Anarcho-Capitalism

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).



BREAKING DOWN '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. Anarchy

    The condition of a society with no government. Some people think ...
  2. Building Society

    A type of financial institution that provides banking and other ...
  3. Murray N. Rothbard

    A natural-law libertarian and ardent proponent of Austrian economics, ...
  4. Economist

    An expert who studies the relationship between a society's resources ...
  5. Limited Government

    A political system in which legalized force is restricted through ...
  6. Rate Of Adoption

    The number of members of a society who start using a new technology ...
Related Articles
  1. Economics

    What is the Private Sector?

    The private sector encompasses all for-profit businesses that are not owned or operated by the government.
  2. Entrepreneurship

    Risks Associated With Government Contracts

    Government contracts can be rewarding, but they also come with a variety of risks.
  3. Economics

    Explaining Limited Government

    Limited government is a political viewpoint that favors few, if any, government controls on individuals and the economy.
  4. Economics

    Can Socialism Work In America?

    Capitalism has its shortcomings, but pure socialism is not the answer. The American system of capitalism with socialistic touches might be good for the US.
  5. Economics

    Crowding Out Effect

    Crowding out effect is an economic term referring to government spending driving down private sector spending, and can have several more specific meanings.
  6. Investing Basics

    What are Government Securities?

    Government securities are debt instruments that governments issue to raise capital.
  7. Insurance

    The Government And Risk: A Love-Hate Relationship

    Though the U.S. government can help its citizens by subsidizing risky loans, the costs always come back to the taxpayers.
  8. Economics

    Macroeconomics: Government - Expenditures, Taxes and Debt

    By Stephen Simpson ExternalitiesIn a market economy there are important differences between public and private goods. Private goods are considered "rival and excludable" - one person consuming ...
  9. Investing News

    How Is the Bank of Japan Monetizing Government Debt?

    With its massive QE program and more recent adoption of negative interest rates, it looks like the BOJ is monetizing the Japanese government's debt.
  10. Economics

    Government Regulations: Do They Help Businesses?

    Is it possible that laws created to protect consumers can benefit businesses at the same time?
RELATED FAQS
  1. In what types of societies does limited government work best?

    See what a society needs to function with a limited government, and how social cooperation can be achieved through voluntary ... Read Answer >>
  2. What role does the government play in capitalism?

    Take a deeper look at the role of government in a capitalist economic system and about competing ideas about the proper amount ... Read Answer >>
  3. Why do most economists favor capitalism?

    Learn more about how capitalism works and why it is a popular system among economists throughout the world. Read Answer >>
  4. What is the Mont Pelerin Society?

    The Mont Pelerin Society was formed in 1947 when economist Friedrich von Hayek invited 39 people to meet at Mont Pelerin ... Read Answer >>
  5. Is the United States considered a market economy or a mixed economy?

    Find out why the United States is considered a mixed economy and how nearly every economic transaction is influenced by public ... Read Answer >>
  6. What are the advantages of a limited government in connection with a capitalist economy?

    Read about the advantages of limited government, why free markets are more efficient and how social cooperation grows where ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center