Is Anarcho-Capitalism Possible?

Is Anarcho-Capitalism Possible?
Profile photo of Antony Mueller

cornfields2Even if one agrees that anarcho-capitalism has become a necessity, the question arises whether such a governance is possible. After all, at first sight, insurmountable problems seem to prevent the flourishing of a stateless society. Libertarianism means a private law society. Private businesses in the marketplace provide the traditional functions of the state. The voluntary contract-order of anarcho-capitalism substitutes the hierarchical commando-coordination of activities of the state. The basic meaning of anarcho-capitalism is an order where horizontal cooperation based on voluntary exchange dominates the coordination of human activities.

Although a libertarian order amounts to a revolution as to its consequences, the path to its creation must be non-revolutionary. The spontaneous order of an anarcho-capitalist society requires that it comes about as a gradual process of privatizations. Beginning with the sale of semi-public enterprises and public utilities, privatization should extend step by step to education and health and finally encompass security and the judicial system. Supervised by an Assembly whose members are selected by lot from the constituency of the citizens, the function of government would be handed out to a private government management company.

Under anarcho-capitalism, most of what the state supplies in services could fall to a fraction of the present volume. On a world-wide scale, military spending alone comprises around 1.7 trillion US-dollars annually. The so-called ‘public services’ would not only become better and cheaper, but it would also turn out that under a free market, the demand for education, healthcare, defense, and domestic security would be much different from how it is now. Therefore, to privatize many of the activities, which now are under the authority of state would not only lead to a decrease of the costs per unit of the services but also reduce the volume of supply because a large part of the current supply of so-called ‘public goods’ is a useless waste. Losing none of the genuine benefits of education, healthcare, and defense, the budgets for these provisions could fall to a fraction of their present size.

If one includes the overblown judicial and public administration apparatus into the reduction of state activity, government spending, which nowadays is close to fifty percent of the gross domestic product in most industrialized countries, could come down to the single digits. Taxes and contributions could fall by ninety percent.

Different from what is presently the dominant belief, to privatize the police functions, and the judiciary is not such a big problem. It would mean to extend what is already going on. In the United States of today, for example, private policing, such as by security guards, happens already at a grand scale and comprises more than one million persons. In some countries, including the United States, the number of private police and security already exceeds the number of official policemen. The private provision of judicial services is on the rise. Arbitration courts experience a strong and increasing demand including services for cross-border disputes. These trends will go on because private protection and arbitration is cheaper and better than the public provision. In Brazil, for example, which entertains one of the most expensive judicial systems of the world, currently about eighty million cases are pending without decision, and legal uncertainty has become monstrous. In the United States, many parts of the judicial system have gone berserk.

  • Arthur Wyss

    Recently I made a proposal for a libertarian anarcho-capitalist society to be established in Switzerland but I of course never expected anyone to take it seriously. Some Swiss official want to talk to me about my proposal and they have scheduled a conference call with me this Friday. Please read my proposal and offer me some advice for my upcoming conference call with the Swiss officials. That proposal follows.

    Swiss Freedom City Proposal

    This proposal is a plan for developing an environment that will attract not only the world’s best and brightest innovative entrepreneurs to Switzerland, but also it will be self-funding by luring substantial investment capital. What is the appeal of Silicon Valley? Switzerland could create a stronger magnet that would have much more attraction than Silicon Valley and there are no competitors offering anything as desirable to high-tech innovators. If this plan is fulfilled Switzerland will undoubtedly be the next home of the global high-tech surge.

    The Seasteading Institute was founded by Google software engineer Patri Friedman, who is the grandson of Nobel Prize-winning economist Milton Friedman. The Seasteading Institute was largely funded by Pay Pal founder and early Facebook investor Peter Thiel. The concept of the Seasteading Institute is to establish a haven for creative people who want more freedom, including tech industry tycoons such as James R. Von Ehr II, recognized as a leader within the nanotechnology industry and is Founder and Chairman of Zyvex Technologies, Zyvex Labs, and Zycraft. James R. Von Ehr II sits on the Seasteading Institute Board of Trustees.

    The most creative people especially those who work in Information Technology (IT) are highly attracted to the prospect of freedom. This proposal advocates for the Swiss government to set aside some public land to facilitate a concept similar to that of the Seasteading Institute. If the available public land lacks utilities, liberty-minded investors would be happy to provide the necessary infrastructure to make the site habitable if an opportunity for freedom exists. Freedom is an irresistible allurement. Such a milieu would attract many of the most creative and avant-garde visionaries from all over the world. The exact degree of appeal could be correlated by the level of freedom permitted there. This plan calls for the establishment of an autonomous region, under the protectorate of Switzerland but otherwise, the residents there would be free to manage their own affairs as libertarian anarcho-capitalists. Currently, there is no place on earth where this extent of freedom is tolerated.

    Many countries have free trade zones but this concept is a step beyond that. This proposed land-based autonomous region would follow a similar precedent as the autonomy China granted to Hong Kong or the status of Svalbard in Norway. Examples of similar agreements are the Status of Forces Agreements (SOFA) that many nations have with NATO or the USA.

    The German-Finnish Internet entrepreneur Kim Dotcom is working to create a new Twitter and Facebook replacement. Most creative geniuses crave freedom above all else and currently, there is no competition. There is no safe haven for these kinds of creative entrepreneurial geniuses. If there were some place on earth where a high level of freedom was permitted it would quickly become the richest city on earth. The surrounding area would also be greatly enriched as suppliers and providers of the workforce. Also, the Intellectual Property (IP) created by these people would also benefit the host nation, Switzerland. It would be good for Switzerland to become the new hub for technology.

    Freedom is the most attractive thing on earth and is also the rarest and most sought after thing on earth. The first place to actually incorporate the core concepts of a Rothbardian libertarian anarcho-capitalist society will quickly attract investment and will appeal to the smartest and most capable entrepreneurial freedom loving people from all over the world. This proposed Freedom City will create a brain-drain in the rest of the world if it is implemented. The world’s most creative scientists, inventors, engineers, artists, software designers, imaginative entrepreneurs, as well as many of the super-rich and super-stars would flock to any place that offered such a high level of freedom. If this plan is approved the following steps would need to be implemented.

    Step One: The first and most essential step would be to get permission from the Swiss government to set up an autonomous zone somewhere in Switzerland where the residents will not be restricted by Swiss laws.

    Step Two: Prepare a press release announcing the formation of a new autonomous zone in Switzerland that is conducive to creative entrepreneurs especially those in the field of Information Technology (IT) and other innovative new high-tech industries. Then contact existing organizations that advocate for the Seasteading Institute and similar concepts. After getting all the free publicity that is readily available, finally, begin an online advertising campaign aimed at Silicon Valley software developers and other high-tech tycoons.

    Step Three: Take applications from potential residents and choose those who have the most to offer, either by capital investment or creative talent.

    A sample draft charter of the proposed region could be as follows:

    Swiss Freedom City

    The anarcho-capitalist libertarian society of Freedom City Switzerland has been established in an autonomous region under the protectorate of Switzerland. Applicants can submit their personal and/or business profiles and provide convincing verifiable details of how they would be beneficial to Freedom City. The Swiss Freedom City Selection Committee will select from among the applicants those who are most likely to contribute to the success of Freedom City. Freedom City Switzerland is seeking creative citizens to immigrate to its liberty oriented community based on the principles of libertarian anarcho-capitalism which are similar to the Libertarian Platform.

    Reading the Vision/Strategy of the Seasteading Institute and the Libertarian Platform will give you a general idea of the Freedom City concept, however, we differ by leaning more in the direction of personal freedom and freedom for entrepreneurs. Our concept is simple, the guiding principle of Freedom City is a hands-off policy. In other words, this libertarian anarcho-capitalist society would operate under the universal non-aggression principle (NAP) where you are free to live as you like. The free-market will supply services such as security, dispute resolution, and infrastructure that will eliminate the need for state force. Instead of confiscatory taxes, you will only need to pay for the competitive free-market services and vendors that you choose. The German philosopher Immanuel Kant described this style of society as “Law and Freedom without Force.”

    Respectfully submitted for your consideration and critique and I welcome a counter-proposal or compromise solution.

    Arthur Wyss

    • Antony Mueller

      Please let me know how I can participate.

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Profile photo of Antony Mueller

Antony Mueller is a German professor of economics who currently teaches in Brazil. He has recently published the book "Beyond the State and Politics. Capitalism for the New Millennium".

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