[bobman0330]

A workable anarchocapitalist system requires more than simply the absence of government. It also requires that the people generally respect property and the legitimacy of voluntary transactions. That is why Somalia, though thoroughly governmentless, has no had economic success. Its people don't value private property, and, as a result, time-preferences are rationally high.

(The reason why respect for property rights is so important has to do with the nature of property. ACists often claim that property is "natural," but this is false. Property is everywhere and always a community phenomenon. It may be natural for me to pluck an apple out of a tree and eat it; that is, possession is natural. But it is not at all natural for random strangers to defend my right to possess the apple against anyone who tries to take it from me. They could just as easily not care. This community recognition of my right of possession is the key to property. I digress...]

The implicit assumption in the ACist argument is that the US would be different. That assumption, however, rests on shaky foundations. True, most people recognize my right to possess an apple and eat it. But the majority of people are far less willing to recognize my right to possess, say, $75 billion. If you took a poll, most people would say that hedge fund managers make too much money. Bill Gates has too much money.

Likewise with voluntary transactions. If I sell my couch on Craigslist, no one will care. But if I own the only factory in a small town and employ starving workers for a very low wage, people will start to look at me askance. And if I start employing children or provide unsafe working conditions, I'd better start looking over my shoulder.

It's hard to predict what the results of limited lack of respect for property rights might be. Perhaps the hypothetical low-wage factory owner just has to build a high-security compound and employ armed guards. But it's also possible that the workers get really mad, storm the compound, and kill the owner and his family. Maybe that happens in a lot of places and there's a repeat of the Russian Revolution.

A critical and often-overlooked function of the democratic system is to mediate the competing demands (legitimate or illegitimate, rational or irrational) of various parties. Bill Gates can keep his billions, but he has to pay higher taxes, hedge-fund managers can get paid what they want, but maybe they don't get capital-gains treatment. Viewing democracy as solely a decision-making prospect (a role for which it is laughably ill-suited) is unfair. Even if we accept that democratic interventions are never efficient, it might still be the case that they resolve non-economic problems. The world has never experienced a society where wealth inequality was allowed to increase without limitation or responsibility. It's possible that irrational jealousies on the part of the underclass would make such a world unstable.