What is anarchy? Chaos.

Despite my professor’s attempts to dispel this myth close to a dozen times, many of my International Politics classmates used this one word definition to characterize philosophies that prescribe an absence of central government.

The key word here is “central.” Anarchy is not an absence of government, but of central government. Most people don’t realize that anarchists in fact usually favor decentralized government, such as voluntary states, labor unions, and other collectives that do not mandate participation simply because one lives in a certain geographic area.

Billionaire Nick Hanauer has warned that rising levels of inequality cannot continue forever, and that there will be consequences for those at the top.

Why is this important? Consider the shift in the economic landscape over the past several decades. The number of billionaires has doubled since the 2008 recession, and inequality is rapidly increasing. One proposed solution identified by the international poverty organization Oxfam to the crisis is to increase the minimum wage and tax billionaires. Capital in the 21st Century, a popular and recently released book by French economist Thomas Piketty  advocates for an 80% tax on income over $500,000. Even billionaire Nick Hanauer has echoed similar sentiments, advocating for a $15/hour minimum wage, which is already being implemented in cities like Seattle. Hanauer makes an interesting “libertarian” argument on the third page of his article: If the minimum wage is $15/hour, then there will be less demand for the welfare state. As he puts it, the only way to slash government is to reduce the demand for it.

In fact, this is not true: there is a better solution than fighting fire with fire, or government with government. There is a way to allow for a true market anarchy to flourish while not ignoring the widening wealth gap that is eerily reminiscent of Marx’s prediction that capitalism would collapse due to surplus value going to the few while the many toil away for low wages. Indeed, if things remain the way they are now and we simply “let the market take care of it” as the well-worn cliché among libertarians goes, Marx will likely be proven right in only a few decades.

So what is this “way” towards harmony between optimal political systems (anarchy) and economic systems (a reasonable amount of inequality, but no more)? The answer lies in collective ownership of the means of production, while avoiding state interference. To most observers, the first part of that sentence sounds like socialism, while the latter sounds like capitalism. In reality, the size of government doesn’t have anything to do with economic models. Although capitalist states have historically been seen as being less intrusive, the best path forward is to combine a system of voluntary government – meeting the definition of “anarchy” – with an economic system that distributes capital in an equitable manner.

French economist Thomas Piketty recently released a controversial book that advocates for government intervention to mitigate rapidly rising economic inequality.

Achieving this comes by replacing the traditional employee-owner model in which large corporations are owned by the extremely wealthy and employees work for less than the true market value of their labor, thus transferring the surplus value to the owners and shareholders. Instead, there should be a mutualist system in which employees own a share of the company they work for, thus giving each worker an incentive to care about the welfare of the company as their income will increase or decrease accordingly. In a traditional capitalist system, only shareholders and owners care about financials, and most employees earn a constant wage regardless of company performance.

Libertarians would be wise to support an economic system that incentivizes everyone, not just entrepreneurs, to innovate, take risks and work hard. It should distribute wealth based on the value of the labor of each individual in the market and the amount of labor provided by each individual, not on capital gains and surplus value. This will keep the plutocrats safe from the pitchforks that Hanauer fears, and negate the need for government intervention that prominent individuals like Piketty and organizations like Oxfam advocate.

This would also prevent what many of my peers mistook for anarchy: Chaos.