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Anarcho-Capitalists Against Ayn Rand

Tags Free MarketsHistory of the Austrian School of Economics

05/16/2014David Gordon

J. Michael Oliver tells us that this remarkable book began as an academic thesis written in 1972 and submitted the next year for a graduate degree at the University of South Carolina. The book is much more than an academic thesis, though; it is a distinguished addition to libertarian thought.

Oliver’s principal contribution arises from his reaction to two intellectual movements. Like many in the 1960s and 70s, he was attracted to the Objectivist philosophy of Ayn Rand. Together with several others in the Objectivist movement, though, Oliver disagreed with the political conclusions that Rand and her inner circle drew from her philosophy. “Some students of the philosophy concluded that Rand and the ‘orthodox’ Objectivists had failed to develop a political theory that followed from the more basic principles of Objectivism. It was at that time that Rand’s advocacy of limited government began to come under attack from a growing number of deviant ‘objectivists.’ The libertarian-objectivists ... declared that government, limited or otherwise, is without justification, and that the only social system consistent with man’s nature is a non-state, market society, or anarcho-capitalism.”

To claim that Rand misconceived the implications of her own philosophy is a daring thesis, but Oliver makes a good case for it. After a succinct account of Objectivist metaphysics, epistemology, and theory of volition, Oliver turns to ethics. Here one feature stands to the fore. Objectivist ethics, as the name suggests, holds that the requirements for human flourishing are objective matters of fact: “Objectivists deny that there is any justification for the belief that ethics and values are beyond the realm of fact and reason. Man is, after all, a living being with a particular identity and particular requirements for his life. It is not the case that any actions will sustain his life; only those actions which are consonant with man’s well-being will sustain him. Man cannot choose his values at random without reference to himself and still hope to live. This concept applies to an individual man as well as a human society (composed of individuals). Objective values follow from man’s identity.”

If there are objective requirements for your survival, that is going to be a matter of considerable interest to you; but is that the sum and substance of ethics? This is not the place to examine this question, but, at any rate, one of the arguments Rand used to support her egoist ethics does not succeed. Rand stated the argument in this way: “Try to imagine an immortal, indestructible robot, an entity which moves and acts, but cannot be affected by anything, which cannot be damaged, injured, or destroyed. Such an entity would not be able to have any values; it would have nothing to gain or lose; it could not regard anything as for it or against it, as serving or threatening its value, as fulfilling or frustrating its interests. It could have no interests and no goals.”

Why is the indestructible robot unable to have values? The answer, according to Rand, is that because the robot cannot be destroyed or damaged, nothing can matter to it. But why does the robot’s invulnerability imply that nothing matters to it? The answer is that because the purpose of values is to promote one’s own survival, indestructibility removes the point of values. If nothing can kill or injure it, it doesn’t need to do anything to prevent being killed or injured.

But this isn’t an argument at all for ethical egoism: Rand’s conclusion follows only if one already accepts that the purpose of values is to secure one’s own survival. Suppose the robot is altruistic: why would its own invulnerability prevent it from valuing the welfare of others? After all, even Rand doesn’t claim that altruism is impossible: she just thinks it is mistaken.

But this is by the way. Much more important for our purposes are the political conclusions Oliver draws from Objectivist ethics. He begins with something Rand herself accepted. “Man is a being of choice. Those essential actions, both physical and cognitive, which he must undertake to maintain his being are subject to his volition. Since his life depends upon his capacity to choose, it follows that his life requires the freedom to choose. ... Given that life is the standard of value, it is right that man be free to exercise his choice. The principle of rights as understood by the new libertarians is merely a statement of the fact that if man is to maintain life on the level which his nature permits, then men (in human society) must refrain from violating one another’s freedom.”

To protect these rights, Rand thought it necessary to have a limited government, and here is where Oliver diverges from his philosophical mentor. A regime of rights, along the lines Rand sets out, does not at all require an agency, however limited, holding a monopoly on the permissible use of force. Such an agency of necessity violates the very rights Rand advocated. “Government, being a coercive monopoly, must prohibit its citizens through the threat of force, from engaging the services of any alternative institution ...”

Government then necessarily violates rights; and furthermore, a limited government cannot for long remain limited. “The new libertarian concludes that the internal checks and balances on governmental power and the alleged mechanisms for the defense of minorities are ... flimsy constructs. ... Genuine competition, whether from another coercive agency of from a non-coercive business, can serve as the only real “limit” on State power, and it does so precisely by depriving government of its status as a ‘government.’ Logically, then, if government exists, it is unlimited and self-determining.”

How, then, can rights be protected? Oliver finds the answer in anarcho-capitalism, and he makes extensive and effective use of the work of Murray Rothbard in his account of this system: “While anarcho-capitalists are in agreement that there can and should be market alternatives to government police, courts, prisons and armed forces, they are not in agreement as to the specifics of such private agencies and their methods ... [but] the assumption herein is that the market will always tend toward rationality and satisfaction of the objective requirements for human life. ... Protection from aggression, conflict arbitration, and rectification of wrongdoing are genuine needs of man in society. Satisfaction of these demands must be in keeping with man’s nature (i.e., the principle of rights) if the corrective measures are not to be unjust and economically destructive in themselves.”

But must not Oliver overcome an objection? The standard response of Objectivists to anarchism is that there cannot be a market in law and defense. To the contrary, the free market presupposes the existence of a fixed legal order, not subject to competition; and this only a government can provide.1

Oliver not only answers this difficulty but turns it against the objectivist defenders of the state. It is entirely true, Oliver says, that the free market presupposes objective law; but the requirements of objective law are fixed by human nature. Far from requiring a state, objective law correctly understood precludes its existence. “There is no need for a legislative process. Law is inherent in the nature of things — including man’s nature. Thus, discovery of law rather than the fabrication of law is called for. ... Because capitalism/voluntarism is based upon a recognition of the necessity of freedom of thought and action, it makes no sense to create a monopolistic agency for the discovery of truth and law.” In an anarcho-capitalist society, the basic elements of law would not be “up for grabs,” contrary to the claims of the Randian critics of anarchism.2

It is state-created law, not anarcho-capitalism, that conflicts with legal objectivity. “One deleterious effect of governmental law is the suppression or obfuscation of concern for objective law. After generations of living under an omnipresent legal system, men could easily come to view government as the source of law, thus losing sight of natural, objective law.”

There is much else of great interest in The New Libertarianism, including a detailed account of how anarchist law enforcement might operate; a trenchant criticism of the influential notion of “spontaneous field control” advanced by the Yale political scientists Robert Dahl, and Charles Lindblom; and suggestions about how a free market might use innovative technology to solve transportation problems. The New Libertarianism is a major contribution to the defense of anarcho-capitalism.

  • 1. For further discussion, see my “Binswanger on Anarchism.”
  • 2. For a discussion of the objection, by both supporters and opponents of it, see Roderick Long and Tibor Machan, eds., Anarchism/ Minarchism (Ashgate, 2008) and my review in The Mises Review.

Contact David Gordon

David Gordon is Senior Fellow at the Mises Institute and editor of the Mises Review.