Market Anarchism? Caveat Emptor!

In A Structured Anarchism, John Griffin argues that an anarchist communist society, while a desirable goal in the distant future, is not practical in the short-term. This is because 1) people accustomed to a capitalist society aren’t culturally prepared for it, and 2) the modern economy is too complicated to organize without the “self-regulation” of a market system. Therefore Griffin calls for a series of short term compromises to be made with classical liberal economics, and dubs this “collectivist anarchism.”

Griffin, unfortunately, doesn’t understand collectivism nor economics in general. He manages to garble and lump together the views of Proudhon, Bakunin, and Malatesta. Bakunin was the only collectivist of the three. Proudhon was a mutualist and Malatesta, an anarchist communist. Besides mistakenly lumping them all as “collectivists,” Griffin makes an even bigger error by equating collectivism with “market anarchism.” Collectivism, however, was not based on a market economy, but on a federally coordinated system of “honest exchange” of products at their labor cost. In a market system the prices of products are determined according to their relative scarcity (ie. the “law of supply and demand”). These are not the same thing. Time and again, whether on the issue of markets or money, Griffin proves he is in no position to lecture other anarchists about their shaky grasp of economics. For instance, on page 22 he writes, “The extraction of large amounts of unearned income by the capitalists is a source of inflation, since too much money is generated to buy the available goods, thus encouraging price rises. Any inflation in a collectivist [sic] economy will not be aggravated by this spurious money growth, since those who operate it are remunerated only for work done.”

The extraction of value by the capitalist out of the workers’ gross product has nothing whatsoever to do with the money supply, since the capitalist does not print his/her own money. (In effect, Griffin is saying that a robber creates money when he steals your purse.) If what Griffin was saying were true, the history of capitalism would be one long inflationary spiral, without periodic economic depressions. On the contrary, capitalism, if not interfered with by the state, tends towards economic depressions (which cause deflation), since its constant drive to reduce workers to low wages and unemployment has a depressive effect.

In reality, the individual capitalist has very little control over the money supply, which is a source of constant consternation to the pro-laissez faire monetarists, like Hayek and Milton Friedman, so oddly respected by Griffin (p.23). The monetarists, however, do not suggest that the money supply be set according to what has been produced, since according to them only the market can determine the “true” value of these products anyway. What the monetarists argue is that the state should increase the money supply at a constant rate, so the capitalists can plan ahead without having to worry about whether the state economic planners will overreact to some minor market “adjustment.” According to classical laissez faire theory, business cycles are inevitable and the market eventually corrects itself. As for the effects these cycles have on working people and the poor in the meantime, Hayek and Friedman could bloody well care less. We should not forget the role of the “Chicago Boys” (a group of Friedman’s disciples) in running the economy of the ruthless Pinochet regime in Chile. Griffin should freely choose his mentors more carefully.

The state has always played a key role in the capitalist market and monetary systems. First its role was as a defender of private property, strike breaker of last resort, and as a foundation of a (somewhat) stable currency. More recently it has acted as a “pump primer,” business subsidizer, and money lender of the last resort. The so-called “Keynesian revolution” in capitalist economics was not the beginning of the state’s role in the economy, just an attempt to better play that role in hopes of making a more smooth running system and to stave off its collapse. Griffin himself admits that “the manipulation of the market by both the State and the Capitalists make the so-called ‘free market’ unfree.” (p.24)

Yet by making this admission, Griffin has inadvertently undermined one of his own arguments. On the one hand he attacks the anarchist communist position because “it lacks empirical justification from modern technological societies: it is not enough in my view to dwell on its great ethical strength, and gloss over organizational problems.” (p.24) But on the other, he doesn’t hold his own doctrine up to the same standard. It may be true that the market system “works” (perhaps in the since that the inhabitants of Europe and North America haven’t all starved to death so far), but as he admits it is not a “free market,” and thus cannot be used to accurately predict what might happen in an anarchist version. What of the many problems which would result when the state no longer plays even its “limited” role in the laissez faire sense? Who, for instance, would issue money in his anarcho-market economy and guarantee its value? Although Griffin cites Malatesta to back-up his claim for the necessity of money during the transition towards an anarchist economy, he apparently missed the Malatesta’s admonition that “one should seek a way to ensure that money truly represents the useful work by its possessors…” (Malatesta: Life and Ideas, edited by Richards, p. 101). Griffin, in spite of his enthusiasm for money, doesn’t address this problem.

Unlike the anarchist communists, what Griffin lacks in empirical evidence and practical concern for organizational problems, he can not make up for with “ethical strength.” For in his conciliatory approach towards market economics, he is prepared to sacrifice even the most basic anarchist principles, including the abolition of wage slavery and an end to the private ownership of the means of production: “I think we have to face up to the fact that if some people want to be employed and others want to employ them, then wage labor will continue. Recourse to coercion by anarchists not involved should in my view be regarded as a ‘cure’ which is worse than the disease. As long as libertarian cultures constitute the dominant socializing force, I do not think that the presence of small scale capitalist enterprises is very important.” (p.30)

Perhaps Griffin does not understand the implications of what he has written. We are not talking about economic individualism, self-employment or family businesses (which as long as they don’t employ non-family members, are not capitalist). The only reason workers want to be employed by capitalists is because they have no other means for making a living, no access to the means of production other than by selling themselves. For a capitalist sector to exist there must be some form of private ownership of productive resources, and a scarcity of alternatives. The workers must be in a condition of economic desperation for them to be willing to give up an equal voice in the management of their daily affairs and accept a boss. Wage labor would not be tolerated in an anarchist society anymore than extortion or blackmail, no matter how much the perpetrator might claim the victims “asked for it.” It would not take any “coercion” to get rid of wage labor either, as long as the condition for possession of any productive property is that all workers be given an equal voice in management. If not, the facility in question is given to some other group that will run things democratically.

To the extent that A Structured Anarchism was meant to stir controversy, it has succeeded. If it was meant to lay the foundation for a more practical anarchist economic alternative, it is a botched attempt. Griffin’s “collectivism” might more accurately be described as watered-down mutualism mixed with laissez faire liberal ideology.

–Jeff Stein