Simply because a disregard for equality soon ends with liberty for the majority being negated in many important ways. Most "anarcho"-capitalists and right-Libertarians deny (or at best ignore) market power. Rothbard, for example, claims that economic power does not exist; what people call "economic power" is "simply the right under freedom to refuse to make an exchange" [The Ethics of Liberty, p. 222] and so the concept is meaningless.
However, the fact is that there are substantial power centres in society (and so are the source of hierarchical power and authoritarian social relations) which are not the state. The central fallacy of "anarcho"-capitalism is the (unstated) assumption that the various actors within an economy have relatively equal power. This assumption has been noted by many readers of their works. For example, Peter Marshall notes that "'anarcho-capitalists' like Murray Rothbard assume individuals would have equal bargaining power in a [capitalist] market-based society" [Demanding the Impossible, p. 46] George Walford also makes this clear in his comments on David Friedman's The Machinery of Freedom:
"The private ownership envisages by the anarcho-capitalists would be very different from that which we know. It is hardly going too far to say that while the one is nasty, the other would be nice. In anarcho-capitalism there would be no National Insurance, no Social Security, no National Health Service and not even anything corresponding to the Poor Laws; there would be no public safety-nets at all. It would be a rigorously competitive society: work, beg or die. But as one reads on, learning that each individual would have to buy, personally, all goods and services needed, not only food, clothing and shelter but also education, medicine, sanitation, justice, police, all forms of security and insurance, even permission to use the streets (for these also would be privately owned), as one reads about all this a curious feature emerges: everybody always has enough money to buy all these things.
"There are no public casual wards or hospitals or hospices, but neither is there anybody dying in the streets. There is no public educational system but no uneducated children, no public police service but nobody unable to buy the services of an efficient security firm, no public law but nobody unable to buy the use of a private legal system. Neither is there anybody able to buy much more than anybody else; no person or group possesses economic power over others.
"No explanation is offered. The anarcho-capitalists simply take it for granted that in their favoured society, although it possesses no machinery for restraining competition (for this would need to exercise authority over the competitors and it is an anarcho- capitalist society) competition would not be carried to the point where anybody actually suffered from it. While proclaiming their system to be a competitive one, in which private interest rules unchecked, they show it operating as a co-operative one, in which no person or group profits at the cost of another." [On the Capitalist Anarchists]
This assumption of (relative) equality comes to the fore in Murray Rothbard's "Homesteading" concept of property (discussed in section F.4.1). "Homesteading" paints a picture of individuals and families doing into the wilderness to make a home for themselves, fighting against the elements and so forth. It does not invoke the idea of transnational corporations employing tens of thousands of people or a population without land, resources and selling their labour to others. Indeed, Rothbard argues that economic power does not exist (at least under capitalism; as we saw in section F.1 he does make — highly illogical — exceptions). Similarly, David Friedman's example of a pro-death penalty and anti-death penalty "defence" firm coming to an agreement (see section F.6.3) assumes that the firms have equal bargaining powers and resources — if not, then the bargaining process would be very one-sided and the smaller company would think twice before taking on the larger one in battle (the likely outcome if they cannot come to an agreement on this issue) and so compromise.
However, the right-libertarian denial of market power is unsurprising. The necessity, not the redundancy, of equality is required if the inherent problems of contract are not to become too obvious. If some individuals are assumed to have significantly more power than others, and if they are always self-interested, then a contract that creates equal partners is impossible — the pact will establish an association of masters and servants. Needless to say, the strong will present the contract as being to the advantage of both: the strong no longer have to labour (and become rich, i.e. even stronger) and the weak receive an income and so do not starve.
If freedom is considered as a function of ownership then it is very clear that individuals lacking property (outside their own body, of course) loses effective control over their own person and labour (which was, lets not forget, the basis of their equal natural rights). When ones bargaining power is weak (which is typically the case in the labour market) exchanges tend to magnify inequalities of wealth and power over time rather than working towards an equalisation.
In other words, "contract" need not replace power if the bargaining position and wealth of the would-be contractors are not equal (for, if the bargainers had equal power it is doubtful they would agree to sell control of their liberty/time to another). This means that "power" and "market" are not antithetical terms. While, in an abstract sense, all market relations are voluntary in practice this is not the case within a capitalist market. For example, a large company has a comparative advantage over small ones and communities which will definitely shape the outcome of any contract. For example, a large company or rich person will have access to more funds and so stretch out litigations and strikes until their opponents resources are exhausted. Or, if a local company is polluting the environment, the local community may put up with the damage caused out of fear that the industry (which it depends upon) would relocate to another area. If members of the community did sue, then the company would be merely exercising its property rights when it threatened to move to another location. In such circumstances, the community would "freely" consent to its conditions or face massive economic and social disruption. And, similarly, "the landlords' agents who threaten to discharge agricultural workers and tenants who failed to vote the reactionary ticket" in the 1936 Spanish election were just exercising their legitimate property rights when they threatened working people and their families with economic uncertainty and distress. [Murray Bookchin, The Spanish Anarchists, p. 260]
If we take the labour market, it is clear that the "buyers" and "sellers" of labour power are rarely on an equal footing (if they were, then capitalism would soon go into crisis — see section C.7). In fact, competition "in labour markets is typically skewed in favour of employers: it is a buyer's market. And in a buyer's market, it is the sellers who compromise." [Juliet B. Schor, The Overworked American, p. 129] Thus the ability to refuse an exchange weights most heavily on one class than another and so ensures that "free exchange" works to ensure the domination (and so exploitation) of one party by the other.
Inequality in the market ensures that the decisions of the majority of within it are shaped in accordance with that needs of the powerful, not the needs of all. It was for this reason that the Individual Anarchist J.K. Ingalls opposed Henry George's proposal of nationalising the land. Ingalls was well aware that the rich could outbid the poor for leases on land and so the dispossession of the working classes would continue.
The market, therefore, does not end power or unfreedom — they are still there, but in different forms. And for an exchange to be truly voluntary, both parties must have equal power to accept, reject, or influence its terms. Unfortunately, these conditions are rarely meet on the labour market or within the capitalist market in general. Thus Rothbard's argument that economic power does not exist fails to acknowledge that the rich can out-bid the poor for resources and that a corporation generally has greater ability to refuse a contract (with an individual, union or community) than vice versa (and that the impact of such a refusal is such that it will encourage the others involved to "compromise" far sooner). And in such circumstances, formally free individuals will have to "consent" to be unfree in order to survive.
As Max Stirner pointed out in the 1840s, free competition "is not 'free,' because I lack the things for competition." Due to this basic inequality of wealth (of "things") we find that "[u]nder the regime of the commonality the labourers always fall into the hands of the possessors . . . of the capitalists, therefore. The labourer cannot realise on his labour to the extent of the value that it has for the customer." [The Ego and Its Own, p. 262 and p. 115] It is interesting to note that even Stirner recognises that capitalism results in exploitation. And we may add that value the labourer does not "realise" goes into the hands of the capitalists, who invest it in more "things" and which consolidates and increases their advantage in "free" competition.
To quote Stephan L. Newman:
"Another disquieting aspect of the libertarians' refusal to acknowledge power in the market is their failure to confront the tension between freedom and autonomy. . . Wage labour under capitalism is, of course, formally free labour. No one is forced to work at gun point. Economic circumstance, however, often has the effect of force; it compels the relatively poor to accept work under conditions dictated by owners and managers. The individual worker retains freedom [i.e. negative liberty] but loses autonomy [positive liberty]." [Liberalism at Wit's End, pp. 122-123]
If we consider "equality before the law" it is obvious that this also has limitations in an (materially) unequal society. Brian Morris notes that for Ayn Rand, "[u]nder capitalism . . . politics (state) and economics (capitalism) are separated . . . This, of course, is pure ideology, for Rand's justification of the state is that it 'protects' private property, that is, it supports and upholds the economic power of capitalists by coercive means." [Ecology & Anarchism, p. 189] The same can be said of "anarcho"-capitalism and its "protection agencies" and "general libertarian law code." If within a society a few own all the resources and the majority are dispossessed, then any law code which protects private property automatically empowers the owning class. Workers will always be initiating force if act against the code and so "equality before the law" reinforces inequality of power and wealth.
This means that a system of property rights protects the liberties of some people in a way which gives them an unacceptable degree of power over others. And this cannot be met merely by reaffirming the rights in question, we have to assess the relative importance of various kinds of liberty and other values we how dear.
Therefore right-libertarian disregard for equality is important because it allows "anarcho"-capitalism to ignore many important restrictions of freedom in society. In addition, it allows them to brush over the negative effects of their system by painting an unreal picture of a capitalist society without vast extremes of wealth and power (indeed, they often construe capitalist society in terms of an ideal — namely artisan production — that is really pre-capitalist and whose social basis has been eroded by capitalist development). Inequality shapes the decisions we have available and what ones we make — "An 'incentive' is always available in conditions of substantial social inequality that ensure that the 'weak' enter into a contract. When social inequality prevails, questions arises about what counts as voluntary entry into a contract . . . Men and women . . . are now juridically free and equal citizens, but, in unequal social conditions, the possibility cannot be ruled out that some or many contracts create relationships that bear uncomfortable resemblances to a slave contract." [Carole Pateman, The Sexual Contract, p. 62]
This ideological confusion of right-libertarianism can also be seen from their opposition to taxation. On the one hand, they argue that taxation is wrong because it takes money from those who "earn" it and gives it to the poor. On the other hand, "free market" capitalism is assumed to be a more equal society! If taxation takes from the rich and gives to the poor, how will "anarcho"-capitalism be more egalitarian? That equalisation mechanism would be gone (of course, it could be claimed that all great riches are purely the result of state intervention skewing the "free market" but that places all their "rags to riches" stories in a strange position). Thus we have a problem, either we have relative equality or we do not. Either we have riches, and so market power, or we do not. And its clear from the likes of Rothbard, "anarcho"-capitalism will not be without its millionaires (there is, after all, apparently nothing un-libertarian about "organisation, hierarchy, wage-work, granting of funds by libertarian millionaires, and a libertarian party"). And so we are left with market power and so extensive unfreedom.
Thus, for a ideology that denounces egalitarianism as a "revolt against nature" it is pretty funny that they paint a picture of "anarcho"-capitalism as a society of (relative) equals. In other words, their propaganda is based on something that has never existed, and never will, namely an egalitarian capitalist society.