Is Anarcho-Capitalism Broken?
I just saw a video titled “Anarcho-capitalism Why it’s Broken & How to Fix it“ by the YouTube channel Storm Clouds Gathering. In it, Aaron Hawkins reiterates a number of common criticisms of anarcho-capitalism, while simultaneously claiming to have done hundreds of hours of research on the subject. He makes anti-capitalist arguments over and over and over again, all while claiming to be trying to “fix” anarcho-capitalism. He asks a bunch of questions, leaves them without answers, and asserts his failure to answer as proof of anarcho-capitalism’s undesirability or impossibility.
Storm Clouds Gathering, otherwise known as Aaron Hawkins, is a left leaning guy who never quite makes clear what it is he’s proposing, but it’s pretty clear he’s sympathetic to the “Venus Project” or Zeitgeist movement. The basic idea behind the channel is to poke holes in libertarian philosophy while maintaining itself as anti-State through a series of increasingly contradictory statements. The anti-propertarian, anti-capitalist arguments he makes are the picture perfect example of the leftist infiltration of the libertarian movement I’ve been talking about, and the large following he has built demonstrates the damage this kind of thing is doing.
Watch the video below, (Or don’t, I quote him exactly before refuting his points throughout the article) and then I’ll address specific issues with it. I apologize in advance for you losing this 16 minutes of your life, but if you care about the cause of liberty, it’s kind of important to understand what people like Aaron Hawkins of Storm Clouds Gathering are doing to undermine it.
Aaron Hawkins starts off by saying he agrees with the non-aggression principle, the core tenet of anarcho-capitalism and libertarianism in general. He asserts that this is not anarcho-capitalism, but voluntarism, and he asserts himself as a voluntarist. Like the other left wing entryists, Hawkins understands that if he openly rejects the NAP, he will not be taken seriously by anyone entertaining anarcho-capitalism. Since the goal is to move anarcho-capitalists left, he pretends to agree with its core foundation before proposing “modifications” that undermine the concept. Just like “progressives” have been doing in State politics for centuries.
Storm Clouds Gathering then goes on to say that anarcho-capitalism is more than voluntarism. He makes the assertion that anarcho-capitalism differs from voluntarism in that;
- Everything and anything can and should be privately owned with the exception of other people and ideas.
- Intellectual property should therefore be eliminated.
- The State should be eliminated and all functions currently run by the State should be privatized and run for profit by business.
- All rules and regulations concerning commerce should be eliminated.
- There should be no overarching societal rules on which types of commerce should take place, or how businesses can operate.
- Nor should there be any rules or regulations on the activities an individual can engage in.
- In fact, there’s no accounting for any unified system of rules at all.
- There would be no borders or national boundaries
None of this is really incorrect, except for the assertion that this is somehow different from, or in addition to, voluntarism. Quite the contrary, he just outlined some of the basic tenets of voluntarism. What he’s doing here is setting up an argument to redefine aggression, as to keep himself in line with the non-aggression principle, while advocating what we would commonly term as aggression. It’s an intentional and dishonest attempt at subversion. For example, if it’s not okay for everything to be privately owned, then necessarily the anti-propertarian makes claims of legitimacy when he violates the property of another. If there is some problem with the abolition of intellectual property, then the “owner” of the intellectual property necessarily asserts the right to use force against the copycat. There’s no way to portray this as voluntarism.
To the issue of for profit agencies running things, of course, anarcho-capitalism does not forbid running an institution that does not profit. Go right ahead, losing money is not illegal in an anarcho-capitalist society. We’re just pointing out that basic math dictates this business model is unsustainable sans charity (permissible but unlikely) or aggression (impermissible and happening all the time).
If Hawkins asserts that any of the things he listed are impermissible, he necessary advocates forcing someone to stop engaging in those activities.
He goes on to assert that, unlike voluntarism, anarcho-capitalism would accomplish this in the following ways;
- Society would be massively restructured
- A number of new types of institutions would be introduced to replace the State, including
- Dispute resolution organizations or DRO’s, basically private courts
- Ratings agencies for individuals and businesses to keep records of interactions
- Private security and rights enforcement agencies which would carry out the functions of law enforcement
Hawkins acknowledges that if you ask around, there will be variations on any of these ideas in anarcho-capitalist circles, but asserts that this is a “fairly representative top level summary of the philosophy”. Again, he’s not that far off, except for his assertion that this is somehow different from, or in addition to, voluntarism.
I also disagree that it’s that “massive” of a restructuring. We already have private arbitration services and private security. They are for profit business models that exist in the world already. All anarcho-capitalism really proposes is that State institutions be eliminated because they cannot stand in the marketplace sans aggression, and that in their absence, market forces would necessarily fill the demand.
Hawkins claims he has spent hundreds of hours listening to in depth presentations explaining on how all this would work. I highly doubt that’s true, since Hawkins never actually listens to anyone in the numerous interactions he’s had with anarcho-capitalists, instead just waiting for his turn to bash capitalism. If this were true, he would probably have an actual understanding of anarcho-capitalism, and if he did, he wouldn’t be opposed to it. If he claims to have listened to hundreds of hours of presentations, yet has only the most inept understanding of anarcho-capitalist philosophy and economics, then he’s not being honest.
In either case, he asserts that anarcho-capitalism has some serious problems, none of which have been answered to his satisfaction.
Anarcho-capitalism is not concerned with the satisfaction of Storm Clouds Gathering, or Aaron Hawkins, or the other irresponsible left wing ideologues of the world, not even the general public. If these ideas had been to the satisfaction of the general public, then we would already live in an anarcho-capitalist society. Most people like aggression when it suits them, and no amount of reason is going to change that. If we were concerned with convincing everyone, we would be Democrats. The whole point of liberty is that despite your dissatisfaction, despite the popularity of bad ideas, you have no right to impose your will upon me. Make no mistake about it, anarcho-capitalism seeks to take from you, with or without your consent, the power to use initiatory force. Those of us who honestly follow these ideas through to their ultimate conclusion will tell you, this means killing you if necessary, and the NAP provides for this defensive use of force.
Hawkins goes on to say the first problem that stands out is criminal justice, particularly in regards to violent crime. He asks “How would an anarcho-capitalist society deal with accused murderers or rapists, when all functions of the State, are handled by businesses, for profit? How would the free market provide justice?”
First things first, even without an answer, this is a rejection of the “free market’s” ability to handle problems. How can you simultaneously believe in non-aggression, and reject the free market? You cannot. People are either free to contract for services, or they are compelled, and there’s no two ways about it.
Nobody who has spent “hundreds of hours listening to in depth presentations” on anarcho-capitalism would be asking this question. This has literally been answered a hundred different ways. Instead of relying on any actual understanding he would have gained from said study, Hawkins takes a clip from a Stefan Molyneux video to set up as a straw man.
If Hawkins had even taken the time to understand Molyneux, much less anarcho-capitalism as a whole, he would know that the clip he’s about to deconstruct is not a fair representation of the whole of anarcho-capitalist justice. Again, Hawkins is exposed as dishonest, and everything he says should be called into question since he has no interest in telling the truth. Molyneux’s entire bit is to paint a picture of a Utopian futuristic society that is almost completely free of violence because it has been bred out of the human psyche hundreds of years from now. I’d be amiss to say there is nobody who takes this seriously, but there’s not a single anarcho-capitalist alive, who seriously intends on living in a free society, that can take it seriously. By Molyneux’s own account, we’re all going to die under the boot of the State.
So to answer your question of how anarcho-capitalism handles murderers and rapists, it’s actually pretty simple. By killing them. I know this is kind of hard to imagine living in modernity, but a free society would be home to armed people who are trained in the use of their weapons. Committing crimes in such a place is extraordinarily hazardous to one’s health, which is why there is so little crime in places like New Hampshire, despite a very small and inept government presence there, and no market force to fill its demand.
This makes a lot of people uncomfortable, so people like Stefan go and paint these quaint little rosy pictures of how there will be no violence in their perfect little world. The fact of the matter is, they are lying either to you, or to themselves when they do this. There is no escape from responsibility if we are to be free people, and that responsibility includes the responsibility for protecting oneself. In the absence of the State, people will either get their heads around this, or rightfully be erased from the gene pool, making room for those who are better equipped to survive.
But to the larger question of DRO’s and crime prevention, Hawkins makes the oldest anti-capitalist argument in the book, again exposing that he has not only failed to study anarcho-capitalism, but the most basic foundations of economics. He argues that the profit motive incentivizes bad outcomes because they pay better.
The argument Stefan makes is that preventative measures are more profitable than curative ones, and so DRO’s would be incentivized to prevent crime rather than dealing with it after it happens. While I think the scenario Stefan outlines for accomplishing this, specifically parents paying for parenting advice to prevent children from becoming violent in the first place, is kind of ridiculous, the theory of prevention being preferable to cure in a market setting is still true.
Aaron Hawkins asks of this “According to what economic law?” To this I answer, all of them.
When a person attempts to secure their home, they do not leave the doors and windows open in hopes a burglar will come and steal their property, so they can go and retrieve it later on. It makes a lot more sense to lock the doors and windows, to install cameras, to have an alarm system, and so on. They buy home owners insurance, and the insurance company gives them discounts for having these preventative measures in place, because the insurance company prefers the discount for prevention over paying out losses in the event of a burglary.
Same thing with cars. If you’ve ever purchased car insurance, you probably got asked all sorts of questions about safety and anti-theft features on your vehicle. This is not some inane survey to satisfy the curiosity of the the insurance salesman, these are discounts in coverage for prevention of injuries and losses that come in the event of theft or collision.
Health insurance pays for your regular medical check ups, and gives lower rates to non-smokers than smokers, along with other healthy choice incentives. Is this because they want you to take a day off of work and not enjoy yourself? No. It is because it is in the interests of the insurance company that you do not get sick, because paying for your cures is really expensive.
Most importantly, for nearly any business model, it’s pretty much common sense that they prefer their customers to be alive, because dead customers do not pay.
Aaron Hawkins says “There is absolutely no evidence whatsoever to back up this assertion, in fact, even a cursory examination of existing economies in various states of regulation shows that the very opposite is true”. I suppose Hawkins has never purchased any sort of insurance policy any time in his entire life, typical of an irresponsible leftist.
He goes on to make the case that “if you go to rural Mexico for example, in towns where there isn’t even a police station, in the regions where government officials don’t even enter for fear of being shot, you don’t find businesses thriving by preventing disease by encouraging people to eat more vegetables and exercising, but you will still find people selling cures” he says “The reason for this is simple, prevention involves making lifestyle changes before a problem is evident, and from an economic standpoint it’s much harder to convince people to cough up money for something that might happen, than it is to convince them to pay for something that’s already causing them discomfort.”
Again, he completely ignores the fact that insurance companies exist and make billions of dollars. Beyond that, the reason things are not going so well in Mexico is certainly simple enough, but not for the reasons Hawkins states. Firstly, in these rural regions of Mexico you probably don’t find many thriving businesses of any nature, cure, prevention, or otherwise. I don’t imagine a cancer patient in these regions is exactly jumping for joy at the abundance of cures available. If government officials are so afraid to enter these neighborhoods, it isn’t because thriving anarcho-capitalist societies have expelled them with competing defense organizations. It’s because the Mexican government has completely failed to do anything about the private sector criminal element, while simultaneously making it a felony to own a firearm. When firearms are outlawed, that means only the criminals and the government have guns, because your average citizen won’t commit a felony for fear of being imprisoned or murdered by his government. We don’t even need to leave the United States to see what happens when a population is disarmed by its government, the highest murder rates in the US are in the cities with the strictest gun control laws. Without a powerful government to take on the criminal elements that thrive in those conditions, no businesses can operate. These rural regions are not anarcho-capitalist societies, they are simply territories the elected government has ceded control of to the drug cartels.
In civilized places, where people go to doctors for checkups and have insurance, the doctor absolutely encourages the patient to exercise and eat healthy. Could the doctor make more money if the patient has a heart attack? Well, only if you go to a heart surgeon for your regular medical checkups, which I don’t think many of us do. We go to general practitioners who are in the business of keeping us coming back for checkups, by giving us good advice. There’s not a doctor alive who would tell a patient “I really think you should smoke more cigarettes, and those filters are for pussies”. But that’s exactly the kind of insane economic theory these anti-capitalist arguments rest upon.
So, in the event that you are armed and prepared to defend yourself, you have a crime prevention plan, you have cameras and security systems installed in your home, you have insurance and all these other wonderful things that the free market provides, and a crime still happens, then what? Hawkins asks “Let’s say Jimbob stabs his wife to death with a kitchen knife, now this happens in Ancapistan, so we can presume that the wife’s family might go to some private security or rights enforcement agency and drag the man to a private court, but how on Earth are you going to have any justice in a system where each court can make up its own rules and deal out justice arbitrarily, after all, there’s no unified laws in an anarcho-capitalist society”.
I would start by suggesting that the wife not marry a murdering psychopath. Again, prevention being preferable to cure. But, let’s start off by entertaining one of the less desirable possibilities. Jimbob gets away with it. He murders his wife, and there is no justice. Does Hawkins propose a system where this is impossible? No. Could such a system ever exist? No. Have governments been taking away more and more freedom and levying more and more violence upon society claiming to try and make this the case? Absolutely.
How are you going to have any justice in a society where each court can make up its own rules? I don’t know, how could you ever have communication in a society where each email and telephone provider is free to make up its own rules? You do realize that the Internet is almost completely ungoverned, and that all these interconnected systems that make it possible for you to read this article, depend upon cooperation between competing businesses, don’t you?
Asking questions and then failing to answer them yourself does not make your argument against something stand. Hawkins provides absolutely nothing outside of this. He simply says that he does not know the answer to a question, and that since he doesn’t know it, the philosophy he is attempting to poke holes in is somehow undesirable or incorrect. It’s the intellectual equivalent of a child asking his parent “But why, Mommy?!?!?” over and over again.
The Internet incentivizes providers to use cooperating protocols, without this, communications between networks would be impossible. A provider can give his customer a better service by being able to connect to the entire world, than he can by offering the customer a connection to his very limited network. If this were not true, we’d all still be using Compuserve, and Prodigy instead of the World Wide Web. Hell, we wouldn’t have even had those services, because telephone networks wouldn’t have been able to interconnect the world over as they had decades ago.
Likewise, competing security forces will have similar incentives. If you operate under a completely different set of laws than I do, it makes it nearly impossible for us to do business. For us to enter into contracts, we would necessarily have to agree upon an arbiter. If we cannot agree on an arbiter, then we are terribly unlikely to do business with each other. This isn’t to say that we can’t, but our transaction would be strictly between the two of us, and outside agencies would be unlikely to help either of us out in the event of a default. This provides an incentive to make laws relatively uniform, because people don’t tend to like limitations on who they can do business with. Additionally, the only law we’re seeking to enforce here is non-aggression, which is about as universal as it gets.
To the more specific question of the wife murderer, I can’t imagine an insurance company that would want to insure a murderer. The liabilities for the insurer would be outrageous. To protect him from competing defense agencies would cause costs to skyrocket and manpower to be lost in battle. Nor can I imagine an insurance company that would drop its clients on a simple accusation, as this would completely defeat the purpose of the insurance, and lead to nobody buying it. So it is in the best interests of both the representatives of the accused and of the accuser to actually get to the bottom of this mess. The investigative techniques, well, we see those on TV all the time. DNA, Luminol, questioning witnesses, checking financial records, pretty much everything except beating confessions out of innocent suspects, as the insurance company, unlike the State, has an actual incentive to solve the problem and avoid criminals driving up expenses in the future.
Hawkins asks “What if they can’t afford the service?”
The same thing that happens when you can’t afford any product or service. Either someone else pays, or you don’t get it. Freedom means responsibility, and that’s something that will be forever lost on leftists like Hawkins. Your choices in this world are limited to feeding yourself or starving to death, and every attempt to change that reality has lead to greater and greater tyranny, misery, and ironically enough, starvation in the world. The same thing goes for justice. Justice, like all things, always has been for sale, and always will be for sale. We do not seek to “implement a system of profit motive” we simply recognize that the profit motive exists, no matter how much people like Hawkins complain about it after their AdSense ads roll.
If irresponsible people can’t afford protection services (which would likely be very inexpensive in a free market, as softer personalities would spend hours explaining) then let them live by the law of the jungle while civilized people produce and improve the world around them. If the problem is something other than irresponsibility, say a disability, then we can expect family members to assist each other.
Poverty in the world stems mainly from two things, and contrary to popular belief, capitalism isn’t one of them. It is the State, and irresponsibility, which feed off of each other in perpetuity. The State over regulates economies, driving out competition, and prints money, driving up inflation, which puts tremendous upward pressure on prices. The worse this gets, the more irresponsible people rush into voting booths demanding assistance and illusory “fairness” laws, which drives up regulations and taxes putting greater upward pressure on prices, leading people back into voting booths to ask for more of the same, wash, rinse, repeat.
In the absence of the State, every rational economic analysis tells us that production will thrive and provide greater access to goods and services for all. If you still can’t afford goods and services in that environment, then you’re probably somebody who lives at the expense of the State today, and to you I say good riddance.
This part of the video is followed by an anti-capitalist rant which goes in all different directions and is too long for me to quote here. To make a long story short, he completely ignores the fact that anarcho-capitalists advocate for the non-aggression principle. That the free market is only concerned with supply and demand as expressed in prices, sellers want to make as much money as possible, buyers want to pay the least money possible, and morality never comes into play.
For starters, if Hawkins tosses out the fact that we’re advocating for non-aggression, and says that our non-aggressionist system is going to result in massive amounts of aggression anyway. Then he necessarily has to accept that his anti-market ideology is demonstrated to have caused the most death and destruction of any philosophy to date, and in all likelihood will do so in the future, even if he tries to paint it as voluntary.
He addresses, among other things, improper waste disposal as a business practice, blaming capitalism. This is why all things should be privately owned. If somebody wants to dump garbage in their own back yard, let them. The only time improper waste disposal becomes a problem is when we’re dealing with a tragedy of the commons, which Hawkins would have known if he had actually spent “hundreds of hours” studying anarcho-capitalism, or even the most cursory study of free market economics.
He addresses slave labor, again failing the most introductory look at the subject of economics. The fact of the matter is, chattel slavery went out of style in most of the world long before government forced the issue. Businesses realized that paying wages incentivizes workers to better performance than whips and chains. If we listen to Hawkins long enough, he’ll call this wage slavery because he’s an antipropertarian leftist, but that’s not the slavery he claims to address in the video.
Like most anti-capitalists, he figures that the only way to make a moral decision is to make an economic sacrifice, that doing the right thing always involves a loss. This is obviously not the case if one studies economics. The only way to gain in a free market is to benefit others, if you do not benefit others, then others will not pay you. It’s really very simple. Every example like the two I just listed has an answer, but he never bothered to consider them, he just attacks capitalism because that’s what he feels like doing, and that’s what his subscribers signed up for. If he thinks that he is doing a good thing by producing these videos, then how can he say that he makes a sacrifice by doing so? He’s getting paid to make these videos through AdSense revenues. Before his video starts, an ad for one of the insurance companies he pretends doesn’t exist plays, and he gets money for that.
He brings up the BP oil spill, and says that markets did not boycott BP, and BP is still in business, therefore, anti-capitalism.
I guess Hawkins needs to be reminded that BP is part of a global energy cartel enforced by government. You know, that central system of rules he thinks we need so badly. Perhaps he should also be reminded that BP dumped oil into the ocean, which again leads us back to the tragedy of the commons he failed to ever consider in any of his “hundreds of hours” of economic research.
He brings up Goldman Sachs, and says that despite their immoral business practices, people still do business with them. I suppose that Goldman Sachs’s access to the Federal Reserve’s discount window means free markets are evil, right?
He brings up Monsanto, which exists entirely because of the intellectual property laws he apparently doesn’t think we should be abolishing.
He brings up reputation management services. Making the claim that exposing a company’s immoral business practices don’t harm the company, because the company will simply hire a public relations firm to make itself look better. If his point is that people tell lies, I suppose his entire presentation and persona does a pretty good job of making that case. Outside of initiating force against the people who run the company, I’m really interested to know how he proposes to deal with this problem. In the meanwhile savvy consumers can do their research and decide if they want to do business with the company. Anarcho-capitalism never made the case that all immoral actors would go out of business, only that you could choose if you wanted to do business with them.
He goes on to give US government mercenaries in Iraq as an example of private protection agencies. Now you’re really reaching, Aaron. Yes, Blackwater and companies like it run around murdering innocent people in Iraq because the US government pays them to. Sort of like it pays its regular soldiers to. Tell me, who in the free market would pay the expense of hiring people to murder random civilians on the street? What economic benefit could this possibly bring? None. This is government activity, not that of free market agents.
He says that Mafias and criminal cartels are businesses that operate outside of the law and are therefore 100% unregulated. He says they thrive when governments are weakened, as evident from the Soviet Union collapse where organized crime “filled the power vacuum left by the failed state”. When in reality, the mafia exists (to the extent that it even does) BECAUSE of government regulation. As in the example from Mexico earlier, a government’s failure to accomplish any of its stated goals is not evidence of a free market failure, it is only evidence of the failure of government. Revenues for organized crime come entirely from activity that law abiding citizens cannot and will not engage in, like drug dealing, prostitution, and illegal gambling. The violence perpetrated by these institutions comes largely to prevent people from ratting them out to governments. In the absence of the State, drug dealing, prostitution, and gambling are perfectly legitimate trades, and these organizations are deprived of huge swaths of revenue that would normally pay for the men and munitions needed to wage violence. Without a government to imprison them, there is less motivation for said violence.
In conclusion, Hawkins makes the following assertions.
1. Anarcho-capitalism needs to account for a unified set of rules. He says “You can call it a constitution if you like, but in the end it would need to be treated as a contract” a contract that everybody would have to sign, you know, to make it voluntary of course.
This sounds an awful lot like the “social contract” of today, you just want to make sure everybody actually signs it. So in other words, to “fix” anarcho capitalism, we need to not have anarchy. Thanks for the suggestion, Aaron, but the whole point of anarchism is the recognition that people have different desires and motivations, and a centralized set of rules, however you seek to impose it on people, completely defeats the purpose, even if you try to deceptively paint it as voluntary.
2. “If your goal is to organize a free society, and you’re going to organize your society around businesses, then you cannot ignore the vertical collectivist nature of modern companies horizontal decision making processes and non-hierarchical business models need to be a part of the overall vision, otherwise you’re just going to end up with a collection of miniature dictatorships”
So the other part of how to “fix” anarcho capitalism, is to not have capitalism. Thanks again, Aaron, but no thanks. I rather like the model of many mini dictatorships, where I can choose my associations freely. My home is a mini dictatorship, and anyone who steps inside is under my authority. If I provide them with services, either I accept the terms of payment and they accept the terms of service, or we go our separate ways, in this instance we are both dictators over our own dominion, and that’s exactly how it should be.
3. “Stop trying to fit every human interaction into a business model”
Make me, statist.
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