Anarcho-capitalism is seen as a form of individualist anarchism by several scholars. All of the classical individualist anarchists opposed profit-making and, hence, capitalism as it is commonly defined today. Nevertheless, anarcho-capitalism, which has no opposition to profit, is sometimes regarded as a form of individualist anarchism in recent times. For example, contemporary individualist anarchist Daniel Burton, who believes that most modern day individualist anarchists are class war anti-capitalists, nonetheless says that anarcho-capitalism is a type of individualist anarchism. Individualist Anarchist Laurance Labadie argued that Rothbard "upholds presumably in his courts the very economic evils which are at bottom the very reason for human contention and conflict." Wendy McElroy calls herself both an individualist anarchist and an anarcho-capitalist, and Italian anarcho-capitalist Guglielmo Piombini regards anarcho-capitalism as a form of individualist anarchism. Historian Ralph Raico regards it as "a form of individualist anarchism". Simon Tormey, in his book Anti-Capitalism: A Beginner's Guide places no anti-capitalist restriction on being an individualist anarchist: "Pro-capitalist anarchism is, as one might expect, particularly prevalent in the US where it feeds on the strong individualist and libertarian currents that have always been a part of the American political imaginary. To return to the point, however, there are individualist anarchists who are most certainly not anti-capitalist and there are those who may well be."
Some anarcho-capitalists argue that their philosophy is related to individualist anarchism. They believe a major difficulty in resolving the debate is due to the conflicting definitions of the words "anarchism" and "capitalism" as used by the two sides. The traditions that object to the term anarcho-capitalism tend to use the term "anarchism" to refer to political movements that are both anti-statist and anti-capitalist. Conversely, libertarians and anarcho-capitalists most commonly apply the term "anarchism" to any philosophy that opposes all forms of initiatory coercion (without specifications regarding economic systems). However, even this is disputed, as most anarchists argue that capitalism is inherently coercive.
Lysander Spooner's articles, such as No Treason, and the Letter to Thomas Bayard were widely reprinted in early anarcho-capitalist journals, and his ideas – especially his individualist critique of the state and his defense of the right to ignore or withdraw from it – were often cited by anarcho-capitalists. Spooner was staunchly opposed to government interference in economic matters, and supported a "right to acquire property [...] as one of the natural, inherent, inalienable rights of men [...] one which government has no power to infringe [...]". Like all anarchists, he opposed government regulation: "All legislative restraints upon the rate of interest are arbitrary and tyrannical restraints upon a man's natural capacity amid natural right to hire capital, upon which to bestow his labor." He was particularly vocal, however, in opposing any collusion between banks and government, and argued that the monopolistic privileges that the government granted to a few bankers were the source of many social and economic ills.
Benjamin Tucker supported private ownership of the product of labor, which he believed entailed a rejection of both collective and capitalist ownership. He was a staunch advocate of the mutualist form of recompensing labor, which holds to "Cost the limit of price". He also advocated a free market economy, which he believed was prohibited by capitalist monopoly of credit and land backed by the state. He believed that anyone who wishes should be allowed to engage in the banking business and issue their private currency without needing special permission from government, and that unused land should not be restricted to those who wished to use it. He believed that if these and other coercive actions were eliminated that profit in economic transactions would be rendered nearly impossible because of increased availability of capital to all individuals and resulting increased competition in business. Accepting the labor theory of value and the resulting "cost principle" as a premise marks one of mutualism's main conflicts with anarcho-capitalism. Although his self-identification as a socialist and sympathy for the labor movement led to hostility from some early anarcho-capitalists such as Robert LeFevre, others, such as Murray Rothbard, embraced his critique of the state and claimed that he defined his "socialism" not in terms of opposition to a free market or private property, but in opposition to government privileges for business. However, individualists argue that capitalism cannot be maintained in the absence of the state. For example, Kevin Carson argues, "As a mutualist anarchist, I believe that expropriation of surplus value – i.e., capitalism – cannot occur without state coercion to maintain the privilege of usurer, landlord, and capitalist. It was for this reason that the free market mutualist Benjamin Tucker – from whom right-libertarians selectively borrow – regarded himself as a libertarian socialist." Tucker characterized the economic demands of Proudhon and Warren by saying, "though opposed to socializing the ownership of capital, they aimed nevertheless to socialize its effects by making its use beneficial to all instead of a means of impoverishing the many to enrich the few [...] Absolute Free Trade; free trade at home, as well as with foreign countries; the logical carrying out of the Manchester doctrine; laissez-faire the universal rule."
Anarcho-capitalism is sometimes viewed by those sympathetic to it as a form of individualist anarchism, despite the fact that the original individualist anarchists universally rejected capitalism (i.e., they opposed profit, which is seen as a fundamental characteristic of capitalism). Organizations such as mutualist.org remain dedicated to "free market anticapitalism," while individualists like Larry Gambone explicitly state that all capitalism is state capitalism. Nonetheless, anarcho-capitalist Wendy McElroy considers herself to be an individualist, while admitting that the original individualists were universally anticapitalist. In addition, historian Guglielmo Piombini considers anarcho-capitalism a form of individualist anarchism, though he offers no support for this statement. Social anarchist author Iain McKay and historian Peter Sabatini both argue that anarcho-capitalism is fundamentally opposed to individualist anarchism.
The similarity to anarcho-capitalism in regard to private defense of liberty and property is probably best seen in a quote by 19th-century individualist anarchist Victor Yarros:
While the claim is controversial, some scholars regard anarcho-capitalism as being a form of individualism anarchism. However, other scholars, and many individualist anarchists themselves, do not accept anarcho-capitalism as a form of individualist anarchism, individualist or not, as they assert that anarchism is fundamentally opposed to capitalism. As individualist anarchist Joe Peacott says:
Individualist anarchists have continued to espouse the labor theory of value, finding profit to be unnatural and exploitative. In the mainstream, however, the popularity of the labor theory of value of classical economics was superseded by greater acceptance of the subjective theory of value of neo-classical economics. Eventually, in the 1950s, Murray Rothbard coined the term "anarcho-capitalism" to define his anti-statist, laissez-faire capitalist philosophy.
Rothbard noted that while "strongly tempted," he could not call his ideology "individualist anarchism" because "Spooner and Tucker have in a sense preempted that name for their doctrine and that from that doctrine I have certain differences." Rothbard also supported unregulated banking, as Tucker and other individualists did, but believed that Tucker and Spooner had a flawed understanding of economics to believe that unregulated banking would eliminate profit from interest. Rothbard says interest rates are ultimately determined by the time value of money, rather than the supply of money and that interest/profit would still exist in a free banking environment. He says: "it has been particularly distressing to me as an ardent admirer of Spooner and Tucker to find that their followers have emphasized and concentrated on their totally fallacious monetary views almost to the exclusion of all else and even bring them forth as a panacea for all economic and social ills." Rothbard suggested that individualist anarchists drop the labor theory of value which he believed to be erroneous and leading to a false conclusion that profit was exploitative or unnatural in laissez-faire. Rothbard sought to introduce Lockean property rights and marginalism into individualist anarchism:
Rothbard also rejected Tucker and Spooner's support of a system where there is no written law. He says,
Instead, he argues,
Individualist anarchist Laurance Labadie responded that:
Mere common sense would suggest that any court would be influenced by experience; and any free-market court or judge would in the very nature of things have some precedents guiding them in their instructions to a jury. But since no case is exactly the same, a jury would have considerable say about the heinousness of the offence in each case, realising that circumstances alter cases, and prescribing penalty accordingly. This appeared to Spooner and Tucker to be a more flexible and equitable administration of justice possible or feasible, human beings being what they are... But when Mr. Rothbard quibbles about the jurisprudential ideas of Spooner and Tucker, and at the same time upholds presumably in his courts the very economic evils which are at bottom the very reason for human contention and conflict, he would seem to be a man who chokes at a gnat while swallowing a camel.
However, this criticism is specific to Rothbard's suggested version of anarcho-capitalism rather than to anarcho-capitalism in general. There are anarcho-capitalists who oppose the existence of all statutory law, such as Morris and Linda Tannehill. Individualist anarchism is a broad philosophy with various theorists having their own suggested versions.
Philosopher Brad Spangler also finds fault in the understanding of Rothbard's political philosophy held by self-described left-anarchists. Spangler makes the argument that what we typically call "anarcho-capitalism" is in fact a stigmergic socialism. "It is my contention," writes Spangler, "that Rothbardian anarcho-capitalism is misnamed because it is actually a variety of socialism, in that it offers an alternative understanding of existing capitalism (or any other variety of statism) as systematic theft from the lower classes and envisions a more just society without that oppression. Rather than depending upon the labor theory of value to understand this systematic theft, Rothbardian market anarchism utilizes natural law theory and Lockean principles of property and self-ownership taken to their logical extreme as an alternative framework for understanding and combating oppression." He goes on to call Murray Rothbard "a visionary socialist," admitting that it would likely cause Rothbard fits to be characterized as such.
Though some scholars say that anarcho-capitalism is a form of anarchism, most anarchists disagree. Some writers on anarchism point out that anarcho-capitalism and most other forms of anarchism are very different, calling it "right-libertarianism" rather than left-libertarianism, but maintaining that it is still anarchism. Peter Marshall simply concludes that "few anarchists would accept 'anarcho-capitalists' into the anarchist camp."
Some anarchists maintain strongly that anarcho-capitalism is not a form of anarchism due to their belief that anarchism is necessarily anti-capitalist as well as anti-statist. They note that, historically, those who called themselves "anarchist" have been opposed to what they called "capitalism," and that anarchists like Proudhon, Bakunin, Kropotkin and Tucker all called themselves socialists, and they argue that anarcho-capitalism "is judged to be anarchism largely because anarcho-capitalists say they are 'anarchists' and because they criticise the State." Significantly, few anarchists who called themselves "socialist" defined "anarchism" as purely opposition to the state. For example, Errico Malatesta argued that the oppressed "sought to overthrow both State and property – then it was that anarchism was born." More recent anarchist thinkers have also noted that anarchism has not been solely concerned with the state:
"Critics have sometimes contended that anarchist thought, and classical anarchist theory in particular, has emphasised opposition to the state to the point of neglecting the real hegemony of economic power. This interpretation arises, perhaps, from a simplistic and overdrawn distinction between the anarchist focus on political domination and the Marxist focus on economic exploitation . . . there is abundant evidence against such a thesis throughout the history of anarchist thought."'
Both social anarchists and anarcho-capitalists refer to the etymological origins of the word "anarchy" as "without rulers". Conventionally, anarchists interpret this to mean anything fitting the definition of ruler.
Anarcho-capitalists specifically interpret this to apply to any form of institutionalized coercion, arguing that in a society free from coercion, no institution can exist to prevent a person from following another. Anarcho-capitalists further argue that the forced prevention of any voluntary action (save for those actions which infringe upon the equal rights of others) creates a coercive hierarchy, a ruler class and a ruled class. They argue that this class structure exists everywhere and only where coercion prevails. Classical American individualist anarchists in the Josiah Warren or Benjamin Tucker tradition favoured small local market, also opposing the existence of social class structure since it, they argue, cuts individual liberty by making some people work and receive orders from others above; however the classical American individualist anarchists opposed what they called capitalism, believing that profit would decrease approaching zero under free market anarchy.
Many scholars such as David Osterfeld and David Miller view anarcho-capitalism as a 20th-century modification of the type of individualist anarchism that was popular in America in the late 19th and early 20th centuries. Scholar of political philosophy, Ian Adam, says "it is not in fact the case (as is sometimes thought) that anarcho-capitalism came out of the blue, without past or pedigree. It has a good deal in common with the earlier American tradition of individualist anarchism." Anti-capitalist anarchists tend to reject such claims, noting that many of the individualist anarchists called themselves socialists, and that all had a vision of a free society at odds with what they called capitalism. However, the scholars making the assertion that anarcho-capitalism is a more recent form of individualist anarchism are aware that 19th century individualist anarchists were opposed to capitalism (and communism); the assertion is that anarcho-capitalism is a subjectivist form of individualist anarchism. In other words, opposition to profit is not a necessary condition of being an individualist anarchist.
Nevertheless, one anti-capitalist individualist anarchist laments, "is time that anarchists recognise the valuable contributions of... individualist anarchist theory and take advantage of its ideas. It would be both futile and criminal to leave it to the capitalist libertarians..." Anarchist author Iain McKay argues that individualism is essentially anti-capitalist and that anarcho-capitalism's claim to the tradition require reading individualist anarchists out of context (). Individualist anarchist Joe Peacott argues that individualism rejects capitalist economic arrangements.
One set of approaches concludes that capitalism, by necessity, requires a state, and therefore capitalism cannot exist without a state. For example, Larry Gambone states, "for anarchists, capitalism is the result of the development of the state and therefore, all capitalism is in one sense, state capitalism." He adds that when the anarchists use the term "capitalism," they are referring to those who have "gained wealth from the use of governmental power or from privileges granted by government." Anarcho-capitalist Wendy McElroy says that when 19th century individualist anarchists referred to "capitalism" they meant state capitalism, the alliance of government and business. Using this understanding of the manifestation of capitalism, some have argued that anarcho-"capitalism" is not truly a form of capitalism to begin with, and that therefore anarcho-"capitalism" is just as anti-capitalist as Tucker and Spooner. Left-libertarian Brad Spangler, for example, has argued that anarcho-capitalism, properly understood, is a stigmergic form of socialism.
For those that maintain that anarcho-capitalism is, in fact, a form of capitalism, the issue of contention then becomes whether or not capitalism can be created, or maintained, in the absence of a state that intervenes in private property claims. Anarcho-capitalist Murray Rothbard noted a difference between two contradictory concepts of capitalism, "free-market capitalism" characterized by voluntary exchange and "state capitalism" characterized by violent expropriation. He believed that only free-market capitalism is true capitalism and as such "the fullest expression of anarchism". However, most anarchists would agree with scholar Jeremy Jennings statement that it is "hard not to conclude that these ideas [anarcho-capitalism] – with roots deep in classical liberalism – are described as anarchist only on the basis of a misunderstanding of what anarchism is."
Social anarchists are opposed to concentrations of wealth as this, they argue, results in economic power and limits the individual freedom of others. They argue that inequalities in wealth results in a situation where the many have little choice but to sell their liberty.
Anarcho-capitalists and other anarchists identifying with non-violent struggle subscribe to the general rule that physical force should not be initiated, but reserved for defense. Some of the 19th century individualist anarchists, such Josiah Warren and Lysander Spooner based their individualism on natural law, but many were "egoists," believing that no rights exist without contract that results out of individual self-interest. Benjamin Tucker says: "I see no reason, as far as moral obligation is concerned, why one [man] should not sub-ordinate or destroy the other. But if each of these men can be made to see that the other's free life is helpful to him, then they will agree not to invade each other; in other words, they will equalize their existences, or rights to existence by contract. ... Before contract is the right of might. Contract is the voluntary suspension of the right to might. The power secured by such suspension we may call the right of contract. These two rights -the right of might and the right of contract -are the only rights that ever have been or ever can be. So-called moral rights have no existence." Anarcho-capitalist David Friedman also subscribes to a contractual view of rights, as opposed to anarcho-capitalist Murray Rothbard's natural law basis.
Historically many self described anarchist theorists, activists, and revolutionaries have advocated and employed violence that was not in self-defense. Particularly, insurrectionary anarchism places a specific spotlight on the concept of the "attack" in order to achieve anarchy. Notable figures include Emma Goldman, The Invisible Committee, Alexander Berkman, Peter Gelderloos, Pierre Proudhon, and those in the illegalist strain. This feature is far from universal, however, with major left anarchist figures defending pacifism (most notably Tolstoy.)
Anarcho-capitalists advocate private competition in defense, and in a sense require it due to their emphasis on private property, interest, rent and profit. Rothbard defines "anarchism as a system which provides no legal sanction for such aggression ['against person and property']" and said that "what anarchism proposes to do, then, is to abolish the State, i.e. to abolish the regularized institution of aggressive coercion." However, anarchists are unimpressed by this claim. They simply reply that this is privatising, not abolishing, the state; David Weick, for instance, argues that it would be better called "feudalism". Similarly, anarchists ask who defines what is and is not a "legal sanction" and what is and is not "aggressive coercion." Rothbard would assert that the violator of the property right of the victim would be the aggressor. This claim is justified using natural law theory.
While individualist anarchists expect that one would defend their own property through possession, some, such as Tucker and Spooner, support private defense to protect property. Tucker differentiates protection from rent or tax, because the primary form of protection would be possessive, saying that "defense is a service like any other service; that it is labor both useful and desired, and therefore an economic commodity subject to the law of supply and demand;" (Instead of a Book).
Many anarchists argue that capitalism runs contrary to an egalitarian power structure, which is necessary to anarchism. They also argue that the system of wage labour, a staple characteristic of capitalism, is authoritarian and coercive in nature, and oppose class distinction between labourers and employers. A major line of reasoning is that employees are subject to the authority of their employer with respect to the latter's property and, because such an hierarchy could not be tolerated within an egalitarian power structure, it is essential to anarchism for such practices to be abolished. The writers of An Anarchist FAQ argue that "social relations between capitalists and employees can never be equal, because private ownership of the means of production gives rise to social hierarchy and relations of coercive authority and subordination".
Individualist anarchists, however, did not necessarily object to private ownership of the means of production, nor universally reject wage labour as illegitimate hierarchy. Nineteenth-century individualist anarchist Stephen Pearl Andrews said, "The 'Wages System' is essentially proper and right. It is a right to that one man employ another, it is right that he pay him wages, and it is right that he direct him absolutely, arbitrarily, if you will, in the performance of his labor. [. . .] It is not in any, nor in all of these features combined, that the wrong of our present system is to be sought and found. It is in the simply failure to do Equity. It is not that men are employed and paid, but that they are not paid justly...." Any that had opposition to employment by others, opposed it for monetary reasons rather than condemning it as hierarchical. For example, Spooner argued that "each man should be his own employer, or work directly for himself, and not for another for wages; because, in the latter case, a part of the fruits of his labor go to his employer, instead of coming to himself." Rather than object to wages being paid, individualist anarchists believed that wages were not adequately compensating labor due to state interference in the economy. Benjamin Tucker thought that the elimination of state intervention would increase competition in capital, eliminate the possibility of an employer receiving an income without himself laboring, and create a society in which "every man will be a labourer exchanging with fellow-labourers."
Anarcho-capitalist David D. Friedman stated a preference for a society not based in wage labor, but one in which "almost everyone is self employed. Instead of corporations there are large groups of entrepreneurs related by trade, not authority. Each sells, not his time, but what his time produces." Like all individualist anarchists, anarcho-capitalists support the liberty of individuals to be self-employed or to contract to be employed by others, whichever they prefer. Anarcho-capitalist Murray Rothbard, however, explicitly stated that "wage-wage" was one of "a whole slew of institutions necessary to the triumph of liberty" (including "organization, hierarchy, wage-work, granting of funds by libertarian millionaires, and a libertarian political party"). According to Rothbard, "rejection of wage-labor" was "unlibertarian."
The writers of An Anarchist FAQ argue that wage labour is not consistent with anarchist principles, including the stated principles of individualist anarchists like Tucker. Unlike anarcho-capitalism, however, it "can easily be made consistent anarchism by applying its own principles consistently."
In social anarchism there is no outright ban on wage labor, but rather a lack of enforcement of "'agreements' in which workers sign away their liberty". Effectively, this undermines the wage labor system, which depends on the employer's recourse (e.g. to the state) in order for the terms of such "agreements" to be enforced, and thus a ban imposed by a democratic collective is unnecessary.
Both social and individualist anarchists note that current distributions of property have not been created by legitimate means and that the current system of property rights is the result of state intervention.
Likewise, anarcho-capitalists do not defend all private property, but only that which has become private property by "homesteading." They do not see the creation of private property by mere claim as legitimate, nor do they defend private property that has been transferred from one person or business to another by force, whether by the state or private individuals. Rothbard says: "What we libertarians object to, then, is not government per se but crime, what we object to is unjust or criminal property titles; what we are for is not "private" property per se but just, innocent, non-criminal private property." Anarcho-capitalists do not defend the current distribution of property.
Many anarchists argue that anarcho-capitalism is contradictory, and say that the anarcho-capitalist definition of private property is uncomfortably similar to its definition of the state. For example, leading anarcho-capitalist Murray Rothbard argued that the state "arrogates to itself a monopoly of force . . . over a given area territorial area.", yet he also argued: "Obviously, in a free society, Smith has the ultimate decision-making power over his own just property, Jones over his, etc." However, the key word is "arrogates," as anarcho-capitalists only support property created by homesteading which they do not see as arrogation but as earning through one's labor. To arrogate a monopoly of force would be to exercise control over an area that one has not homesteaded, or to exercise control over an area by one who has not received the homesteaded property through voluntary means.
To anarcho-capitalists, any geographical holding as large as most current incarnations of the state would be impossible to achieve by any one proprietor without the tools of the state. Standard private holdings tend to be not only much smaller, but antithetical to coercive relationships - as any visitor, lessee, or employee, would be free to move elsewhere at will. Further, the state, being an artificial entity without a head of its own, has an entirely different set of motives regarding care of a property, resulting in proportionate carelessness for that property (i.e. pollution).
Anarchists also note that once land and capital are monopolised by a minority, attempts by those subject to this economic and social power to end it automatically become "aggression." As Kropotkin noted, "modern Individualism... [is] a powerful indictment against the dangers and wrongs of government, but its practical solution of the social problem... lead[s] us to inquire if the talk of 'No force' be merely an excuse for supporting landlord and capitalist domination."
Many nineteenth-century individualist anarchists, including Benjamin Tucker, rejected the anarcho-capitalist Lockean position in favour of the anarchist position of "occupancy and use" (or "possession", to use Proudhon's term), particularly in land. One notable exception is Lysander Spooner, who did not require that land use be "continual" to retain ownership. Similarly, anarcho-capitalist Rothbard argued that one must "use the land, to cultivate it in some way, before he could be asserted to own it." and did not require continual use to retain ownership. Many individualist anarchists of the nineteenth century accepted Proudhon's position on land: "What I cannot accept, regarding land, is that the work put in gives a right to ownership of what has been worked on." If there was a shortage of land, he "accept[ed] equal division. Anything else... is an abuse." Anarchist critics of anarcho-capitalism also note that Proudhon's "What is Property?" explicitly attacks the position on land ownership supported by Spooner and anarcho-capitalists. Benjamin Tucker, however, changed his mind on land and said in 1862: "In times past...it was my habit to talk glibly of the right of man to land. It was a bad habit, and I long ago sloughed it off. Man's only right to land is his might over it. If his neighbor is mightier than he and takes the land from him, then the land is his neighbor's, until the latter is dispossessed by one mightier still." Anarcho-capitalists, such as Murray Rothbard, disagree that might and theft grants a right over land.
Because of his belief in the labor theory of value, when the nineteenth century individualist Benjamin Tucker said that an employee should receive his "full produce," he took it to mean that the full produce was an amount of money fully commensurate with the amount of a labor performed. He believed individuals were receiving less than their "full produce" because of state intervention interfering with competitive market forces and thereby artificially lowering the price of labor—a view shared by anarcho-capitalists today. Tucker did not advocate interfering with individuals contracting as employee and employer if they desire, but believed that the price of labor would increase in a true laissez-faire economy. He thought that legal restrictions on banking caused the price of capital to be unnaturally expensive and that if these restrictions were removed that capital would become available "at cost." This, he believed, would cause new businesses to proliferate and raise the demand for labor and therefore the price as well. Individualist Lysander Spooner advocated that workers maximize their incomes through universal self-employment.
Many individualist anarchists argue that a truly free market would result in a non-capitalist anarchism, without social or economic hierarchy. The contemporary individualist Kevin A. Carson holds that capitalism is founded on "an act of robbery as massive as feudalism," and argues that capitalism could not exist in the absence of a state. Carson argues that if a truly free market were to have been put in effect it would have resulted in a system where the ability to extract a profit from labor and capital would be negligible as "a system of power in which ownership and control are divorced from labor – could not survive in a free market.". Anarcho-capitalists disagree, with most stating that this economic system would involve hierarchy, inequality as well as interest, rent and profit.
Right-libertarians, Carson argues, "take existing property relations and class power as a given." Carson, like previous individualist anarchists, thinks that the "modern worker, like the slave or the serf, is the victim of ongoing robbery; he works in an enterprise built from past stolen labor" so they are "justified in taking direct control of production, and keeping the entire product of his [or her] labor." At first glance, anarcho-capitalists may consider such expropriation as coercion, but at second glance, most anarcho-capitalists agree with Carson conception of appropriation. As Carson writes,
The only cases in which I have advocated seizure of the means of production by workers are those in which that notorious "socialist" Murray Rothbard advocated it (in Confiscation and the Homestead Principle): that is, in the case of enterprises which get the majority of their profits from state intervention, and can therefore justly be treated as branches of the state. And even in those cases I advocated, not nationalization, but the direct homesteading of plants by the labor force, and their conversion to producer cooperatives competing in an unregulated market.
Since anarchists by definition favour voluntary interaction, anarcho-capitalists have argued from a different definition of "voluntary" than has been historically used by anarchists. This has led to disputes over whether anarcho-capitalists support a genuinely "free market." Anarcho-capitalists (and capitalists in general) understand a trade to be voluntary if there is no physical coercion or threat thereof. Opponents take into account other forms of coercion, such as economic coercion, arguing that an environment of property domination coerces individuals into accepting trades that are not optimal to them because their choices are being actively restricted by others. Anarcho-capitalists maintain that such restrictions tend not to be intrusive, but rather ensures order between visitors.
Some anarchists reject institutions such as interest, rent, and profit as being intrusive and exploitative, and thus they believe that they should be abolished. They maintain that such institutions were made possible, in part, by state restrictions on banking and currency issuance as well as titles to land, and by vast accumulations of wealth which arise in capitalism and interfere with the free economy. Anarcho-capitalists do not believe that interest, rent, or profit are exploitative, arguing they are compatible with free markets, and claiming these institutions would prevail without government interference. However, like individualist anarchists, some anarcho-capitalists believe that in a free market, interest rates would substantially fall, but more due to falling time preference.
Historically, most anarchists have argued that profit, rent, and interest are exploitative. Some anarchists, like Proudhon, Bakunin and Tucker, base this in the labour theory of value while others, like Kropotkin and Malatesta, did not. While classical economists such as Adam Smith also accepted the labor theory of value, most modern economists, including most anarcho-capitalists and some other anarchists, espouse a subjective theory of value and marginalism - that value of commodities and labor is variable and based on factors outside the means of production, such as scarcity, and the subjective value to potential buyers.
In the eyes of anarchists who embrace a labor theory of value, profit is derived by paying labor less than what it is worth, with the employer retaining the difference, and is considered exploitative. For anarcho-capitalists, worth is subjective. And they believe that both employer and employee profit by giving what they value less (equipment and labor, respectively) for what they value more (labour and wages, respectively) or else they would not agree to trade, and therefore the agreement is not considered exploitative by anarcho-capitalists.
The nineteenth century individualists depart from anarcho-capitalists in arguing that all wages should be equal insofar as labor is commensurate, in accordance with the principle of "cost the limit of price." Anarcho-capitalists, believing that the value of any particular labor is subjective, and should be ultimately decided by mutual agreement, have no opposition whatsoever to employers profiting from the labor of their employees. However, as market anarchist Sheldon Richman writes, the Austrian economist Eugen von Böhm-Bawerk had his own exploitation theory based on the artificial raising of the employers time preference.
This has been a major point of contention between anarcho-capitalists and other anarchists, most of whom see this as a form of hierarchy, exploitation and privatized statism. Post-left anarchist Bob Black adds "To my mind a right-wing anarchist is just a minarchist who'd abolish the state to his own satisfaction by calling it something else...They don't denounce what the state does, they just object to who's doing it."
Benjamin Tucker believed that more employment opportunities would be available if government did not enforce a credit monopoly and land monopoly, as he believed that low-interest or no-interest loans would be readily available to the general public due to competing lenders, and that profiting in wage labor would be nearly impossible due to increased competition on the part of businesses to attract labor.
Murray Rothbard was "a student and disciple of the Austrian economist Ludwig von Mises, [who] combined the laissez-faire economics of his teacher with the absolutist views of human rights and rejection of the state he had absorbed from studying the individualist American anarchists of the nineteenth century such as Lysander Spooner and Benjamin Tucker." Rothbard said:
Like the nineteenth century individualists, Rothbard believed that security should be provided by multiple competing businesses rather than by a tax-funded central agency. However, he rejected their labor theory of value in favor of the modern neo-classical marginalist view. Thus, like most modern economists, he did not believe that prices in a free market would, or should, be proportional to labor (nor that "usury" or "exploitation" necessarily occurs where they are disproportionate). Instead, he believed that different prices of goods and services in a market, whether completely free or not, are ultimately the result of goods and services having different marginal utilities rather than of their embodying differing amounts of labor – and that there is nothing unjust about this. Rothbard also disagreed with Tucker that interest would disappear with unregulated banking and money issuance. Rothbard believed that people in general do not wish to lend their money to others without compensation, so there is no reason why this would change where banking is unregulated. Nor, did he agree that unregulated banking would increase the supply of money because he believed the supply of money in a truly free market is self-regulating. And, he believed that it is good that it would not increase the supply or inflation would result. Few individualist anarchists still agree with the labor theory of value of the nineteenth century individualists or their theories on money, and as a result, according to mutualist Kevin Carson, "most people who call themselves 'individualist anarchists' today are followers of Murray Rothbard's Austrian economics."
Though Rothbard said "I am ... strongly tempted to call myself an 'individualist anarchist,' except for the fact that Spooner and Tucker have in a sense preempted that name for their doctrine and that from that doctrine I have certain differences," some scholars classify anarcho-capitalism as a capitalist form of individualist anarchism. Anarcho-capitalist Wendy McElroy does describe herself as a "Rothbardian and an individualist anarchist." Anti-capitalist anti-communist individualist anarchist Joe Peacott concurs that there are significant economic differences: "The anarchist capitalists ... reject a key part of the thought of the [19th century] individualists ... that rent, interest, and profit are ways to steal this wealth from its rightful owners." However, most anarchists believe that support of free market capitalism disqualifies anarcho-capitalists from being anarchists, individualist or otherwise. Some individualist anarchists have continued to espouse the labor theory of value, finding profit to be unnatural and exploitative. In the mainstream, however, the popularity of the labor theory of value of classical economics was superseded by greater acceptance of the subjective theory of value of neo-classical economics. Eventually, Murray Rothbard coined the term "anarcho-capitalism" to define his anti-statist, laissez-faire capitalist philosophy. Anarcho-capitalism has a theory of legitimacy that supports private property, as long as it is not obtained by coercion. Its leading proponents are Murray Rothbard and David Friedman and it has been influenced by non-anarchist libertarians such as Frederic Bastiat and Robert Nozick, and also by Ayn Rand (although she rejected anarchism).
Many anarcho-capitalists say their views have no relation to what they call social anarchism, other than opposition to the State. Nevertheless many anarchists who oppose capitalism also like to see themselves as individualist and argue that the social classes created by capitalism limit liberty by forcing some individuals to work and receive orders from others above them, and also limiting individual's use of their time and subjectivity. This is in many respects, in their views, as much destruction or more destruction of liberty as the existence of states. Some anarchists have even argued that individualism and communism are not only compatible but even necessary complements in order to protect individual liberty.