The individualist anarchists advocated individual possession of land and tools and the free exchange of the products of labour between self-employed people. Therefore they also supported the idea of "defence associations" to ensure that the fruits of an individual's labour would not be stolen by others. Again, the social context of individualist anarchism -- namely, a society of self-employed artisans (see sections G.1 and G.2) -- is crucial for understanding these proposals. However, as in their treatment of Tucker's support for contract theory, "anarcho"-capitalists (e.g. Murray Rothbard) remove the individualists' ideas about free-market defence associations and courts from the social context in which they were proposed, using those ideas in an attempt to turn the individualists into defenders of capitalism.
As indicated in section G.1, the social context in question was one in which an economy of artisans and peasant farmers was being replaced by a state-backed capitalism. This context is crucial for understanding the idea of the "defence associations" that Tucker suggested. For what he proposed was clearly not the defence of capitalist property relations. This can be seen, for example, in his comments on land use. Thus:
"'The land for the people' . . . means the protection by . . . voluntary associations for the maintenance of justice . . . of all people who desire to cultivate land in possession of whatever land they personally cultivate . . . and the positive refusal of the protecting power to lend its aid to the collection of any rent, whatsoever." [Op. Cit., p. 299]
There is no mention here of protecting capitalist farming, i.e. employing wage labour; rather, there is explicit mention that only land being used for personal cultivation -- thus without employing wage labour -- would be defended. In other words, the defence association would defend "occupancy and use" (which is a clear break with capitalist property rights) and not the domination of the landlord over society or those who use the land the landlord claims to own.
Refusal to pay rent on land is a key aspect of Tucker's thought, and it is significant that he explicitly rejects the idea that a defence association can be used to collect it. In addition, as a means towards anarchy, Tucker suggests "inducing the people to steadily refuse the payment of rent and taxes" [Op. Cit., p. 299]. It is hard to imagine that a landowner influenced by Murray Rothbard or David Friedman would support such an arrangement or a "defence association" that supported it.
The various economic proposals made by the individualist anarchists were designed to eliminate the vast differences in wealth accruing from the "usury" of industrial capitalists, bankers, and landlords. For example, Josiah Warren "proposed like Robert Owen an exchange of notes based on labour time. . . He wanted to establish an 'equitable commerce' in which all goods are exchanged for their cost of production. . . . In this way profit and interest would be eradicated and a highly egalitarian order would emerge." [Peter Marshall, Demanding the Impossible, p. 385] Given that the Warrenites considered that both workers and managers would receive equal payment for equal hours worked, the end of a parasitic class of wealthy capitalists was inevitable.
In the case of Benjamin Tucker, he was a firm adherent of the labour theory of value, believing that a free market and interest-free credit would reduce prices to the cost of production and increase demand for labour to the point where workers would receive the full value of their labour. In addition, recognising that gold was a rare commodity, he rejected a gold-backed money supply in favour of a land-backed one, as land with "permanent improvements on [it]. . . [is] an excellent basis for currency." [Instead of a Book, p. 198] Given that much of the population at the time worked on their own land, such a money system would have ensured that entry into the banking market was easier as well, by allowing easy credit secured by land. Mutualism replaced the gold standard (which, by its very nature would produce an oligarchy of banks) with money backed by other, more available, commodities.
Rothbard rejects all of this, the social context of Tucker's ideas on "defence associations." In fact, he attacks what he considers the "bad economics" of the individualists without realising it is precisely these "bad" (i.e. anti-capitalist) economics which will make "defence associations" irrelevant as workers' received the full product of their labour (so destroying usury) and workers' control spreads and replaces the irrational authority of the capitalist-labourer social relationship with the egalitarian relationships of co-operative and artisan production. Unless this social context exists, any defence associations will soon become mini-states, serving to enrich the elite few by protecting the usury they gain from, and their power and control (i.e. government) over, those who toil. In other words, the "defence associations" of Tucker and Spooner would not be private states, enforcing the power of capitalists upon wage workers. Instead, they would be like insurance companies, protecting possessions against theft (as opposed to protecting capitalist theft from the dispossessed as would be the case in "anarcho"-capitalism -- an important difference lost on the private staters).
In addition, the emphasis given by Tucker and Lysander Spooner to the place of juries in a free society is equally important for understanding how their ideas about defence associations fit into a non-capitalist scheme. For by emphasising the importance of trial by jury, they knock an important leg from under the private statism associated with "anarcho"-capitalism. Unlike a wealthy judge, a jury made up mainly of fellow workers would be more inclined to give verdicts in favour of workers struggling against bosses or of peasants being forced off their land by immoral, but legal, means. It is hardly surprising that Rothbard rejects this in favour of the mysticism and authoritarianism of "natural law." As Lysander Spooner argued in 1852, "[i]f a jury have not the right to judge between the government and those who disobey its laws, and resist its oppressions, the government is absolute, and the people, legally speaking, are slaves. Like many other slaves they may have sufficient courage and strength to keep their masters somewhat in check; but they are nevertheless known to the law only as slaves." [Trial by Jury] And "Natural Law" implies a body, a "Natural Government" perhaps, which determines what it is -- in Rothbard's case a system of professional and wealthy "arbitrators" who determine what is and what is not "custom" and "reason."
As Individualist Anarchist Laurance Labadie (the son of Joseph Labadie) argues against Rothbard's misrepresentation of the idea that there would be "no rational or objective body of law" in Individualist Anarchy:
"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 the 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." [quoted by Mildred J. Loomis and Mark A. Sullivan, Benjamin R. Tucker and the Champions of Liberty, Coughlin, Hamilton and Sullivan (eds.), p. 124]
By focusing selectively on a few individualist proposals taken out of their social context, Murray Rothbard and other "anarcho"-capitalists have turned the potential libertarianism of the individualist anarchists into yet another ideological weapon in the hands of (private) statism and capitalism. As Peter Sabatini argues (in Libertarianism: Bogus Anarchy):
"in those rare moments when [Murray] Rothbard (or any other [right-wing] Libertarian) does draw upon individualist anarchism, he is always highly selective about what he pulls out. Most of the doctrine's core principles, being decidedly anti-Libertarianism, are conveniently ignored, and so what remains is shrill anti-statism conjoined to a vacuous freedom in hackneyed defence of capitalism. In sum, the 'anarchy' of Libertarianism reduces to a liberal fraud."