The intellectual antecedents of the idea of “anarcho-capitalism”

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Introduction: 50 Years and counting

50 years ago I first came across the theory of anarcho-capitalism when I was in my last two years of high school (1973-74). I read everything I could get my hands on and I still have most of those books still in my possession, although they are a bit worse for wear, as you can see from the photo above. Here are the titles of the books in the photo – what is missing from this collection is Roy Childs, “An Open Letter to Ayn Rand: Objectivism and the State” (1969) which I have lost:

  1. Etienne de la Boetie, The Politics of Obedience: The Discourse of Voluntary Servitude (1570s, Free Life Editions 1975)
  2. Frédéric Bastiat, Economic Sophisms (1846, FEE 1968)
  3. Frédéric Bastiat, Economic Harmonies (1851, FEE 1979)
  4. Frédéric Bastiat, Selected Essays on political Economy (FEE 1975)
  5. Gustave de Molinari, The Production of Security (1849, Center for Libertarian Studies 1977)
  6. Gustave de Molinari, Les Soirées de la rue Sainte-Lazare (Guillaumin 1849)
  7. Herbert Spencer, Social Statics (1851, Robert Schalkenbach Foundation 1970)
  8. Lysander Spooner, No Treason and Letter to Thomas Bayard (1870, Ralph Myles 1973
  9. Lysander Spooner, Collected Works, vol. 1 (M&S Press 1971)
  10. Albert Jay Nock, Our Enemy, the State (1935, Free Life Editions 1973)
  11. Ayn Rand, Atlas Shrugged (1957, New American Library, dated by me Jan. 1973)
  12. Morris and Linda Tannehill, The Market for Liberty (1970)
  13. Richard and Ernestine Perkins, Precondition for Peace and Prosperity: Rational Anarchy (1971)
  14. John Hospers Libertarianism: A Political Philosophy for Tomorrow (1971)
  15. Murray N. Rothbard, Man, Economy, and State (1962, Nash Publishing 1970)
  16. Murray N. Rothbard, Power and Market: Government and the Economy (Institute for Human Studies 1970)
  17. Murray N. Rothbard, For a New Liberty (1973)
  18. Murray N. Rothbard, “The Anatomy, of the State” (1965) in Egalitarianism as a Revolt against Nature (Libertarian Review Press 1974)
  19. Robert Nozick, Anarachy, State and Utopia (1974)
  20. Workers Party. Platform (1975)

After the State Member of Parliament, John Ruddick gave his inaugural speech in the Lower House [Youtube: https://www.youtube.com/watch?v=Hw1zPTDEVxA on 28 June 2023, in which he outlined an “anarcho-capitalist” policy agenda which he and the Liberal Democrats Party endorsed, I was asked to explain something about where the term “anarcho-capitalist” came from and what the theory was about. Here are the “interview points” I drew up, along with some recommended reading for those who would like to explore the matter further.

Interview Talking Points

1.) The term AC emerged during the 1970s in the US when the modern libertarian movement began

  1. at a time when the US was still fighting an unpopular and failing war in Vietnam
  2. Pres. Richard Nixon was trying to silence his opponents with a number of criminal activities known as the ”Watergate” break-in and resulting coverup and scandal
  3. the first “Oil Crisis” pushed up prices adding to already high inflation
  4. and in Australia just after the Labor Party came to power in 1972 and began its radical reform program

2.) its basic philosophy is a version, admittedly very radical, of what is known as “classical liberalism”, i.e. a belief that individuals have a right to life, liberty, and property so long as they do not engage in aggression (violence) against others who have an equal right to their LLP; ; what this means in practice is

  1. a belief in the importance the “non-aggression principle”, i.e. that no person (including those who work for the government) has the right to initiate the use of violence e against another person except in self-defense (this is what sets AC apart from other “classical liberals”)
  2. the protection of private property under the rule of law
  3. the right to engage in production and trade of any good or service, (thus free markets in everything)
  4. and to exchange what is produced with others – in other words free trade in everything, everywhere, with anyone
  5. thus, since governments use coercion against individuals on a massive scale (taxation, regulation, conscription, spending), they must be very limited in what they can do (the standard “classical liberal” position) , or better, done away with entirely (the anarcho-capitalist view)

3.) The term was first used and the theory developed by the Austrian economist and libertarian political philosopher Murray Rothbard in NYC, especially in his book For New Liberty (1973) and the Harvard philosopher Robert Nozick’s book Anarchy, State and Utopia (1974)

  1. this is when the idea of AC came to Australia – so exactly 50 years ago – I was still at high school and was a member of a group of libertarians in Sydney at that time who debated its merits; the intellectual battle lines were drawn up between the supporters of the Russian-American novelist Ayn Rand (limited government) and Murray Rothbard and Roy Childs (anarcho-capitalism)
  2. an influential group of people who were part of the Australian Libertarian Party of the period – going under the provocative name of the “Workers Party” – were “anarcho-capitalists”; and wrote the party’s platform and were active in the 1975 federal election which saw the end of Whitlam’s government.

4.) The much earlier antecedents go back to the late 18th and early 19th centuries, especially among the French liberal political economists, who have been my life’s academic interest ;

  1. Jean-Baptiste Say – admired stateless settlements in American mid-west and thought they did a better job than the chaos of the French revolutionary and Napoleonic governments (lectures 1819-20)
  2. Charles Dunoyer – called for the break-up of large states as part of “the municipalisation of the world” in order to break up their power and tax-base (1825)
  3. Gustave de Molinari – the most important one in the group ; he was the first (1849) to see that, once you removed all the things governments should not do in the first place, then all so-called “public goods” (roads, lighting, police, and even national defence) could be better provided by voluntary activity in a free market
    1. either by insurance companies (1849 “The Production of Security”) who would provide police services and courts in order to protect the customer’s property by going after criminals and getting restitution
    2. or by the creation of private “proprietary communities” (1884) where entrepreneurs would build entire communities with all public services provided, which would be paid for those owners who “bought into” the community by buying a house
  4. GdM’s work on “private property insurance companies” caught Rothbard’s eye when he was writing his books in the 1950s and 1960s and this idea became a key component of his theory of AC
  5. P.S.: I should also mention the work of Herbert Spencer in the 1870s and 1880s whose social and economic theory of the state is very is very similar to anarcho-capitalism

5.) There is a new generation of anarcho-capitalist economic theorists working in the US, the most important of which are Edward Stringham and Peter Boettke ;

  1. and I continue to document the history of this tradition in my own writings and the texts I put online on my website, as I have done for over 40 years

6.) The accusation of “utopian” or “impractical” is often made against AC.

  1. The first point I would make is “like” has to be compared with “like”, in other words that
    1. the ideal of socialism should be compared to the ideal of AC
    2. and that the actual practice of socialism be compared to the actual practice of free markets
    3. too often socialist like to compare the ideal of socialism with the practice of highly regulated “capitalism” which is what we have today
  2. I would also argue that the true utopians are
    1. the socialists, who falsely believe that
      1. human nature can and should be changed so people are no longer “selfish” and “acquisitive”
      2. and the corollary that politicians and bureaucrats do not also have “selfish interests” which they pursue while in office
      3. that they can ignore or wish away the fundamental economic problem of scarcity and the need for “trade offs”
      4. that they can ignore or wish away “the knowledge problem” (Hayek) or the “economic calculation problem” (Mises)
    2. the “liberals”, who falsely believe that,
      1. even if they manage to reduce the size of government, it will not stay limited for long
      2. and all of the same beliefs the socialists have which I have listed above

Further reading

1.) Modern advocates of AC:

  • the collection of essays and extracts edited by Edward P. Stringham, Anarchy and the Law: The Political Economy of Choice (The Independent Institute and Transaction Publishers, 2007)
  • a collection of essays by Peter J. Boettke, The Struggle For A Better World (Arlington, Virginia: Mercatus Center, 2021). Online https://ppe.mercatus.org/publications/freedom-and-flourishing/struggle-better-world;
  • the collections of essays which survey the current state of the libertarian movement:
    • The Routledge Handbook of Libertarianism. Edited by: Jason Brennan, Bas van der Vossen, and David Schmidtz (New York : Routledge, 2018),
    • The Routledge Companion to Libertarianism. Edited by Matt Zwolinski and Benjamin Ferguson (Routledge, 2022) – note that I have an essay in this volume on classical liberal ideas on “Class”, pp. 291-307. A longer version of which is online <davidmhart.com/liberty/ClassAnalysis/HistoricalSurvey/index.html>

2.) On the “Paris School” of Political Economy: