Principles of Libertarian Economics pt 2

by Abraham Guillen (translated by Jeff Stein)

As part of our continuing efforts to present anarchist economic theory, we offer this translation from Abraham Guillen’s book, Economia Libertaria. Because of its length, we are publishing it in three parts. The first part was in LLR #14, the conclusion will be in LLR #16.

The Demystification of Politics

The experience of more than half a century of “velvet socialist” [ie. social democrat], Christian democrat and liberal governments practicing Keynesian economics in the West, as well as the totalitarian communist governments of the East with centralized planning, has been that the workers remain wage slaves either way, building up surplus value for the private or State owner. They are exploited as much on one side of the world as another, whether under the governments of Olaf Palme, of Kohl or Honecker, of Thatcher or Reagan, of Gorbachev or Yeltsin.

From this it can be deduced that “state socialism” is neither socialism nor communism, but is instead the collective ownership, usufruct, of the totalitarian bureaucracy over the surplus value extracted by the State. This bureaucratic socialism is the formal critic of private capitalism, but allows it to be transformed in the West into multinational capitalism, and in the East allows capitalism to be restored. Consequently, this leaves “libertarian socialism,” essentially anarchism, as the rational and necessary critic of both private capitalism and of state socialism as bourgeois socialism.

But if libertarian socialism wants to be an alternative to the bourgeois socialism of the West and the social-economic chaos of the East, it must be able to make the beauty and seduction of anarchist utopia compatible with a realistic economic, social and scientific vision of the world, consistent with our time. It must present a social-economic program which overcomes the crises in economy, society, politics, ecology, demographics, energy, of moral and intellectual value. It must seek to harmonize natural resources and human resources in a new social-economic order in which all people have the right to labor and education, in a way that overcomes definitively the old division of manual and intellectual work.

“Is it necessary,” asked Bakunin, “to repeat the irrefutable arguments of socialism, which no bourgeois economist has yet succeeded in disproving? What is property, what is capital in their present form? For the capitalist and the property owner they mean the power and the right, guaranteed by the State, to live without working. And since neither property nor capital produces anything when not fertilized by labor, that means the power and the right to live by exploiting the work of someone else, the right to exploit the work of those who possess neither property nor capital and who are thus forced to sell their productive power to the lucky owners of one or the other.” (Obras. Volume III, p.191)

But let us again insist that the workers, within a self-managed economy where the means of production and exchange are socialized, without either bourgeois owners, or technocrats and bureaucrats of centralized state economic planning, would be capable of conducting the economy themselves.

Now then, a libertarian economy of the self-managed type has to be capable of producing an economic surplus greater than under private or state capitalism; of converting a large part of this surplus to the reproduction of social capital, improving the productivity of labor. Therefore the workers will achieve a higher rate of growth in productive forces than private or state capitalism. There will be, thus, better and greater production with less expense of human effort and greater and better use of automated machinery. This is because only the automation of labor makes it possible to create the technical basis for libertarian communism. Socialism or communism can be justified neither economically, politically nor socially as popular misery. A dominant class backlash would be justified as necessary if the workers eat all their capital without replacing it, or without increasing it more than the soviet bureaucracy or the western bourgeoisie.

Proudhon, quoted by Guerin, concerning the self-managed economic regime, said: “The classes…must merge into one and the same association of producers.” [Would self-management succeed?] “On the reply to this …depends the whole future of the workers. If it is affirmative an entire new world will open up for humanity; if it is negative the proletarian can take it as certain….There is no hope for him in this poor world.” (Daniel Guerin, Anarchism, p.48)

In sum, there is no need to lament, there is a need to educate, to become the protagonist of the future; to prepare oneself to improve things and to make revolutionary changes; to understand the sciences, sociology, economy, and revolutionary strategy; since without a successful revolution, there can be no liberation of the workers, an outcome which cannot delegated to others but must come from the exertion of their own self-powers.

Planning and Self-Management

The planned economy has been praised by the technocrats and bureaucrats of socialism, East and West, as the rationalization and codification of national economies, with the goal of giving them a harmonious law of development, both economic and technological. According to this scheme, all the sectors of production and services will be coordinated so that none of them advances ahead or falls behind so much that it causes a crisis of disproportional development between the branches of industry, agriculture and services. However this supposed “law of harmonious development of national economies” directed by an army of bureaucrats and technocrats has in reality only introduced alongside private capitalism the capitalism of the State, leaving the workers, as always, as dependent wage workers. In both cases the workers are wage slaves that produce surplus value for the capitalist enterprenuers or the State-enterprenuer.

Apologizing for the planned economy, as the scientific economy par excellence which can predict the future with rigorous calculations, able to conduct national economies according to prior objectives based upon macroeconomic calculations, to guide the desired economic development with the help of “control equations” for the month, year, four-year, five-year, all the economic science which was the hallmark of central-planning, was declared as vulgar economic science. Particularly has this been the case in the Soviet Union, although now Yeltsin under the IMF has discovered capitalism, pure and simple, as a new “democratic” economy, even though it impoverishes the workers.

But after many years of centralized planning the national economies have revealed a crisis of underproduction, or undersupply of the market and a crisis of disproportional and unequal development between industry and agriculture, in the USSR and all the countries of the ruble zone. Indicative planning, as advocated in the West by the techno-bureaucratic thought of Keynes, Schumpeter, Galbraith and Burnham, was an economic doctrine, of center and left and including some of the right, taken up by the parties of the social-democrats, socialists, christian-democrats and neo-liberals. These parties mobilize the politicians of the middle class professionals, who aspire to a State-benefactor where, as the first enterprise of all, the technocrats are the directors more than the capitalists properly speaking.

By means of the welfare-State the reformist middle class, from right to left, comes robbing the usufruct of the government. Thanks to the sector of nationalized enterprises, of social security insurance, of public services, and the nationalization of many banks, a “bureaucratic-technocratic bourgeoisie” is created, more solid, if possible, than the old bourgeoisie. Thereafter, if their businesses register a deficit, there is no one who will cancel it, or even less keep account of credits and debtsor if things go bad force the enterprise into bankruptcy. On the contrary, the abundant existence of nationalized enterprises in the West has created a whole series of directors, executives and “businessmen” with inflated salaries, regardless of whether their enterprises can show benefits greater than losses. This “bourgeoisie of the State” is shoving aside the classic bourgeoisie, since the former has political parties monopolizing the State, the nationalized banks, the machinery to print inflated money and to tax with discretion. The only beneficiary from the growing productivity of labor, growing like a foam on the waves, is not a private owning class, but those who indirectly own public property in the form of State property, as a political class.

Accordingly, indicative planning or centralized planning, which aspires to impose a balanced national economic development, has distorted the law of harmonious social division of labor. The welfare State expands the unproductive sector (middle class functionaries, bureaucrats and technocrats), while increasing the productivity of labor in industry and agriculture. This creates an aberrant economy of inflation of the unproductive population which sterilely devours the wealth of societies and nations. It can lead to a total economic crisis, of systematic nature, since in order to resolve it requires more than simply changing leaders. Instead a corrupt, contradictory and antagonistic socio-economic regime of multi-national capitalist monopolies opposed to the general interest must be replaced with universal libertarian socialism.

The economists and politicians of the middle class parties, including in their ranks the reformist union bureaucrats, the professional politicians, the phoney savants (political, economic, and technical), would submit to a social economy, as much in the East as in the West, of a dictatorship of the techno-bureaucracy as “new dominant class.” The bourgeoisie, due to the centralization of capital in both large and small enterprises, diminishes in statistical number, according to the law of mercantile competition, liquidating in the market those capitalists who are smaller and thus equipped with less productive machines which produce at a higher cost. But, in contrast, the bureaucracy, the technocracy, the professional of all types, are augmented more by the very same thing that diminishes the bourgeoisie annihilated by economic competition, the centralization of capital in the multinationals.

The Totalitarian State

In this sense, the State tends to convert itself into the largest of all business enterprises in the West, and as the only business in the East, that is to say, the enterprise which owns all the nationalized enterprises. And thus, under these conditions, the State which owns everything also is the master of all persons who by virtue of their political alienation see the State as God- protector, although the State as sole protector of Society takes from them by taxes, charges or low salaries more than it gives in return. Meanwhile the poor people are hoping that the State is a benefactor, and that a middle class political party will offer to save them in return for their votes. Each day things go from bad to worse, because the countless bureaucrats consume from above the capital which is needed below to maintain full employment in industry and agriculture.

Without debureaucratization and debourgeoisfication there is no way out of the growing economic and social crisis which is caused by the excessive economic waste involved in the sterile consumption of the parasitic classes: the bureaucratic apparatus of the State, the superfluous institutions filled with supernumerous personnel, the administrations of enterprises which have begun to have more “white collars” than productive workers, and finally, a whole series of “tertiary” and “quaternary” services that spend without contributing much to the social wealth. And we are not saying that this happens only in the capitalist countries, but that this affects equally badly the so-called “socialist” countries. By means of centralized bureaucratic planning of their economies, all social capital, labor, national income and economic power is placed in the hands of a techno-bureaucracy of planning, for whom workers and their products are only ciphers in five-year plans.

In this way they create social relations between those who have Power and those who suffer as wage workers not essentially different than those existing in the capitalist countries. So it is that the worker continues as the producer of surplus value, whether for the State or private businesses. Meanwhile the workers do not have the right to self-manage their own workplaces, to democratically decide its organization and the economic surplus produced, nor to elect their own workplace councils by direct and secret vote. Without these rights, centralized planning creates a bureaucracy based upon state property instead of social property, and endeavors to substitute State capitalism for private capitalism. Thus eventually it ends up by alienating into an external power outside of the wage workers, whether under the western capitalist or the soviet model.

The large western capitalist enterprise, national or multi- national, when it concentrates multi-millions in capital and exploits monopolies in production and thousands of workers (for example Fiat, Siemens, I.C.I., General Motors, Unilever, Nestle, Hitachi, or nationalized industrial complexes like IRI, British Steel and INI) leads to a bureaucratic and totalitarian condition within the enterprise. The workers neither know nor elect the administrative councils of these gigantic corporations, anymore than the workers in the former USSR. The directors are forced upon them from above, just as in other ages the mandarins and satraps were designated in the regimes of Asian despotism.

For the Soviet regime to have qualified as socialist, not just semantically but in reality, it would have had as its economic basis the social ownership of the means of production and exchange, the direct democracy of the people instead of the bureaucratic dictatorship of the single Party, the decentralization of power (economic, political and administrative) by the means of a federalism which would have assured the popular participation at all levels of decision-making, political, economic, social, cultural, informational and self-defense. In this way a self- managed, libertarian, self-organized society, would have replaced the dictatorship of the bureaucracy, in which society was regimented and watched-over by the State-employer, all-powerful permanent leaders and the political police of the KGB.

It could be argued that a vision of such nature is utopian or too good to be true, but historical experience shows that centralism cannot create more productive forces than can decentralization and federalism. Centralism is always bureaucratism and consequently consumes unproductively in the salaries of supernumerous personnel. In our epoch computer networks–if they are well programmed, if their memory is updated and constantly renewed, if they register all the fundamental data of a country, a society, an enterprise, a locality, district and region–are more efficient and cheaper for the management of the enterprise or society than the professional politicians or technocrats and bureaucrats of all types.

If the State is given too much power, as under the Soviet model or under the western welfare-State, it will tend towards state control over capital, labor, technology, science, information, industry, of social security and public services. Therefore this absolute power will create a totalitarian State, even though disguised as a parliamentary regime, symbolically under the Soviet model and rhetorically but not in practice in the West. In either case, the totalitarian bureaucracy or the pseudo- democratic political class collectively controls the business of the State as its business, but parasitically as a cancer on Society.

Popular Self-Government

In our school of thought, economic growth, the right of work for all, economic, cultural and technological progress, are developed with fewer obstacles in a libertarian society than in a society under the totalitarian dictatorship of large capitalist monopolies or the capitalism of the State. In both cases, given the great progress realized by our society, the dictatorships of private capital or State capital can be overcome. A self-managed society can be established with social ownership of the means of production and exchange, uniting capital, labor and technology without antagonism over classes or forms of property. This would create an egalitarian society in culture, economics and technology, thanks to an economy of abundance.

It is possible to the give power of self-government to the local communities, districts, provinces and regions, by means of an economic federalism and self-administration which would be integrated into a Supreme Economic Council. This would not be a Gosplan as in the former USSR, but a co-government of things by means of federations of production and services. These federations would function democratically and be self-managed, with the goal of the total process having a law of harmony of development without economic crises of disproportionality between all the branches of production and services. In other words, they would function without relative crises of underproduction or overproduction as occurs, respectively, under State capitalism or private capitalism.

For this to happen, it is necessary to have democracy and economic growth, with an increased productivity of labor. This would also require the full employment of the active population, along with the full participation of all in the decisions and the knowledge for this within reach of everyone. It is necessary to create a libertarian society, in which the elites of power and knowledge and social estates of every type, would be transcended in work, science, capital and technology, by means of effective self- management, the real participation of the people. Thus it would be possible to abolish all class domination, whether that of the bourgeois State and its capitalist economy or that of the bureaucratic, totalitarian State and its centrally planned economy. It is necessary, therefore, to liberate oneself ideologically from parliamentary socialism, from totalitarian communism, from bourgeois democracy which is economic dictatorship, from corporatism of every type–and establishing in their place a democracy of association, self-managed and libertarian, where everyone would be equal in rights and responsibilities, with privileges for no one. Only this type of self-government is government of the people, by the people and for the people.

Federations of Production and Services

The planning of economic, cultural and technological development must arise from the putting of social wealth in common and not under the domination of the State and its techno- bureaucracy. The first case involves a program of harmonizing the proportion of growth of the branches of production and services with full participation from bottom to top, based on a libertarian and federative socialism. The second, the concentration of all power in the hands of the State, leads to centralized planning from top to bottom, without popular participation, so that the workers are more objects than subjects, so many ciphers in the Gosplan, according to the soviet model.

If the worker remains separated from worker by means of private property or State property, there must be between capital and labor a power of domination over those who labor for a wage. The working people can never be emancipated within this mode. Emancipation can not be won individually but only collectively, although each may have free will. The realization of full liberty and personality for the worker requires a self-organized society without the need for State oppression, whether it is called right or left, bourgeois or bureaucratic, conservative or revolutionary. Without self-managed socialism, social property and self- government, all systems are the same.

The salvation of humanity is collective and not individual, because the human is a social being, solidaric, with the aim of self-defense from other species since the paleolithic period. It is the class division of humanity, in the wake of private property and the State, which makes possible the exploitation of man by man, of the proletarian by the proprietor. Along these lines, Bakunin said to his friend Reichel: “All our philosophy starts from a false premise. This is that it begins by always considering man as an individual and not, as it must, as a being who belongs to a collective.” (Oeuvres, Volume II, p.60)

On this sentiment, Proudhon agreed with Bakunin to the extent that man is a social being, needing community and solidarity: “All that reason knows and affirms–leads us to say–that the human being, just the same as an idea, is part of a group… All that exists is in groups; all that form the group are one, and consequently, what is …Outside the group are no more than abstractions, phantasms. By this concept, the human being in general…is from that which I am able to prove positive reality.” (Philosophie du progress, Obras, Volume XX, pp. 36-38)

The human being, in reality, does not exist outside the society from which he/she has appeared as a free subject; but at the same time solidarity with others in daily life, at work, in education, in self-defense, particularly at the beginning of humanity, “mutual aid” was the basis of existence of man associated to man, even though under capitalism man is possessed by an appetite for wealth and the cult of the money-god.

Developing the doctrine of “mutual aid,” Kropotkin, who studied the behavior of many animal species, predicted that this would evolve in a future society:

Society would be composed of a multitude of associations united among themselves for everything which would require their common effort: federations of producers in all branches of production, agricultural, industrial, intellectual, artistic; communities for consumption, entrusted to provide to all everything related to housing, lighting, heating, nutrition, sanitation, etc.; federations of communities between themselves; federations of communities of production groups; groupings even wider still, which would encompass a whole country or including various countries; groupings of people dedicated to work in common for the satisfaction of their economic, intellectual, artistic needs, which are not limited by territorial boundaries. All these associated groups would combine freely their efforts by means of a reciprocal alliance (…); and a complete liberty would preside over the unfolding of new forms of production, of research and of self- organization; individual initiative, not withstanding, would be encouraged and all tendencies towards uniformity and centralization, combatted. (Alrededor de una vida, p. 140)

By means of this federalism based upon libertarian socialism, the economy, the natural and human resources, the balance of natural ecosystems, the full employment of available labor, the leisure and education time at all levels of knowledge, the social- economic and cultural life of locality, district, province, region, nation or the world, can be programmed with the participation of everyone in everything, without creating a great deal of confusion. On the contrary, the local and the universal, the individual and the society, the particular and the general, would be understood perfectly by reason of complete information from computer networks which would register all the important data to accomplish at the end a perfect database. By virtue of this, everyone would know all, avoiding thus a condition in which those with knowledge have the power, as occurs in the totalitarian, bureaucratic, centrally planned countries, where the people are ignored.

The federations of production and services, dividing into natural associations, from the bottom to the top, create the democratic conditions for a planning with liberty. Unlike what happened in soviet Russia, the economic planning would not be entrusted to a dictatorship of technocrats who want to substitute themselves for the old bourgeoisie. To be employed by the total State instead of by an individual boss does not change the condition of dependency and alienation for the worker, except to make the situation worse; since this makes the law into a fraud, a law that does not limit the absolute powers of the State, which corrupts absolutely the few who govern absolutely, the few oppressors and exploiters written in the lists of the “Nomenclature.” To change, therefore, private capitalism for State capitalism from a western pseudo-democratic bourgeoisie to a totalitarian bureaucracy is a poor trade for the wage workers since they do not cease to be what they are, the producers of surplus value for the bourgeoisie or bureaucracy, for the private boss or for the State.

In consequence, as the founders of the IWA put it, “the emancipation of the workers is the task of the workers themselves.” From this point of view, working people can only emancipate themselves by the means of a libertarian socialism of self- management where “the chaos of production would not reign,” but instead there would prevail a planning with liberty, with the participation of workers and citizens at all levels of political and economic decision-making; of information, culture, science and technology; of information processing, gathering, classification, and computerization of data, economic, demographic, political, social, scientific, technical, natural resources, etc.

A social-economic program, with continual popular participation (not indirectly through municipal, regional or national elections), must be by the means of federations in industry, agriculture, and services, integrated into a Federative Council of the Economy, in which all the federations producing goods and services must be represented. By way of example, this “Federative Council of the Economy” would have to integrate, among others, the following federations: Fruits and horticultural products; Cereals; Feed for livestock; Food industry, including imports; Hostelry and Tourism; Wine, beer, and alcoholic beverages; Oils and greases from vegetable and animals; Fishing: boats and canning; Textiles; Furs and leather; Timber and cork; Paper and graphic arts; Chemicals; Construction; Glass and ceramics; Metal machining; Steel; Non-ferrous minerals: metals and alloys; Energy: petroleum, coal, gas, electricity, and atomic energy; Information and the construction of computers, integrated micro-circuits, and semi-conductors; Electronics: numerical controlled machines; Biotechnology; Aero-space; Research and Development, uniting technology with work.

This list of industrial federations does not include all the social and public services, which would be too tedious to number but would have to be represented in the Federative Council of the Economy as well. By example, commerce, banking, sanitation, security and social security, which are enormous, would have to be reorganized, since these entail much unproductive work that would have to be reduced. The goal must be that concrete production is not exceeded by unproductive work, since this would restrain or slow real economic growth. In other words, there must be no false increase in the Gross Internal Product, which occurs when it is incremented solely by services and not in the branches of industry, in either the primary sector (agriculture, fishing, livestock, lumber, minerals, etc.) or the secondary sector (industry of diverse types).


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