Anarcho-capitalism Works

An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West

This paper was written while Terry Anderson was a National Fellow at the Hoover Institution, 1977-78. While retaining responsibility for any errors, the authors wish to thank Jon Christianson, Murray Rothbard, and Gordon Tullock for their valuable comments.

by Terry L. Anderson and P. J. Hill

Department of Economics, Montana State University


The growth of government during this century has attracted the attention of many scholars interested in explaining that growth and in proposing ways to limit it. As a result of this attention, the public choice literature has experienced an upsurge in the interest in anarchy and its implications for social organization. The work of Rawls and Nozick, two volumes edited by Gordon Tullock, Explorations in the Theory of Anarchy, and a hook by David Friedman, The Machinery of Freedom, provide examples. The goals of the literature have varied from providing a conceptual framework for comparing Leviathan and its opposite extreme to presenting a formula for the operation of society in a state of anarchy. But nearly all of this work has one common aspect; it explores the “theory of anarchy.” The purpose of this paper is to take us from the theoretical world of anarchy to a case study of its application. To accomplish our task we will first discuss what is meant by “anarcho-capitalism” and present several hypotheses relating to the nature of social organization in this world. These hypotheses will then he tested in the context of the American West during its earliest settlement. We propose to examine property rights formulation and protection under voluntary organizations such as private protection agencies, vigilantes, wagon trains, and early mining camps. Although the early West was not completely anarchistic, we believe that government as a legitimate agency of coercion was absent for a long enough period to provide insights into the operation and viability of property rights in the absence of a formal state. The nature of contracts for the provision of “public goods” and the evolution of western “laws” for the period from 1830 to 1900 will provide the data for this case study.

The West during this time often is perceived as a place of great chaos, with little respect for property or life. Our research indicates that this was not the case; property rights were protected and civil order prevailed. Private agencies provided the necessary basis for an orderly society in which property was protected and conflicts were resolved. These agencies often did not qualify as governments because they did not have a legal monopoly on “keeping order.” They soon discovered that “warfare” was a costly way of resolving disputes and lower cost methods of settlement (arbitration, courts, etc.) resulted. In summary, this paper argues that a characterization of the American West as chaotic would appear to be incorrect.

Anarchy: Order or Chaos?

Though the first dictionary definition of anarchy is “the state of having no government,” many people believe that the third definition, “confusion or chaos generally,” is more appropriate since it is a necessary result of the first. If we were to engage seriously in the task of dismantling the government as it exists in the U.S., the political economist would find no scarcity of programs to eliminate. However, as the dismantling continued, the decisions would become more and more difficult, with the last “public goods” to be dealt with probably being programs designed to define and enforce property rights. Consider the following two categories of responses to this problem:

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2 responses to “Anarcho-capitalism Works

  1. I read this article several years ago. It certainly dispels the false history portrayed in the movies and the popular histories of the period. It is too bad we don’t enjoy the same “protection” of that era.

  2. Incredibly interesting! Thanks for the tip.