4.04.2010

Anarcho Capitalism, Fascism or Freedom?

There are several critiques about Anarcho-capitalism that when brought up go largely unanswered, rebutted, or even noticed by the proponents of the system. They are conveniently ignored, like children chained to tables in sweatshops. I can’t help but presume that the silence is because either the proponents of said system don’t have an answer, didn’t think about it, don’t want to think about it, or if they do answer it will be forced to admit that the system requires the very thing they allegedly oppose: centralized authority.

I’m going to pick on just one criticism, one that has yet to receive any coherent answer from anyone – even those who are articulate and well educated. Currency.

Let’s start from the very beginning, yes?

In order for capitalism to function, it requires some form of currency. At its base – some means of exchange is needed to keep track of one’s “participation in and contribution to society”. Now that itself is a point I could rant on about for pages, so I’ll save that for next time. Back to currency. In a system that uses currency, the currency must retain a specific value for all currency used in that particular area or region. The value can increase or decrease, but it must do so uniformly – lest it loses its value altogether and becomes worthless.

This brings up two major issues: One it requires a centralized authority to regulate the value of said currency, and two it intimates that the currency is only valid in a particular space or for a specific population, which is reminiscent of a country with borders.

Now, you might be thinking to yourself – “But, but…Rothbard explains that currency can be regulated by competing businesses!” or perhaps even “Never mind that, we’ll use gold!”. Well there’s a few problems with both thoughts. I’ll start with gold.

Gold does not have an inherent value. It’s a piece of metal. Soft metal, at that. The only reason gold has any value is because it is given a value by a centralized authority. And even then, the value of gold rises and falls. And the only reason anyone thinks it’s valuable is because it is a limited resource. In capitalism, limited or finite items have higher values because they’re harder to get – but the problem with finite currency is that…are you ready for this?....It’s a limited, and thus finite resource! Look at it mathematically. If x = a finite resource, and y = number of people, and n = number of living years of people, and a = number the population grows annually, and b = the number of additional years people live due to scientific advancement then:

So if X = Y*N then X can never = Y(a)*(N+b). Why? Because x is finite and can never change its number. Once you’ve outgrown your currency base, that’s it. There ain’t no more. Your population can never exceed the gold you have, either in numbers or years lived, and certainly not by both.

So fiat currency it is. Which leads me to my second point. If you have a fiat currency, you must have control over it. You must regulate it. If it goes unregulated, and anyone can just up and start printing money – on their own, or as a business – then you have more currency in the general population than you are supposed to, which causes value fluctuations. Further that, but you can’t have two or three competing currency companies for several reasons. Number one, they can’t change the value of the currency they print if they want the economy to live. SO they will not be in “competition” in any way other than their profits. And companies seeking profits will produce more goods than their competitors (because they can’t change the product or price) thus flooding the economy with too much money.
So the amount of money they can produce will also need to be regulated on top of the value they “sell” it for. There is no competition there, in fact it’s just a centralized authority broken down under two or three different names. Their products are uniform in every way. The only difference is that they must profit from it in order to stay in business, and that’s critique number three:

There’s only one way to make a profit from printing currency. Let me explain:

Let’s say you get an island, and you start your own country. One group says “we’ll handle the currency”. OK. “But for a price”. Say what?. How is a community going to buy currency if they need currency to buy the currency they need to buy it? Not gonna happen. You might argue that the first go-round will be a freebie – kinda like your first crack rock. But even then, you can’t privately profit from printing currency unless everyone contributes to the company that makes the currency to help keep them in business. Which sounds a lot like taxation……

Which must then be regulated and overseen.

Do you see where this is going?

Just in terms of the basic tools necessary to make capitalism run, you need centralized authorities in place, and overseeing and regulating it. And while some Ancaps may be thinking that it’s not so bad considering how much other freedom they will have, I’d like to remind everyone that private companies do not bend to the wishes of the public. You cannot even pretend to vote them out of control – and he with the money has the control.

That’s also known as….Fascism.

There are many more critiques of Anarcho-capitalism, however on the basic logic of it, it is an unstable economic system that requires centralized authority and regulation to even get off the ground.