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Source- This post is based on the article “Understanding the debates around anarcho-capitalism” published in “The Hindu” on 13th December 2023.
Why in the News?
The term “Anarcho-Capitalism” has surged in prominence as Javier Milei, a self-professed anarcho-capitalist, secured victory in recent Argentina’s presidential elections.
What is Anarcho-Capitalism?
1) Anarcho-Capitalism is a political philosophy advocating for the elimination of the State and the delegation of law and order to private entities within a free-market system.
2) Coined by American libertarian economist Murray Rothbard, the ideology attributes its roots to Belgian political economist Gustave de Molinari, considered to be the first anarcho-capitalist.
3) David Friedman, Edward Stringham, and Michael Huemer stand among the contemporary proponents of anarcho-capitalism.
What are the Arguments made by Anarcho-Capitalists?
1) Private Companies Excelling in Policing and Legal Services: In a free market, private companies can effectively provide policing and legal services, often outperforming the state in both quality and affordability.
2) They give two reasons for this –
a. As private companies would depend on customer patronage for their survival, they would effectively serve the needs of their customers. This is in contrast to the current model of State run policing and legal services where citizens need to pay taxes regardless of the quality of these services.
b. Competition between different private police and courts would ensure that the quality of police and legal services is high and prices low
What are the Criticisms of Anarcho-Capitalism?
1) Armed Private Groups and the Threat of Chaos– Anarcho-capitalism critics argue that providing services like police and judiciary through multiple firms in a single region would lead to conflict among armed private groups, causing chaos.
2) Wealth Disparities in Private Justice– Critics also contend that market-driven police protection and legal adjudication would disproportionately benefit the wealthy, allowing them to escape justice by paying more to private entities and leaving the poor without recourse.
UPSC Syllabus- Polity and Nation
