Anarcho-Capitalism

AAA

DEFINITION of 'Anarcho-Capitalism'

A term coined by Austrian-school economist Murray Rothbard to describe a market-based society with no government. Instead of government, all goods and services would be provided by private businesses. Politics and taxes would not exist in an anarcho-capitalist society, nor would services like public education, police protection and law enforcement that are normally provided by government agencies.


Instead, the private sector would provide all necessary services. For example, people would contract with protection agencies, perhaps in a manner similar to how they contract with insurance agencies, to protect their life, liberty and property. Victimless crimes, such as drug use, and crimes against the state, such as treason, would not exist under anarcho-capitalism. Assistance to the needy would be provided through voluntary charity instead of compulsory income redistribution (welfare).



INVESTOPEDIA EXPLAINS 'Anarcho-Capitalism'

Anarcho-capitalists believe in free markets and competition rather than force and that a society based on voluntary trade is more effective because individuals are willing participants and businesses have an incentive of profit to satisfy customers and clients, where as government agencies have captive "customers" and "clients" by force of law. The idea is that an anarcho-capitalist society would maximize individual freedom and economic prosperity. Most modern capitalist societies are mixed economies, with free-market capitalism distorted by government intervention and individual rights restricted by government.



RELATED TERMS
  1. Mixed Economic System

    An economic system that features characteristics of both capitalism ...
  2. Capitalism

    A system of economics based on the private ownership of capital ...
  3. Perfect Competition

    A market structure in which the following five criteria are met: ...
  4. Political Economy

    The study and use of how economic theory and methods influences ...
  5. Marxism

    A social, political and economic philosophy that examines the ...
  6. Anglo-Saxon Capitalism

    A form of capitalism that is usually associated with the United ...
RELATED FAQS
  1. In what types of economies are regressive taxes common?

    Regressive taxation systems are more likely to be found in developing countries or emerging market economies than in the ... Read Full Answer >>
  2. What causes politicians or governments to begin "pork barrel" spending?

    Pork barrel spending occurs when the government taxes the general population to hand out concentrated benefits to special ... Read Full Answer >>
  3. What are some examples of "pork barrel politics" in the United States?

    So-called "pork barrel politics" has been present in the United States' legislative and, to a lesser degree, executive branches ... Read Full Answer >>
  4. How is the principle agent problem manifested in the government?

    The principal-agent problem describes challenges that occur when agents and principals have conflicting interests. Democratically ... Read Full Answer >>
  5. Why do supply shocks occur and who do they negatively affect the most?

    The exact nature and cause of supply shocks is imperfectly understood. The most common explanation is that an unexpected ... Read Full Answer >>
  6. What kinds of productivity data does the Bureau of Labor Statistics keep?

    The U.S. Bureau of Labor Statistics (BLS) tracks two primary sets of productivity data for the U.S. economy: labor productivity ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    4 Misconceptions About Free Markets

    These fallacies have hounded free market economists since the days of Adam Smith.
  2. Economics

    The History Of Economic Thought

    Economics is a vital part of every day life. Discover the major players who shaped its development.
  3. Personal Finance

    The History Of Capitalism: From Feudalism To Wall Street

    Find out how the economic system we now use was created.
  4. Options & Futures

    Financial Capitalism Opens Doors To Personal Fortune

    The Industrial Revolution introduced a new age of investing and financial self sufficiency.
  5. Economics

    How The GDP Of The US Is Calculated

    The US GDP may not be a perfect economic measure, but the ability to compare it to prior periods and other countries makes it the most applicable.
  6. Taxes

    Are Taxes the Solution for Income Inequality?

    Income inequality continues to increase. Why? And are taxes the solution?
  7. Taxes

    Presidential Candidates And Wall Street In 2016

    Wall Street's influence will play a large role in the 2016 presidential race. As election season begins, candidates are showing their true colors.
  8. Economics

    Presidential Candidates For Students In 2016

    Early 2016 Presidential candidates are already making clear their intended strategies for solving the country's growing student loan debt issues.
  9. Economics

    China And The Maritime Silk Road

    We provide an overview of China's planned Maritime Silk Road.
  10. Forex Education

    What Is A Currency War And How Does It Work?

    We look at what a currency war is, what factors may lead to it, the impacts of such a strategy, and whether there is a currency war currently.

You May Also Like

Hot Definitions
  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  2. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  3. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  4. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  5. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center