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. How does the role of Medicare/Medicaid affect the drugs sector in the U.S.?

    Medicare and Medicaid have enormous influence on the pharmaceutical, or drugs, sector in the United States. For instance, ... Read Full Answer >>
  2. What are the ethical arguments against government subsidies to companies like Tesla?

    The ethical argument behind government subsidies is that they should be put into place to help industries that will, in turn, ... Read Full Answer >>
  3. What do I do if I think an accountant is in violation of the Generally Accepted Accounting ...

    The Financial Accounting Standards Board (FASB) promulgates generally accepted accounting principles (GAAP) in the United ... Read Full Answer >>
  4. How autonomous are special administrative regions?

    When most people think of special administrative regions, or SARs, they are referring to Hong Kong and its relationship with ... Read Full Answer >>
  5. Can a special administrative region declare autonomy?

    Special administrative regions, or SARs, namely Hong Kong and Macau, do not declare autonomy so much as they are granted ... Read Full Answer >>
  6. How will a value added tax impact the government budget?

    In 1992, the Congressional Budget Office conducted an economic study on value-added tax, or VAT. At the time, the CBO concluded ... 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. Professionals

    Can Young Workers Rely on Social Security?

    Young savers have time on their hands to take advantage of many investment strategies, and they should because Social Security alone might not be enough.
  6. Economics

    Sacrifices Necessary to Keep Puerto Rico Afloat

    After years of band aids and significant borrowing to meet its obligations, the time has come for meaningful reform in Puerto Rico.
  7. Economics

    Global Impact of China's Geopolitical Strategy

    China's geopolitical strategy is shifting the status quo from the Pacific to the Pentagon. Can the U.S. keep pace with Chinese military innovation?
  8. Economics

    3 Possibilities If Sanctions Against Iran Lift

    What would happen if sanctions against Iran were lifted?
  9. Economics

    Understanding Iran Sanctions by the US

    Considering US sanctions have been in place for almost 40 years, and Iran is still considered a troubled region, can we say they have been effective?
  10. Economics

    Industries That Will Benefit From Lifting Iran Sanctions

    After sanctions related to Iran's nuclear program are lifted, a number of global industries should benefit from the opening up of second largest country in the Middle East.

You May Also Like

Hot Definitions
  1. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  2. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  3. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  4. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  5. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  6. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!