This is a common right-libertarian objection. Robert Nozick, for example, imagines the following scenario:

"[S]mall factories would spring up in a socialist society, unless forbidden. I melt some of my personal possessions and build a machine out of the material. I offer you and others a philosophy lecture once a week in exchange for yet other things, and so on . . . some persons might even want to leave their jobs in socialist industry and work full time in this private sector. . . [This is] how private property even in means of production would occur in a socialist society."

Hence Nozick claims that "the socialist society will have to forbid capitalist acts between consenting adults." [Anarchy, State and Utopia, pp. 162-3]

As Jeff Stein points out, however, "the only reason workers want to be employed by capitalists is because they have no other means for making a living, no access to the means of production other than by selling themselves. For a capitalist sector to exist there must be some form of private ownership of productive resources, and a scarcity of alternatives. The workers must be in a condition of economic desperation for them to be willing to give up an equal voice in the management of their daily affairs and accept a boss." ["Market Anarchism? Caveat Emptor!", a review of A Structured Anarchism : An Overview of Libertarian Theory and Practice by John Griffin, Libertarian Labour Review #13, Winter 1992-93, pp. 33-39]

In an anarchist society, there is no need for anyone to "forbid" capitalist acts. All people have to do is refrain from helping would-be capitalists set up monopolies of productive assets. This is because, as we have noted in section B.3.2, capitalism cannot exist without some form of state to protect such monopolies. In a libertarian-socialist society, of course, there would be no state to begin with, and so there would be no question of it "refraining" from doing anything, including protecting would-be capitalists' monopolies of the means of production. In other words, would-be capitalists would face stiff competition for workers in an anarchist society. This is because self-managed workplaces would be able to offer workers more benefits (such as self-government, better working conditions, etc.) than the would-be capitalist ones. The would-be capitalists would have to offer not only excellent wages and conditions but also, in all likelihood, workers' control and hire-purchase on capital used. The chances of making a profit once the various monopolies associated with capitalism are abolished are slim.

It should be noted that Nozick makes a serious error in his case. He assumes that the "use rights" associated with an anarchist (i.e. socialist) society are identical to the "property rights" of a capitalist one. This is not the case, and so his argument is weakened and loses its force. Simply put, there is no such thing as an absolute or "natural" law of property. As John Stuart Mill pointed out, "powers of exclusive use and control are very various, and differ greatly in different countries and in different states of society." ["Chapters on Socialism," Principles of Political Economy, p. 432] Therefore, Nozick slips an ideological ringer into his example by erroneously interpreting socialism (or any other society for that matter) as specifying a distribution of private property rights (like those he, and other supporters of capitalism, believes in) along with the wealth. As Mill argued, "[o]ne of the mistakes oftenest committed, and which are the sources of the greatest practical errors in human affairs, is that of supposing that the same name always stands for the same aggregation of ideas. No word has been subject of more of this kind of misunderstanding that the word property." [Ibid.] Unfortunately, this errors seems particularly common with right-wing libertarians, who assume any use of the word "property" means what they mean by the word (this error reaches ridiculous levels when it comes to their co-option of the Individualist Anarchists based on this error!).

In other words, Nozick assumes that in all societies property rights must replace use rights in both consumption and production (an assumption that is ahistorical in the extreme). As Cheyney C. Ryan comments, "[d]ifferent conceptions of justice differ not only in how they would apportion society's holdings but in what rights individuals have over their holdings once they have been apportioned." ["Property Rights and Individual Liberty", in Reading Nozick, p. 331]

In effect, what possessions someone holds within a libertarian socialist society will not be his or her property (in the capitalist sense) any more than a company car is the property of the employee under capitalism. This means that as long as an individual remained a member of a commune and abided by the rules they helped create in that commune then they would have full use of the resources of that commune and could use their possessions as they saw fit (even "melt them down" to create a new machine, or whatever). Such lack of absolute "ownership" does not reduce liberty any more than the employee and the company car he or she uses (bar destruction and selling it, the employee can use it as they see fit).

This point highlights another flaw in Nozick's argument. If his argument is true, then it applies equally to capitalist society. For 40 hours plus a week, workers are employed by a boss. In that time they are given resources to use, under instructions of their boss. They are most definitely not allowed to melt down these resources to create a machine or use the resources they have been given access to further their own plans. In other words, "capitalist society will have to forbid capitalist acts between consenting adults." This can apply equally to rented accommodation as well, for example when landlords ban working from home or selling off the furniture that is provided. Thus, ironically, capitalism forbids capitalist acts between consenting adults all the time.

Of course, Nozick's reply to this point would be that the individual's involved have "consented" to these rules when they signed their contract. But the same can be said of an anarchist society — it is freely joined and freely left. To join a communist-anarchist society it would simply be a case of agreeing to "exchange" the product of ones labour freely with the other members of that society. Thus you could smelt down personal possessions and create a machine, exchange your time with others and so on. However, if wage labour becomes involved then the individuals involved have ceased being members of "the socialist society" by their actions. They have violated their agreements with their fellows and so it is not a case of "forbidding" certain acts. Rather it is a case of individuals meeting their self-created obligations. If this is "authoritarian" then so is capitalism — and we must stress that at least anarchist associations are based on self-management and so the individuals involved have an equal say in the obligations they live under.

Notice also that Nozick confuses exchange with capitalism ("I offer you a lecture once a week in exchange for other things"). This is a telling mistake by someone who claims to be an expert on capitalism, because the defining feature of capitalism is not exchange (which obviously took place long before capitalism existed) but labour contracts involving capitalist middlemen who appropriate a portion of the value produced by workers — in other words, wage labour. Nozick's example is merely a direct labour contract between the producer and the consumer. It does not involve any capitalist intermediary taking a percentage of the value created by the producer. Nor does it involve exploitative wage labour, what makes capitalism capitalism. It is only this latter type of transaction that libertarian socialism prevents — and not by "forbidding" it but simply by refusing to maintain the conditions necessary for it to occur, i.e. protection of capitalist property.

In addition, we must note that Nozick also confuses "private property in the means of production" with capitalism. Liberation socialism can be easily compatible with "private property in the means of production" when that "private property" is based on possession rather than capitalistic property. This can be seen from Kropotkin's arguments that peasant and artisan workers, those who "exploit nobody," would not be expropriated in an anarchist revolution. [Act for Yourselves, pp. 104-5] Nozick, in other words, confuses private property with possession and confuses pre-capitalist forms of production with capitalist ones. Thus possession of the means of production by people outside of the free commune is perfectly acceptable to social anarchists (see also section I.6.2).

Lastly, we must also note that Nozick also ignores the fact that acquisition must come before transfer, meaning that before "consenting" capitalist acts occur, individual ones must precede it. As argued above, for this to happen the would-be capitalist must steal communally owned resources by barring others from using them. This obviously would restrict the liberty of those who currently used them and so be hotly opposed by members of a community. If an individual did desire to use resources to employ wage labour then they would have effectively removed themselves from "socialist society" and so that society would bar them from using its resources (i.e. they would have to buy access to all the resources they currently took for granted).

Thus an anarchist society would have a flexible approach to Nozick's (flawed) argument. Individuals, in their free time, could "exchange" their time and possessions as they saw fit. These, however, are not "capitalist acts" regardless of Nozick's claims. However, the moment an individual employs wage labour then, by this act, they have broken their agreements with their fellows and, therefore, no longer part of "socialist society." This would involve them no longer having access to the benefits of communal life and to communal possessions. They have, in effect, placed themselves outside of their community and must fair for themselves. After all, if they desire to create "private property" (in the capitalist sense) then they have no right of access to communal possessions without paying for that right. For those who become wage slaves, a socialist society would, probably, be less strict. As Bakunin argued:

"Since the freedom of every individual is inalienable, society shall never allow any individual whatsoever legally to alienate his [or her] freedom or engage upon any contract with another on any footing but the utmost equality and reciprocity. It shall not, however, have the power to disbar a man or woman so devoid of any sense of personal dignity as to contract a relationship of voluntary servitude with another individual, but it will consider them as living off private charity and therefore unfit to enjoy political rights throughout the duration of that servitude." [Michael Bakunin: Selected Writings, pp. 68-9]

It should also be noted here that Nozick's theory does not provide any support for such appropriation of commonly held resources, meaning that his (right) libertarianism is totally without foundations (see section B.3.4 for details). His argument in favour of such appropriations recognises that certain liberties are very definitely restricted by private property (and it should be keep in mind that the destruction of commonly held resources, such as village commons, were enforced by the state — see section F.8.3). As Cheyney C. Ryan points out, Nozick "invoke[s] personal liberty as the decisive ground for rejecting patterned principles of justice [such as socialism] and restrictions on the ownership of capital. . .[b]ut where the rights of private property admittedly restrict the liberties of the average person, he seems perfectly happy to trade off such liberties against material gain for society as a whole." ["Property Rights and Individual Liberty", in Reading Nozack, p. 339]

Again, as pointed out in section F.2 (What do "anarcho"-capitalists mean by "freedom?") right-libertarians would better be termed "Propertarians." Why is liberty according a primary importance when arguing against socialism but not when private property restricts liberty? Obviously, Nozick considers the liberties associated with private property as more important than liberty in general. Likewise, capitalism must forbid corresponding socialist acts by individuals (for example, squatting unused property or trespassing on private property) and often socialist acts between consenting individuals (for example, the formation of unions against the wishes of the property owner who is, of course, sovereign over their property and those who use it, or the use of workplace resources to meet the needs of the producer rather than the owner).

So, to conclude, this question involves some strange logic (and many question begging assumptions) and ultimately fails in its attempt to prove libertarian socialism must "ban" "capitalistic acts between individuals." In addition, the objection undermines capitalism because it cannot support the creation of private property out of communal property in the first place.