The anarchist paradox
The paradox arises from the assumption contained in the notions of “anarcho-capitalism” and “anarcho-socialism” upheld by most anarchists, that is, the notion that anarchism is compatible with a specific economic system.
Anarchism can be simply described as any system which has no formal (“public”) authority. It is, therefore, not a result but a process. It does dictate attributes of the authority structures, but that’s it. This does not automatically dictate the economical system that results from it.
The economical system of a society is obviously molded by its political system (the reverse is true, to a more limited extent). The laws of a society dictate what its economical actors can and cannot do, and what they will profit from. The political mode of a society dictates how the laws will change. The possible feedback loop occurs at the level of the political mode – that is to say, the level to which people are allowed to influence the political process.
What we need to understand is that economics does not necessarily follow from politics in all respects. In the case of anarchy this is especially true since the political mode is dispersed and strong – which is to say that a lot of people take decisions, and their decisions are not opposed by a central authority (unless a central authority is formed, but this would also be a dispersed decision).
Therefore, the economical system that follows from any given anarchy is determined by these decisions. In short, what we have here is the functional equivalent of a democratic system. It does differ in terms of granularity (while in a democracy every citizen has a part of the decision-making, in an anarchy such equality is not assured), but it is functionally equivalent. Given this, we cannot assure that an anarchy will be capitalist, or socialist, or corporatist, or syndicalist, or a mix, or anything at all. Only particular institutions, supported by private individuals, can ensure anything at all.
Therefore anarcho-capitalism and anarcho-socialism are both oxymorons. An anarchy is not necessarily capitalist or socialist, and a capitalist or socialist system is not necessarily anarchist. It is not simply a matter of being able to do it, but in the very nature of the system.
In an anarchic system, the coercive agent is the set of hostile political agents, that is, political agents whose goals deviate our actions from maximum benefit. In short, our freedom is dampened by the cost of countering the attacks on our rights by others.
I have already written about the dynamics of statist systems versus libertarian systems in my article “Good greed and bad greed” . I have not, however, written about the dynamics of anarchist systems.
As we already saw, maximum benefit for all is derived from a situation where all agents are free to trade for maximum gain. In such a situation, there are no coercive agents to take away or force away our maximum benefit, and the monetary flow is optimal. In a statist system, the coercive agent is the state. In an anarchic system, the coercive agent is the set of hostile political agents, that is, political agents whose goals deviate our actions from maximum benefit. In short, our freedom is dampened by the cost of countering the attacks on our rights by others.
We can express this simply with :
Bm-C=Bn, or Bm-(Ci*P)=Bn
Bm = Maximum benefit, when all agents are free to trade for maximum gain.
C = Costs entailed by countering attacks on our economic rights by other political agents. These costs are roughly proportional to the product of Ci, the cost generated by a single agent, and P, the percentage of hostile political agents.
Bn = Net benefit in a given anarchic system.
The key term here is obviously P. If there are no hostile political agents, then Bm=Bn, and we obtain an optimal situation. This, however, is a limit case. If P is any other value, then we cannot obtain an optimal situation.
The value of P is the democratic aspect I was discussing. It is the equivalent of a vote. People decide to oppose another’s rights, or they do not. Without a stable government to prevent the initiation of force between citizens, there is no way to fix the value of P.
Whenever the disadvantage of anarchism is symmetrical to the disadvantage of statism (or how to calculate such a thing) remains to be seen. But it is clear that anarchy is the functional equivalent of a democracy, and therefore vastly non-optimal. Trying to pin capitalism (or anything else, for that matter) to it does not improve the situation at all.