Dr. J.R.R. Tolkien is the most important fantasy writer in all of history and the most important writer of the 20th century. His two most famous works – “The Hobbit” and its sequel trilogy “The Lord of The Rings” – are the foundation of the entire fantasy genre. The themes and ideas of his writings have captivated people for almost a century now and nowhere is his keen insight into the nature of humanity, history, and society better demonstrated than in his writings about government and what we would today called the State. Tolkien in his own private letters identified himself as an anarchist. In this article I will be exploring exactly what he meant by calling himself an anarchist, why we should be paying attention to his insights about government, and the economic ideals he championed, which are fundamentally free market in nature. Using his public works and his private letters as sources, I will demonstrate that Tolkien was, in modern terms, an anarcho-capitalist.