                  6 Is "anarcho"-capitalism against the state?

   No. Due to its basis in private property, "anarcho"-capitalism implies
   a class division of society into bosses and workers. Any such division
   will require a state to maintain it. However, it need not be the same
   state as exists now. Regarding this point, "anarcho"-capitalism plainly
   advocates "defence associations" to protect property. For the
   "anarcho"-capitalist, however, these private companies are not states.
   For anarchists, they most definitely are.

   According to Murray Rothbard ["Society Without A State", in Nomos XIX,
   Pennock and Chapman, eds., p. 192.], a state must have one or both of
   the following characteristics:

   1) The ability to tax those who live within it.
       2) It asserts and usually obtains a coerced monopoly of the
       provision of defence over a given area.

   He makes the same point in The Ethics of Liberty [p. 171].

   Instead of this, the "anarcho"-capitalist thinks that people should be
   able to select their own "defence companies" (which would provide the
   needed police) and courts from the free market in "defence" which would
   spring up after the state monopoly has been eliminated. These companies
   "all. . . would have to abide by the basic law code" ["Society Without
   A State", p. 206]. Thus a "general libertarian law code" would govern
   the actions of these companies. This "law code" would prohibit coercive
   aggression at the very least, although to do so it would have to
   specify what counted as legitimate property, how said can be owned and
   what actually constitutes aggression. Thus the law code would be quite
   extensive.

   How is this law code to be actually specified? Would these laws be
   democratically decided? Would they reflect common usage (i.e. custom)?
   "supply and demand"? "Natural law"? Given the strong dislike of
   democracy shown by "anarcho"-capitalists, we think we can safely say
   that some combination of the last two options would be used. Murray
   Rothbard, as noted in [1]section 1.4, opposed the individualist
   anarchist principle that juries would judge both the facts and the law,
   suggesting instead that "Libertarian lawyers and jurists" would
   determine a "rational and objective code of libertarian legal
   principles and procedures." The judges in his system would "not [be]
   making the law but finding it on the basis of agreed-upon principles
   derived either from custom or reason." ["Society without a State", Op.
   Cit., p. 206] David Friedman, on the other hand, argues that different
   defence firms would sell their own laws. [The Machinery of Freedom, p.
   116] It is sometimes acknowledged that non-libertarian laws may be
   demanded (and supplied) in such a market.

   Around this system of "defence companies" is a free market in
   "arbitrators" and "appeal judges" to administer justice and the "basic
   law code." Rothbard believes that such a system would see "arbitrators
   with the best reputation for efficiency and probity. . .[being] chosen
   by the various parties in the market. . .[and] will come to be given an
   increasing amount of business." [Rothbard, Op. Cit., p.199] Judges
   "will prosper on the market in proportion to their reputation for
   efficiency and impartiality." [Op. Cit., p. 204]

   Therefore, like any other company, arbitrators would strive for profits
   and wealth, with the most successful ones becoming "prosperous." Of
   course, such wealth would have no impact on the decisions of the
   judges, and if it did, the population (in theory) are free to select
   any other judge (although, of course, they would also "strive for
   profits and wealth" -- which means the choice of character may be
   somewhat limited! -- and the laws which they were using to guide their
   judgements would be enforcing capitalist rights).

   Whether or not this system would work as desired is discussed in the
   following sections. We think that it will not. Moreover, we will argue
   that "anarcho"-capitalist "defence companies" meet not only the
   criteria of statehood we outlined in section [2]B.2, but also
   Rothbard's own criteria for the state, quoted above.

   As regards the anarchist criterion, it is clear that "defence
   companies" exist to defend private property; that they are hierarchical
   (in that they are capitalist companies which defend the power of those
   who employ them); that they are professional coercive bodies; and that
   they exercise a monopoly of force over a given area (the area,
   initially, being the property of the person or company who is employing
   the "association"). If, as Ayn Rand noted (using a Weberian definition
   of the state) a government is an institution "that holds the exclusive
   power to enforce certain rules of conduct in a given geographical area"
   [Capitalism: The Unknown Ideal, p. 239] then these "defence companies"
   are the means by which the property owner (who exercises a monopoly to
   determine the rules governing their property) enforce their rules.

   For this (and other reasons), we should call the "anarcho"-capitalist
   defence firms "private states" -- that is what they are -- and
   "anarcho"-capitalism "private state" capitalism.

   Before discussing these points further, it is necessary to point out a
   relatively common fallacy of "anarcho"-capitalists. This is the idea
   that "defence" under the system they advocate means defending people,
   not territorial areas. This, for some, means that defence companies are
   not "states." However, as people and their property and possessions do
   not exist merely in thought but on the Earth, it is obvious that these
   companies will be administering "justice" over a given area of the
   planet. It is also obvious, therefore, that these "defence
   associations" will operate over a (property-owner defined) area of land
   and enforce the property-owner's laws, rules and regulations. The
   deeply anti-libertarian, indeed fascistic, aspects of this
   "arrangement" will be examined in the following sections.

6.1 What's wrong with this "free market" justice?

   It does not take much imagination to figure out whose interests
   "prosperous" arbitrators, judges and defence companies would defend:
   their own, as well as those who pay their wages -- which is to say,
   other members of the rich elite. As the law exists to defend property,
   then it (by definition) exists to defend the power of capitalists
   against their workers.

   Rothbard argues that the "judges" would "not [be] making the law but
   finding it on the basis of agreed-upon principles derived either from
   custom or reason" [Rothbard, Op. Cit., p. 206]. However, this begs the
   question: whose reason? whose customs? Do individuals in different
   classes share the same customs? The same ideas of right and wrong?
   Would rich and poor desire the same from a "basic law code"? Obviously
   not. The rich would only support a code which defended their power over
   the poor.

   Although only "finding" the law, the arbitrators and judges still exert
   an influence in the "justice" process, an influence not impartial or
   neutral. As the arbitrators themselves would be part of a profession,
   with specific companies developing within the market, it does not take
   a genius to realise that when "interpreting" the "basic law code," such
   companies would hardly act against their own interests as companies. In
   addition, if the "justice" system was based on "one dollar, one vote,"
   the "law" would best defend those with the most "votes" (the question
   of market forces will be discussed in section [3]6.3). Moreover, even
   if "market forces" would ensure that "impartial" judges were dominant,
   all judges would be enforcing a very partial law code (namely one that
   defended capitalist property rights). Impartiality when enforcing
   partial laws hardly makes judgements less unfair.

   Thus, due to these three pressures -- the interests of
   arbitrators/judges, the influence of money and the nature of the law --
   the terms of "free agreements" under such a law system would be tilted
   in favour of lenders over debtors, landlords over tenants, employers
   over employees, and in general, the rich over the poor, just as we have
   today. This is what one would expect in a system based on
   "unrestricted" property rights and a (capitalist) free market. A
   similar tendency towards the standardisation of output in an industry
   in response to influences of wealth can be seen from the current media
   system (see section D.3 -- [4]How does wealth influence the mass
   media?)

   Some "anarcho"-capitalists, however, claim that just as cheaper cars
   were developed to meet demand, so cheaper defence associations and
   "people's arbitrators" would develop on the market for the working
   class. In this way impartiality will be ensured. This argument
   overlooks a few key points:

   Firstly, the general "libertarian" law code would be applicable to all
   associations, so they would have to operate within a system determined
   by the power of money and of capital. The law code would reflect,
   therefore, property not labour and so "socialistic" law codes would be
   classed as "outlaw" ones. The options then facing working people is to
   select a firm which best enforced the capitalist law in their favour.
   And as noted above, the impartial enforcement of a biased law code will
   hardly ensure freedom or justice for all.

   Secondly, in a race between a Jaguar and a Volkswagen Beetle, who is
   more likely to win? The rich would have "the best justice money can
   buy," as they do now. Members of the capitalist class would be able to
   select the firms with the best lawyers, best private cops and most
   resources. Those without the financial clout to purchase quality
   "justice" would simply be out of luck - such is the "magic" of the
   marketplace.

   Thirdly, because of the tendency toward concentration, centralisation,
   and oligopoly under capitalism (due to increasing capital costs for new
   firms entering the market, as discussed in section [5]C.4), a few
   companies would soon dominate the market -- with obvious implications
   for "justice."

   Different firms will have different resources. In other words, in a
   conflict between a small firm and a larger one, the smaller one is at a
   disadvantage in terms of resources. They may not be in a position to
   fight the larger company if it rejects arbitration and so may give in
   simply because, as the "anarcho"-capitalists so rightly point out,
   conflict and violence will push up a company's costs and so they would
   have to be avoided by smaller companies. It is ironic that the
   "anarcho"-capitalist implicitly assumes that every "defence company" is
   approximately of the same size, with the same resources behind it. In
   real life, this would clearly not the case.

   Fourthly, it is very likely that many companies would make subscription
   to a specific "defence" firm or court a requirement of employment. Just
   as today many (most?) workers have to sign no-union contracts (and face
   being fired if they change their minds), it does not take much
   imagination to see that the same could apply to "defence" firms and
   courts. This was/is the case in company towns (indeed, you can consider
   unions as a form of "defence" firm and these companies refused to
   recognise them). As the labour market is almost always a buyer's
   market, it is not enough to argue that workers can find a new job
   without this condition. They may not and so have to put up with this
   situation. And if (as seems likely) the laws and rules of the
   property-owner will take precedence in any conflict, then workers and
   tenants will be at a disadvantage no matter how "impartial" the judges.

   Ironically, some "anarcho"-capitalists point to current day
   company/union negotiations as an example of how different defence firms
   would work out their differences peacefully. Sadly for this argument,
   union rights under "actually existing capitalism" were created and
   enforced by the state in direct opposition to capitalist "freedom of
   contract." Before the law was changed, unions were often crushed by
   force -- the companies were better armed, had more resources and had
   the law on their side. Today, with the "downsizing" of companies we can
   see what happens to "peaceful negotiation" and "co-operation" between
   unions and companies when it is no longer required (i.e. when the
   resources of both sides are unequal). The market power of companies far
   exceeds those of the unions and the law, by definition, favours the
   companies. As an example of how competing "protection agencies" will
   work in an "anarcho"-capitalist society, it is far more insightful than
   originally intended!

   Now let us consider the "basic law code" itself. How the laws in the
   "general libertarian law code" would actually be selected is anyone's
   guess, although many "anarcho"-capitalists support the myth of "natural
   law," and this would suggest an unchangeable law code selected by those
   considered as "the voice of nature" (see [6]section 11. for a
   discussion of its authoritarian implications). David Friedman argues
   that as well as a market in defence companies, there will also be a
   market in laws and rights. However, there will be extensive market
   pressure to unify these differing law codes into one standard one
   (imagine what would happen if ever CD manufacturer created a unique CD
   player, or every computer manufacturer different sized floppy-disk
   drivers -- little wonder, then, that over time companies standardise
   their products). Friedman himself acknowledges that this process is
   likely (and uses the example of standard paper sizes to indicate such a
   process).

   In any event, the laws would not be decided on the basis of "one
   person, one vote"; hence, as market forces worked their magic, the
   "general" law code would reflect vested interests and so be very hard
   to change. As rights and laws would be a commodity like everything else
   in capitalism, they would soon reflect the interests of the rich --
   particularly if those interpreting the law are wealthy professionals
   and companies with vested interests of their own. Little wonder that
   the individualist anarchists proposed "trial by jury" as the only basis
   for real justice in a free society. For, unlike professional
   "arbitrators," juries are ad hoc, made up of ordinary people and do not
   reflect power, authority, or the influence of wealth. And by being able
   to judge the law as well as a conflict, they can ensure a populist
   revision of laws as society progresses.

   Thus a system of "defence" on the market will continue to reflect the
   influence and power of property owners and wealth and not be subject to
   popular control beyond choosing between companies to enforce the
   capitalist laws.

6.2 What are the social consequences of such a system?

   The "anarcho" capitalist imagines that there will be police agencies,
   "defence associations," courts, and appeals courts all organised on a
   free-market basis and available for hire. As David Weick points out,
   however, the major problem with such a system would not be the
   corruption of "private" courts and police forces (although, as
   suggested above, this could indeed be a problem):

     "There is something more serious than the 'Mafia danger', and this
     other problem concerns the role of such 'defence' institutions in a
     given social and economic context.

     "[The] context. . . is one of a free-market economy with no
     restraints upon accumulation of property. Now, we had an American
     experience, roughly from the end of the Civil War to the 1930's, in
     what were in effect private courts, private police, indeed private
     governments. We had the experience of the (private) Pinkerton police
     which, by its spies, by its agents provocateurs, and by methods that
     included violence and kidnapping, was one of the most powerful tools
     of large corporations and an instrument of oppression of working
     people. We had the experience as well of the police forces
     established to the same end, within corporations, by numerous
     companies. . . . (The automobile companies drew upon additional
     covert instruments of a private nature, usually termed vigilante,
     such as the Black Legion). These were, in effect, private armies,
     and were sometimes described as such. The territories owned by coal
     companies, which frequently included entire towns and their
     environs, the stores the miners were obliged by economic coercion to
     patronise, the houses they lived in, were commonly policed by the
     private police of the United States Steel Corporation or whatever
     company owned the properties. The chief practical function of these
     police was, of course, to prevent labour organisation and preserve a
     certain balance of 'bargaining.'

     "These complexes were a law unto themselves, powerful enough to
     ignore, when they did not purchase, the governments of various
     jurisdictions of the American federal system. This industrial system
     was, at the time, often characterised as feudalism. . . ."
     ["Anarchist Justice", Op. Cit., pp. 223-224]

   For a description of the weaponry and activities of these private
   armies, the economic historian Maurice Dobbs presents an excellent
   summary in Studies in Capitalist Development [pp. 353-357]. According
   to a report on "Private Police Systems" cited by Dobbs, in a town
   dominated by Republican Steel, the "civil liberties and the rights of
   labour were suppressed by company police. Union organisers were driven
   out of town." Company towns had their own (company-run) money, stores,
   houses and jails and many corporations had machine-guns and tear-gas
   along with the usual shot-guns, rifles and revolvers. The "usurpation
   of police powers by privately paid 'guards and 'deputies', often hired
   from detective agencies, many with criminal records" was "a general
   practice in many parts of the country."

   The local (state-run) law enforcement agencies turned a blind-eye to
   what was going on (after all, the workers had broken their contracts
   and so were "criminal aggressors" against the companies) even when
   union members and strikers were beaten and killed. The workers own
   defence organisations were the only ones willing to help them, and if
   the workers seemed to be winning then troops were called in to "restore
   the peace" (as happened in the Ludlow strike, when strikers originally
   cheered the troops as they thought they would defend their civil
   rights; needless to say, they were wrong).

   Here we have a society which is claimed by many "anarcho"-capitalists
   as one of the closest examples to their "ideal," with limited state
   intervention, free reign for property owners, etc. What happened? The
   rich reduced the working class to a serf-like existence, capitalist
   production undermined independent producers (much to the annoyance of
   individualist anarchists at the time), and the result was the emergence
   of the corporate America that "anarcho"-capitalists say they oppose.

   Are we to expect that "anarcho"-capitalism will be different? That,
   unlike before, "defence" firms will intervene on behalf of strikers?
   Given that the "general libertarian law code" will be enforcing
   capitalist property rights, workers will be in exactly the same
   situation as they were then. Support of strikers violating property
   rights would be a violation of the "general libertarian law code" and
   be costly for profit making firms to do (if not dangerous as they could
   be "outlawed" by the rest). Thus "anarcho"-capitalism will extend
   extensive rights and powers to bosses, but few if any rights to
   rebellious workers. And this difference in power is enshrined within
   the fundamental institutions of the system.

   In evaluating "anarcho"-capitalism's claim to be a form of anarchism,
   Peter Marshall notes that "private protection agencies would merely
   serve the interests of their paymasters." [Demanding the Impossible, p.
   653] With the increase of private "defence associations" under "really
   existing capitalism" today (associations that many
   "anarcho"-capitalists point to as examples of their ideas), we see a
   vindication of Marshall's claim. There have been many documented
   experiences of protesters being badly beaten by private security
   guards. As far as market theory goes, the companies are only supplying
   what the buyer is demanding. The rights of others are not a factor (yet
   more "externalities," obviously). Even if the victims successfully sue
   the company, the message is clear -- social activism can seriously
   damage your health. With a reversion to "a general libertarian law
   code" enforced by private companies, this form of "defence" of
   "absolute" property rights can only increase, perhaps to the levels
   previously attained in the heyday of US capitalism, as described above
   by Weick.

6.3 But surely market forces will stop abuses by the rich?

   Unlikely. The rise of corporations within America indicates exactly how
   a "general libertarian law code" would reflect the interests of the
   rich and powerful. The laws recognising corporations as "legal persons"
   were not primarily a product of "the state" but of private lawyers
   hired by the rich -- a result with which Rothbard would have no
   problem. As Howard Zinn notes:

     "the American Bar Association, organised by lawyers accustomed to
     serving the wealthy, began a national campaign of education to
     reverse the [Supreme] Court decision [that companies could not be
     considered as a person]. . . . By 1886. . . the Supreme Court had
     accepted the argument that corporations were 'persons' and their
     money was property protected by the process clause of the Fourteenth
     Amendment. . . . The justices of the Supreme Court were not simply
     interpreters of the Constitution. They were men of certain
     backgrounds, of certain [class] interests." [A People's History of
     the United States, p. 255]

   Of course it will be argued that the Supreme Court is a monopoly and so
   our analysis is flawed. In "anarcho"-capitalism there is no monopoly.
   But the corporate laws came about because there was a demand for them.
   That demand would still have existed in "anarcho"-capitalism. Now,
   while there may be no Supreme Court, Rothbard does maintain that "the
   basic Law Code . . .would have to be agreed upon by all the judicial
   agencies" but he maintains that this "would imply no unified legal
   system"! Even though "[a]ny agencies that transgressed the basic
   libertarian law code would be open outlaws" and soon crushed this is
   not, apparently, a monopoly. [The Ethics of Liberty, p. 234] So, you
   either agree to the law code or you go out of business. And that is not
   a monopoly! Therefore, we think, our comments on the Supreme Court
   decision are valid.

   If all the available defence firms enforce the same laws, then it can
   hardly be called "competitive"! And if this is the case (and it is)
   "when private wealth is uncontrolled, then a police-judicial complex
   enjoying a clientele of wealthy corporations whose motto is
   self-interest is hardly an innocuous social force controllable by the
   possibility of forming or affiliating with competing 'companies.'"
   [Weick, Op. Cit., p. 225]

   This is particularly true if these companies are themselves Big
   Business and so have a large impact on the laws they are enforcing. If
   the law code recognises and protects capitalist power, property and
   wealth as fundamental any attempt to change this is "initiation of
   force" and so the power of the rich is written into the system from the
   start!

   (And, we must add, if there is a general libertarian law code to which
   all must subscribe, where does that put customer demand? If people
   demand a non-libertarian law code, will defence firms refuse to supply
   it? If so, will not new firms, looking for profit, spring up that will
   supply what is being demanded? And will that not put them in direct
   conflict with the existing, pro-general law code ones? And will a
   market in law codes not just reflect economic power and wealth? David
   Friedman, who is for a market in law codes, argues that "[i]f almost
   everyone believes strongly that heroin addiction is so horrible that it
   should not be permitted anywhere under any circumstances
   anarcho-capitalist institutions will produce laws against heroin. Laws
   are being produced on the market, and that is what the market wants."
   And he adds that "market demands are in dollars, not votes. The
   legality of heroin will be determined, not by how many are for or
   against but how high a cost each side is willing to bear in order to
   get its way." [The Machinery of Freedom, p. 127] And, as the market is
   less than equal in terms of income and wealth, such a position will
   mean that the capitalist class will have a higher effective demand than
   the working class, and more resources to pay for any conflicts that
   arise. Thus any law codes that develop will tend to reflect the
   interests of the wealthy.)

   Which brings us nicely on to the next problem regarding market forces.

   As well as the obvious influence of economic interests and differences
   in wealth, another problem faces the "free market" justice of
   "anarcho"-capitalism. This is the "general libertarian law code"
   itself. Even if we assume that the system actually works like it should
   in theory, the simple fact remains that these "defence companies" are
   enforcing laws which explicitly defend capitalist property (and so
   social relations). Capitalists own the means of production upon which
   they hire wage-labourers to work and this is an inequality established
   prior to any specific transaction in the labour market. This inequality
   reflects itself in terms of differences in power within (and outside)
   the company and in the "law code" of "anarcho"-capitalism which
   protects that power against the dispossessed.

   In other words, the law code within which the defence companies work
   assumes that capitalist property is legitimate and that force can
   legitimately be used to defend it. This means that, in effect,
   "anarcho"-capitalism is based on a monopoly of law, a monopoly which
   explicitly exists to defend the power and capital of the wealthy. The
   major difference is that the agencies used to protect that wealth will
   be in a weaker position to act independently of their pay-masters.
   Unlike the state, the "defence" firm is not remotely accountable to the
   general population and cannot be used to equalise even slightly the
   power relationships between worker and capitalist.

   And, needless to say, it is very likely that the private police forces
   will give preferential treatment to their wealthier customers (what
   business does not?) and that the law code will reflect the interests of
   the wealthier sectors of society (particularly if "prosperous" judges
   administer that code) in reality, even if not in theory. Since, in
   capitalist practice, "the customer is always right," the best-paying
   customers will get their way in "anarcho"-capitalist society.

   For example, in chapter 29 of The Machinery of Freedom, David Friedman
   presents an example of how a clash of different law codes could be
   resolved by a bargaining process (the law in question is the death
   penalty). This process would involve one defence firm giving a sum of
   money to the other for them accepting the appropriate (anti/pro capital
   punishment) court. Friedman claims that "[a]s in any good trade,
   everyone gains" but this is obviously not true. Assuming the
   anti-capital punishment defence firm pays the pro one to accept an
   anti-capital punishment court, then, yes, both defence firms have made
   money and so are happy, so are the anti-capital punishment consumers
   but the pro-death penalty customers have only (perhaps) received a cut
   in their bills. Their desire to see criminals hanged (for whatever
   reason) has been ignored (if they were not in favour of the death
   penalty, they would not have subscribed to that company). Friedman
   claims that the deal, by allowing the anti-death penalty firm to cut
   its costs, will ensure that it "keep its customers and even get more"
   but this is just an assumption. It is just as likely to loose customers
   to a defence firm that refuses to compromise (and has the resources to
   back it up). Friedman's assumption that lower costs will automatically
   win over people's passions is unfounded. As is the assumption that both
   firms have equal resources and bargaining power. If the pro-capital
   punishment firm demands more than the anti can provide and has larger
   weaponry and troops, then the anti defence firm may have to agree to
   let the pro one have its way.

   So, all in all, it is not clear that "everyone gains" -- there may be a
   sizeable percentage of those involved who do not "gain" as their desire
   for capital punishment is traded away by those who claimed they would
   enforce it.

   In other words, a system of competing law codes and privatised rights
   does not ensure that all consumers interests are meet. Given unequal
   resources within society, it is also clear that the "effective demand"
   of the parties involved to see their law codes enforced is drastically
   different. The wealthy head of a transnational corporation will have
   far more resources available to him to pay for his laws to be enforced
   than one of his employees on the assembly line. Moreover, as we argue
   in sections [7]3.1 and [8]10.2, the labour market is usually skewed in
   favour of capitalists. This means that workers have to compromise to
   get work and such compromises may involve agreeing to join a specific
   "defence" firm or not join one at all (just as workers are often forced
   to sign non-union contracts today in order to get work). In other
   words, a privatised law system is very likely to skew the enforcement
   of laws in line with the skewing of income and wealth in society. At
   the very least, unlike every other market, the customer is not
   guaranteed to get exactly what they demand simply because the product
   they "consume" is dependent on other within the same market to ensure
   its supply. The unique workings of the law/defence market are such as
   to deny customer choice (we will discuss other aspects of this unique
   market shortly).

   Weick sums up by saying "any judicial system is going to exist in the
   context of economic institutions. If there are gross inequalities of
   power in the economic and social domains, one has to imagine society as
   strangely compartmentalised in order to believe that those inequalities
   will fail to reflect themselves in the judicial and legal domain, and
   that the economically powerful will be unable to manipulate the legal
   and judicial system to their advantage. To abstract from such
   influences of context, and then consider the merits of an abstract
   judicial system. . . is to follow a method that is not likely to take
   us far. This, by the way, is a criticism that applies. . .to any theory
   that relies on a rule of law to override the tendencies inherent in a
   given social and economic system" [Weick, Op. Cit., p. 225] (For a
   discussion of this problem as it would surface in attempts to protect
   the environment under "anarcho"-capitalism, see sections [9]E.2 and
   [10]E.3).

   There is another reason why "market forces" will not stop abuse by the
   rich, or indeed stop the system from turning from private to public
   statism. This is due to the nature of the "defence" market (for a
   similar analysis of the "defence" market see Tyler Cowen's "Law as a
   Public Good: The Economics of Anarchy" in Economics and Philosophy, no.
   8 (1992), pp. 249-267 and "Rejoinder to David Friedman on the Economics
   of Anarchy" in Economics and Philosophy, no. 10 (1994), pp. 329-332).
   In "anarcho"-capitalist theory it is assumed that the competing
   "defence companies" have a vested interest in peacefully settling
   differences between themselves by means of arbitration. In order to be
   competitive on the market, companies will have to co-operate via
   contractual relations otherwise the higher price associated with
   conflict will make the company uncompetitive and it will go under.
   Those companies that ignore decisions made in arbitration would be
   outlawed by others, ostracised and their rulings ignored. By this
   process, it is argued, a system of competing "defence" companies will
   be stable and not turn into a civil war between agencies with each
   enforcing the interests of their clients against others by force.

   However, there is a catch. Unlike every other market, the businesses in
   competition in the "defence" industry must co-operate with its fellows
   in order to provide its services for its customers. They need to be
   able to agree to courts and judges, agree to abide by decisions and law
   codes and so forth. In economics there are other, more accurate, terms
   to describe co-operative activity between companies: collusion and
   cartels. Collusion and cartels is where companies in a specific market
   agree to work together to restrict competition and reap the benefits of
   monopoly power by working to achieve the same ends in partnership with
   each other. In other words this means that collusion is built into the
   system, with the necessary contractual relations between agencies in
   the "protection" market requiring that firms co-operate and, by so
   doing, to behave (effectively) as one large firm (and so, effectively,
   resemble the state even more than they already do). Quoting Adam Smith
   seems appropriate here: "People of the same trade seldom meet together,
   even for merriment and diversion, but the conversation ends in a
   conspiracy against the public, or in some contrivance to raise prices."
   [The Wealth of Nations, p. 117]

   For example, when buying food it does not matter whether the
   supermarkets I visit have good relations with each other. The goods I
   buy are independent of the relationships that exist between competing
   companies. However, in the case of private states, this is not the
   case. If a specific "defence" company has bad relationships with other
   companies in the market then it is against my self-interest to
   subscribe to it. Why join a private state if its judgements are ignored
   by the others and it has to resort to violence to be heard? This, as
   well as being potentially dangerous, will also push up the prices I
   have to pay. Arbitration is one of the most important services a
   defence firm can offer its customers and its market share is based upon
   being able to settle interagency disputes without risk of war or
   uncertainty that the final outcome will not be accepted by all parties.

   Therefore, the market set-up within the "anarcho"-capitalist "defence"
   market is such that private states have to co-operate with the others
   (or go out of business fast) and this means collusion can take place.
   In other words, a system of private states will have to agree to work
   together in order to provide the service of "law enforcement" to their
   customers and the result of such co-operation is to create a cartel.
   However, unlike cartels in other industries, the "defence" cartel will
   be a stable body simply because its members have to work with their
   competitors in order to survive.

   Let us look at what would happen after such a cartel is formed in a
   specific area and a new "defence company" desired to enter the market.
   This new company will have to work with the members of the cartel in
   order to provide its services to its customers (note that
   "anarcho"-capitalists already assume that they "will have to" subscribe
   to the same law code). If the new defence firm tries to under-cut the
   cartel's monopoly prices, the other companies would refuse to work with
   it. Having to face constant conflict or the possibility of conflict,
   seeing its decisions being ignored by other agencies and being
   uncertain what the results of a dispute would be, few would patronise
   the new "defence company." The new company's prices would go up and so
   face either folding or joining the cartel. Unlike every other market,
   if a "defence company" does not have friendly, co-operative relations
   with other firms in the same industry then it will go out of business.

   This means that the firms that are co-operating have but to agree not
   to deal with new firms which are attempting to undermine the cartel in
   order for them to fail. A "cartel busting" firm goes out of business in
   the same way an outlaw one does - the higher costs associated with
   having to solve all its conflicts by force, not arbitration, increases
   its production costs much higher than the competitors and the firm
   faces insurmountable difficulties selling its products at a profit
   (ignoring any drop of demand due to fears of conflict by actual and
   potential customers). Even if we assume that many people will happily
   join the new firm in spite of the dangers to protect themselves against
   the cartel and its taxation (i.e. monopoly profits), enough will remain
   members of the cartel (perhaps they will be fired if they change,
   perhaps they dislike change and think the extra money is worth peace,
   perhaps they fear that by joining the new company their peace will be
   disrupted or the outcomes of their problems with others too unsure to
   be worth it, perhaps they are shareholders and want to maintain their
   income) so that co-operation will still be needed and conflict
   unprofitable and dangerous (and as the cartel will have more resources
   than the new firm, it could usually hold out longer than the new firm
   could). In effect, breaking the cartel may take the form of an armed
   revolution -- as it would with any state.

   The forces that break up cartels and monopolies in other industries
   (such as free entry -- although, of course the "defence" market will be
   subject to oligopolistic tendencies as any other and this will create
   barriers to entry, see section [11]C.4) do not work here and so new
   firms have to co-operate or loose market share and/or profits. This
   means that "defence companies" will reap monopoly profits and, more
   importantly, have a monopoly of force over a given area.

   Hence a monopoly of private states will develop in addition to the
   existing monopoly of law and this is a de facto monopoly of force over
   a given area (i.e. some kind of public state run by share holders). New
   companies attempting to enter the "defence" industry will have to work
   with the existing cartel in order to provide the services it offers to
   its customers. The cartel is in a dominant position and new entries
   into the market either become part of it or fail. This is exactly the
   position with the state, with "private agencies" free to operate as
   long as they work to the state's guidelines. As with the monopolist
   "general libertarian law code", if you do not toe the line, you go out
   of business fast.

   It is also likely that a multitude of cartels would develop, with a
   given cartel operating in a given locality. This is because law
   enforcement would be localised in given areas as most crime occurs
   where the criminal lives. Few criminals would live in New York and
   commit crimes in Portland. However, as defence companies have to
   co-operate to provide their services, so would the cartels. Few people
   live all their lives in one area and so firms from different cartels
   would come into contact, so forming a cartel of cartels.

   A cartel of cartels may (perhaps) be less powerful than a local cartel,
   but it would still be required and for exactly the same reasons a local
   one is. Therefore "anarcho"-capitalism would, like "actually existing
   capitalism," be marked by a series of public states covering given
   areas, co-ordinated by larger states at higher levels. Such a set up
   would parallel the United States in many ways except it would be run
   directly by wealthy shareholders without the sham of "democratic"
   elections. Moreover, as in the USA and other states there will still be
   a monopoly of rules and laws (the "general libertarian law code").

   Some "anarcho"-capitalists claim that this will not occur, but that the
   co-operation needed to provide the service of law enforcement will
   somehow not turn into collusion between companies. However, they are
   quick to argue that renegade "agencies" (for example, the so-called
   "Mafia problem" or those who reject judgements) will go out of business
   because of the higher costs associated with conflict and not
   arbitration. However, these higher costs are ensured because the firms
   in question do not co-operate with others. If other agencies boycott a
   firm but co-operate with all the others, then the boycotted firm will
   be at the same disadvantage -- regardless of whether it is a cartel
   buster or a renegade.

   The "anarcho"-capitalist is trying to have it both ways. If the
   punishment of non-conforming firms cannot occur, then
   "anarcho"-capitalism will turn into a war of all against all or, at the
   very least, the service of social peace and law enforcement cannot be
   provided. If firms cannot deter others from disrupting the social peace
   (one service the firm provides) then "anarcho"-capitalism is not stable
   and will not remain orderly as agencies develop which favour the
   interests of their own customers and enforce their own law codes at the
   expense of others. If collusion cannot occur (or is too costly) then
   neither can the punishment of non-conforming firms and
   "anarcho"-capitalism will prove to be unstable.

   So, to sum up, the "defence" market of private states has powerful
   forces within it to turn it into a monopoly of force over a given area.
   From a privately chosen monopoly of force over a specific (privately
   owned) area, the market of private states will turn into a monopoly of
   force over a general area. This is due to the need for peaceful
   relations between companies, relations which are required for a firm to
   secure market share. The unique market forces that exist within this
   market ensure collusion and monopoly.

   In other words, the system of private states will become a cartel and
   so a public state - unaccountable to all but its shareholders, a state
   of the wealthy, by the wealthy, for the wealthy. In other words,
   fascism.

6.4 Why are these "defence associations" states?

   It is clear that "anarcho"-capitalist defence associations meet the
   criteria of statehood outlined in section B.2 ([12]"Why are anarchists
   against the state"). They defend property and preserve authority
   relationships, they practice coercion, and are hierarchical
   institutions which govern those under them on behalf of a "ruling
   elite," i.e. those who employ both the governing forces and those they
   govern. Thus, from an anarchist perspective, these "defence
   associations" as most definitely states.

   What is interesting, however, is that by their own definitions a very
   good case can be made that these "defence associations" as states in
   the "anarcho"-capitalist sense too. Capitalist apologists usually
   define a "government" (or state) as those who have a monopoly of force
   and coercion within a given area. Relative to the rest of the society,
   these defence associations would have a monopoly of force and coercion
   of a given piece of property; thus, by the "anarcho"-capitalists' own
   definition of statehood, these associations would qualify!

   If we look at Rothbard's definition of statehood, which requires (a)
   the power to tax and/or (b) a "coerced monopoly of the provision of
   defence over a given area", "anarcho"-capitalism runs into trouble.

   In the first place, the costs of hiring defence associations will be
   deducted from the wealth created by those who use, but do not own, the
   property of capitalists and landlords. Let not forget that a capitalist
   will only employ a worker or rent out land and housing if they make a
   profit from so doing. Without the labour of the worker, there would be
   nothing to sell and no wages to pay for rent. Thus a company's or
   landlord's "defence" firm will be paid from the revenue gathered from
   the capitalists power to extract a tribute from those who use, but do
   not own, a property. In other words, workers would pay for the agencies
   that enforce their employers' authority over them via the wage system
   and rent -- taxation in a more insidious form.

   In the second, under capitalism most people spend a large part of their
   day on other people's property -- that is, they work for capitalists
   and/or live in rented accommodation. Hence if property owners select a
   "defence association" to protect their factories, farms, rental
   housing, etc., their employees and tenants will view it as a "coerced
   monopoly of the provision of defence over a given area." For certainly
   the employees and tenants will not be able to hire their own defence
   companies to expropriate the capitalists and landlords. So, from the
   standpoint of the employees and tenants, the owners do have a monopoly
   of "defence" over the areas in question. Of course, the
   "anarcho"-capitalist will argue that the tenants and workers "consent"
   to all the rules and conditions of a contract when they sign it and so
   the property owner's monopoly is not "coerced." However, the "consent"
   argument is so weak in conditions of inequality as to be useless (see
   sections [13]2.4 and [14]3.1, for example) and, moreover, it can and
   has been used to justify the state. In other words, "consent" in and of
   itself does not ensure that a given regime is not statist (see section
   [15]2.3 for more on this). So an argument along these lines is deeply
   flawed and can be used to justify regimes which are little better than
   "industrial feudalism" (such as, as indicated in [16]section B.4,
   company towns, for example -- an institution which right-libertarianism
   has no problem with). Even the "general libertarian law code," could be
   considered a "monopoly of government over a particular area,"
   particularly if ordinary people have no real means of affecting the law
   code, either because it is market-driven and so is money-determined, or
   because it will be "natural" law and so unchangeable by mere mortals.

   In other words, if the state "arrogates to itself a monopoly of force,
   of ultimate decision-making power, over a given area territorial area"
   [Rothbard, The Ethics of Liberty, p. 170] then its pretty clear that
   the property owner shares this power. The owner is, after all, the
   "ultimate decision-making power" in their workplace or on their land.
   If the boss takes a dislike to you (for example, you do not follow
   their orders) then you get fired. If you cannot get a job or rent the
   land without agreeing to certain conditions (such as not joining a
   union or subscribing to the "defence firm" approved by your employer)
   then you either sign the contract or look for something else. Of course
   Rothbard fails to note that bosses have this monopoly of power and is
   instead referring to "prohibiting the voluntary purchase and sale of
   defence and judicial services." [Op. Cit., p. 171] But just as surely
   as the law of contract allows the banning of unions from a property, it
   can just as surely ban the sale and purchase of defence and judicial
   services (it could be argued that market forces will stop this
   happening, but this is unlikely as bosses usually have the advantage on
   the labour market and workers have to compromise to get a job -- see
   section [17]10.2 on why this is the case). After all, in the company
   towns, only company money was legal tender and company police the only
   law enforcers.

   Therefore, it is obvious that the "anarcho"-capitalist system meets the
   Weberian criteria of a monopoly to enforce certain rules in a given
   area of land. The "general libertarian law code" is a monopoly and
   property owners determine the rules that apply to their property.
   Moreover, if the rules that property owners enforce are subject to
   rules contained in the monopolistic "general libertarian law code" (for
   example, that they cannot ban the sale and purchase of certain products
   -- such as defence -- on their own territory) then "anarcho"-capitalism
   definitely meets the Weberian definition of the state (as described by
   Ayn Rand as an institution "that holds the exclusive power to enforce
   certain rules of conduct in a given geographical area" [Capitalism: The
   Unknown Ideal, p. 239]) as its "law code" overrides the desires of
   property owners to do what they like on their own property.

   Therefore, no matter how you look at it, "anarcho"-capitalism and its
   "defence" market promotes a "monopoly of ultimate decision making
   power" over a "given territorial area". It is obvious that for
   anarchists, the "anarcho"-capitalist system is a state system. As, as
   we note, a reasonable case can be made for it also being a state in
   "anarcho"-capitalist theory as well.

   So, in effect, "anarcho"-capitalism has a different sort of state, one
   in which bosses hire and fire the policeman. As Peter Sabatini notes
   [in Libertarianism: Bogus Anarchy], "[w]ithin Libertarianism, Rothbard
   represents a minority perspective that actually argues for the total
   elimination of the state. However Rothbard's claim as an anarchist is
   quickly voided when it is shown that he only wants an end to the public
   state. In its place he allows countless private states, with each
   person supplying their own police force, army, and law, or else
   purchasing these services from capitalist vendors. . . Rothbard sees
   nothing at all wrong with the amassing of wealth, therefore those with
   more capital will inevitably have greater coercive force at their
   disposal, just as they do now."

   Far from wanting to abolish the state, then, "anarcho"-capitalists only
   desire to privatise it - to make it solely accountable to capitalist
   wealth. Their "companies" perform the same services as the state, for
   the same people, in the same manner. However, there is one slight
   difference. Property owners would be able to select between competing
   companies for their "services." Because such "companies" are employed
   by the boss, they would be used to reinforce the totalitarian nature of
   capitalist firms by ensuring that the police and the law they enforce
   are not even slightly accountable to ordinary people.

   Looking beyond the "defence association" to the defence market itself
   (as we argued in the [18]last section), this will become a cartel and
   so become some kind of public state. The very nature of the private
   state, its need to co-operate with others in the same industry, push it
   towards a monopoly network of firms and so a monopoly of force over a
   given area. Given the assumptions used to defend "anarcho"-capitalism,
   its system of private statism will develop into public statism - a
   state run by managers accountable only to the share-holding elite.

   To quote Peter Marshall again, the "anarcho"-capitalists "claim that
   all would benefit from a free exchange on the market, it is by no means
   certain; any unfettered market system would most likely sponsor a
   reversion to an unequal society with defence associations perpetuating
   exploitation and privilege." [Demanding the Impossible, p. 565]
   History, and current practice, prove this point.

   In short, "anarcho"-capitalists are not anarchists at all, they are
   just capitalists who desire to see private states develop -- states
   which are strictly accountable to their paymasters without even the
   sham of democracy we have today. Hence a far better name for
   "anarcho"-capitalism would be "private-state" capitalism. At least that
   way we get a fairer idea of what they are trying to sell us. As Bob
   Black writes in The Libertarian as Conservative, "To my mind a
   right-wing anarchist is just a minarchist who'd abolish the state to
   his own satisfaction by calling it something else. . . . They don't
   denounce what the state does, they just object to who's doing it."

6.5 What other effects would "free market" justice have?

   Such a system would be dangerous simply because of the power it places
   in the hands of companies. As Michael Taylor notes, "whether the
   [protection] market is competitive or not, it must be remembered that
   the product is a peculiar one: when we buy cars or shoes or telephone
   services we do not give the firm power based on force, but armed
   protection agencies, like the state, make customers (their own and
   others') vulnerable, and having given them power we cannot be sure that
   they will use it only for our protection." [Community, Anarchy and
   Liberty, p. 65]

   As we argued above, there are many reasons to believe that a
   "protection" market will place most of society (bar the wealthy elite)
   in a "vulnerable" position. One such reason is the assumptions of the
   "anarcho"-capitalists themselves. As they note, capitalism is marked by
   an extreme division of labour. Instead of everyone having all the
   skills they need, these skills are distributed throughout society and
   all (so it is claimed) benefit.

   This applies equally to the "defence" market. People subscribe to a
   "defence firm" because they either cannot or do not want the labour of
   having to protect their own property and person. The skills of defence,
   therefore, are concentrated in these companies and so these firms will
   have an advantage in terms of experience and mental state (they are
   trained to fight) as well as, as seems likely, weaponry. This means
   that most normal people will be somewhat at a disadvantage if a cartel
   of defence firms decides to act coercively. The division of labour
   society will discourage the spread of skills required for sustained
   warfare throughout society and so, perhaps, ensure that customers
   remain "vulnerable." The price of liberty may be eternal vigilance, but
   are most people willing to include eternal preparation of war as well?
   For modern society, the answer seems to be no, they prefer to let
   others do that (namely the state and its armed forces). And, we should
   note, an armed society may be a polite one, but its politeness comes
   from fear, not mutual respect and so totally phoney and soul
   destroying.

   If we look at inequality within society, this may produce a
   ghettoisation effect within "anarcho"-capitalism. As David Friedman
   notes, conflict between defence firms is bad for business. Conflict
   costs money both in terms of weaponry used and increased ("danger
   money") wages. For this reason he thinks that peaceful co-operation
   will exist between firms. However, if we look at poor areas with high
   crime rates then its clear that such an area will be a dangerous place.
   In other words, it is very likely to be high in conflict. But conflict
   increases costs, and so prices. Does this mean that those areas which
   need police most will also have the highest prices for law enforcement?
   That is the case with insurance now, so perhaps we will see whole areas
   turning into Hobbesian anarchy simply because the high costs associated
   with dangerous areas will make the effective demand for their services
   approach zero.

   In a system based on "private statism," police and justice would be
   determined by "free market" forces. As indicated in section [19]B.4.1,
   right-libertarians maintain that one would have few rights on other
   peoples' property, and so the owner's will would be the law (possibly
   restricted somewhat by a "general libertarian law code", perhaps not --
   see [20]last section). In this situation, those who could not afford
   police protection would become victims of roving bandits and rampant
   crime, resulting in a society where the wealthy are securely protected
   in their bastions by their own armed forces, with a bunch of poor
   crowded around them for protection. This would be very similar to
   feudal Europe.

   The competing police forces would also be attempting to execute the
   laws of their sponsors in areas that may not be theirs to begin with,
   which would lead to conflicts unless everyone agreed to follow a
   "general libertarian law code" (as Rothbard, for one, wants). If there
   were competing law codes, the problem of whose "laws" to select and
   enforce would arise, with each of the wealthy security sponsors
   desiring that their law control all of the land. And, as noted earlier,
   if there were one "libertarian law code," this would be a "monopoly of
   government" over a given area, and therefore statist.

   In addition, it should be noted that the right-libertarian claim that
   under their system anarchistic associations would be allowed as long as
   they are formed voluntarily just reflects their usual vacuous concept
   of freedom. This is because such associations would exist within and be
   subject to the "general libertarian law code" of "anarcho"-capitalist
   society. These laws would reflect and protect the interests and power
   of those with capitalist property, meaning that unless these owners
   agree, trying to live an anarchist life would be nearly impossible (its
   all fine and well to say that those with property can do what they
   like, if you do not have property then experimentation could prove
   difficult -- not to mention, of course, few areas are completely
   self-sufficient meaning that anarchistic associations will be subject
   to market forces, market forces which stress and reward the opposite of
   the values these communes were set up to create). Thus we must buy the
   right to be free!

   If, as anarchists desire, most people refuse to recognise or defend the
   rights of private property and freely associate accordingly to organise
   their own lives and ignore their bosses, this would still be classed as
   "initiation of force" under "anarcho"-capitalism, and thus repressed.
   In other words, like any authoritarian system, the "rules" within
   "anarcho"-capitalism do not evolve with society and its changing
   concepts (this can be seen from the popularity of "natural law" with
   right-libertarians, the authoritarian nature of which is discussed in
   [21]section 11).

   Therefore, in "anarcho"-capitalism you are free to follow the
   (capitalist) laws and to act within the limits of these laws. It is
   only within this context that you can experiment (if you can afford
   to). If you act outside these laws, then you will be subject to
   coercion. The amount of coercion required to prevent such actions
   depends on how willing people are to respect the laws. Hence it is not
   the case that an "anarcho"-capitalist society is particularly conducive
   to social experimentation and free evolution, as its advocates like to
   claim. Indeed, the opposite may be the case, as any capitalist system
   will have vast differences of wealth and power within it, thus ensuring
   that the ability to experiment is limited to those who can afford it.
   As Jonathan Wolff points out, the "image of people freely moving from
   one utopia to another until they find their heaven, ignores the thought
   that certain choices may be irreversible. . . This thought may lead to
   speculation about whether a law of evolution would apply to the plural
   utopias. Perhaps, in the long run, we may find the framework regulated
   by the law of survival of the economically most fit, and so we would
   expect to see a development not of diversity but of homogeneity. Those
   communities with great market power would eventually soak up all but
   the most resistant of those communities around them." [Robert Nozick:
   Property, Justice and the Minimal State, p. 135]

   And if the initial distribution of resources is similar to that already
   existing then the "economically most fit" will be capitalistic (as
   argued in section [22]J.5.12, the capitalist market actively selects
   against co-operatives even though they are more productive). Given the
   head start provided by statism, it seems likely that explicitly
   capitalist utopia's would remain the dominant type (particularly as the
   rights framework is such as to protect capitalist property rights).
   Moreover, we doubt that most "anarcho"-capitalists would embrace the
   ideology if it was more than likely that non-capitalist utopias would
   overcome the capitalist ones (after all, they are self-proclaimed
   capitalists).

   So, given that "anarcho"-capitalists who follow Murray Rothbard's ideas
   and minimal-statist right-libertarians agree that all must follow the
   basic "general libertarian law code" which defends capitalist property
   rights, we can safely say that the economically "most fit" would be
   capitalist ones. Hardly surprising if the law code reflects capitalist
   ideas of right and wrong. In addition, as George Reitzer has argued
   (see The McDonaldization of Society), capitalism is driven towards
   standardisation and conformity by its own logic. This suggests that
   plurality of communities would soon be replaced by a series of
   "communities" which share the same features of hierarchy and ruling
   elites. ("Anarcho"-capitalists who follow David Friedman's ideas
   consider it possible, perhaps likely, that a free market in laws will
   result in one standard law code and so this also applies to that school
   as well)

   So, in the end, the "anarcho" capitalists argue that in their system
   you are free to follow the (capitalist) law and work in the
   (capitalist) economy, and if you are lucky, take part in a "commune" as
   a collective capitalist. How very generous of them! Of course, any
   attempt to change said rules or economy are illegal and would be
   stopped by private states.

   As well as indicating the falsity of "anarcho"-capitalist claims to
   support "experimentation," this discussion has also indicated that
   coercion would not be absent from "anarcho"-capitalism. This would be
   the case only if everyone voluntarily respected private property rights
   and abided by the law (i.e. acted in a capitalist-approved way). As
   long as you follow the law, you will be fine -- which is exactly the
   same as under public statism. Moreover, if the citizens of a society do
   not want a capitalist order, it may require a lot of coercion to impose
   it. This can be seen from the experiences of the Italian factory
   occupations in 1920 (see section [23]A.5.5), in which workers refused
   to accept capitalist property or authority as valid and ignored it. In
   response to this change of thought within a large part of society, the
   capitalists backed fascism in order to stop the evolutionary process
   within society.

   The socialist economic historian Maurice Dobbs, after reviewing the
   private armies in 1920s and 1930s America made much the same point:

     "When business policy takes the step of financing and arming a mass
     political movement to capture the machinery of government, to outlaw
     opposing forms of organisation and suppress hostile opinions we have
     merely a further and more logical stage beyond [private armies]"
     [Op, Cit., p. 357]

   (Noted Austrian Economist Ludwig von Mises whose extreme free market
   liberal political and economic ideas inspired right-libertarianism in
   many ways had this to say about fascism: "It cannot be denied that
   Fascism and similar movements aiming at the establishment of
   dictatorships are full of the best intentions and that their
   intervention has, for the moment, saved European civilisation. The
   merit that Fascism has thereby won for itself will live eternally in
   history." [Liberalism, p. 51])

   This example illustrates the fact that capitalism per se is essentially
   authoritarian, because it is necessarily based on coercion and
   hierarchy, which explains why capitalists have resorted to the most
   extreme forms of authoritarianism -- including totalitarian
   dictatorship -- during crises that threatened the fundamental rules of
   the system itself. There is no reason to think that
   "anarcho"-capitalism would be any different.

   Since "anarcho"-capitalism, with its private states, does not actually
   want to get rid of hierarchical forms of authority, the need for one
   government to unify the enforcement activities of the various defence
   companies becomes apparent. In the end, that is what
   "anarcho"-capitalism recognises with its "general libertarian law code"
   (based either on market forces or "natural law"). Thus it appears that
   one government/hierarchy over a given territory is inevitable under any
   form of capitalism. That being the case, it is obvious that a
   democratic form of statism, with its checks and balances, is preferable
   to a dictatorship that imposes "absolute" property rights and so
   "absolute" power.

   Of course, we do have another option than either private or public
   statism. This is anarchism, the end of hierarchical authority and its
   replacement by the "natural" authority of communal and workplace
   self-management.

References

   1. file://localhost/home/mauro/baku/debianize/maint/anarchy/append131.html#secf11
   2. file://localhost/home/mauro/baku/debianize/maint/anarchy/secB2.html
   3. file://localhost/home/mauro/baku/debianize/maint/anarchy/append136.html#secf63
   4. file://localhost/home/mauro/baku/debianize/maint/anarchy/secD3.html
   5. file://localhost/home/mauro/baku/debianize/maint/anarchy/secC4.html
   6. file://localhost/home/mauro/baku/debianize/maint/anarchy/append1311.html
   7. file://localhost/home/mauro/baku/debianize/maint/anarchy/append133.html#secf31
   8. file://localhost/home/mauro/baku/debianize/maint/anarchy/append1310.html#secf102
   9. file://localhost/home/mauro/baku/debianize/maint/anarchy/secE2.html
  10. file://localhost/home/mauro/baku/debianize/maint/anarchy/secE3.html
  11. file://localhost/home/mauro/baku/debianize/maint/anarchy/secC4.html
  12. file://localhost/home/mauro/baku/debianize/maint/anarchy/secB2.html
  13. file://localhost/home/mauro/baku/debianize/maint/anarchy/append132.html#secf24
  14. file://localhost/home/mauro/baku/debianize/maint/anarchy/append133.html#secf31
  15. file://localhost/home/mauro/baku/debianize/maint/anarchy/append132.html#secf23
  16. file://localhost/home/mauro/baku/debianize/maint/anarchy/secB4.html
  17. file://localhost/home/mauro/baku/debianize/maint/anarchy/append1310.html#secf102
  18. file://localhost/home/mauro/baku/debianize/maint/anarchy/append136.html#secf63
  19. file://localhost/home/mauro/baku/debianize/maint/anarchy/secB4.html#secb41
  20. file://localhost/home/mauro/baku/debianize/maint/anarchy/append136.html#secf64
  21. file://localhost/home/mauro/baku/debianize/maint/anarchy/append1311.html
  22. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj512
  23. file://localhost/home/mauro/baku/debianize/maint/anarchy/secA5.html#seca55
