To Think Like an Anarcho-Capitalist

What Anarcho-Capitalism Is

Anarcho-capitalism synthesizes two fundamental observations: (1) The state is a moral evil that uses aggression to achieve its ends, and any organization that doesn't use aggression wouldn't qualify as a state. (2) A free market economy is the natural conclusion of extending the non-aggression principle into economics, and it is the most value-productive economic arrangement possible.

This isn't a political ideology built on preferences or outcomes. It's the logical conclusion of applying consistent reasoning to questions of ethics, property, and human action.

The Foundational Axioms

Scarcity and Conflict

We live in a world of scarce means and infinite wants. Resources are finite. Multiple people often want the same thing. This creates conflicts. Even in a garden of Eden with infinite resources, conflicts would still occur because one cannot occupy the same space and time as another.

This is where all political and economic reasoning must start: How do we resolve conflicts over scarce resources?

Self-Ownership

You own yourself. This isn't derived from democracy, divine mandate, or social contract. It's axiomatic. You are the only one who can directly control your body and mind. You must have exclusive control over the scarce means that is yourself to even engage in argumentation.

Arguing against self-ownership creates a performative contradiction - you presuppose that you do not and cannot own your interlocutor (otherwise why would you need to convince him?). The very act of argumentation proves self-ownership.

The Non-Aggression Principle

With respect to all conflicts over scarce resources, aggression is inherently illegitimate. Arguing against this is contradictory. This is proven through argumentation ethics: argumentation presupposes non-aggression, and the attempt to argue otherwise is a performative contradiction.

Arguing that argumentation does not presuppose non-aggression precisely proves that arguing must in fact presuppose non-aggression - because you are arguing, which cannot be an aggressive action. To argue for aggression presupposes the norm of non-aggression as argumentation is a conflict-free interaction. This is like saying "I ought not speak" while speaking.

Argumentation Ethics: The Logical Proof

Hans-Hermann Hoppe's argument from argument establishes the NAP as dialectically true:

  1. Argumentation is conflict-free - it's used to derive truth values by disputing contradicting claims. Arguing otherwise results in a contradiction.

  2. The opposite of argumentation is aggression - jungle law, which succumbs to the primacy of consciousness fallacy.

  3. Arguing for aggression presupposes non-aggression - since argumentation is conflict-free, arguing for aggression is a performative contradiction. You're using a peaceful method (argumentation) to prove that violence is valid, while simultaneously proving that violence cannot convince anyone of anything.

  4. Argumentation presupposes property rights - to deny property rights in argumentation presupposes one's self-ownership as well as the interlocutor's. Why would you need to engage with someone if you owned them? You clearly do not and cannot.

Any ethic that allows for even a smidge of aggression is contradictory and thus false.

Property Rights

Property rights begin with self-ownership and extend to external resources through three legitimate means:

Homesteading (First-Comer Ethic)

The first person to mix their labor with unowned resources becomes the rightful owner. This is the only property ethic that doesn't create systematic conflict.

Every alternative collapses:

The homesteading principle flows directly from self-ownership: you own your body, therefore you own your labor. When you mix your labor with unowned resources, you own the result. To deny homesteading rights is to deny that people own their labor - which means slavery is legitimate.

Production

Creating new value from owned resources. If you own the inputs and transform them through your labor, you own the output.

Trade

Voluntary exchange of property titles. Both parties expect to gain more value than what they give up, otherwise trade wouldn't occur.

These three methods - homesteading, production, and trade - are the only legitimate ways to acquire property without creating conflict.

Austrian Economics: The Study of Human Action

Austrian economics is the study of human action (praxeology), not macro aggregation and mathematical formulas. It's fiercely logical and realistic, grounded in the axiom that man must act.

The Axiom of Action

Man acts purposefully to remove felt uneasiness. He acts to gain and/or keep that which he values. This is not an empirical observation but an a priori truth - you cannot argue against it without engaging in purposeful action, thus proving it true.

Subjective (Anthropogenic) Value Theory

Value exists only in relation to conscious beings who can value. A diamond in the ground has no value until someone recognizes its utility. Value is anthropogenic - born of man.

Value scales are ordinal (ranked), not cardinal (measured). You can prefer A > B > C, but you cannot quantify "how much more" you value A than B. That's like asking how much the color red weighs.

Price reflects relative scarcity and facilitates trade - it does not measure value. Trading 10 apples for shoes doesn't mean you value shoes "10 apples worth." Price tells us about supply/demand relationships, not intrinsic value.

The Economic Calculation Problem

This is why socialism is impossible, not merely undesirable.

Mises' argument:

  1. Socialism abolishes private property in capital goods and resources
  2. Without private property, resources cannot be exchanged
  3. Without exchange, there can be no market prices
  4. Without market prices, the state cannot calculate costs of production
  5. Without economic calculation, socialist planners cannot know the most valuable uses of scarce resources

Central planners are groping in the dark. Without price signals, they cannot economize properly - they cannot assess the performance and efficiency of their proposed solutions. Socialism doesn't just fail in practice; it's logically impossible.

The Knowledge Problem

Even if you gave central planners all the data, they couldn't process it fast enough. Knowledge is dispersed, local, and tacit. The price system is an information throughput mechanism that no central planner can replicate.

The State: Monopoly on Violence

The state is an entity with a monopoly on violence. Not to be confused with governance. Governance can exist through voluntary arrangements - arbitration, private security, insurance, mutual aid societies. The state is defined by its use of aggression.

Taxation is Theft

Taxation is the involuntary reallocation of capital. Since it's involuntary, it is by definition an inferior use of capital. Why? Because value is subjective, and the previous owner had to be coerced into giving it up. If he valued what the state provides more than his money, he would have voluntarily traded for it.

Every individual's taxes are a misallocation of resources. Taxation affects all actors in an economy, meaning it creates systemic economic destruction.

Democracy is Mob Rule

Democracy isn't enlightened governance - it's mob rule with better PR. The core mechanism is unchanged: the majority gets to impose its will on the minority through institutionalized force.

The supposed "guardrails" (constitutions, bills of rights) are enforced by the democratic government itself. If the majority votes to change the rules, what stops them? The courts are appointed by the democratic government. The constitution can be amended democratically. Democracy contains no mechanism to prevent mob rule because democracy is mob rule.

Examples: Venezuela elected Maduro. Germany elected Hitler. Bolivia elected communist wealth confiscators. Zimbabwe elected Mugabe. In each case, the "guardrails" either didn't exist, were circumvented, or were democratically modified.

Democracy gives you exactly what you voted against. If 51% vote for Policy X and 49% vote against it, everyone gets Policy X - including the 49% who opposed it. No optionality. No recourse. Just forced compliance.

Inverse Incentive Structures

The state operates on inverse incentives. In the market, failure means bankruptcy - you lose your own resources. In the state, failure means expanded budgets - you get more of other people's resources.

The market punishes incompetence and rewards competence. The state rewards incompetence with more funding and punishes competence by cutting budgets of efficient programs.

The Free Market Alternative

Free markets are not just preferable - they're the logical conclusion of the non-aggression principle applied to economics.

Voluntary Exchange

All market interactions are voluntary. Both parties expect to benefit or they wouldn't trade. This creates positive-sum outcomes (win-win) rather than democracy's zero-sum outcomes (win-lose).

The Price System

Prices coordinate dispersed knowledge across millions of actors. They signal relative scarcity and guide resources to their most valued uses. No central planner can replicate this information processing.

Price signals tell entrepreneurs:

Profit and loss provide immediate feedback. Profit signals you're creating value. Loss signals you're destroying it. This is economic calculation in action.

Skin in the Game

Market actors risk their own capital. Success means personal reward. Failure means personal loss. This aligns incentives with outcomes in a way state action never can.

Politicians and bureaucrats risk other people's money. They face no real consequences for failure. They can't economically calculate because they don't face market prices or profit/loss signals.

Sound Money vs Fiat Currency

Fiat Currency is Theft

Fiat currency is government monopoly money backed by nothing but legal tender laws and the threat of violence. Inflation is the increase in money supply, which dilutes the purchasing power of all existing currency holders. This is wealth transfer from savers to early receivers of new money (government, banks, politically connected entities).

Fractional Reserve Banking

Fractional reserve banking creates money from nothing through lending out deposits. This is fraud - claiming to hold customer deposits in reserve while simultaneously lending them out. It creates boom-bust cycles by expanding credit beyond real savings.

Bitcoin as Sound Money

Bitcoin is scarce, decentralized, and immune to state manipulation. Fixed supply of 21 million. No central authority can inflate it away. It separates money from state - a crucial separation for a free society, just as we separate church from state.

The Ancap Synthesis

Thinking like an anarcho-capitalist means:

Philosophically: Recognizing that aggression is always illegitimate. The NAP isn't a preference - it's logically necessary. Any argument for aggression presupposes non-aggression, creating a performative contradiction.

Ethically: Grounding rights in self-ownership and the homesteading principle. Property rights aren't granted by states or society - they're derived from the fact that you own yourself and your labor.

Economically: Understanding that free markets aren't just efficient - they're the only system that allows economic calculation. Socialism isn't just bad policy; it's impossible. Central planning cannot calculate without market prices.

Politically: Rejecting the state as an institution built on systematic aggression. The state is a monopoly on violence that claims the right to tax (steal), regulate (threaten), and conscript (enslave). Any organization that provides services without aggression isn't a state - it's a business.

Monetarily: Preferring sound money (Bitcoin, gold) over fiat currency. Inflation is theft. Central banking is economic destruction. Money should be market-chosen, not state-imposed.

The Worst Case Scenario

The common objection: "Won't a state form in anarcho-capitalism?"

First, this is an appeal to futility. "Murder happens, so why have laws against it?" The fact that people might violate the NAP doesn't make the NAP less valid.

Second, anarcho-capitalism deters state formation. States form when people grant them legitimacy. Once you understand that the state operates through aggression, that taxation is theft, and that democracy is mob rule - you stop granting them that legitimacy. The ideological foundation for the state collapses.

Third, even if a state did form, we'd be no worse off than we are now. The entire argument presupposes that we need the current state to prevent a future state. That's like saying we need the mafia to prevent organized crime.

Conclusion

Anarcho-capitalism isn't utopian thinking. It's the application of consistent logical and ethical principles:

You can't selectively apply the NAP. You can't say "aggression is wrong, except when the state does it" any more than you can say "murder is wrong, except on Tuesdays." Either aggression is legitimate or it isn't.

The state is the largest, most destructive violation of the NAP in human history. It claims the right to tax your income, regulate your behavior, inflate your currency, conscript you into wars, and imprison you for victimless crimes. It does all this while claiming to "protect" you from the very aggression it perpetrates.

Anarcho-capitalism rejects this contradiction. It extends the principle of non-aggression consistently across all human interaction. It recognizes that free markets, voluntary exchange, and property rights aren't just practical - they're the only arrangements consistent with human freedom and economic prosperity.

This is how anarcho-capitalists think. Not from preference or pragmatism, but from logical necessity.