalism”) than on property as a set of resource usage norms.

Proudhon is illustrative of how, when one reads 19th century anarchists, one must take into account their deficient economics, just as when one reads ancient philosophers one must omit their pandering to gods and patron princes. Take the grain, the eloquent anti-statism, and ignore the chaff, the naïve antipropertarianism. Proudhon, and some of his mutualist followers even today, believed that absentee ownership was a major cause of poverty, injustice, and exploitation. They believed that renting land or housing or commercial buildings was illegitimate, and should be deemed abandonment by the owner. Never rent to a mutualist!

This crippling deformation of property ownership was combined with the false economic belief that usury rates would go down to zero in a freed market. In other words, without State intervention, early mutualists believed that interest rates, profit, and rent (above labor costs) would vanish. They did not understand time preference in those days, nor subjective utility. It would not be until the 20th century that primitive socialist just price doctrines would be rejected for marginal utility theory.

The liberty-oriented capitalists of the mid-19th century were mostly minarchist - not anarchist. They wanted a minimal State, a “nightwatchman State” as Wilhelm von Humboldt put it in The Limits of State Action.[8] Proudhon debated with Frederic Bastiat, a champion of free market capitalism. Bastiat’s protégé, Gustave de Molinari, is credited with writing the first anarcho-capitalist essay, The Production of Security. In it, he points out that economists have rejected monopoly (for good reason) in every good and service except one. Why make an exception for the production of defense? He proposed private defense agencies and courts. About the same time de Puydt wrote his classic Panarchy proposing essentially the same thing. The idea that anarchism can include many diverse voluntary “governments” and property systems was understood by some even in the mid-19th century.

Socialist anarchism committed suicide in the late 1800s by embracing terrorism, or as they called it, propaganda of the deed. Even though American Individualists like Benjamin Tucker condemned terrorism, socialist anarchists generally endorsed it, incurring the full wrath of the State. By 1920 Red Emma had been deported to the USSR, and Benjamin Tucker had emigrated to France.

Libertarianism, often cynical or minarchist, did not die. Anti-statist capitalism was championed by H. L. Mencken, Albert Jay Nock, Franz Oppenheimer, and Frank Chodorov. The latter three favored a geo-anarchist scheme, where sticky property prevailed for all man-made goods, but not for land and natural resources. This position, inspired by Henry George’s theories, would have a so-called “land tax” with proceeds going to the local community, bio-region, watershed, or other more-or-less local association.



Murray Rothbard Murray Rothbard

The founders of modern anarcho-capitalism were Murray N. Rothbard (For a New Liberty, Man, Economy, and State) and David D. Friedman (The Machinery of Freedom.) Rothbard probably coined the term “anarcho-capitalism” around 1960. He had rejected the term “anarchism” several years before, but after studying the works of Lysander Spooner and Benjamin Tucker, he realized that their politics were quite good. Why not take their strong point, their anti-statism, and leave their pre-modern economics? That is what we anarchists have done ever since. Rothbard combined American individualist anarchism with modern "Austrian" economics, giving us contemporary anarchism.





David Friedman David Friedman

By the turn of the 20th century, even the statist form of socialism was discredited. The Berlin Wall had fallen, the Soviet Union had devolved into a number of smaller entities, most a lot more prosperous and free than they were under the yoke of empire. The word “socialism” was still heard, but instead of government ownership of the means of production, it came to mean governments nurturing “capitalism.” This corporatism painted as “market socialism” became the model in China. This is a double-edged sword for a State, since the degree of success in markets is inversely proportional to government interference. To the degree the State allows free markets and private property, it undermines its own rule and limits its future predation.

While the demise of socialism was important to the rise of libertarian capitalism, even more important was the new “information age” technologies. In particular, personal computers, the internet, and strong cryptography combined to allow a degree of liberty never before experienced by modern man. For the first time since 1500, technology favored the individual over the State. These technologies allowed people three advantages: pseudonymity, wealth secure from government predation, and communications secure from government spying. Capitalism, the “unknown ideal” as Ayn Rand put it, was finally within grasp!

There are three aspects of negating compulsory government: technical, political, and economic. We begin with the technical tools, and then tell how these tools favor our political and economic struggle for liberty.

Computers have gone from large room-sized contraptions to hand-held devices 1000 times as powerful. They have gone from being owned only by governments and banks to being owned by normal working people. Nowadays, everyone has access to computing power only dreamed about by Alan Turing or Albert Einstein.

Add to that a worldwide network - the internet. Virtually every book ever published is at your fingertips. You can get instant news from anywhere on earth. Or off of it. One can learn how to do almost anything by watching online videos, and hear lectures by world-class instructors. That is empowerment!

But how can this empowerment of the individual be protected from confiscation or ruination by the State? That is where public key cryptography comes in. This “strong crypto” allows us to communicate securely, but it does much more than that! It allows pseudonymity and anonymity, which has major implications for free markets and protection from government plunder. How can a government rob someone if it doesn’t know their name, location, or where their wealth is? Obviously, it cannot. Beyond secret messages and pseudonymity, crypto offers other tools for liberty.

Crypto currencies (such as Bitcoin and Ethereum) allow us to escape what Benjamin Tucker called “the money monopoly.” Crypto currency gives us free banking, where “everyone is his own banker.” It will inevitably destroy government supported banking cartels, as the technology takes off. Plunder by government fiat money (seigniorage) and corporate privilege (fractional reserve banking) will end as people move to more secure value-retaining crypto currencies. It is likely that future crypto currencies will be redeemable in gold, silver, or kilowatt hours.

Much of modern commerce depends on reputation - systems of trust. As the State declines, its artificial systems of credentialism and licensure will give way to superior voluntary systems based on public ledgers - blockchains. We no longer need a centralized authority to provide trust systems. Imagine that your business or personal reputation, at least the part you wish to make public, was verifiable history recorded on an unalterable blockchain. Instead of relying on untrustworthy and corrupt government officials to register property deeds and titles, you record the transactions on a blockchain. Instead of relying on the shoddy word of government agents, or licensing, or permission of any kind, we can now rely on publicly available crypto-certified information.

The technologies described above enable anarchists to secede from government. At first the secession may be mostly virtual, such as online communities and affinity groups. But strong crypto also allows secession plans to proceed using secure communications. Everyone has PGP or an equivalent. Local groups can secede and stay under the government radar. Alternative structures, agorist enterprises, and other activities frowned upon by the State can be organized more easily than ever before. Social networks allow a type of mass communication never seen before, although many have significant security issues.

One possible scenario for the near future is that the US will break up like the USSR did, probably triggered by either hyperinflation or terrorism. There will be sudden mass secession, just like the Soviet Union experienced in 1991. With our voluntary associations and social networks, we will be ready for local self-rule, and strive to make our localities, our communities and neighborhoods, into anarchist enclaves, stateless and free. Defense services, as well as other legitimate services formerly captured by government, will instead be provided by voluntary society.

In the meantime, what do we do? Create the world you wish to see, Gandhi advised. If you want an alternative to statist pigs and corrupt courts, then set up a neighborhood watch or local arbitration group. Publicize it to your neighbors. Convince people to use your service rather than the government’s offering.

Maybe defense of rights is not your forte. Perhaps you like growing food. You might start an urban farming group if you live in town. There is a growing locavore movement. There is a good demand for raw milk, especially where it is outlawed. Needless to say, cannabis is a high-dollar crop with plenty of demand. Agorism is, simply put, engaging in the black or grey market, the untaxed economy, the “counter-economy.”

Anarchy occurs when the whole economy is agorist

- free, unrestrained and untaxed.

The voluntary associations that replace government agencies need not be for-profit. Perhaps many neighborhoods will opt for a participatory neighborhood watch, a mutual. Mayby a lot of people will get medical services through consumer cooperatives, like the early 20th century friendly societies and their “lodge practice.” Who can predict the markets of the future? For anarchists, so long as it is voluntary it is okay. As anarchists, we are indifferent whether people choose to get medical services from coops or firms, though as capitalists we might predict that firms would generally do a better job or be more efficient.

In an anarchist society, we expect many different legal systems - sets of norms - regarding property and other things. Some areas, especially commercial areas but also probably most residential neighborhoods, will likely have no default property norms at all. Put another way, the current owner can specify any norm he pleases. This default non-territorial norm is, it so happens, identical to the sticky property norm that anarcho-capitalists favor. It is worth observing the fact that sticky property is the most tolerant of all property systems, since it allows all other property systems to co-exist within it. That is, sticky property allows any property owner to hold his property under alternative norms, such as collective or possession rules.

However, since free like-minded people will often group together, we also expect to see various enclaves - areas with more or less standard consensus norms. Thus, it will not be uncommon to see mutualist possession property neighborhoods, communist collectives, geoist bioregions, and so on, in addition to the non-territorial open norm areas. No doubt there will be some xenophobic and separatist people, too, residing more or less in isolation, perhaps preferring to trade from afar if at all.

One of the excuses used by statists for political authority is that the State provides safety, or in more recent times, environmental protection. Both of these claims are empirically false. States, particularly their militaries, have been the major polluters for about a century. Furthermore, because of the collaboration of States, pollution of the oceans is ongoing. When States create an unmanaged commons like the ocean, then the tragedy of the commons is inevitable. Only by making the oceans private property, giving people an incentive to protect their interests, will the plastic "continent of trash" in the Pacific Ocean start to shrink.

Cartels are unstable in a free market. Case after case shows that the problems of internal defection and external competition prevent cartels from being sustainable - unless the government gives them help. What kind of help? The State uses its monopoly on force to 1) outlaw member defections from the cartel, and 2) create barriers to new competition, solving both of the problems cited. The government, in short, creates a cartel enforcement agency, euphemistically called a “regulatory agency.”

How does the government justify screwing the consumer in this manner? By crying, “safety.” Safety is an all purpose excuse for control, since nothing is perfectly safe. Safety sells to the economically illiterate, those ignorant of the many market incentives for safety - incentives not perverted by political bribes and crony corporatist favors. In short, voluntary accreditation works better than compulsory licensure, and consumer groups, professional associations, retailers, and "word of mouth" do more for safety than decrees of posturing politicians covertly creating barriers.

After more than a century of going the wrong way, anarchism has come around to embracing private property and libertarian capitalism. The three major forms of anarchism today are anarcho-capitalism, geo-anarchism, and mutualism. Pure sticky property anarcho-capitalism is most predominant, and favors the most tolerant of resource usage norms. Geo-anarchism is like anarcho-capitalism, except that it favors local collective ownership of rental rights on land and natural resources. Mutualism favors a type of private property which disallows absentee ownership, but is otherwise free market propertarian. These individualist anarchists sometimes call themselves “voluntaryists,” since that is a friendly descriptive name that doesn’t scare people like the label “anarchist” does. Socialist anarchism, due to its past proclivity for terrorism, its utopianism, but primarily its ignorance of modern economics, cannot be forgotten too soon, but some of its adherents did have some intelligent things to say about political authority.

[1] Anarchism, Voltairine de Cleyre (1901).

[2] God and the State, Mikhail Bakunin.

[3] Universal property norms are described in Property Panarchy by Hogeye Bill.

[4] A Vindication of Natural Society, Edmund Burke.

[5] An Enquiry Concerning Political Justice, William Godwin.

[6] In late 19th century terminology, “capitalism” meant “corporatism” per the Hodgskin and Marx inspired definition of the time. When reading these documents, one must make this mental translation. Also, “socialism” had a different meaning - basically any normative theory about society. Thus, what we call capitalism would have been considered stigmergic socialism, or free market anti-capitalism by our 19th century cohorts.

[7] What is Property, Pierre Proudhon.

[8] The Limits of State Action, Wilhelm von Humboldt.

[9] The Production of Security, Gustave de Monlinari.

[10] Panarchy, P. E. de Puydt.

[11] For a New Liberty, Man, Economy, and State, Murray Rothbard.

[12] The Machinery of Freedom, David Friedman.

[13] The Satoshi Revolution, Wendy McElroy

[14] The Libertarian Principle of Secession, Llewellyn H. Rockwell Jr.

[15] New Libertarian Manifesto, Samuel Edward Konkin III.

[16] Anarcho-capitalist FAQ, Hogeye Bill.

[17] A Voluntaryist Bibliography, Annotated, by Carl Watner.