Both Capitalism and Socialism are economic systems. Many people hold strong opinions about which they prefer. This fact does not change how we analyze and apply the 3LP or the 3L Legal Principle. We should always use the same standard for all issues and all entities. As with all other issues, competent adults should be free to decide how to run their lives. These decisions include whether they prefer Capitalism or Socialism. Both economic systems can peacefully coexist. Forcing any economic system on any person always amounts to a violation of the 3L Legal Principle. Therefore, the person committed to the 3LP is always against forcing any economic system upon anyone.

Simply analyzing the 3L Legal Principle, as applied to the situation, always resolves the issue. There is no reason to argue about which economic system is better so long as competent adults are free to select if or how they opt to earn, keep, invest, spend or share their money, labor, or other property without violating the 3L Legal Principle. Both Capitalism and Socialism have versions that are compatible with the 3L Legal Principle. People who engage in either of these voluntary versions should always be left alone. However, both Capitalism and Socialism also have versions that violate the 3L Legal Principle. Like all other activity that violates the 3L Legal Principle, either of these versions ought to be immediately outlawed.


Voluntary Capitalism or Free Market-Capitalism simply recognizes the right of competent adults to exchange their labor or property with other competent adults voluntarily. As with all other voluntary activities, the owners of the property or labor involved in the exchange should have the sole discretion to settle on whatever terms of trade they agree upon without any interference from others. As always, as long as nobody violates the 3L Legal Principle, this activity should be legally permitted. An example of such an exchange is when a competent adult, who is the rightful owner of a particular property, agrees to sell that property to a competent adult buyer at a voluntarily agreed-upon price. In the absence of any threat, or actual use of force, fraud, or coercion, there is no valid legal reason to object to such a transaction. Because people subjectively value things differently, such a free and voluntary exchange results in a win/win for the participants and should always be encouraged. Both parties involved in the transaction have determined they are better off after the trade than beforehand. We should encourage as many of these voluntary interactions as possible.

However, Capitalism that violates the 3L Legal Principle, referred to as involuntary Capitalism or Crony-Capitalism, occurs when the mechanisms of government are employed to impose laws or rules that coercively advantage one person or company over another. Contrary to the free-market version, Crony-Capitalism allows individuals or businesses to profit by simply influencing politicians to change laws or administrative rules or to spend the stolen taxpayer’s money in such a way to coercively further the interests of that individual or business. Wealthy individuals or companies donating substantial amounts of money to the campaigns of relevant politicians often gain such influence. This practice usually results in a coercively generated market advantage or benefit for the contributing individual or business.

An example of Crony-Capitalism would be when a government creates a coercive monopoly by legally permitting only one company to do business in a particular geographic area. This favoritism often occurs when a government awards a service contract, such as trash collection or another utility service, to one exclusive company that, in exchange, benefits the politicians involved, often with financial contributions to their campaign. This cronyism results in coercively advantaging the contributing individual or company over their competition that did not similarly donate. Because Crony-Capitalism violates the 3L Legal Principle, it should be outlawed.

It is critical to the analysis to carefully and honestly determine whether we are analyzing Free Market-Capitalism or Crony-Capitalism because they are radically different; one is voluntary, and one is not. Competent adult owners of property freely and honestly exchanging their property or labor never violates the 3L Legal Principle. However, forcing or coercing people or companies to either engage in or not to engage in transactions always violates the 3L Legal Principle.


The 3LP applies precisely the same way to Socialism. Like voluntary or free-market Capitalism, Voluntary-Socialism does not violate the 3L Legal Principle. Competent adults are always free to organize how they prefer to collectively earn, keep, invest, spend, or share their money in any way they choose so long as they do not violate the 3L Legal Principle. Some people prefer Socialism for various reasons, including moral ones such as helping the less fortunate. Some people favor a socialized or communal healthcare system, charity system, educational system, retirement system, or other project requiring the sharing of collective resources purporting to convey mutual benefits or simply be more charitable. Like any other voluntary choice by competent adults, so long as nobody violates the 3L Legal Principle, such a choice should be legally permitted and protected.

An example of Voluntary-Socialism is the Israeli Kibbutz.xiii Still in existence today, these private Socialist communities of competent adults voluntarily choose to live communally and pool resources and efforts. Because people are free to either voluntarily join the Kibbutz or not, there is no violation of the 3L Legal Principle.

Moreover, given our current technology, traditional geographic limitations to Voluntary-Socialism no longer exist. For example, it is now entirely possible for people living at different locations on the planet to share economic resources easily and to distribute those resources towards common goals such as socialized healthcare, retirement benefits, charity for the poor, or virtually any other economically based purpose. The Kibbutz concept can now easily be expanded to an online community voluntarily sharing resources in any way they prefer. People in different places can communally own land in distant parts of the world. Voluntary-Socialism should be entirely free to expand across the globe to the extent competent adults voluntarily prefer to opt-in to such an economic system. Absent a valid contractual agreement to the contrary; such people should also be at liberty to entirely opt-out at any time.

Contrasted with Voluntary-Socialism, Involuntary-Socialism, like all other involuntary transactions, consistently violates the 3L Legal Principle and should therefore be immediately outlawed. Involuntary-Socialism occurs when people are forced or coerced, often through the government, to contribute economically to programs such as socialized healthcare, retirement benefits, or charity for the poor. While these may be worthy goals, attempting to achieve them by forcing others to contribute violates the 3L Legal Principle. For this reason alone, the law should never permit involuntary Socialism.


There are various reasons why a person may prefer Capitalism or Socialism. That debate is a personal choice beyond the scope of this book. As with Free Market-Capitalism, Voluntary-Socialism does not violate the 3L Legal Principle. People who opt for such voluntary economic arrangements ought to be left alone. Similarly, both Involuntary-Capitalism or Crony-Capitalism and Involuntary-Socialism consistently violate the 3L Legal Principle and should be immediately outlawed.

For the person committed to the 3LP, the only relevant question regarding Capitalism and Socialism, or some combination thereof or even a completely different economic system, is whether people are free to opt-in or forced into either scheme. The former is simply a choice for competent adults to make. The latter violates the 3L Legal Principle and should always be outlawed. If you are interested in determining whether competent adults prefer Free Market-Capitalism or Voluntary Socialism, what better way than giving them a free choice to opt into either system and see which they choose? We should immediately discard any economic system that only exists so long as it forces people to participate.