Anarcho-Socialism vs. Anarcho-Capitalism

[This is cross-posted at City of God]

In the wake of the emerging church movement, new attempts to grapple with a Christian approach to economics have become more intensely discussed and put into practice. One of the most popular “third-way” economics, at least in theory, seems to be anarcho-socialism. While, as with most things intellectual, there are variations on this position, there seems to be one or two positions that these variations all hold in common: (1) a labour theory of value, and (2) a dislike of economization and the price-system.

Lurking within many of these positions is a deep suspicion of “private property”. Of course, as with general view of anarcho-socialism, so in the case of private property, there are variations on how it is opposed. Nevertheless, if any sense is to be made of the “socialism” part of anarcho-socialism, some degree of opposition to private property must be present.

Part of the suspicion of private property comes from (1) above. That is, a labour theory of value, most fundamentally, believes that the value of any product must be the same as the value of the input of labour that produced it. By implication, this means if a labourer is paid less by an employer for the production of a good than the employer will make by selling it, so that the employer makes a profit off of the labourer, the labourer is actually being defrauded by the amount that the employer makes in profit. For, as was explained, if the object is worth however much the labour was worth, then there is no room left for an employer to make a profit, unless the employer is simply underpaying the labourer, or else is defrauding the customer.

Austrian economists, the consummate free-marketeers, in response, developed what is called the subjective theory of value (otherwise known as marginal utility theory). The subjective theory of value argues that the value of any product is determined by individual according to their preferences, and that market prices therefore are simply what the buyer and seller can agree on as a mutually beneficial compromise between their two value schemes, leading both to agree that economic exchange is more worthwhile than not exchanging. This fundamental view of value has many implications. It implies that wealth is not a zero-sum game. In any voluntary exchange, in fact, both parties believe they are actually increasing their wealth, simultaneously. It is a win-win situation, because both are getting something they prefer in exchange for something they prefer less. This means that real wealth is created every time a voluntary exchange occurs. It also means that the labour theory’s criticisms of profit are misguided.

The fact is, the existence of profit-making by an employer does not imply that the labourer has been stolen from, because it is entirely possible for a labourer to voluntarily prefer a fixed wage lower than the market price of a product rather than the chance of making the higher profit along with the attendant risks of being an entrepreneur. The labourer prefers a guaranteed wage now to a possible profits in the future, whereas the employer prefers potential higher profits in the future to a more secure income in the present. In the end, some people voluntarily prefer to be employees and have a more reliable source of income, and some people prefer to be their own employers and take on higher risk for the chance of a higher income. In situations like this, employers and employees have a mutually beneficial relationship; no one is being stolen from. Rather, the employer’s profit margin is higher than wage rates because the employer is the one risking his or her own capital; the labourer is not.

Some socialists have also issued criticisms of the principle of economy and of the price system. The former principle basically means just this: it is just a fact of existence that resources are scarce, and so rational agents will act to meet their ends with the least amount of waste possible. Waste, the destruction of wealth, is ultimately a harmful thing in a world where we do not have infinite goods to meet our needs. Rational people perceive this, and so act to avoid unnecessary waste. The converse of this point is that they act in the way they believe is the most efficient to achieve their ends. The price system is simply the social outworking of this principle. As was explained above, prices are just agents communicating to other agents what they think the value of a product is. When a price is agreed upon between a buyer and seller, both are convinced that the product has been appropriately valued, and they believe that they will be benefitted more by what they are receiving than what they are giving away. Socialists (again, as far as I know, some, though perhaps all) have criticized these principles as inhuman. Murray Rothbard, in a 1970 article, “The Death Wish of the Anarcho-Communists”, quotes one socialist making this point:

The anti-rational spirit of anarcho-communism was expressed by Norman O. Brown, one of the gurus of the new “counter-culture”:

The great economist von Mises tried to refute socialism by demonstrating that, in abolishing exchange, socialism made economic calculation, and hence economic rationality, impossible … But if von Mises is right, then what he discovered is not a refutation but a psychoanalytical justification of socialism … It is one of the sad ironies of contemporary intellectual life that the reply of socialist economists to von Mises’ arguments was to attempt to show that socialism was not incompatible with “rational economic calculation” — that is to say, that it could retain the inhuman principle of economizing. (Life Against Death, Random House, paperback, 1959, pp. 238-39.)

But, in response, Rothbard argues that it is in fact the denial of this system that is inhuman:

The fact that the abandonment of rationality and economics in behalf of “freedom” and whim will lead to the scrapping of modern production and civilization and return us to barbarism does not faze our anarcho-communists and other exponents of the new “counter-culture.” But what they do not seem to realize is that the result of this return to primitivism would be starvation and death for nearly all of mankind and a grinding subsistence for the ones remaining.

And it seems hard to deny this counter-argument. For, if an agent did not act in a way that attempted to be efficient with the use of scarce resources, they would lose those scarce resources through continual waste. And if a community of agents could not, or would not, signal to each other what they thought would be the most valuable/efficient use of a particular object would be through a price system, they would have no way of collectively acting in a way that would economize their scarce resources. And eventually, the continual waste of scarce resources would indeed lead straight into “starvation and death for nearly all of mankind and a grinding subsistence for the ones remaining.”

Thus, in the end, it seems that a capitalist understanding of wealth and property is necessary to prevent poverty and death; the principle of scarcity and the need to plan accordingly can be ignored only at our own peril.

With these criticisms made of socialist versions of anarchism, though, there is one valid criticism to be made of some forms of anarcho-capitalism. It seems (at least in my limited forays into their literature) many anarcho-capitalists (usually of the atheistic variety), believe strongly that there exists only one moral wrong: aggression. This means that letting another person starve to death, when you could prevent such an end, and there was no reason not to prevent it, would be perfectly morally licit. Obviously, this sits in stark contrast to the Bible’s command to “love your neighbour as yourself”, especially when it is seen in light of Jesus’ interpretation of it in the story of the Good Samaritan. It is quite clear that our Lord interpreted this fundamental axiom of the Law to require compassion and charity. This does not mean that everyone is required to share their goods in an absolutely equal fashion. In a situation where two people are both well off enough not to need charity, but one is richer and the other is poorer, there is no moral obligation for the richer person to share with absolute equality all of his goods with the poorer person. Absolute economic equality is not a requirement of natural justice. But, that said, human beings have a moral obligation to help our truly needy neighbour, insofar as it is possible for us to help them; this is matter of justice, of the Creator’s moral law, not subjective preference. God will not accept the rationalizations of the atheistic anarcho-capitalists on judgment day.

And so, one could perhaps argue that the only morally permissible type of anarchism is one which affirms two counterbalancing propositions: (1) the ultimate choice over what to do with property should lie with its private owner, not with a community acting coercively, but (2) private owners of property are still morally obligated to help their neighbours when it is possible for them to do so. The decision should ultimately be left with the individual (in the sense that the community should not use violence against them or their property), but the individual is obligated by God to show charity.

So, what does one call this kind of anarchism? Is it capitalistic, because it opposes coercion in exchange, supports the principle of private property, and denies an absolute moral imperative to voluntarily create total economic equality? Or is it socialistic, because it opposes an inhuman disregard for the suffering of others in affirming a moral obligation to show love to our neighbour? I tend to think that, because of the possibilities available for the meaning of the term “capitalist”, it is in fact capitalist. That is, because not all capitalisms deny there are moral obligations to help our neighbour, this “socialistic” principle does not rule out the appropriateness of the term. But maybe others will disagree. I think, however, in the end, this is just a semantic disagreement.

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2 thoughts on “Anarcho-Socialism vs. Anarcho-Capitalism

  1. I agree, it is semantics. I am, at various times, a populist, an anarchist, a free-market capitalist, a philantropist, and a socialist. We’re hard-wired to exist in small bands, tribes or groups. Although being steadily eroded by the State, the moral imperative to help our friends, family and neighbors is still strong.

  2. “many anarcho-capitalists (usually of the atheistic variety), believe strongly that there exists only one moral wrong: aggression.”

    Anarchy is a political philosophy. Xnity is a world view. Anarchy never claims to be a complete set of morality. Most anarchist, including atheists like Molyneux and Rothbard, make distinctions between what may be most moral and what should be legally required.

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