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What is Market Anarchism?
an introduction
6/26/2003

While much has been written about issues related to market anarchism here on this website, very little has been written about what market anarchism actually is. People who browse to the site are often dropped into the middle of a discussion over mutualist banking, odd applications of moral axioms, or something equally obtuse. What they really want to know is what we're about.

Market anarchism is, in brief, private property without the state. It is the purest form of libertarian political thought (although some disagree), the central tenet of which is the Non-Aggression Principle, which L. Neil Smith has defined as such:

A libertarian is a person who believes that no one has the right, under any circumstances, to initiate force against another human being, or to advocate or delegate its initiation. Those who act consistently with this principle are libertarians, whether they realize it or not. Those who fail to act consistently with it are not libertarians, regardless of what they may claim.

A similar sentiment was echoed in the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.

Setting aside the discussion of the Creator, most market anarchists would agree strongly. Most markets anarchists are descendents of the natural law theory of Western civilization, which was best explained by John Locke in his Second Treatise on Government. In brief, he explained that men are free by right, and that free meant not only the right to exist, but also the right to govern both oneself and things in the physical world so long as they are not used to harm another. We call the right to exist the right to life. The right to govern oneself is the right to liberty. The right to govern things in the physical world is the right to property.

Natural law theory was put into action in 17th and 18th centuries in Britain and America and formed the intellectual backing for the American Revolution as well as the reforms in Britain that divided state powers and hobbled the monarch. Much of both the political thought and action at the time was devoted to putting natural law theory into practice, a practice that meant reducing the power of the state and restricting the areas it controls. It also meant putting the ultimate political power in the hands of people, giving them a choke chain to restrict the power of the state through elections.

Market anarchism is a continuation of the natural law ideal, taking it to its logical extreme. Under the classical republican ideal, the state is the protector of the rights of men. The state provides those services needed to secure rights police, courts, defense and the people in exchange pay taxes for those services. Where market anarchists dissent is that the state shuts down the market for competition in those services (violating the right to liberty) and extracts payment for the services it does provide under threat of violence (violating the right to property). Instead we argue that even the services of police, courts, and defense, even the provision of the law itself, should be voluntary, no different from choosing a phone company.

The classical republican will then bring up the phrase "consent of the governed". The gist of the argument is that there is an unwritten agreement between the state and its citizens called a social contract that sets the bounds of the state. By choosing to live in a certain area, you agree to abide by the social contract and hence the state. It's a tacit consent, little different from the unwritten rule that you don't walk into a convenience store stark naked.

But market anarchists argue that living in the area a state controls does not constitute the consent of the governed because the state's authority over a given area is dubious. In natural law theory, a man governs his own property, which can be justly acquired by producing a thing, trading something produced for another thing, or bringing an unowned resource into use. The state's governance would be just if it had acquired the property it controls by one of these just means, just as the owner of the convenience store gets to say no to stark naked customers. However, the state asserts its authority to control a wide swath of land that it has not justly acquired. Moreover, the state rarely claims ownership of the property it controls and simply assumes the authority to govern it. In an ironic twist, often the state governs the property while it recognizes someone else as the just owner!

The other set of market anarchists, those who do not come from the natural law tradition, comes from the utilitarian perspective of men like John Stuart Mill and Alex Bentham. They argue that the just society is one that maximizes the happiness of its people, similar to Aristotle's arguments in Ethics and Politics. These anarchists point out that the state necessarily shuts down competition in the provision of services, no matter how small the state is. When the state shuts down competition (or to put it another way, creates a monopoly) in the provision of a good or service, the customers are denied the ability to seek those services elsewhere. Since the foundation of improvement in services is competition among providers, shutting down the market for the provision of services in such things like courts and police denies improvement in those services.

Denying improvement in those services benefits some and harms others. Those who benefit are the providers of those services, since they continue to receive their business without needing to improve quality or lower prices to stave off competitors. Those who are harmed are the customers, those who would seek out competition to the monopolist provider. Since the customers of the service usually far outnumber the providers of the service, more people are harmed than helped by shutting down the market in a particular service. This decreases the happiness of the society as a whole because the harm has outweighed the benefit. Abolishing the state, which means abolishing the restraints on the market, increases the happiness of society by allowing customers to benefit from competition among providers.

From these two perspectives, market anarchists reject the state. Instead, we seek a society where those who govern property are the just owners of that property, and, if governments are formed among men, they are done so by literal, actual consent of each one of the governed instead of the arbitrary borders of the state. We seek that each man be allowed to live and act as he chooses so long as he does not harm anyone else, and that the way to achieve this is to abolish the state.


Joshua Holmes will be attending Case Western Reserve University School of Law in the fall. He plans to study technology and the law and eventually become an arbiter in technology issues. He also (justly) governs the IRC channel #MarketAnarchy on the PurpleWire network.

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