Why and How?
If you’re an anarcho-capitalist, you’re obviously opposed to the state and want to see it abolished. But it’s important to understand why you’re opposed to the state as well. Some idealistic anarcho-capitalists have proposed an alliance with anarcho-communists, mutualists, syndicalists, and other types of “anarchists” because we supposedly share a common enemy with them. However, such thinking is woefully and dangerously misguided if we consider the reasons each of these groups are opposed to the state in the first place. Anarcho-capitalists hate the state because it is a serial violator of private property rights by its very nature. Anarcho-communists, mutualists, and syndicalists, on the other hand, hate the state because they believe it to be the protector of private property rights (a performative contradiction, so to speak). Although both camps of anarchists oppose the state, they do so for diametrically opposing reasons and thus are wholly incompatible with one another. So much for “panarchy.”
That much at least is obvious to most anarcho-capitalists. But the other important related question to consider is how the state violates private property rights, and this is the question which many anarcho-capitalists fail to consider when they attempt to determine the “libertarian” position on certain issues. This question is important because it is inherently linked to one’s understanding of private property norms and their implications. Sure, one can be an anarcho-capitalist based purely on the ethical grounds of the non-aggression principle, but without a rigorous understanding of the economics and ethics of private property, one will inevitably fail to correctly analyze the problems created by the state and will consequently fail to prescribe the proper solutions.
Two Kinds of Evil
First, I will establish the definition of libertarianism/anarcho-capitalism. It is the affirmation of absolute private property rights and the consistent application of the non-aggression principle (NAP). Libertarians support the self-ownership of one’s body and the private ownership of scarce goods in general (e.g. land, the means of production, other scarce resources etc.) and believe that the only just ways to acquire property are through original appropriation or voluntary transfer. The non-aggression principle can be summarized as the belief that all initiations of physical interference with the persons or property of others or threats thereof are criminal or unjustified. As such, one may justly respond to such aggression via force for either the ends of defense or punishment.
From this definition, how does the state put itself at odds with libertarianism? There are two ways. First, the state inherently violates the non-aggression principle. These are actions which are unjust in and of themselves. For instance, the state murders people in its unjust, aggressive wars. It also imprisons people for “victimless crimes” such as the possession or use of certain plants on one’s own property and kills them if they resist. It also forcibly confiscates the legitimately acquired property of the individuals under its jurisdiction through taxation, which is theft. The list could go on and on.
There is another way in which the state violates the NAP, and that is through the monopolization of legitimate market functions. These involve actions which are not NAP violations themselves (and in many cases are useful and productive), but which the state, in a NAP violation of its own, has arrogated to itself the sole right to perform. This is a violation of the NAP because it prohibits private property owners from using their property for peaceful and productive ends, thus barring them from exercising exclusive control over their property. The state generally funds the provision of these goods and services not via legitimately acquiring money through voluntary transactions, but through different forms of theft such as direct taxation, borrowing (i.e. a tax on future generations), and inflation (i.e. a hidden regressive tax). By prohibiting the full exercise of private property rights and funding its activities through theft, the state’s monopolization of certain market functions constitutes a violation of the NAP, albeit of a different sort than the types discussed previously.
Often times, at least in the Western world, the state does not outright prohibit the private provision of particular goods and services, but instead crowds out the private market with its own illegitimately funded “enterprises,” resulting in a “soft monopoly,” so to speak. These state-run “enterprises,” being funded by theft, are not subject to actual market forces and thus do not compete fairly with privately-run enterprises and end up shrinking the private market for these goods and services, artificially reducing competition, and preventing the reduction of prices in the private market which would otherwise happen under stateless conditions. Additionally, many onerous regulations are placed on private businesses in these industries which further suppress the private market’s ability to drive down prices and drive up quality. A prime example of this would be the case of public schools, and healthcare in many countries, where private provision is legally allowed but crippled by regulations and crowded out by theft-subsidized state provision. This is also the case for roads, firefighters, security, legal dispute resolution, and perhaps even military defense. To be sure, this is not as bad as complete monopolization, but nevertheless constitutes a violation of the NAP by restricting the full exercise of private property rights and employing theft to fund state activities.
The obvious solution to these evils, of course, is to have all goods and services privatized and deregulated. That is, the functions currently performed by the state which do not fall into the first category of inherent NAP violations would instead be provided by the free market. This would involve the complete privatization of law enforcement, military defense, education, healthcare, and transportation.
This, however, does not address the question of how we would prefer the state to act given its monopolization of certain goods and services. The purity-spiraling anarchist (i.e. the “anarcho-purist”) of course, would answer this question by saying that the state should just abolish itself, but that is a juvenile answer that does not address the question according to its parameters (i.e. that full privatization is off the table. Obviously, as AnCaps we prefer absolute privatization, but some of us understand we won’t practically get there in one fell swoop, hence our desire to consider intermediate steps which may bring us closer to the ultimate end of complete privatization). Such thinking is primarily the result of failing to recognize the validity of ordinal preferences within a libertarian framework.
In fact, libertarians who express ordinal preferences regarding non-ideal situations are often condemned as “unprincipled” by those anarcho-purists who would prefer to purity-spiral rather than think critically about actual solutions to the problems created by the state (it should be noted that they aren’t actually any more “pure” than other AnCaps who consider such intermediate solutions, they just fail to understand that less aggression is better than more aggression. For whatever reason, they simply parrot the fact that no aggression is better than any aggression, despite the fact that all AnCaps understand and agree with this elementary point). The anarcho-purist’s second problem is that he fails to make the distinction between the two types of state evil described previously, between the state’s inherent NAP violations and the otherwise ethical actions performed by the state which are unethically funded by taxation and/or enabled by monopolization. Such a distinction, according to the anarcho-purist, is meaningless because all state activity is bad. However, as previously explained, the failure to understand why a particular state activity is bad will result in the incorrect problem being diagnosed and the incorrect solutions being applied.
So how should we prefer the government to operate its monopolistic “enterprises” if the monopoly cannot be immediately abolished? The anarcho-purist would simply prefer the government to not act at all. However, this proposition is absurd if one considers its implications. This would require firefighters to allow houses to burn down, police officers and judges to allow murderers, rapists, and thieves to run free, roads to fall into ruin, and Canadian government nurses to allow their patients to die. All of this would happen, of course, while private actors were simultaneously prohibited or severely restricted from providing the services which the state failed to deliver. That is, the monopolization of the provision of a good or service by the state, and the state’s subsequent failure to deliver those goods and services, constitutes a de facto prohibition on those goods and services. Now, in the case of “goods and services” the state provides which are inherent NAP violations (i.e. not legitimate goods or services) such as aggressive wars of regime-change, the state’s “failure to act” should indeed be seen as a good thing. However, in the case of legitimate goods and services such as firefighting, catching and punishing violent criminals, constructing and maintaining roads, and healthcare, the state monopolist’s failure to act prevents these goods and services from being provided at all. Again, the anarcho-purist’s failure to recognize this problem stems from the misguided and juvenile belief that opposing any and all state actions is the “principled” libertarian position, when really the only libertarian principles are the affirmation of private property rights and the NAP derived from it. As was explained in the previous section, not all state actions are inherent violations of the NAP, although they all at the very least are connected to NAP violations. Thus, opposing state actions which do not inherently violate the NAP while private property owners are restricted from performing those same actions is de facto support for their unethical prohibition.
Other left-libertarians would say that the government should operate according to the principle of “non-discrimination” – that is, government enterprises and public resources, in general, should operate as egalitarian free-for-alls in which all people have an equal right to access and/or employ them. This attitude can be most recently seen in the outraged left-libertarian responses (here, here, and here) to Trump’s announced ban on transgender individuals in the military. While some of these “libertarians” may correctly recognize the right of private property owners to exercise discrimination, they believe that discrimination suddenly becomes unethical when the government does it. That is, they are opposed to the idea of the government enterprise behaving like a private enterprise (which, in the case of a military defense agency, would almost certainly not employ transgender soldiers). It behooves one to ask exactly what aspect of the non-aggression principle is at odds with discrimination, whether from state or private actors? To the contrary, opposition to discrimination from any sort of actor implies a positive right to access either legitimately owned or stolen scarce resources and thus undermines the basis of the non-aggression principle in private property norms. Whether such resources are legitimately (i.e. privately) owned or stolen by the state is irrelevant, as the very purpose of property norms, in general, is to minimize conflicts over scarce resources, as Hans Hermann Hoppe explains in the beginning of this lecture. Thus, an ethical stance against discrimination, whether “public” or “private,” inevitably undermines the non-aggression principle by encouraging self-defeating property norms (i.e. norms which generate conflict over scarce resources).
No, the correct solution is not the one which brings us closer to the left-libertarian vision of egalitarian utopia, but the one which brings us closer to private property norms. The state, in other words, should approximate the behavior of a private property owner as best it can, given that privatizing it out of existence is not a practically available option. As Rothbard argues,
We must reject once and for all the left-libertarian view that all government-operated resources must be cesspools. We must try, short of ultimate privatization, to operate government facilities in a manner most conducive to a business, or to neighborhood control.
Hoppe elaborates further on this point in his brilliant book “Democracy, the God That Failed,” arguing that monarchs are more likely than democratic rulers to approximate the behavior of private property owners.
The defining characteristic of private government ownership is that the expropriated resources and the monopoly privilege of future expropriation are individually owned. The appropriated resources are added to the ruler’s private estate and treated as if they were a part of it, and the monopoly privilege of future expropriation is attached as a title to this estate and leads to an instant increase in its present value (‘capitalization’ of monopoly profit). Most importantly, as private owner of the government estate, the ruler is entitled to pass his possessions onto his personal heir; he may sell, rent, or give away part or all of his privileged estate and privately pocket the receipts from the sale or rental; and he may personally employ or dismiss every administrator and employee of his estate.
In contrast, with a publicly owned government the control over the government apparatus lies in the hands of a trustee, or caretaker. The caretaker may use the apparatus to his personal advantage, but he does not own it. He cannot sell government resources and privately pocket the receipts, nor can he pass government possessions onto his personal heir. He owns the current use of government resources, but not their capital value. Moreover, while entrance into the position of a private owner of government is restricted by the owner’s personal discretion, entrance into the position of a caretaker-ruler is open. Anyone, in principle, can become the government’s caretaker.
Without getting too far into the details of Hoppe’s argument (which is concisely explained here), we can see how a monarch (i.e. a private, dynastic owner of the “government estate”) would be more strongly incentivized to behave like an actual private property owner than would a democratically elected ruler. Therefore, if Hoppe’s argument is true, libertarians should indeed support monarchy over democracy. Notice how this would also be strongly at odds with the egalitarian impulse of left-libertarians – one of the major appeals to democracy, after all, is its egalitarian nature, which is why leftists, in general, are so fond of it. Thus, we see how the proper libertarian strategy of inching society closer to a private property-based social order is incompatible with the left-libertarian desire for an egalitarian, “non-discriminatory” society, and also incompatible with the anarcho-purist’s desire to reject any and all solutions which do not immediately result in the total abolition of the state.
In summary, the libertarian solution to state monopolization of legitimate market functions, short of outright privatization, should be to encourage state behavior that most closely resembles the behavior of an actual private property owner within a free market.
We arrive now at the elephant in the room: the borders debate (for an in-depth examination of this topic see The Libertarian Case Against Open Borders). Many libertarians support an open borders policy because they believe that state restrictions on immigration are a violation of private property rights. Although they (usually) correctly recognize the ideal situation as one where private property owners would have exclusive control over the defense of their own borders, they incorrectly assume that ending state enforcement of borders under current circumstances would result in private property borders. Either that, or they completely ignore the question of what effect current conditions would have on the ability of private property owners to defend their own property without the enforcement of state borders. The reality is that due to anti-discrimination (i.e. forced integration) laws, the existence of a welfare state and public services and utilities, and democracy, there would be no way for private property owners to effectively defend their own property if the state were to enact an open borders policy while maintaining all other conditions. That is, an open borders policy would exacerbate the problems that are currently in place due to these conditions.
The most obvious problem is the presence of anti-discrimination laws. These laws violate private property owners’ freedom of association by forcing them to engage in undesired transactions. Whether it is a Christian baker being forced to bake a cake for a same-sex wedding, a Jewish baker being forced to bake a cake with a swastika design for a neo-Nazi, or an employer being forced to hire someone with a disability, anti-discrimination laws are violations of private property rights and a social engineering tool used by the state for the purpose of forced integration. These laws also prohibit certain types of restrictive homeowner covenants, such as those based on racial preferences. In the presence of such laws, unrestricted mass migration inevitably results in mass forced integration and an increase in social conflict. This is, of coure, to be expected by one who understands the vital role of private property norms (specifically freedom of association) in preventing social conflict.
Then there is the problem of the welfare state and public resources in general. While essentially every libertarian claims to be against these things, we must again reiterate why the welfare state is a bad thing. It is bad because it is funded by theft, of course, but it is also bad because it increases conflict over scarce physical resources, which under a private property social order would be minimized. Therefore, increasing the pool of people who have access to the welfare state by allowing latecomers access to it exacerbates the problems already inherent in the welfare state. Eventually, as conflicts over these scarce “publicly-owned” resources increases, there will arise a point where the welfare system will be overloaded, leading to a Cloward-Piven collapse which will serve as a pretext for the establishment of full-blown communism. Already we can see the welfare state in Europe becoming increasingly overburdened, as the host populations are systemically looted to subsidize the importation of welfare shoppers and jihadists. Even in America, where the problem is admittedly not as bad, immigrants on the whole end up being net tax consumers rather than victims. Appeals to “freedom of movement” are irrelevant here. The issue at hand is the erosion of property norms leading to a maximization of conflict over scarce resources, which is accelerated by “free immigration” under welfare state conditions.
There is also the problem of democracy. While it is true that non-citizens cannot vote immediately upon arriving into another country, many of these people eventually become citizens, along with their children who are granted “birthright citizenship” in America as well as in many European countries (with varying nuances and restrictions). When the majority of these immigrants (and their descendants) come from a different ethnic and cultural background, this exacerbates political tension, as voting blocs begin to form along ethnic and cultural lines. In a democracy with a powerful, centralized government, shifting demographics creates a very real political threat to the host population which will inevitably respond through ethno-nationalist movements like the alt-right. Joe Salerno from the Mises Institute wrote a brilliant article a few months ago (expanded upon by Lew Rockwell in this follow-up piece) on this phenomenon which he points out was recognized by Mises himself. Simply put, democracy cannot coexist with “free immigration” as long as current conditions exist which prevent people from freely exercising political self-determination according to the nationality principle. As Salerno argues:
Thus, Mises views immigration as always and everywhere a “problem” to which there is “no solution,” as long as interventionist political regimes are the norm. Only when the crossing of state borders by members of a different nation portend no political dangers for the indigenous nationality will the “problem of immigration” disappear and be replaced by the benign migration of labor that creates unalloyed and mutual economic advantages for all individuals and peoples. From Mises’s perspective, then, the solution to the immigration problem is not to legislate some vague, ad hoc right to the “freedom of movement” between existing fixed-boundary states. Rather, it is to complete the laissez-faire liberal revolution and secure private property rights by providing for the continual redrawing of state boundaries in accordance with the right of self-determination and the nationality principle. Then — and only then — can the continual and wealth-creating reallocation of labor throughout the world required by a dynamic capitalist economy be peacefully accommodated without precipitating political conflict.
Mises, being a supporter of democracy himself, assumed democratic conditions when making these observations. It stands to reason that the “political dangers for the indigenous nationality” caused by immigration, while they would not be completely eliminated, would certainly be reduced under a monarchical state where demographic shifts would have a far weaker impact on the political environment. Unfortunately, the current situation in most Western countries is that of a democratic welfare state with forced integration policies. Under these circumstances, it is arguably appropriate to describe state control of borders as a “soft monopolization” on the defense of scarce resources, as the ability of private property owners to exercise exclusive control of their own property is currently impeded by the aforementioned conditions. Therefore, an open borders policy would exacerbate already existing private property violations and function as a de facto crippling of private property defense, as Lew Rockwell pointed out in this speech a few years ago.
Of course, the default objection one will typically hear is that the real solution is to get rid of the welfare state along with any other conditions which facilitate the erosion of private property norms. However, this objection ignores the real question at hand. To illustrate the problem here without the baggage of the borders debate, it may be helpful to present it in more abstract logical terms.
Let’s say one would support policy X over policy Y because of principle A. Let’s say policy X is compatible with principle A under ideal condition 1, but under non-ideal condition 2, policy X will result in a further violation of principle A than under policy Y. Moreover, suppose you are discussing which policy is better (or rather, less destructive) given condition 2, and the person you are speaking with incessantly accuses your arguments for policy Y given condition 2 (as well as your presumed mutual agreement on principle A) as being “unprincipled,” and the only argument he makes in response is that condition 2 should be changed to condition 1, thereby ignoring the entire premise of the discussion.
This is precisely the kind of “argument” which is so common among open borders libertarians, and so frustrating to those of us who oppose open state borders because it is not an actual argument. It is an avoidance of the entire debate at hand in favor of purity-spiraling. It is a shutting down of meaningful discussion on actual solutions to the problems created by the state. It is an utter lack of critical thinking regarding the practical application of (supposedly) mutually agreed-upon principles. It is an obstacle to those of us who actually want to make progress in advancing private property norms.
Private property norms are the basis of libertarianism, not some abstract right to “freedom of movement.” They matter because without them, conflict over scarce physical resources is maximized, the tragedy of the commons becomes inevitable, and civilization declines and ultimately collapses. This is why it is so vital that libertarians understand private property norms and how to practically apply them to current statist conditions. Libertarians must end the purity-spiraling, stop promoting egalitarianism, and start fighting for private property rights.