Accumulation of Freedom: Writings on Anarchist Economics

review by ridhiman balaji, ASR 81

A shorter version of this review was published in ASR 81 (Winter 2021)

Deric Shannon, Anthony Nocella & John Asimakopoulos, eds., Accumulation of Freedom: Writings on Anarchist Economics. AK Press, 2012, 375 pp., $21, paperback.

Accumulation of Freedom is a collection of essays written by various anarchists and libertarian socialists. They provide their own take on issues such as revolutionary strategy, globalization, class, hegemony and many others. Many of the contributors are anarcho-communists. The book is very much a mixed bag; some essays are really good, while others are quite bad. Accumulation begins with a preface by Kinna, who begins by presenting a critique of mainstream economics, which many believe is based on unrealistic assumptions. Kinna blames the ideology of neoliberalism for the emergence of a global economic system in which economic institutions such as the market are under-regulated and ill-planned. Contrary to the “anarcho”-capitalism of Murray Rothbard, Kinna argues “anarchism offers a strong and rich heritage of anti-capitalist thinking.” (6) According to Kinna, neoliberal globalization has produced three sets of problems: 1) Corporate capitalism, 2) environmental and ecological costs of industrialization and modernization, and 3) the unfairness of global market regulation and, in particular, the Western bias of institutions such as the International Monetary Fund and the World Trade Organization. Although Kinna does a good job discussing issues raised by neoliberal capitalism, readers would have also benefited from a discussion of potential solutions to these problems.

The introductory essay by the editors, Anarchist Economics: A Holistic View, discusses why anarchists oppose capitalism and the institution of wage labor. The authors argue that anarchists generally accept a traditional two-class analytical framework which divides people into two categories: the working class and the ruling class. However, as the authors point out, not everyone fits neatly into these categories, as some have argued for the existence of a third class, such as the “the middle class,” “the coordinator class,” “the techno-managerial class,” etc. The editors then provide a brief overview of the three main anarchist schools of thought: Mutualism (Proudhon), Collectivism (Bakunin), and Communism (Kropotkin). Although the authors do a good job of providing a brief overview of classical anarchism, their discussion of Proudhon’s Mutualism is quite misleading. This is addressed later in this review.

In Examining the History of Anarchist Economics to See the Future, Spannos discusses key events in anarchist history. The essay is well written, and Spannos’ decision to use Maurice Brinton’s account of how the Bolsheviks dismantled workers’ control was a good choice. There is not much discussion, however, of what role unions can or should play in building a more emancipatory and liberatory society.

In Laying the Foundations: Proudhon’s Contribution to Anarchist Economics, Iain McKay provides an excellent overview of Proudhon, making a strong case for his continuing relevance. McKay’s essay is very useful for first-time readers of Proudhon, with plenty of textual evidence. However, I did not find McKay’s assertion that Marx’s account of “exploitation” is essentially the same as Proudhon’s very convincing. As I read him, Proudhon appears to be much more interested in theorizing in terms of property, as opposed to Marx who puts forward a value-theoretic critique of capitalism. For Proudhon, the value workers create is their property [“the price is not sufficient: the labour of the workers has created a value; now this value is their property” (McKay 2011, 114)] Thus, what capitalists are really appropriating is workers’ property. McKay’s assertion that “Proudhon was the first to expound many of the key concepts of Marxist Economics” (68) is also not very convincing. If McKay is suggesting that Proudhon came up with the notion of “surplus-value” before Marx, then this point is not clearly established. The problem for Proudhon, as I read him, is not that “workers [produce] more value than they [receive] in wages” (66), rather that workers do not enjoy the fruits of their labor. In other words, the problem is not the size of the wage, rather that only capitalists profit from any production opportunity undertaken even though the effort was a joint collaboration between workers and capitalists.

McKay also interprets Proudhon to be an early proponent of what is known in the Post-Keynesian school of thought as the “endogenous theory of money.” (72) There are numerous problems with this assertion. First, the problem with the “endogenous theory of money” is that its proponents use a very different operating definition of “money” which, in my view, obscures the way money and taxes actually function in capitalist societies. According to the classical Quantity Theory of Money (Smith, Ricardo), which Marx rejected, money is currency (cash), which serves as 1) a measure of value and 2) a medium of exchange. Post-Keynesians use a confusing conception of “money”. First, they define “money” as a “unit-of-account”. Second, their definition of money is inclusive of credit instruments and debt obligations (IOUs). This approach is inimical to the medium of exchange character of money. On the question of whether Proudhon was a proponent of the “endogenous theory of money,” it is not immediately discernible from McKay’s comments whether this is the case. Proudhon writes,

Indeed, in all possible societies, even communistic, there is need for a measure of exchange, otherwise either the right of the producer, or that of the consumer, is affected. Until values are generally constituted by some method of association, there is need that one certain product, selected from among all others, whose value seems to be the most authentic, the best defined, the least alterable, and which combines with this advantage durability and portability, be taken for the symbol, that is to say, both for the instrument of circulation and the standard of other values. (McKay 2011, 230. Emphasis Added)

Here we can see that Proudhon, following the Quantity Theory of Money, thinks that money should be both “instrument of circulation” as well as “the standard for other values.” This seems to suggest, contrary to McKay, that Proudhon was not a proponent of the “endogenous theory of money.” Nonetheless, McKay’s essay provides a very useful introduction to Proudhon, while making a strong case that Kropotkin owes many ‘debts’ to Proudhon.

The essay Capitalism in the 2000s, by Volcano and Shannon is problematic. It is unclear what differentiates “neoliberal capitalism” from “non-neoliberal capitalism” and why this is relevant. The core characteristic features of the neoliberal paradigm are not specified. Although the authors do a good job scrutinizing the way globalization occurs under capitalism, in some areas their discussion is not very clear. They claim greater capital mobility has caused a “race to the bottom.” (82) This is an empirical claim which depends crucially on which part of the world you look at and what time period. They claim workers are “forced to work for wages well below the standards set by union victories in (over)developed countries.” (82) Perhaps this is true of most developing countries, but what does greater capital mobility have to do with this? Capitalists do not only seek low wages, they also seek higher levels of productivity and higher rates of profit. The authors are correct, however, that the discussion needs to shift from “globalization” to a different kind of globalization. The authors also discuss some polling data which appears to show increased interest in “socialist alternatives.” (85) However, many of these attitudes are contingent on the specific time period under examination. The victory of Donald Trump over Hillary Clinton in 2016, as well as the recent loss of Bernie Sanders in the Democratic primaries, indicates that conservative attitudes remain fairly popular in the U.S. The victories of Modi in India and Bolsanaro in Brazil, as well as other neo-fascists around the world, suggest the global working-class has not been won over to socialist ideas. The rest of the essay, however, does a good job discussing many of the problems which arise under capitalism, such as periodic crises, the feminization of poverty, and general ecological unsustainability.

Fight to Win! Tools for Confronting Capital by Cochrane and Monaghan is highly problematic. The major problem is that the authors recommend the works of two radical institutionalist economists, Johnathan Nitzan and Shimshon Bichler, who misrepresent Marx. For starters, it is unclear what the authors mean by the notion of “Labor theory of value,” a term which, in my view, does not accurately represent Marx’s value theory (nor Ricardo’s or Smith’s). Indeed, the authors do not bother defining the notion at all, it is simply presumed from the get-go that the term is problematic. Then the authors introduce readers to the concept of “Differential Accumulation” developed by Nitzan and Bichler. In their books The Global Political Economy of Israel (2002) and Capital As Power (2009), Nitzan and Bichler argue that capital is a “strategic power institution,” and that “capital represents the complex assemblages of assets under the control of particular capitalist entities, including the means of production.” (98) For Nitzan and Bichler, accumulation of capital represents the commodification of power, and claims of control over social processes. Thus, Cochrane and Monaghan write, “given that power can only be understood as a relation between two entities, capitalists judge their accumulatory success in relative terms.” (99) The writers use this concept to evaluate the success and failures of three political-economic disruption campaigns: 1) Anti-sweatshop targeting of Nike, 2) Take down SNC-Lavalin!, and 3) Stop Huntingdon Animal Cruelty. Although these campaigns were successful in damaging capitalist profits, they write, campaigns such as the anti-sweatshop campaign “intentionally mimicked the hierarchical structure of the corporations they targeted,” and their leadership structure “privileged the type of male-dominated, competitive, and non-participatory environments that anarchists are committed to eliminating.” (113) Although Cochrane and Monaghan’s analysis is sharp and insightful, readers should be aware that prominent Marx scholar Andrew Kliman has debunked Nitzan and Bichler’s characterizations of Marx [see Value and Crisis: Bichler and Nitzan versus Marx (2011)]. Moreover, Nitzan and Bichler’s theoretical apparatus systematically neglects any discussion of class.

The essay Escaping Capitalist Hegemony by Wright and Williams is very interesting. The authors challenge the widely held belief that we live in a “capitalist” world. Wright and Williams argue there is no such thing as “capitalist hegemony” by pointing to already existing non-capitalist economic spaces in contemporary society. By looking at alternative forms of work, such as work that is non-exchanged and non-monetized, or work that is monetized but not undertaken primarily for profit-motivated purposes, Wright and Williams argue that alternative non-capitalist economic practices are already prevalent in western economies. However, the notion of “capitalism” is used very loosely throughout the essay, obscuring the way capitalism actually functions. Chapter 51 of Das Kapital provides useful criteria for distinguishing capitalist modes of production from non-capitalist modes. For Marx, there are two defining features of the capitalist mode of production: production of commodities to satisfy human wants, and the production of surplus value. Under this definition, virtually all of what Wright and Williams are talking about, such as non-exchanged, non-monetized work not undertaken primarily for profit-motivated purposes, would fall within the purview of “capitalism.” This is not to say such programs are undesirable, rather that they are not “not-capitalist.” Furthermore, you cannot have “socialism” or “not-capitalism” in one country. For instance, it is unreasonable to say that Country A, such as China or Vietnam, is “socialist” or “not-capitalist”, while these countries continue to trade and interact with capitalist countries like the United States or Great Britain. This assertion relies on a confusing conception of “capitalism.” Perhaps in the future, there will be some overlap between capitalism and socialism as there was between feudalism and capitalism, but we are nowhere near the point where capitalism is coming to an end.

Asimakopoulos’ Globalized Contradictions of Capitalism and the Imperative for Epochal Change argues that capitalism is destined to collapse repeatedly unless the state uses violence to keep it in place. (140) Asimakopoulos looks at SSA Theory developed by Kotz, McDonough and Reich in their book Social Structures of Accumulation (1994). SSA emphasizes the role of institutional arrangements on long-term economic growth, as opposed to what Asimakopoulos calls “deterministic-mechanistic Marxist economic theory.” (140) Asimakopoulos examines the emergence of three regimes, financial regime, neoliberal trade regime, and globally segmented labor markets, arguing that hegemonic powers like the U.S. and the European Union are in a position of global privilege. SSA theory incorporates neo-marxist perspectives developed by Baran and Sweezy, in particular their ideas on overproduction and underconsumption, as well as World-Systems Theory developed by Andre Frank. The problem is that these perspectives shift the discussion away from the exploitative relationship between capitalists and workers, instead, looking at interactions among states, like the U.S., or a conglomeration of states like the EU. Should libertarian socialists express solidarity with “underprivileged” states like India, China, Indonesia, etc.? Or should they express solidarity with the international working-class? It is not the state which appropriates surplus value from workers, rather it is capitalists. The section on “The neoliberal trade regime” (144-146) is quite confusing. Asimakopoulos spends a fair bit of time explaining the United States’ trade deficit with countries like Mexico and China, but it is unclear why trade deficits are inherently undesirable. A trade deficit is only half the picture, there is also a net inflow of capital from countries that run trade surpluses with the U.S., such as China and Mexico. When countries like China purchase U.S. securities like treasury bills, they finance the government’s budget deficit and create employment opportunities for workers in the U.S. Thus, Asimakopoulos presents an incomplete picture of an interconnected world where current account deficits are offset by capital account surpluses.

Hahnel’s essay The Economic Crisis and Libertarian Socialists does a good job examining the United States’ lackluster response to the 2007-2008 financial crisis, and remains relevant in light of the economic crises induced by the Covid-19 pandemic. It is important to remember, however, that the Covid-19 recession is much bigger than the Great Recession of 2007-2008. Although Hahnel does a good job of looking at how the United States’ policy response to the crises was insufficient, readers would have also benefited from a discussion of the various ways in which the economy could have been restructured to be made more democratic. Various conditions could have been attached to firms that were bailed (GM, Chrysler), such as more representation on the board of directors, increasing worker-equity through policies like employee stock ownership plans, maximum wages for CEOs, and other such policies to make the workplace more equitable and democratic.

In their essay, Education’s Diminishing Returns and Revolutionary Potential in the United States and Beyond, Armaline and Armaline discuss education policy, an important issue which is often neglected when thinking about envisioning a new and better society. “The new generation of workers, young adults, and graduates face a difficult economic climate—all amidst rising costs for education, credit, general costs of living, and record levels of national debt. As it seems, many will enter the employment market carrying significant debt in comparison to previous generations.” (180-181) The authors argue that school in many ways remains a “false promise”, as it not only reproduces inequalities along the lines of race, class and gender (183), but also maintains and perpetuates global capitalism, since “public education is often a mechanism to produce new generations of workers socialized for their inclusion, typically as wage slaves, in the larger political economy.” (183) Indeed, schools are coercive institutions which teach students to conform to social, cultural and occupational hierarchies, rather than “rather than critical independent thought necessary for personal autonomy and democratic societies” (183). Many working-class students perceive school to be irrelevant to “real life.” (186) Overall, the authors do an outstanding job in criticizing the current state of public education and pointing to some ways forward.

Gordon’s essay, Anarchist Economics in Practice, is also well-written and very useful. Gordon provides an important discussion of actual economic practices undertaken by anarchists, including abstention, anarchist unions, workplace and university occupations, cooperatives and communes, local currencies, Food Not Bombs, Free shops (“gift economies”), DIY cultural production, and the electronic commons. As Gordon writes, many of these practices are prefigurative, that is, the methods by which these practices are undertaken aim to exemplify the type of future society anarchists strive towards. However, as Gordon writes, some practices such as local currency exchanges are not sufficiently prefigurative:

Some readers may object to the inclusion of certain examples, which, they may argue, do not in fact qualify as anarchist. Alternative currencies and workers’ cooperatives, for example, would receive criticism from anarcho-communists since they retain, respectively, the use of symbolic means of exchange and the payment of wages. Thus they are not only islands inside capitalism, but also not sufficiently prefigurative of an anarchist-communist society— one in which there are no wages, and products are not exchanged but distributed according to need. (204-205)

Gordon also provides a useful discussion of revolutionary strategy. He differentiates between three different outlooks: 1) constructive direct action, 2) propaganda by the deed, 3) and the politics of collapse. Indeed, as Gordon writes, “Constructive direct action means that anarchists who seek a world based on different social relations undertake their construction by themselves. On such an account, for social change to be successful, the modes of organization that will replace capitalism, the state, patriarchy, and so on must be prepared and developed alongside (though not instead of) the attack on present institutions.” (213) It is important to realize, as Gordon notes, that “anarchist economic practices ultimately function within rather than outside capitalism,” and so “are by no means entirely detached from the capitalist economy.” (213) With respect to “propaganda of the deed,” readers would have benefited from an explicit definition of the phrase. As Gordon writes, the term has often been associated with destruction and violence. However, its origins are quite different, and if one interprets the term (as Gordon does) as “the actual implementation and display of anarchist social relations” (214) then the term “prefigurative politics” captures the essence of this phrase without any of its negative connotations. In that respect, his discussion of “propaganda of the deed” is redundant. Gordon’s discussion of “the politics of collapse” also merits close attention. Gordon’s rhetoric towards the end comes across as alarmist. He writes, “the converging crises of the twenty-first century—climate change, financial meltdown, and the imminent peak in oil production—may be the only hope for large-scale social transformation.” (216, emphasis added) This type of rhetoric has a tendency to dissuade activists from using their agency to bring changes to the world. It conveys a sense of inevitability, that things in the world occur due to the immutable “internal logic” of institutions. This perspective denies the role of human agency which can be used to create alternatives and bring changes to the world. The actions of institutions, such as corporations that pollute the environment, cannot be detached from the role humans played in enabling them.

Readers will experience difficulties in understanding Kaltefleiter’s essay. Kaltefleiter’s Currency and Café Anarchy is about money and currency, but the basic issue is Kaltefleiter’s decision to use a theory by Stuart Hall known as the encoding/decoding model of communication. The theory, in my view, is unnecessarily complicated and not very useful in this context. Money is an instrument that the ruling class uses to subordinate workers. The question of how to encode or decode texts is, in my view, a distraction. Furthermore, Kaltefleiter does not provide readers with terminology that is adequately defined. As an example, Kaltefleiter writes,

Popular and scholarly understandings of money tend to share some common traits found in narratives of globalization and modernity dyads. Cultural anthropologist Faidra Papavasiliou argues that money is a “fact,” a reality that almost assumes the status of an agent, an agent that is increasingly unified and uniform across sociocultural, political, and economic boundaries. (226, emphasis added)

There is some interesting discussion of alternative forms of currency (mediums of exchange), such as the Ithaca HOURS system in Ithaca, New York. However, some of Kaltefleiter’s statements are prone to misinterpretation. For instance,

The capitalist agenda contributes to what Heidegger referred to as the loss of any meaningful distinction between “nearness” and “distance” and contributes to a leveling down of human experience, which in turn spawns an indifference that renders human experience monotonous and one-dimensional. It is within this space of one-dimensionality that a sense of community is lost unless local citizens take responsibilities for charting their own forms of social change. (229, emphasis added)

One could misinterpret the sentence highlighted above as an injunction to pursue ethno-centric policies. Local communities should assert themselves, but only in the context of a wider project which calls for solidarity with the global working-class. Finally, Kaltefleiter fails to discuss some key issues like how debt is used as a system of bondage by capitalists, or what remuneration of work would look like in a post-capitalist society.

Occupy, Resist, Produce! Lessons from Latin America’s Occupied Factories by Marie Trigona looks at movements across Latin America to occupy factories and other places of work through direct action. Many of these occupations occurred in Argentina, spreading in the wake of the financial crisis of 2001. Trigona writes, “In Argentina, more than 13,000 people work in occupied factories and businesses, otherwise known as recuperated enterprises.” (238). The occupation of BAUEN Hotel is discussed in great detail, as is the occupation of FASINPAT, a ceramic tile factory. Overall, Trigona does an excellent job highlighting successful experiences of worker control. Indeed, as Trigona writes, workplace occupations “provide a liberatory vision by sowing the seeds for a new society today,” and by “challenging market systems of domination, and questioning the legitimacy of private property.” (240)

Ernesto Aguilar’s essay, Call It an Uprising: People of Color and the Third World Organize against Capitalism, is deficient in many respects. The essay does not have an underlying thesis; rather there is a topic of discussion: “the response of people of color to capitalism.” (257) Moreover, Aguilar barely mentions classical anarchists (Proudhon, Bakunin, Kropotkin), instead relying heavily on Marxists like István Mészáros, C.L.R James, Vijay Prashad, etc. Aguilar writes,

As a movement that aims for libertarian socialism, anarchism must account for the experiences of people of color because of their unique role in (sometimes forcibly) building modern capitalism, as well as maintaining it.  Further, as a movement that aims to abolish all hierarchical authority, anarchism requires an analysis of colonialism, imperialism, and white supremacy in order to live up to its own aims. Unfortunately, in much anarchist theorizing and movement building this is notably absent. (258)

But how is “anarchism,” an ideology which includes a wide-ranging set of ideas (from the Egoism/Individualism of Stirner to the Collectivism of Bakunin), inattentive or inimical to “colonialism, imperialism and white supremacy”? Aguilar doesn’t provide a sufficient justification. Instead, Aguilar simply moves on to a different topic, globalization. Perhaps the only unifying theme in Aguilar’s essay is the concept of “dignidad,” the Spanish word for dignity. But dignity in relation to what? The workplace? Race? Class? Aguilar is correct that many people of color continue to fight against capitalism. But some of these people are also reactionaries who do not want anything to do with socialism. Furthermore, if states in the Global South such as Venezuela, Ecuador or India, challenge the global hegemony of the U.S., it would be irrational to interpret this as the people of those countries fighting against the imperialism of The West. Thus, if (former) heads of states like Rafael Correa challenge the legitimacy of Ecuador’s debts or reject U.S. trade agreements, it does not follow that “people of color are challenging capitalism and oppression.” (268)

Towards the end, Aguilar writes, “Radical white revolutionary tendencies such as First World socialism and anarchism have not adequately responded to the ways people of color and the Third World have taken on capitalism.” He continues, “one of Marxism’s most stunning failures, and a major obstacle to relevance beyond shorthand in the new millennium, has been a chronic inability to understand race and to dismiss racial oppression in favor of economism and reductionism. Such critiques paradoxically reduce race and gender to personal identity and competitors to class, thus missing their material basis and the ways they intersect with class.” (270) One could argue that this is the case. However, it is hardly reasonable to suggest that all Marxists uniformly are economistic and reductionists. If anything, the shortcomings of some Marxists warrant a more integrated approach to issues of “race” and “class,” which Aguilar fails to offer.

Shannon’s essay, Chopping Off the Invisible Hand: Internal Problems with Markets and Anarchist Theory, Strategy, and Vision, also suffers from numerous drawbacks. Shannon argues that Proudhon’s Mutualism is essentially a market form of socialism. While one can certainly interpret Proudhon in this manner, Shannon does not provide textual evidence to establish this claim. Instead Shannon assumes that this is the case, and writes “Proudhon envisioned a world where these worker-owned and self-managed firms would compete in a stateless market—a socialist market that was regulated by a grand agro-industrial federation.” (276) Relying heavily on Kevin Carson’s erroneous presentation of Proudhon, Shannon argues that “expropriation of surplus-value cannot occur without state coercion.” (277-278) This statement is problematic on numerous grounds. On the one hand, capitalists appropriate surplus value produced by workers, not “expropriate.” On the other hand, it is not immediately clear that Proudhon uses the same conception of exploitation as Marx. As mentioned previously, I interpret Proudhon to be putting forward a property-theoretic critique of capitalism. By contrast, Marx presents a value-theoretic critique. For Proudhon, the value workers produce, is their property. When capitalists unjustly appropriate additional value produced by workers, Proudhon uses the term “collective force.” (67) Unfortunately, Shannon relies heavily on the secondary literature: Kevin Carson, Benjamin Tucker, Martin and Barrot. Shannon also unconvincingly argues, following Joseph Kay, that cooperatives “as a demand under capitalism” suffer from “self-exploitation.” (282) Shannon fails to make a convincing argument, however, as his earlier discussion of Proudhon’s conception of “exploitation” is based on Carson’s erroneous rendering of Proudhon.

In Ditching Class: The Praxis of Anarchist Communist Economics, Nappolos argues that the abolition of class exploitation should be the foundation of any future socialist economy. He argues that libertarian communist economics has the following four defining features: 1) A commitment to a future economy based on the praxis of the revolutionary working class and popular classes, 2) An economy based on the destruction of the wage system of labor, and a de-linking of the value of labor in production from the distribution of society’s wealth to its members, 3) Collective control and management of the entire economy by the direct control of workers and community members united in a council system of direct democracy, 4) The abolition of intermediary institutions of power governing the economy. (292) Nappolos discusses the concept of “prescriptive economics,” which he defines as “attempts to lay out a vision, in our case, of a post-capitalist economic system based on some core values,” (292) and “praxis”, which Paulo Freire defined as “reflection and action upon the world in order to transform it.” (293) Nappolos writes, “Libertarian communist prescriptive economics has then been shaped by belief in the potential leadership of the working class and popular classes, and the commitment to prescriptive economics reflecting both a strategy for achieving such an economy and a theory which reflects our experiences in struggle.” (293)

Nappolos also discusses the experience of small and large scale Libertarian Communist projects, such as Hungary in 1956, Ukrainian communes under Nestor Makhno, Zapatistas, Argentinian factory seizures, Israeli Kibbutz, as well as anarcho-syndicalists during the Spanish Revolution. (294-296) He discusses the role of Gaston Leval, a Spanish anarchist who participated in revolutionary communes across Spain. Nappolos does a good job discussing the ways in which Spanish anarchists realized their vision of a future egalitarian society in the very methods they undertook to carry out their revolution. (297-300) With respect to how distribution of goods in a libertarian communist society might occur, Nappolos distinguishes between planned communist economies, and emergent economies. Whereas in planned economies the distribution of goods occurs through planned production, in an emergent economy, distribution “relies on intuitions and lessons from seeing society as an interdependent, living, and complex, organism-like body” (303) “The motivation for this position,” argues Nappolos, “arises from two sources. First there is a suspicion here about our ability to plan successfully, consciously, and explicitly a full economy; and secondly there is both support for and historical antecedents of a dynamic and evolving form of self-planning in a communist society.” (303)

Toward the end, however, Nappolos runs into trouble:

During the Hungarian and Spanish revolutions, people were able to take over the economy and in some instances in a very rapid period of time convert existing production for private profit into a collectivized economy for common use. This occurred initially outside of any single unified planning apparatus. Distribution evolved out of countless actions of individuals and groups which came to unify and reorganize to meet the demands presented by the wars and communities. This isn’t to say there wasn’t organization, but to say there is a difference between organization that is structurally and historically open and has the ability to produce emergent and evolving structure, versus extensively planned organization that is predictive and fairly static. There is little evidence to point to people living under such conditions guiding their activities by adhering to such programs. We can understand the activity of an economy as emergent out of problem-solving at countless levels, and producing stability once equilibrium can be reached. This is a problem that is unfortunately hidden from these discussions: how to obtain equilibrium in a revolutionary context is in many ways a more significant problem than that of abstract models of potential futures. (303, emphasis added)

What does it mean to reach an “equilibrium” in a “revolutionary context”? “Equilibrium” as a theoretical concept does not belong to classical economics (Smith, Ricardo, Marx; rather it has been popularized by neoclassical economists, but many proponents of classical political economy feel it is not very useful. In fact, I would argue that it is obscurantist, since it misrepresents relations of exploitation based on one’s class position. How can there be an “equilibrium,” “balance” or “stability” with respect to class exploitation? Moreover, in his “critique of the wage system” Nappolos misinterprets the fundamental issue with wage-labor. While he is correct that communists reject wage-labor, the issue is not unfair remuneration for work done, i.e. the problem is not is the magnitude of wages $100/hour vs $1/hour. Rather, it is a matter of ending the hierarchical and exploitative arrangement between bosses and workers. Under capitalism, labor-power is commodified and treated as private property. Capitalists have a monopoly on deriving use-value from labor-power by virtue of their class position, workers cannot do the same. Workers must sell their labor-power for the sake of their livelihood. Capitalists, on the other hand, use the labor-power of workers to make profits, thereby further enriching themselves. The objective is to eliminate this asymmetry in one’s relationship to private property. Furthermore, Nappolos fails to discuss workers’ control of the means of production. Decision-making in large capitalist firms is highly centralized, falling within the purview of the board of directors. These decisions are then handed down to subordinates, who enjoy some degree of independence, but nevertheless are compelled to follow directives from above. Will these hierarchical and authoritarian social relationships exist in a Libertarian Communist society?

Wayne Price’s essay, The Anarchist Method: An Experimental Approach to Post-Capitalist Economies, addresses the question of what a libertarian socialist economy might look like, and what method to pursue in order to realize this objective. Price distinguishes the “anarchist method” from the Utopian-Moral approach – exemplified by Saint-Simon, Robert Owen, Fourier, Cabet, Proudhon – to the Marxist-Determinist approach, exemplified by Marx and Engels. Price classifies Parecon (“participatory economics”) as a part of the Utopian-Moral approach. Price argues that the advantages of utopian models is that “[thinkers] start with a set of moral values by which the present society may be condemned”, then move on to “envision social institutions which could embody these values.” (313) In other words, Utopian-Moral methods such as Parecon “offer a yardstick by which to judge potential economies, as well as real ones, so that radicals do not claim to be for freedom but accept some totalitarian monstrosity.” (313) However, with the exception of Parecon, Price argues that “historic utopian models were very undemocratic in structure.” (314) Moreover, Price argues, “there is a problem in that the utopian approach starts from values rather than from an analysis of how capitalist society functions”, that is, “There is really no necessary connection between any particular model and the dynamics of capitalism (besides the moral critique).” (314) Furthermore, “The visions of the possible futures do not point to any strategies for getting to these futures”; “A program that does not say whether to be revolutionary or reformist is not much of a guide to action.” (314)

Price contrasts the Utopian-moral method to the Marxist-Determinist approach, as expounded by Marx and Engels. For the “original Marxists,” Price argues, it was “necessary to analyze how capitalism was developing, including its main drive mechanism:  the capital-labor relationship in production.” (314) The working-class revolution “provided the basis of a strategy” and “indicated the emergence of a new society out of that revolution.” (314) For Marx and Engels, Price argues, the nature of this new society was only mentioned in passing remarks, such as a few paragraphs in Marx’s “Critique of the Gotha Program.” (314) For instance, Marx argued that workers would initially be paid with “labor credits” and later be provided with goods freely upon need. (315) “The goal of Marx and Engels,” writes Price, “was not to implement a new social system.” Rather, “It was to see that the working class overthrew the capitalist class and took power for itself.  Once this happened, the historical process would take care of further social development.” (315) The advantage of the Marxist-Determinist method for Price is that it is grounded in economic theory. He writes, “It has an analysis of what forces are moving in the direction of a new society and what ones are blocking them.” Furthermore, he writes, “It leads to a strategy that identifies a specific change agent (the working class, leading other oppressed groups).” (315) On the other hand, Price argues, the Marxist-Determinist method “has no moral standard.” He writes,

So when Marxist-led revolutions produce state-capitalist totalitarianisms that murder tens of millions of workers and peasants, very many Marxists support this as the result of the historical process which has created “actually existing socialism.” Marx and Engels would undoubtedly have been horrified by what developed in the Soviet Union and other so-called communist countries. But a method without a moral standard made it difficult for Marxists to not support these states. (315)

Price contrasts both of these approaches with the “anarchist method,” which, he writes, “starts from the doubt that every region and national culture will choose the same version of libertarian socialist society.” (316) As Malatesta writes, there will not be ‘one solution’, rather “a thousand different and changing solutions in the same way as social existence is different and varied in time and space.” (316) Nevertheless, solutions tried must be non-exploitative and non-oppressive. In other words, “they must ‘prevent the constitution and consolidation of new privilege’ and ‘leave the way open for future improvements.’” (317) Differing models of post-capitalist societies, however, raises a different set of issues. One problem which Price identifies is the method of coordination in the post-capitalist economy. How will resources be distributed across the economy? Price points to three proposals: a market, central-planning, and some sort of non-centralized planning. (318) “In a pluralist, experimental, post-capitalist world” writes Price, “different regions might experiment with different types of economic coordination.” (319) Another issue identified by Price, is the size of the economic unit. Price writes,

As internationalists, we are aware that the world is being knit together by imperialist globalization. At the same time we know that much of this worldwide centralization is not due to technical needs but to the need of capitalists to control natural resources, to dominate world markets, and to exploit the poorest workers in order to make the biggest profits. To end the rule of states and bureaucracies, anarchists want as much as possible of local, face-to-face democracy. This requires a degree of economic decentralization. Indeed, any sort of economic planning would be easier, and easier to make democratic, the smaller the units. Finally it would also be easier to keep production and consumption in balance with nature, the smaller the units are. (319)

Another issue discussed by Price, is that of technology. “Just as is true of economic institutions,” writes Price, “productive technology would have to be flexible, pluralistic, and experimental.” (320) “Machinery and the methodology of production have been organized by the processes of capitalism (and militarism) to serve its interests. Technology would have to be completely reorganized and redeveloped over time to meet the needs of a new society.” (320) Another key question is reward for work. “In a fully communist society,” writes Price, “work would be done only for the pleasure of doing it, or because people feel a duty, or because of social pressure.” Price continues, “consumption will be a right, based only on human need and unrelated to effort.” (321) The rest of the essay discusses a “transitional society.” (322-323) As Price notes, the notion of a ‘transitional society’ has been used to justify all sorts of horrors for Stalinist totalitarian dictatorships. (323) As Price writes, “This is not what Bakunin, or even Marx, had in mind. It shows the need for a vision with moral values to judge a new society.” He continues, “Neither Marx nor Bakunin/Guillaume proposed a mechanism for going from a transitional phase to full communism. One possibility might be to use the idea of a split economy (a basic communism and a non-basic needs sector). As productivity grows, the free communist sector might be deliberately expanded, until it gradually includes all (or most) of the economy.” (323)

There are numerous issues with Price’s essay. First, Price fails to distinguish a capitalist system from a non-capitalist system. What is a “capitalist” system? (See my critique of the essay Escaping Capitalist Hegemony by Wright and Williams above.) Furthermore, as someone who identifies as an anarchist, I am not in agreement with Marx’s conception of “the first phase of a communist society.” Marx’s position on the legitimacy of the state has always been ambiguous. Can a society in which harmful instrumentalization of the state persists be characterized as “communist”? I and many other anarchists would say no. Furthermore, it is necessary to draw a distinction between “the first phase of a communist society” vs a “transitional society,” which are not the same thing. The notion of a “transitional society” is in many ways a Leninist concept, which I reject. In my reading of Marx, I have not come across any discussion of a “transitional society,” but rather a direct transition from capitalism to socialism vis a vis a proletarian revolution. Marxists have, in my view, erroneously interpreted Marx as a proponent of a so-called “transitional society.” The essential point is that many people on the left find the concept of an intermediate “transitional society” to be highly objectionable. We should strive for a socialist society, not a “transitional society.”

The final essay by Albert, Porous Borders of Anarchist Vision and Strategy, discusses participatory economics, or “Parecon,” which Albert helped develop in tandem with Robin Hahnel. Albert argues an anarchist society would forbid the systematic privileging of some people materially or socially over others. He writes, “in an anarchist society citizens should freely fulfill themselves without being systematically subordinate to or systematically superior to other citizens. We should each benefit from the same structural opportunities. We should each gain from the gains others enjoy.” (327) Albert writes, while an anarchist society should rule certain institutions out, freedom to own slaves, or the freedom to hire wage-slaves, it should also rule in social components deemed anarchistic. According to Albert, a positive institutional vision would allow people to “have the information, circumstances, inclinations, opportunity, and even the responsibility to creatively and knowledgeably self-manage their own situations.” (329) Albert argues that the first value which a future anarchist economy should embody is that “people should have a say in decisions proportionate to the degree those decisions affect them.” (329) Second, “citizens should have a claim on society’s economic product that increases if they do socially valued work longer, more intensely, or under worse conditions.” (330) Third, “people should care about one another’s well being rather than each of us trampling the rest or at the least turning the other cheek to others’ difficulties.” (330) Fourth, “people should have a wide range of options available and that when making choices, diverse paths forward should be kept available or experimented with.” (330) The fifth and sixth values, are that

humans and the rest of the environment ultimately constitute an entwined community in which humans have to take responsibility not only for the impact of our choices on ourselves but also on the rest of nature’s domain – and, in turn, efficiency is the related idea that economic activity should produce what people seek for fulfillment and development without wasting assets we value, while furthering self-management, equity, solidarity, diversity, and husbandry. (330)

Albert argues that an anarchist economic vision should propose specific institutions because worthy economic values are essential but are not convincing by themselves. In other words, people’s skepticism cannot solely be dispelled by asserting worthy values; we must also “describe institutions consistent with those preferred values.” Furthermore, Albert argues, “values alone do not provide needed orientation for strategy and tactics.” He writes, “Institutional insights that move us toward effective strategic choices need to be shared and built upon, rather than each actor having to start over repeatedly as if no one had traveled similar ground before.” Thus, “parecon proposes a minimalist institutional vision for establishing economic conditions that will permit future people to self manage their own economic lives while also being sufficient to overcome cynicism and inform strategy.” (331) A potential minimalist structure for addressing equitable remuneration and work apportionment are Balanced Job Complexes.

Moreover, Parecon thinks that economic allocation should occur according to participatory planning, that is, “cooperative negotiation of economic inputs and outputs by nested, self-managing workers’ and consumers’ councils.” (336) Albert rejects a pluralist approach, that is, a society where economic allocation is based on a mixture of markets, central-planning and participatory planning, since “If  there are two, three, or more different methods for allocating items, then the same items will have different and conflicting relative prices depending which method of allocation is consulted, and there will also be different and conflicting logic and associated implications for behavior operating as well, and the contradictions will more often than not disrupt viable operations.” (335) Second, “if we self-consciously, or even just inadvertently,  include either markets or central planning or any combination of the two as our means of allocation in a future economy, these structures will subvert our other libertarian values and aspirations, just like including corporate divisions of labor would subvert our agendas,  or including top-down rule would subvert our agendas, or including remuneration for property would subvert our agendas.” Thus, an anarchist vision, according to Albert, should reject market and centrally planned allocation.

On the question of an “Anarchist Strategy,” Albert supports democratic centralism as an organizational principle, but only as a means of facilitating the creation of participatory communes and fostering popular power. Under complicated circumstances, such as in the “early stages of a transition process seeking self-management throughout society” or a situation where a country is in a massive project to bring about structural transformation, Albert argues that democratic centralism could be justified. (340-342) Albert concludes by addressing the necessity to overcome “not only capitalist, but also coordinator mentalities and structures in our own projects and in society writ large.” (343) It is crucial to recognize, Albert writes, that “there is no single virtuous or effective anarchist strategy such that one size fits all.”

On balance, Accumulation does a satisfactory job of providing non-Marxist socialist perspectives on important issues which the left should be concerned with. However, many of the essays rely heavily on what Marxists have to say, or use other people’s erroneous depictions of classical anarchists. Marie Trigona’s essay was my favorite out of the entire collection.

The economics of anarchism

by Iain McKay, ASR 53 (2010)

This article is based on a talk give at the Radical Routes Conference, “Practical Economics: Radical alternatives to a failed economic system,” held on May 23, 2009.

To quote someone who sums up the intellectual times in which we live, Sarah Palin: “Now is not the time to experiment with socialism.” This, during the worse crisis since the 1930s! Anarchists would say that is precisely the time – but only as long as we are talking about libertarian socialism!

Capitalism in crisis (again!), and the failure of state socialism could not be more clear. Social democracy has become neo-liberal (New Labour? New Thatcherites!) while this year also marks the 20th anniversary of the collapse of Stalinism in Eastern Europe. With its state capitalism and party dictatorship, Stalinism made the disease (capitalism) more appealing than the cure (socialism)! In this anarchists should be feel vindicated – the likes of Bakunin predicted both these outcomes decades before they became reality.

So there is an opening for a real alternative. For we must not forget that capitalism is but the latest form of economy. To Proudhon: “the radical vice of political economy, consists … in affirming as a definitive state a transitory condition – namely, the division of society into patricians [a wealthy elite] and proletaires.” So we have seen slave labor, followed by serfdom, followed by capitalism. What is capitalism? As Proudhon put it, the “period through which we are now passing … is distinguished by a special characteristic: WAGE LABOR” (“la salariat,” to use the Frenchman’s favorite term for it).

So capitalism is an economic system based on hired labor, that is selling your labor (liberty) piecemeal to a boss. For anarchists, this is best called “wage slavery”

Anarchism aims for associated labor, free labor in other words – the situation where those who do the work manage it. In the longer term, the aim is for abolition of work (work/play becoming the same thing). To quote Kropotkin, we aim to “create the situation where each person may live by working freely, without being forced to sell [their] work and [their] liberty to others who accumulate wealth by the labor of their serfs.”

Anarchism was not thought up by thinkers in a library. Its origins, as Kropotkin stressed in his classic work “Modern Science and Anarchism,” lie in the struggle and self-activity of working class people against exploitation and oppression.

We do not abstractly compare capitalism to a better society, rather we see the structures of new world being created in struggle within, but against, capitalism. Thus the assemblies and committees created to conduct a strike are seen as the workplace organizations which will organize production in a free society. To quote the Industrial Workers of the World: Building the new world in the shell of the old.

Different schools of anarchism

There are generally three different schools of anarchism (or libertarian socialism): Mutualism, Collectivism and Communism.  Anarcho-Syndicalism is more a tactic than a goal and so its adherents aim for one of these three (usually, anarcho-communism although Bakunin, who first formulated anarcho-syndicalist tactics, called himself a collectivist). In practice, of course, different areas will experiment in different schemes depending on what people desire and the objective circumstances they face. Free experimentation is a basic libertarian principle.

While these three schools differ on some issues, they share certain key principles. In fact, if someone claims something as “anarchism” and it rejects any one of these then we can safely say it is not anarchism at all.

The first principle is possession, not private property. Following Proudhon’s What is Property?, use rights replace property rights in a free society. This automatically implies an egalitarian distribution of wealth. The second is socialization. This means free access to workplaces and land, so the end of landlords and bosses (this is sometimes called “occupancy and use”). The third is voluntary association, in other words self-management of production by those who do it. While the name given to these worker associations vary (cooperatives, syndicates, collectives, workers companies are just four), the principle is the same: one person, one vote. The last key principle is free federation. This is based on free association, which is essential for any dynamic economy, and so horizontal links between producers as well as federations for coordination of joint interests. It would be rooted in decentralization (as both capitalist firms and the Stalinist economies prove, centralization does not work). It would be organized from the bottom up, by means of mandated and recallable delegates

Bakunin summarized this kind of economy well when he stated that the “land belongs to only those who cultivate it with their own hands; to the agricultural communes … the tools of production belong to the workers; to the workers’ associations.” The rationale for decision making by these self-managed workplaces would be as different from capitalism as their structure. To quote Kropotkin, economics in a sane society should be the “study of the needs of mankind, and the means of satisfying them with the least possible waste of human energy.” These days we would need to add ecological considerations – and it is certain that Kropotkin would have agreed (his classic Fields, Factories and Workshops has an obvious ecological perspective, even if he does not use the term).

Critique of Property

To understand anarchist visions of a free economy, you need to understand the anarchist critique of capitalism. As is well known, Proudhon proclaimed that “property is theft.” By that he meant two things. First, that landlords charged tenants for access to the means of life. Thus rent is exploitative. Second, that wage labor results in exploitation. Workers are expected to produce more than their wages. To quote Proudhon:

Whoever labors becomes a proprietor – this is an inevitable deduction from the principles of political economy and jurisprudence. And when I say proprietor, I do not mean simply (as do our hypocritical economists) proprietor of his allowance, his salary, his wages, – I mean proprietor of the value his creates, and by which the master alone profits … The laborer retains, even after he has received his wages, a natural right in the thing he was produced.

This feeds into Proudhon’s “property is despotism.” In other words, that it produces hierarchical social relationships and this authority structure allows them to boss workers around, ensuring that they are exploited. To quote Proudhon again:

Do you know what it is to be a wage-worker? It is to labor under another, watchful for his prejudices even more than for his orders. … It is to have no mind of your own … to know no stimulus save your daily bread and the fear of losing your job. The wage-worker is a man to whom the property owner who hires him says: What you are to do is to be none of your business; you have nothing to control in it.

To achieve this, as noted above, use rights replace property rights. Personal possession remains only in the things you use. To quote Alexander Berkman, anarchism

abolishes private ownership of the means of production and distribution, and with it goes capitalistic business. Personal possession remains only in the things you use. Thus, your watch is your own, but the watch factory belongs to the people. Land, machinery, and all other public utilities will be collective property, neither to be bought nor sold. Actual use will be considered the only title – not to ownership but to possession. The organization of the coal miners, for example, will be in charge of the coal mines, not as owners but as the operating agency. Similarly will the railroad brotherhoods run the railroads, and so on. Collective possession, cooperatively managed in the interests of the community, will take the place of personal ownership privately conducted for profit.

Proudhon summarized this well as “possessors without masters.”

Socialization

While not all anarchists have used the term “socialization,” the fact this is the necessary foundation for a free society and, unsurprisingly, the concept (if not the word) is at the base of anarchism. This is because it ensures universal self-management by allowing free access to the means of production. As Emma Goldman and John Most argued, it “logically excludes any and every relation between master and servant.”

This has been an anarchist position as long as anarchism has been called anarchism. Thus we find Proudhon arguing in 1840 that “the land is indispensable to our existence” and “consequently a common thing, consequently insusceptible of appropriation” and that “all accumulated capital being social property, no one can be its exclusive proprietor.” This means “the farmer does not appropriate the field which he sows” and “all capital … being the result of collective labor” is “collective property.”  Unsurprisingly, Proudhon argued for “democratically organized workers associations” and that “[u]nder the law of association, transmission of wealth does not apply to the instruments of labor, so cannot become a cause of inequality.”

As economist David Ellerman explains, the democratic workplace is a social community,

a community of work rather than a community residence. It is a republic, or res publica of the workplace. The ultimate governance rights are assigned as personal rights … to the people who work in the firm. … This analysis shows how a firm can be socialized and yet remain ‘private’ in the sense of not being government-owned.

Self-management

Socialization logically implies that there would be no labor market, simply people looking for associations to join and association looking for associates. Wage-labor would be a thing of the past and replaced by self-management.

This is sometimes termed “workers’ control” or, in the words of Proudhon, “industrial democracy” and the turning of workplaces into “little republics of workers.” For Kropotkin, a libertarian economy would be based on “associations of men and women who … work on the land, in the factories, in the mines, and so on, [are] themselves the managers of production.”

This would be based on one member, one vote (and so egalitarian structures and results); administrative staff elected and recallable; integration of manual and intellectual work; and division of work rather than division of labor.

Thus, as Proudhon suggested, workplaces “are the common and undivided property of all those who take part therein” rather than “companies of stockholders who plunder the bodies and souls of the wage workers.” This meant free access, with “every individual employed in the association” having “an undivided share in the property of the company” and has “a right to fill any position” as “all positions are elective, and the by-laws subject to the approval of the members.”

While these principles underlie all schools of anarchism, there are differences between them.

Mutualism

The first school of anarchism was mutualism, most famously associated with Proudhon. This system has markets. This does not imply capitalism, as markets are not what define that system. Markets pre-date capitalism by thousands of years. What makes capitalism unique is that it has the production of commodities and wage labor. So mutualism is based on producing commodities, but with wage labor replaced by self-employment and cooperatives.

This implies that distribution is by work done, by deed rather than need. Workers would receive the full product of their labor, after paying for inputs from other cooperatives. This does not mean that cooperatives would not invest, simply that association as a whole would determine what fraction of their collective income would be distributed to individual members and would be retained for use by the cooperative.

It should be noted here that neo-classical economics argues that cooperatives produce high unemployment. However, like the rest of this ideology this is based on false assumptions and is, ultimately, a theory whose predictions have absolutely nothing to do with the observed facts.

As well as cooperatives, the other key idea of mutualism is free credit. A People’s Bank would be organized and would charge interest rates covering costs (near 0%). This would allow workers to create their own means of production. Again, neo-classical economics suggest that there would be a problem of inflation as mutual banks would increase the money supply by creating credit. However, this is flawed as credit is not created willy-nilly but “rationed,” i.e., given to projects which are expected to produce more goods and services. Thus it would not be a case of more and more money chasing a set number of goods but rather money being used to create more and more goods.

Lastly, there is the agro-industrial federation. Proudhon was well aware of the problems faced by isolated cooperatives and so suggested associations organize a federation to reduce risk by creating solidarity, mutual aid and support. As all industries are interrelated, it makes sense for them to support each other. In addition, the federation was seen as a way to stop return of capitalism by market forces. It would also be for public services (such as railways, roads, health care and so forth) which would be communally owned and run by workers cooperatives.

Mutualism is reformist in strategy, aiming to replace capitalism by means of alternative institutions and competition. Few anarchists subscribe to that perspective.

Collectivism

The next school of anarchist economics is collectivism, most famously associated with Bakunin. It is similar to mutualism, less market based (although still based on distribution by deed). However, it has more communistic elements and most of its adherents think it will evolve into libertarian communism.

So it can be considered as a half-way house between mutualism and communism, with elements of both. As such, it will not be discussed here as its features are covered in these two. Like libertarian communism, it is revolutionary, considering that capitalism cannot be reformed.

Communism

First, this is not like Stalinism/Leninism! That was state capitalism and not remotely communistic, never mind libertarian communist. Most anarchists are libertarian communists and the theory is most famously associated with Kropotkin.

Unlike mutualism and collectivism, there are no markets. It is based on the abolition of money or equivalents (such as labor notes). So no wage labor AND no wages system (“From each according to their abilities, to each according to their needs”).

Communist-anarchism extends collective possession to the products of labour. This does not mean we share toothbrushes but simply that goods are freely available to those who need it. To quote Kropotkin: “Communism, but not the monastic or barrack-room Communism formerly advocated [by state socialists], but the free Communism which places the products reaped or manufactured at the disposal of all, leaving to each the liberty to consume them as he pleases in his [or her] own home.”

These anarchists urge the abolition of money because there are many problems with markets as such, problems which capitalism undoubtedly makes worse but which would exist even in a non-capitalist market system. Most obviously, income does not reflect needs and a just society would recognize this. Many needs cannot be provided by markets (public goods and efficient health care, most obviously). Markets block information required for sensible decision making (that something costs £5 does not tell you how much pollution it costs or the conditions of the workplace which created it). They also systematically reward anti-social activity (firms which impose externalities can lower prices to raise profits and be rewarded by increased market share as a result). Market forces produce collectively irrational behavior as a result of atomistic individual actions (e.g., competition can result in people working harder and longer to survive on the market as well as causing over-production and crisis as firms react to the same market signals and flood into a market). The need for profits also increases uncertainty and so the possibility of crisis and its resulting social misery.

Rather than comparing prices, resource allocation in anarcho-communism would be based on comparing the use values of specific goods as well as their relative scarcities. The use-values compared would be both positive (i.e., how well does it meet the requirements) and negative (i.e., what resources does it use it, what pollution does it cause, how much labor is embodied in it, and so on). In this way the actual cost information more often then not hidden by the price can be communicated and used to make sensible decisions. Scarcity would be indicated by syndicates communicating how many orders they are receiving compared to their normal capacity – as syndicates get more orders, their product’s scarcity index would rise so informing other syndicates to seek substitutes for the goods in question.

Evidence

Fine, it will be said, but that is just wishful thinking! Not true as the empirical evidence is overwhelming for libertarian economic ideas.

For example, workers’ participation in management and profit sharing enhance productivity. Worker-run enterprises are more productive than capitalist firms. A staggering 94 percent of 226 studies into this issue showed a positive impact, with 60 percent being statistically significant. Interestingly, for employee ownership to have a strong impact on performance, it needs worker participation in decision making.

Cooperatives, moreover, have narrow differences in wages and status (well under 1 to 10, compared to 1 to 200 and greater in corporations). Unsurprisingly, high levels of equality increase productivity (as workers don’t like slaving to make others rich off their labor).

What about a lack of stock market? No real need to discuss how stock markets are bad for the real economy in the current cycle but they are also characterized by serious communication problems between managers and shareholders. Moreover, the stock market rewards short-term profit-boosting over long-term growth so leading to over-investment in certain industries and increasing risk and gambling. Significantly, bank-centered capitalism has less extreme business cycles than stock market capitalism.

The successful cooperatives under capitalism, like Mondragon, are usually in groups, which shows sense of having an agro-industrial federation, and are often associated with their own banking institutions (which, again, shows the validity of Proudhon’s ideas).

Then there is the example of various social revolutions around the world. No anarchist talk would be complete with a reference to the Spanish Revolution of 1936 and this is no exception. Yet we do so for a reason as this shows that libertarian self-management can work on a large-scale, with most of industry in Catalonia successfully collectivized while vast areas of land owned and managed collectively. More recently, the revolt against neo-liberalism in Argentina included the taking over of closed workplaces. These recuperated factories show that while the bosses need us, we do not need them!

Getting there

So, with the desirability and validity of libertarian socialism sketched, the question becomes one of how do we get there. Obviously, one elements of this would be creating and supporting cooperatives within capitalism. (Proudhon: “That a new society be founded in the heart of the old society.”) This could include promoting socialization and cooperatives as an alternative to closures, bailouts and nationalization.

However, most anarchists see that as just a part of encouraging a culture of resistance, or encouraging collective struggles against capitalism and the state. In other words, encouraging direct action (strikes, protests, occupations, etc.) and ensuring that all struggles are self-managed by those within them and that any organizations they create are also self-managed from below. The goal would be for people to start occupying workplaces, housing, land, etc., and so making socialization a reality. By managing our struggles we learn to manage our lives; by creating organizations for struggles against the current system we create the framework of a free society.

Together we can change the world!

More information on these issues can be found in section I of An Anarchist FAQ (www.anarchistfaq.org.uk).  Radical Routes is a network of cooperatives and can be contacted c/o Cornerstone Resource Centre, 16 Sholebroke Avenue, Leeds, LS7 3HB, England.  Iain McKay is editing a compilation of Proudhon’s selected works.

The Zombie Stomp

ASR 53 (2010)

The economists are nearly unanimous in proclaiming that the U.S. recession has ended, and the economy is now expanding. Ordinary people disagree, but that’s because we look at the question entirely the wrong way. We ask how well the economy is meeting our needs, when we should be asking how well it’s doing at enriching our bosses. That, after all, is the fundamental purpose of a capitalist economy.

And from that vantage point, the infusion of trillions of dollars of society’s hard-built wealth has successfully revived the zombies. The Dow Jones average has been promenading around 10,000 for months, indicating that the stock market has recovered most of its losses even as home foreclosures continue at record rates. True,  the number of people without jobs continues to rise – as does the length of time it takes laid-off workers to find new jobs even at lower pay (or give up, thereby reducing the official unemployment rate), which is now at record levels – but the pace of plant closings and lay-offs has slowed as the bosses run short on wage slaves to fire.

About eight and a half million U.S. workers have lost their jobs since the recession officially started a year ago (though, of course, millions of jobs were disappearing long before that), and many more jobs have disappeared as people retired, often a half-step ahead of the ax. Other jobs have been transformed from full-time wage slavery to part-time immiseration. Temporary and contract work is once again on the upswing.

Labor productivity is skyrocketing, as workers are pressed to do the work that previously required two or three people. Productivity rose by more than 9 percent in the third quarter of 2009 (it was even higher in manufacturing), enabling the bosses to get more production per hour of labor than ever before in recorded history. The economists see this as a good thing, and even when they start hiring again the bosses are hardly likely to tolerate a resumption of the earlier, already-too-hectic, pace of work.

Wages are down for most workers, and health and retirement benefits are in tatters; but executive bonuses are once again raining down from the sky. Even companies in bankruptcy – like the Tribune media conglomerate discussed last issue – are paying out tens of millions of dollars in bonuses to their executives, explaining that unlike us humble wage slaves who can be kept at our jobs through fear of starvation and homelessness, these overpaid parasites require ever-fatter paychecks to motivate them to do their (largely useless) jobs.

The capitalists are doing just fine, thank you very much. (And they should be thanking you, given the trillions of dollars shoveled into their greedy maws to keep them afloat.) The banks that we were told were “too big to fail” a couple years ago are now much, much bigger. Massive infusions of social wealth, not just in the United States but around the world, have enabled these capitalists to escape the consequences of their reckless speculation; instead of being consigned to the graves they so richly deserve, the bosses continue roaming the world looking for ever more victims to feed their insatiable demand for capital. This is indeed a zombie economy, fueled by the dead labor and destroyed dreams of our fellow workers around the world.

The ravages of the financial collapse will be felt for decades to come. The full cost of the bail-out may never be known, but one thing is certain. Tens of millions of human lives could have been saved from poverty-related deaths (malaria, malnutrition, AIDS, and the like) for less than a tenth of what the U.S. government alone spent on bailing out the banks and financiers. The money spent propping up an ownership system that enables a tiny handful to plunder our planet and squander our lives could instead have been used to eradicate world hunger, and to provide decent housing and health care for the world’s population.

It seems like the capitalists may succeed in patching this zombie economy back together for a few years longer. But can we afford the enormous expense of sustaining an economic system that depends on sucking the life blood from the planet, and from the workers who produce our society’s vast wealth?

The parasites who live off our labor see the means of our survival as costs to be shunted aside, our lives and planet as resources to be plundered. They measure our future in fiscal quarters, and their moral compass is the rate of return on investment. Perhaps we could afford to support this zombie system in an earlier age, though millions of our fellow workers died in the glorious cause of raising the profit rate. But today, in the midst of the deepest economic crisis our world has faced since the Great Depression, the capitalist system is a luxury we can no longer afford.

There has been too much chatter about reforming financial markets and the like. It’s time to organize in our communities and at our jobs, to seize our workplaces, to build job control, to win shorter hours, to dump the bosses off our backs. It’s time to rid ourselves of this rotten system, and instead devote our resources to meeting human needs, and the needs of our planet.

Principles of Libertarian Economics: Part I

Libertarian Labor Review 14 (1992-93)

by Abraham Guillen (translated by Jeff Stein)

Introduction: As part of our continuing efforts to present anarchist economic theory, we offer this translation from Abraham Guillen’s book, Economia Libertaria. The author of over fifty books and essays, Guillen is probably best known to English readers for his book, Philosophy of the Urban Guerilla (New York, 1973). A veteran of the Spanish Revolution, member of the CNT and FAI, Guillen spent most of his life in exile in South America. He has worked as a journalist and economist in Argentina, Uruguay and Peru. Presently he lives in Madrid, where he teaches at the International Institute for Self-Management and Communal Action, which is part of the Autonomous University of Madrid, Spain.

For U.S. readers some of Guillen’s terms may be confusing. His use of the term “libertarian” should not be confused with the right-wing laissez faire ideas of the so-called “Libertarian Party.” Although he does refer to “markets” as part of a revolutionary society, it is clear from the context that he is speaking of a system of federalist or collectivist exchange of products at their labor value – not of capitalist markets.

We do not necessarily agree with everything Guillen has to say, particularly his assessment of anti-Soviet marxism. We think it is possible to make an economic critique of marxism without giving in to the temptation of ascribing its failures to original sin or the fall from grace. Despite this and other disagreements, we think this a useful contribution to anarcho-syndicalist economics.

This is the first installment of Guillen’s article. The second part will run next issue.

Self-Management, Planning, Federalism

The principles of libertarian economy were put into practice – more by intuition than by design, without grand theories – by the libertarian collectives in Spain during the revolution of 1936-39. Here the “praxis,” more than any “a priori” theory, demonstrated that an economy inspired by federalist principles and self-managed, with a self-managed market, could work well and avoid the central-planning which always leads to the totalitarian, bureaucratic State, owner of each and everything.

In this article, we are not going to introduce all the self-regulating objective economic laws, although the most important of these, the law of labor value, self-regulates the exchange of goods and services at their just value in order to fulfill the others: the law of economic equity; the law of cooperation, between the distinct integrated federations of the libertarian economy; the law of exchange equivalence. In a market liberated from the capitalists and the opprobrious tutelage of the State, they will self-regulate, almost cybernetically, the economic processes of production, exchange, distribution and consumption. I study these laws and social-economic categories more profoundly in my Economia Autogestionara [Self-managed Economics], particularly, and to some extent in my three other books.

We are not going to deal, in this chapter, which is really an introduction to self-managed economics), with the development of libertarian socialism. Libertarian socialism I define as synonymous with self-managed socialism.

Anarchism and Marxism

From a semantic point of view, libertarian socialism is disposed to unite according to the concept of true socialism (without bureaucracy and with liberty) all well-intentioned socialists. However, the adjective libertarian has an anarchist connotation.

On the other hand the adjective self-managed tends to suggest an even broader front of socialist ideologies, some more bureaucratic than revolutionary, which might be unified, in thought and deed, into a self-managed socialism: the broadest alliance of popular and workers’ struggle, against the technocracies and bureaucracies, both West and East, and against the bourgeois pseudo-democracies of the West.

I would contend that in spite of light shades of ideological differences, the anarchist theory of liberty, federalism and socialism coincides, if not totally then in part, with the best of revolutionary humanism. In this I would include the Marxism thrown away as scrap by the State under the form of “the dictatorship of the proletariat, in the transition from capitalism to socialism,” which showed itself to be in the U.S.S.R. the dictatorship of the Party-State bureaucracy, and was under Stalin just as cruel as nazi-fascist dictators.

So, with the State acting as the revolutionary protagonist, instead of the people self-organized in self-managed enterprises and in libertarian collectives, marxist-leninism leads, not to socialism or even less to communism. Instead it perpetuates, as in the U.S.S.R. and its “satellites,” a capitalism of the State, a worse capitalism, closer to nazi-fascism, than to true socialism.

Marxism, separated from leninism, is a theory of capitalist development, its economic laws and

contradictions. It is thus a continuation of capitalist economics, since without a self-managed socialism all the rest is capitalism or neo-capitalism.

Marx, in Capital, his greatest work, does not say what socialism would be like, only what capitalism is like. This title merits serious study, without satanizing it like many anarchists have done without recognizing that Marx was an investigator of capitalism whose contribution to socialism is very limited. It is for us, those who live in the 20th century, to explain our prodigious, revolutionary and changing century, not by the ideologies of the 19th century which explained very well their own times, but cannot be explanations for us today. And this is not to say, in any manner, that we want to break with the past, since by knowing the past we can understand the present and go with certainty to win a future of peace, prosperity, liberty and equality for all, liberated from the bureaucracies of capitalism and the technocracies risen to State power to exploit Society.

The Libertarian Economy

The libertarian economy, going beyond the marxist-leninist economic doctrine of State capitalism, rejects the State in the name of political and economic liberty. This is because the State protects the capitalists’ private property and the state property of the communist bureaucrats. In this school of thought, Bakunin asserted socialism and liberty at the same time, since he could not conceive that socialism could be less free than the bourgeois democracy described by the Universal Declaration of the Rights of Man from the French Revolution of 1789-93. Thus denouncing the political bureaucracy of the “socialists of the cathedral” (the ideologues who spoke like workers, but wanted to govern like bourgeois), Bakunin exclaimed: “Liberty without socialism is privilege and injustice, and socialism without liberty is slavery

and brutality.” (Obras, vol. 1, p. 59)

For the libertarians, blind obedience to the State is an abdication of Society, since the freedom of each individual must not be limited by a ruling class, either by a class whose power is based on private property, as in the bourgeois State, or on State property, as in the despotic, bureaucratic State-both employer and police at the same time. According to libertarian thinkers, the biggest error of all revolutions rests in the absurd politics of demolishing a government in order to put another in its place which could be worse. Consequently the only true social revolution would be that which destroys the principle of authority, replacing it by self-government of the people – without political parties, without a class of professional politicians, without those who arbitrarily command and others who passively obey.

For Kropotkin, laws could be grouped in three categories: those that protect the persons of privilege, those that protect the governments, and those that protect private property, but that, in reality, disprotect the impoverished working people.

In the conventional capitalist mode of production, the bourgeois State is a committee in the service of the capitalists guaranteeing them the private ownership of the means of production and exchange and the realization; without the intervention of labor, of the surplus value usurped from the wage workers, as much in a parliamentary democracy as in a dictatorship, according to the situation. Under the statist mode of production, whose real expression is the soviet model, the State, a monopoly of the totalitarian bureaucracy, imposes state ownership; dictates wage and price policy; is employer, merchant, banker, police, making laws according to the convenience and interests of the totalitarian bureaucracy. In either case, with a conventional capitalist regime or with State capitalism, whether in the West or in the East, the worker remains a wage worker, producer of an economic surplus for the western bourgeoisie or for the eastern bureaucrats. Thus, by changing only one government for another the workers remain oppressed and exploited, in reality, by capitalism, whether private or of the State.

The fact is that the soviet regime perpetuates capitalism, but in another form, with state ownership and bureaucratic State. It should, according to marxist-leninism, but hasn’t, made socialism except semantically – purely in words, not in reality.

Thus, for example, Marx in his main doctrinal work, Capital, exposed the laws of development of capitalism, but not those of socialism; since Capital is a body of economic doctrine mostly about capitalism which contributes no well-defined socio-economic laws of socialism. On the other hand, Lenin, in State and Revolution, contributes no materials for the building of a socialist society, but takes from Marx the idea of the dictatorship of the proletariat as a transitional step between capitalism and socialism, in order to apply it to

the soviet model, where, in time, this transition in the form of a dictatorial State becomes the permanent dictatorship of the communist bureaucracy over the wage workers, who are the producers of State surplus value, for the totalitarian “Nomenklatura.” In sum, then, socialism has not been realized anywhere, as such and as intended by the utopian and libertarian socialists of the 19th century, since the soviet model was a new capitalism of the bureaucratic State. But the fact of having prestige has enabled marxist-leninism, to a great extent, to present itself as the economic science, the dialectical philosophy, the sociology of class struggle and its solution, the materialist interpretation of history and the State form necessary for the transition from capitalism to socialism. All this body of doctrine penetrated the universities capturing the minds of many students and professors, the “intelligentsia” above all, in pre-revolutionary Russia, where leninism was established as the active political practice of marxism. In the West, marxism never really reached the workers – neither in its most simplified form, The Communist Manifesto and less still of Capital – but many professors, intellectuals, ideologues adopted Marxism as reformism, “socialism of the cathedral” or an ingredient of social democracy; although in recent times the economic ideal of the “socialists of the cathedral,” of the technocracy and of the bureaucracy, was not Marx but better still Keynes, who contributed the economic theory of a neo-capitalism, more a monopoly of the social-democratic political class or of the labor parties than of the bourgeoisie properly speaking.

The failing welfare-State in the West, squeezed by the abuse of inflation and of exorbitant taxes, and the State-owner in the East of the soviet bureaucracy, were established as an alternative to capitalism, as a “velvet socialism” in the West and as totalitarian communism in the East (which in reality is not communism, but a capitalism of the State: the most total of all dictatorships, without precedent in the ancient and modern world, and which has fallen into chaos from the “perestroika” of Gorbachev to the “catastroika” of Yeltsin).

It is necessary, therefore, to redefine what has semantically called itself socialism and is nothing more than State capitalism, investigating and proposing a libertarian economy, whose laws of development-economic, social, political, cultural, scientific and technological-are enunciated as a replacement and alternative to western welfare Statism and to Soviet State-ownership. For this libertarian socialism needs a little more scientific rigor and a little less utopianism, although it is necessary to take the adjective “scientific” with a grain of salt, as it has been depreciated enough by the soviets. Utopia is beautiful, but it must bring something of economy, of reality, of objectivity to the goal of libertarian socialism for it to be an alternative, at the same time, to western monopoly capitalism and to State capitalism, according to the soviet model.

False Democracy

In our epoch the exhaustion of statist politics emerges; so it is with the social-democratic regimes under the control of the parasitical middle classes (in the west); so it is with the totalitarian bureaucracies of the one-party and State-employer; whether under the welfare-State (in the West), or the total State (in the East) and of failed nazi-fascism, the people have understood that they must organize themselves into industrial democracy (self-managed enterprises) and into federated self-government (direct democracy), overthrowing the economic power of the industrial, mercantile and financial bourgeoisie, and the political power of the radical, social-democratic, christian democratic, socialist and neoliberal petty bourgeoisie who, with their various parties, take turns in Power.

Marxism and Keynesianism have contributed equally to the development of statist economics; so it is with the marxist-leninists and petty bourgeois socialists; so it is with the technocrats and bureaucrats of every type, partisans of managed economies with the goal of controlling the national economies and the organs of the world economy, imperialist or hegemonist, like the IMF, the GATT, the U.N. Security Council, instruments of the “new world order” of ex-president Bush.

But from these techno-bureaucratic experiences, with the proliferation of well-paid functionaries, of UN-ocrats, eurocrats, comeconorats, of central planners of every type, we can deduce that when the parasitic classes are augmented at the expense of productive workers, the poorer are the working people and consumers.

The moment arrives, then, when it is necessary to vindicate the restoration of a self-managed economy, debureaucratized and debourgeoisfied, liberated from both marxist-leninist totalitarianism and bureaucracy, and from western keynesian planning, which was based on the extravagant growth of taxes, monetary inflation, government budgetary deficit and full employment from above for the bureaucrats and technocrats, and maximum unemployment below for the productive workers underneath. An aberrant economy of this kind has to lead to the total failure of the welfare-State as long as it consumes unproductively more than it produces positively, in actuality in agriculture, industry, mining and goods production.

One thing is politically and economically evident in our time; the stronger and richer is the State than the more weak and poor are its subjects. In consequence, it can be seen on the political horizon and in immediate society, as much in the West as in the East, there are two great antagonistic human groups: those that order and those that obey; those that work and live poorly and those who don’t work and live well; the authoritarians, who seek to maintain their privileges, and the libertarians, who defend their rights and essential liberties. Thus we behold from the historical perspective, at the end of the twentieth century and beginning of the twenty-first, the crisis of the USA and the ex-USSR.

In regimes of the soviet-type, in which the State possesses all wealth and all power, it has created two great antagonistic classes, the totalitarian government bureaucracy and the working people forced to submit to a savage capitalism of the State. The dialectic of class struggle in bureaucratic socialist countries, by its essence, is transformed into a struggle between oppressed Society and the State oppressor, having thus an anarchist character, since it is the proletariat, paid by the State-employer, that has to overthrow the power of the totalitarian bureaucracy in order to build an economy based on self-management, de-bureaucratized, functioning through federations in production and social and public services, converging in a National Economic Council.

Since the quantification and accounting of the economy must be done federally, by agreement of all and the parts (without central planning by bureaucrats, according to central and final orders), there comes a moment in which the libertarian economy makes it scientifically possible as the best possible administration of economic matters creating thus the conditions to abolish the State, oppressor and exploiter of men, converting to decentralized self-government. In this manner an economic federalism (production of goods and service) and an administrative federalism – one as the self-management of workplaces; the other as local, regional and national self-government – creates a self-power of direct participation of people organized in their own interest; not requiring, therefore, a political governing class, nor a bourgeoisie nor techno-bureaucracy, managing industry in order to usurp the economic surplus produced by the labor of others without paying, usurping by surplus-value for the bourgeoisie of the State-owner, now failing in Russia and China, but which they want to perpetuate as capitalism pure and hard in the ex-COMECON countries.

The Management of Social Capital

The libertarian economy has to assume the increased reproduction of social capital, in such a way that the development of productive forces will not be inferior to that under private or State capitalism. Only then will anew economic regime be justified, historically, socially and politically, if it creates more well-being, a better standard of living, more production with less manual labor than under the old overthrown regime. To not do this would produce over time the conditions for a counter-revolution as long as humanity can not lose productive forces, without earning them constantly until living labor (human productivity) has enough capital (accumulated past labor) that enables one hour of automated labor to produce more than many hours of simple or rudimentary labor based upon the muscular efforts of man.

Accordingly, as workers’ productivity increases, with everyone working scientifically, it half productive and half educational, with the goal of giving everyone equal time for labor and studies, equal scientific, technical and cultural preparation. In this way, all will be capable of doing all, and with the help of the computer revolution, to abolish the traditional division of labor, so that the revolution is not overcome by classes or social estates from dividing labor into manual or intellectual.

The self-managed economy, libertarian in the greatest sense of the word, will have to completely master the basic industries-the creation of new products; the complete utilization of scientific-technological research, bringing it from the universities to the workplaces and institutes; the creation of an agro-industry that will erase the differences in cultural, economic, and technological development between city and country; the constitution of a libertarian society that will balance economics, society, ecology, population and harmonize natural resources and humans, guaranteeing all the right to work, education and leisure; the integral assimilation of the computer revolution in order to liberate (painful) manual labor from material production. Since the automation of labor, plus self-management of social capital at the same time, will create all the technical, economic, cultural and scientific conditions to attain a harmonious society, without social conflicts nor economic contradictions; then self-management plus automation equals libertarian communism.

But prior to attaining the “golden age” of self-government, of equality in education and social conditions for all, where each receives according to their needs and the economic possibilities of society, transcending social hierarchies and the antagonism between wage labor and private or State capital. Prior to this, it will be necessary to transcend political economy as a science of administration of scarce resources and distribution of goods and services according to quantity and quality of labor, abolishing at the same time the division of labor into professions or corporations, by virtue of which some consume more than others, using money and unequal incomes in order to perpetuate the inequality among people.

The spontaneous natural riches, the fruits and wild berries, the water and air to be in reach of all humans, without appropriation, can not be distributed in the mercantile sense of the realization of the law of exchange value since they do not pass in the form of money; price and market-seeking profit, not being the objective of political economy. In libertarian communism, for humanity to attain an economy of abundance a high productivity of automated labor will have to go beyond the laws of exchange value, wages, money, merchandise, unequal incomes, the State (formed in order to impose a unequal division by classes); the political parties and the ideologies peculiar to the political alienation of a competitive society; the division of labor between managers and subordinates.

These can not be economically, politically, socially or culturally transcended, however, by bureaucratic socialism – a neo-bourgeois political economy of usufruct, which is followed by a system of distribution as unequal as capitalism.

The libertarian economy, initially, as happened in Spain during the Revolution of1936-39, the “praxis” set itself problems that had to be the resolved, totally or partially, by bypassing political ideology, creating libertarian collectives, enterprises managed directly by workers without techno-bureaucratic directors; but having to demonstrate by means of self-organized labor that the forces of production would not be wasted. Seeing in practice the human, solidaric and productive labor advantages of the libertarian collectives, the small private property owners associated with them voluntarily. On the other hand, Stalin decreed the forced collectivization of the land into kolkhozes [co-operatives] and sovkhozes [state farms], repressing those peasants who did not want to join them except by pressure of the political police.

The good from the moment it is forced … is converted into evil. Liberty, morality, human dignity, consists precisely in that man does good, not because he is ordered to do it, but because he conceived it, desired it, and loved it. (Bakunin, Obras, Volume 1, p. 280).

In reality, people are neither good nor evil, but products of the societies where they live, conditioned by their economic, political, social, and cultural circumstances. Thus in societies where private or state property holds sway, each individual appears as an enemy of the other, competing with the other, oppressed by the other, limited by the other in rights and duties.

The causes of injustice, in the socio-economic sense, do not reside so much in human conscience as in the inhuman essence of societies of conflicting classes and in the State which perpetuates them throughout history, as if humanity was incapable of overcoming the prehistory of unjust society, with even less equality than primitive society from the paleolithic to the neolithic.

An economist so little suspected of being an anarchist as Adam Smith, but a sincere intellectual and friend of the truth concerning social injustice between people, having as a principal cause the governments of class, said:

Civil government … is in reality established for the defense of those who possess something against those others who possess nothing. The International Workers Association (AIT), in the past century, was more clear about the emancipation of working people than all the later internationals where the union bureaucracies, politicians, and technocrats, allies of each other, had corrupted communist and socialist ideals; whether this corruption was, by favoring the welfare-State, more Keynesian than marxist, in the West, or the totalitarian State, the administrative socialism in the East, which produced plenty of armaments but failed to produce food.

“The three great causes of human immorality are: inequality as much political as economic and social; ignorance, that is the natural result of the former; and, finally, the necessary consequence of both, that is slavery.” (Program of the AIT).

The deeds of the political parties, of the so-called left, and the labor union organizations, with the development of monopoly capitalism (West) and with administrative socialism, East having fallen into the hands of political and union bureaucracies and into those of technocrats, with the words of the left and the deeds of the right – has been to confound, in our epoch, all the values of the popular revolutionary struggle, making the communist and socialist parties, and their union organizations, into transmission belts for the interests of the petty-bourgeoisie of the left which, by the means of political power, aspires to become a “new bourgeoisie.” Thus they adulate the workers, promoting to them a “socialist paradise,” in order to sacrifice them to the capitalist inferno – so it is whether under the laborist or social-democratic model, or under soviet totalitarianism.

To Be Continued

Notes on Anarchist Economics

by Iain McKay, ASR 74 (2018)

Anarchism is generally not associated with economics. There is no “anarchist” school of economics as there are “Marxist,” “Keynesian” and so on ones. This does not mean there are no anarchist texts on economics. Proudhon springs to mind here, with his numerous works on the subject – the three volumes on property (most famous being the first, What is Property?) and the two volumes of System of Economic Contradictions (of which, only the first has been translated) – as does Kropotkin, with his Fields, Factories and Workshops. However, in spite of various important works, there is no well-established body of work which can be called anarchist economics.

There are various reasons for this. Partly, it is due to the typical isolation of the English-speaking movement: many works which could be used to create an anarchist economics have never been translated into English. Partly, it is due to an undeserved sense of inferiority: too many anarchists have followed Marxists by taking Marx’s The Poverty of Philosophy as an accurate account and honest critique of Proudhon’s ideas (it is neither, as I show in “The Poverty of (Marx’s) Philosophy,” Anarcho-Syndicalist Review 70). Partly, it is due to anarchists being – in the main – working-class people who often do not have the time or resources to do the necessary research – and more often, rightly, prefer to change the world than interpret it, particularly given we wish to end the exploitation and oppression we are subject to sooner rather than later.

What would anarchist economics be? There are two different – if somewhat interrelated – possibilities.

First, and least important, would be the economics of an anarchist society. As such a society does not exist, this explains why it is the least important. Adam Smith did not speculate about markets in theory, he described them by observing their workings (I write “markets” rather than “capitalism” as capitalism – wage labor – was not extensive when he was writing and so he was describing an economy marked by substantial self-employed artisans and farmers – an ideal which appealed to Smith). So, in this sense, any anarchist economics would develop as an actual anarchist society develops. Attempts to produce in detail now how a libertarian socialist economy would function are misplaced. All that systems like Parecon can show is that certain notions (such as detailed planning) cannot and will not work – even if its advocates do not seem to recognize this.

So all we can do if sketch general principles – self-management, socio-economic federalism, etc. – and discuss how tendencies within capitalism show their validity. This is important, as anarchists do not abstractly compare the grim reality of capitalism to ideal visions. Rather, as Proudhon stressed (and Kropotkin praised him for), we need to analyze capitalism to understand it and to explore its tendencies – including those tendencies which point beyond it.

Which brings us to the other, more relevant, form of anarchist economics, which would be the analysis and critique of capitalism. The two are interrelated, for what we oppose in capitalism would not exist within an anarchist economy. So, for example, Proudhon’s analysis of exploitation as occurring in production – because workers have sold their liberty to the boss who keeps the “collective force” and “surplus of labor” they create – points logically to workers’ cooperatives (self-management) as the basis of a free economy. Unsurprisingly, he and subsequent anarchists opposed associated labor to wage-labor.

Here we do have much to build on. Proudhon’s analysis of exploitation predates Marx’s nearly identical one by two decades – ironically in 1847 Marx mocked the Frenchman for advocating what he later came to advocate in 1867 (see my “Proudhon’s Constituted Value and the Myth of Labour Notes,” Anarchist Studies 25:1). Other insights, including methodological ones, can be drawn from his and Kropotkin’s contributions – although much of it may need to be translated first.

This does not mean we cannot useful draw upon other schools. Marx, for all his flaws, provided genuine insights into the workings of capitalism. Keynes may have sought to save capitalism from itself, but to do so he had to understand how it works and so is worth reading. The post-Keynesian school, likewise, has a substantial amount of work which would be of use in constructing an anarchist economics. (Steve Keen, author of the excellent Debunking Economics, is a post-Keynesian.) Those schools that have been developed – often explicitly so – to defend capitalism (such as neo-classicalism) have little to offer, except perhaps as examples of what not to do.

Which points to another key aspect of any anarchist economics: an understanding of the flaws of other schools – particularly the mainstream neo-classical school. It should help us see when we are being lied to or when certain conclusions are based on preposterous assumptions or models. The same applies to Marxist economics, which all too often woefully mixes up empirical reality and explanatory categories. As such, it would play a key role in intellectual self-defense.

The key issue, though, is not to confuse understanding how capitalism works from a libertarian perspective, an anarchist economics, with the economics of an anarchy. So an anarchist economics in this sense is still in its early days – even after over 150 years! – but there is a foundation there which can be usefully built upon. The real question is, how do we start? As Kropotkin suggests, by basing our analysis of empirical evidence rather than the abstract model building of neoclassical economics. We need to root our understanding of capitalism in the reality of capitalism – and our struggles against it.

This is no trivial task – but one which would be of benefit.

Peter Kropotkin’s Anarchist Communism

LIBERTARIAN LABOR REVIEW #12 (1992) pp 19-24

by Jon Bekken

Note: This is the second of a two-part article in our ongoing series on anarchist economics. Jeff Stein’s review of the book Looking Forward in this issue is also part of this series. We welcome articles and letters joining in this discussion.

Kropotkin believed that the purpose of anarchist economics, indeed of any viable economic theory, was to satisfy human needs as efficiently as possible-to promote “the economical and social value of the human being.” LLR #11 presented Kropotkin’s argument that capitalism fails miserably on this score; this issue briefly reviews Kropotkin’s conception of the economic framework of a free society.

Our comrades began developing the idea of anarchist communism in the 1870s, during the course of the struggle within the First International against Marx’s authoritarianism. Kropotkin did not originate the theory (though many of its elements can be found in his earliest writings), but he quickly became one of its most prominent advocates. His arguments were influential in convincing the anarchist movement to abandon earlier mutualist and collectivist economic theories in favor of the anarchist communist principles supported by most anarchists by the mid-1880s. [1]

Anarchist Communism

Economists, Kropotkin argued, made a fundamental mistake in beginning their studies from the standpoint of production. Instead, economics should be approached from the standpoint of consumption–of human needs. Needs should govern production; the purpose of anarchist economics is not so much to understand the workings of the capitalist economy (to the extent that it can be said to work at all), but rather to study “the needs of mankind, and the means of satisfying them with the least possible waste of human energy.” Although human needs are not met at present, there were no technical reasons why every family could not have comfortable homes, sufficient food, etc. The problem was not to increase productivity alone; rather, “production, having lost sight of the needs of man, has strayed in an absolutely wrong direction…”[2]

If the goal of an anarchist revolution was the well-being of all, then expropriation (of cities, houses, land, factories, etc.) must be the means. “This rich endowment, painfully won, built, fashioned or invented by our ancestors, must become common property, so that the collective interests of men may gain from it the greatest good for all.” Society, Kropotkin was convinced, must be reconstituted on a communist basis if humanity was ever to be truly free.

Everyone has, above all, the right to live, a free society must share the means of existence among all, without exception. “From the first day of the revolution the worker shall know that a new era is opening … that henceforth none need crouch under the bridges while palaces are hard by, none need fast in the midst of plenty… ”

In his monumental work, The Conquest of Bread, Kropotkin devoted a lengthy chapter to rebutting such common objections as the notion that nobody would work without compulsion and that overseers were necessary to enforce quality standards. Free association, Kropotkin argued, was the solution to most of these objections. If sluggards and loafers began to proliferate, they should be fed to the extent that available resources permitted, but treated as “ghost[s) of bourgeois society.” But very few people would in fact refuse to contribute to society, “there will be no need to manufacture a code of laws on their account.”[3]

Economists’ arguments in favor of property actually “only prove that man really produces most when he works in freedom…” Kropotkin argued that, far from shirking work when they do not receive a wage, when people work cooperatively for the good of all they achieve feats of productivity never realizable through economic or state coercion.

Well-being, that is to say the satisfaction of physical, artistic and moral needs, has always been the most powerful stimulant to work … A free worker, who sees ease and luxury increasing for him and for others in proportion to his efforts spends infinitely far more energy and intelligence, and obtains first-class products in a far greater abundance.[4]

To the extent possible, all goods and services should be provided free of charge to all. Goods available in abundance should be available without limit; those in short supply should be rationed. Already, Kropotkin noted, many goods were provided based on need. Bridges no longer require tolls for passage; parks and gardens are open to all; many railroads offer monthly or annual passes; schools and roads are free; water is supplied to every house; libraries provide information to all without considering ability to pay, and offer assistance to those who do not know how to manage the catalogue. (That many of these services have been eroded in recent years does not invalidate his premise.)

New organizations, based on the same principle—to every man according to his needs—spring up under a thousand different forms; for without a certain leaven of Communism the present societies could not exist ….

Suppose that one of our great cities, so egotistic in ordinary times, were visited tomorrow by some calamity … that same selfish city would decide that the first needs to satisfy were those of the children and the aged ….

How can we doubt, then, that when the instruments of production are placed at the service of all, when business is conducted on Communist principles, when labor, having recovered its place of honor in society, produces much more than is necessary to all—how can we doubt that this force (already so powerful will enlarge its sphere of action till it becomes the ruling principle of social life?[5]

Neither corporate nor government control of the economy served any useful purpose. Already in the 19th century letters could be sent between most countries without any overarching authority whatsoever. Instead, free agreements between scores of autonomous postal systems together made up an integrated postal network. Kropotkin cited several such examples to demonstrate that voluntary and completely non-coercive organizations could provide a complex network of services without the intervention of higher authorities. To this day one can travel across Europe over the lines of a dozen railway systems (capitalist and state “communist”) coordinated by voluntary agreements without any kind of central railway authority.

There is no reason to imagine that similar principles could not be realized locally as well. As Colin Ward notes,

the whole pyramid of hierarchical authority, which has been built up in industry as in every other sphere of life, is a giant confidence trick …. Ossification began from the center …

Every kind of human activity should begin from what is local and immediate, should link in a network with no center and no directing agency, hiving off new cells as the original ones grow. If there is any human activity that does not appear to fit this pattern our first question should be “Why not?” and our second should be “How can we re-arrange it so as to provide for local autonomy, local responsibility, and the fulfillment of local needs.”[6]

Methods

The new society would not be built through gradualist strategies or through government-imposed reforms-it could only be constructed by the people themselves, through direct action. Social revolution could not be imposed from above; rather society should be organized from below, and the revolution made by “the creative genius of local forces.”[7] Kropotkin originally argued that strikes and other labor struggles could not substantially improve workers’ conditions, but later said the anarchist movement had

always advised taking an active part in those workers’ organizations which carry on the direct struggle of labor against capital and its protector—the State. Such a struggle… permits the worker to obtain some temporary improvements in the present conditions of work, while it opens his eyes to the evil that is done by capitalism and the State that supports it, and wakes up his thoughts concern the possibility of organizing consumption, production and exchange without the intervention of the capitalist and the State.[8]

Kropotkin called for expropriation not only of the means of production (land, mines, factories, etc.), but of all goods.

All is interdependent in a civilized society; it is impossible to reform anyone thing without altering the whole. On that day when we strike at private property… we shall be obliged to attack all its manifestations …. Once the principle of the “divine right of property” is shaken. No amount of theorizing will prevent its overthrow, here by the slaves of the soil, there by the slaves of the machine.

Since human beings “are not savages who can live in the woods without other shelter than the branches,” people will demand housing, food, clothing, and other items of consumption necessary to live any kind of decent life.[9]

Shorter Hours

Kropotkin argued that, based upon the technology of his day, people would need put in no more than five hours a day of labor (for 25 years or so of their lives) in order to satisfy their needs for food, clothing, housing, wine, transportation and related necessities.

When we take into account how many, in the so-called civilized nations, produce nothing, how many work at harmful trades doomed to disappear, and lastly, how many are only useless middlemen, we see that in each nation the number of real producers could be doubled. [Kropotkin was writing at the dawn of the 20th century, the proportion is certainly very much higher today.] … In fact, work could be reduced to four or even three hours a day, to produce all the goods that are produced now ….

Such a society could in return guarantee wellbeing more substantial than that enjoyed today by the middle classes. And, moreover, each worker belonging to this society would have at his disposal at least five hours a day which he could devote to science, art, and individual needs which do not come under the category of necessities, but will probably do so later on, when man’s productivity will have been augmented and those objects will no longer appear luxurious.[10]

This latter point was, for Kropotkin, of the greatest importance. It was not enough merely to meet people’s material wants-human beings must also be free to pursue their artistic and aesthetic senses. Kropotkin believed that luxury, far from being wasteful, was an absolute necessity. But if these joys, “now reserved to a few … to give leisure and the possibility of developing everyone’s intellectual capacities,” were to be obtained for all, then “the social revolution must guarantee daily bread to all.”[11]

Tastes, Kropotkin recognized, varied widely. Some people required telescopes and laboratories to complete their lives, others require dance halls or machine shops. But all of this activity was best removed from the confines of capitalist production and carried out on a voluntary, cooperative basis after participants had completed their few hours of necessary labor. Freed from the drudgery of capitalist production, we would all be free to develop our creative instincts. Kropotkin was certain that the result would be finer art, available to all, and dramatic scientific advances (science was, after all, until relatively recently an entirely voluntary endeavor),

Work Need Not be Painful

Under current conditions, Kropotkin recognized, to do productive labor meant long hours in unhealthy workshops, chained to the same task for 20 or 30 years—maybe for one’s entire life. It means living on a paltry wage, never sure what tomorrow will bring; and little opportunity to pursue the delights of science and art. But it was overwork, not work itself, that was repulsive to human nature:

Overwork for supplying the few with luxury—not work for the well-being of all. Work is a … necessity which is health and life itself. If so many branches of useful work are so reluctantly done now, it is merely because they mean overwork, or they are improperly organized… As to the childish question, repeated for fifty years: “Who would do disagreeable work?” frankly I regret that none of our savants has ever been brought to do it… If there is still work which is really disagreeable in itself, it is only because our scientific men have never cared to consider the means of rendering it less so. They have always known that there were plenty of starving men who would do it for a few cents a day.[12]

Kropotkin welcomed mechanization, so that “those who are now the beasts of burden of humanity [may] raise their backs … to become at last men.” But at the same time he recognized that capitalism often introduced machinery in ways destructive both to human life and to the environment. Kropotkin was an early critic of factory farming in the midwestern United States, noting its propensity to exhaust the soil. Machinery must be integrated with rational cultivation practices and small-scale production.[13]

For Kropotkin, the purpose of agriculture—­as all economic activity—was to meet human needs. Today, of course, production has little if anything to do with meeting human needs. A study of famines around the world, for example, has found no correlation between food production and starvation—indeed food is often exported from areas where people are dying of hunger and hunger-related diseases.[14] Even in Kropotkin’s day, entire cities produced nothing but shoddy, second-rate goods, while other towns specialized in the manufacture of luxury goods out of reach of the bulk of the population.

Production must be reorganized on a new basis, and shifted from luxury and export goods to meeting genuine human needs. But it was not simply a matter of producing different goods—the way work was organized and carried out must be fundamentally transformed. When workers controlled their own workplaces, they would no longer tolerate poor conditions or allow their energies to be squandered in anti-social production.

Kropotkin felt it was also necessary to attack the division of labor that both Marxist and capitalist political economists have extolled as a prerequisite of improved productivity (although Marx did argue that ultimately labor should be reintegrated). Kropotkin was prepared to concede that it might well be the case that a person who did only one thing, over and over again, might indeed become quite proficient at it. But such a worker “would lose all interest in his work [and] would be entirely at the mercy of his employer with his limited handicraft.”

It is not enough, after the revolution, to simple reduce the hours of labor. Kropotkin found the notion that workers should be confined to a single repetitious activity a “horrible principle, so noxious to society, so brutalizing to the individual…” The Social Revolution must abolish the separation between manual and brain work, give workers control of their workplaces, abolish wage labor. “Then work will no longer appear a curse of fate; it will become what it should be-the free exercise of all the faculties of man.”[15] Under the rubric of the division of labor, those who actually make things are not supposed to think or make decisions, while others “have the privilege of thinking for the others, and … think badly because the whole world of those who toil with their hands is unknown to them.”

The division of labor means labelling and stamping men for life—some to splice rope in factories, some to be foremen in a business, others to shove huge coal baskets in a particular part of a mine; but none of them to have any idea of machinery as a whole, nor of business, nor of mines. And thereby they destroy the love of work and the capacity for invention… [16]

It would be far better, Kropotkin argued, for teachers to share in the duties of washing the floors, sweeping the school-yard, and the myriad of other tasks essential to school operations, than to allow the formation of an intelligentsia, “an aristocracy of skilled labor.”[17]

And much of the advantage derived from the division of labor is in any event lost through the necessity it creates to cart goods from place to place, and to create enormous bureaucracies to coordinate production of disparate parts that must ultimately be integrated into a single machine. “It is foolish indeed to export wheat and to import flour, to export wool and import cloth, to export iron and import machinery; not only because transportation is a waste of time and money, but, above all, because … the industrial and technical capacities … remain undeveloped if they are not exercised in a variety of industries.”[18]

Kropotkin argued that work duties should be rotated, that agricultural and industrial production should be integrated, that towns should (insofar as possible) produce their own food, and their own industrial products. The division of labor, in industry and in international trade, has been used as a mechanism for despoiling the great majority. With economic self-reliance, Kropotkin argued, people would be able to ensure that their needs were met. The advantages of centralized production are similarly illusory. While it is sometimes convenient for capitalists to bring their operations under central control (although even they increasingly find it necessary to encourage local initiative), this is not because of any technical advantages. Industry is centralized to facilitate market domination, not because of often non-existent economies of scale.[19] To this day the high-tech, advanced industries so often held up to demonstrate the superiority of centralized control are often carried out in small-scale, dispersed operations. Decentralization is, in fact, more efficient.

Abolish the Wage System

Kropotkin argued that the coming social revolution’s “great[est] service to humanity” would be “to make the wage system in all its forms an impossibility.”[20] In Kropotkin’s day, most socialists acknowledged the need to abolish the wage system, but argued for its replacement by labor tokens representing either the “value” of people’s labor or time put in on the job. Kropotkin, too, argued for such a system in 1873.[21] But he soon concluded that such schemes were both wildly impractical and thoroughly reformist:

Once the abolition of private property is proclaimed, and the possession in common of all the means of production is introduced, how can the wages system be maintained in any form? This is, nevertheless, what collectivists are doing when they recommend the use of the ‘labor-cheques’ as a mode of renumeration for labor.[22]

Today labor vouchers are out of favor, but most socialists still accept the wage system and money, often disguised as consumption credits, as inevitable. Proponents of such schemes argue that they are needed “in order to avoid systematic and massive misallocation of time and resources.” The marketplace is, of course, a time-tested mechanism for ascertaining social needs and preferences for goods. The reason there is mass starvation in Africa is not because the market doesn’t work to meet human needs, but because our fellow workers prefer not to eat.

Such devices make sense only within the framework of a market economy where goods are produced and distributed not on the basis of need, but on ability to pay. Whether such an economic system maintains wage differentials (the arguments against these were reviewed in the first installment) or proclaims equal wages (or, perhaps, wage differentials favoring those engaged in “disagreeable or unhealthy work”), it nevertheless upholds an organization of production and consumption which originated in private property and which is realizable only within its constraints.[23]

Kropotkin refuted such arguments 100 years ago, when they were still fresh:

They say, “No private property,” and immediately after strive to maintain private property in its daily manifestations ….

It can never be. For the day on which old institutions will fall under the proletarian axe voices will call our: ‘Bread, shelter, ease for all!’ And those voices will be listened to; the people will say: ‘Let us begin by allaying our thirst for life, for happiness, for liberty, that we have never quenched. And when we shall have tasted of this joy, we will set to work to demolish the last vestiges of middle class rule: its morality drawn from account· books its “debit and credit” philosophy … and we shall build in the name of Communism and Anarchy.[24]

If there was a genuine shortage of necessities, Kropotkin argued that it was more just to ration goods than to maintain mechanisms for exchange. The wage system, in all its forms, should be rejected in favor of communist principles; for if wages are to be maintained (whether based on labor, or any other measure) a State apparatus is perforce necessary as well.

But the fundamental point, for Kropotkin, was that people must seize control of their economic destiny—must be prepared to experiment with new processes and new methods of organization while taking advantage of the existing methods to meet immediate needs. The technical means of satisfying human needs, Kropotkin was convinced, were at hand,

The only thing that may be wanting to the Revolution is the boldness of initiative …. Ceasing to produce for unknown buyers, and looking in its midst for needs and tastes to be satisfied, society will liberally assure the life and ease of each of its members, as well as that moral satisfaction which work gives when freely chosen and freely accomplished… [25]

The Social Revolution would build on the basis of what was—seizing the existing industries and goods to meet immediate needs and as the building blocks from which we would construct a free society. And while it is neither possible nor desirable to spell out in every detail how such an economy might operate, Kropotkin argued that it was in fact essential to think about its general outlines in advance, so that we might build with a purpose.

Expropriation, direct action, federalism and self-management were, for Kropotkin, the means. But a society not built upon communist principles would inevitably succumb to the central power it established to oversee production and distribution. Only the free distribution of necessities, in all their variety, on the basis not of position or productivity, but of need, was compatible with a free society.

Notes:

  1. Caroline Cahm, Kropotkin and the Rise of Revolutionary Anarchism, Cambridge University Press, 1989, pp. 41-67.
  2. Peter Kropotkin, The Conquest of Bread, New York University Press, 1972 (reprint of 1913 edition), pp. 190-92. Kropotkin raised similar arguments in his early (1873) essay, “Must We Occupy Ourselves with an Examination of the Ideal of a Future System?” In: M. Miller (ed.) Selected Writings on Anarchism and Revolution (MIT Press, 1970).
  3. Conquest of Bread, pp. 55, 170,174.
  4. Conquest of Bread, pp. 161-63.
  5. Conquest of Bread, pp. 63-65.
  6. Colin Ward, Anarchy in Action, Freedom Press, 1982, pp. 54, 58.
  7. Kropotkin, Letter to Lenin (1920), p. 337. In: Miller.
  8. Kropotkin, “Modern Science and Anarchism” (1903), p. 171. In: R. Baldwin (ed.): Kropotkin’s Revolutionary Pamphlets, Dover Publications, 1970.
  9. Kropotkin, “Expropriation” (1895), pp. 171-72. In: Miller.
  10. Conquest of Bread, pp. 122-23.
  11. Conquest of Bread, p. 124.
  12. Kropotkin, “Anarchist Communism: Its Basis and Principles” (1891), p. 71. In: Baldwin.
  13. Conquest of Bread, pp. 70,75-76.
  14. Amartya Sen, Poverty and Famines (Clarendon Press, 1981). I take this summary from Ralf Dahrendorf’s The Modern Social Conflict, p. 9 (University of California Press, 1988).
  15. Conquest of Bread, p. 164.
  16. Conquest of Bread, pp. 198-99.
  17. “Must We Occupy Ourselves … ?” p. 56. In: Miller.
  18. Conquest of Bread, p. 206.
  19. Kropotkin, Fields, Factories and Workshops Tomorrow (1899), pp. 153-54 (Freedom Press, 1985).
  20. “Expropriation,” p. 180. In: Miller.
  21. “Must We Occupy Ourselves … ?” pp. 68-69.
  22. Kropotkin, “The Wage System,” pp. 94-96. In: V. Richards, Why Work (Freedom Press). Conquest of Bread, p. 176.
  23. For an example of one such approach see Michael Albert and Robin Hahnel’s Looking Forward: Participatory Economics for the Twenty-First Century, reviewed this issue. Similarly, the WSA’s Richard Laubach argues, in the Discussion Bulletin (#23, May 1987, p. 21; #25, Sept. 1987, pp. 17-22), for “giving all workers a set of votes on what to produce … ‘consumption credits'” used “to acquire goods and services [and thereby] provide information about the community’s cumulative preferences.” (He does not mean that we would inform central planners of our consumption plans for the coming year; an unwieldy system, though not a market economy. Instead, consumers would be provided with an equal number of “consumption credits” which they would use to buy things from stores, just as with money.) We are clearly talking about money here, and an economic system which must quickly either revert to a full-fledged market economy or to central planning—in either case one that has little if anything to do with meeting human needs and promoting human freedom.
  24. Conquest of Bread, pp. 179, 189.
  25. Conquest of Bread, p. 229.

Kropotkin’s Anarchist Critique of Capitalism

Libertarian Labor Review 11 (1991) pp 19-24.

by Jon Bekken

Introduction: This is the second installment in our ongoing overview of anarchist economic ideas. (For an outline of the project, see the introduction to “Proudhon’s Economic Legacy” published in LLR #10.) As noted last issue, we welcome contributions of articles and letters to this discussion.

Peter Kropotkin devoted a major part of his prolific anarchist writings to two related themes: examining the actual workings of capitalist economies and developing the broad outlines of an anarchist-communist society. Kropotkin was not satisfied to merely assert that’ a free society was possible, he sought to show how such a society could be constructed from the materials at hand-realizing that a revolutionary movement that failed to consider the problems of production and distribution would quickly collapse. This installment outlines Kropotkin’s critique of capitalist political economy; next issue will turn to his positive economic program. This distinction, however, is somewhat arbitrary, as Kropotkin always preferred to illustrate what might be by pointing to what already was.

Economic Doctrine

For Kropotkin, the purpose of political economy was to study society’s needs and the means available (either currently in use, or which could be developed with present knowledge) to meet them.

It should try to analyze how far the present means are expedient and satisfactory … [and] should concern itself with the discovery of means for the satisfaction of these needs with the smallest possible waste of labor and with the greatest benefit to mankind in general. [1]

It was this task that Kropotkin took on.

Rather than engage in the abstract theorizing that dominated, then as now, the field, he carried out detailed studies of the agricultural and industrial techniques practical in his day (whether they were in general use or not) and their capacity to meet human needs.

Unlike most economists, Kropotkin insisted on subjecting economic theories to the same rigorous inquiry he would apply to any “scientific” theory:

When certain economists tell us that “in a perfectly free market the price of commodities is measured by the amount of labor socially necessary for their production,” we do not take this assertion on faith …. We not only find most of these so-called laws grossly erroneous, but maintain also that those who believe in them will themselves become convinced of their error as soon as they come to see the necessity of verifying the[m] … by quantitative investigation.

While there certainly was a relationship between the price of commodities and the amount of labor necessary for their production, Kropotkin argued, they were by no means proportional to one another (as the Labor Theory of Value would imply). Nor had socialist economists troubled themselves to investigate whether or not the theory was true by actually gathering data to test the alleged relationship. Anyone who took the trouble to engage in such an investigation would quickly learn that the theory was false. We need only consider the price of oil or gold to realize that these prices are set not by the amount of labor power required to extract and process them, but rather by external market and social conditions. Most so-called economic laws, Kropotkin concluded, were mere suppositions. And although socialist economists “criticize some of these deductions … it has not yet been original enough to find a path of its own.” [2]

Thus, when Marx argued against Proudhon that all products exchanged at (or, at least, fluctuated around) their labor value, he was implicitly arguing for what has been called the Iron Law of Wages (though Marx later refuted himself by conceding that union activity could decrease the level of exploitation). The Socialist Party of Great Britain and similar tendencies are wholly correct when they maintain that a Marxian analysis ,requires that all commodities– including labor power–are valued under capitalism at the cost of their reproduction, which in tum is determined by the most-productive available methods. (Thus a shirt that take 60 minutes to make by hand or five minutes to make by machine sells for the same price on the world market.)

There is, of course, an element of truth to this–which is why the theory was widely accepted by the labor movement. But, as we shall see, it mistakes an association for a causal relationship. The commodity theory of labor would indicate that only by increasing productivity can workers make possible an improved standard of living, and only through socialist revolution can those possible improvements be actually realized. (Otherwise, the benefits merely accrue to the capitalists and their underlings.)

This doctrine leads inevitably to the conclusion th.at wage struggles are essentially a waste of time and energy (though workers, through hundreds of years of struggle, have proved the opposite), and that the only alternative to competing against each other into ever-greater immiseration is a state-managed, planned economy which can determine labor values and ensure their equitable distribution. But this doctrine is wholly false. I tum, below, to Kropotkin’s proof that wage levels have nothing to do with the cost of reproduction. But the essential point is that wage levels, like the price of all commodities, are set not by their cost of production or the amount of labor they require, but by the relative economic, military and social power held by the respective parties. Monopolies, cartels, police clubs, prisons, labor organization, co-operative associations–these and other power relationships skew the relative “value” of commodities, or at least of the price that can be gotten for them. (And it really matters very little whether a canteloupe has a theoretical, labor-derived value of 25 cents if all the stores charge a dollar.)

Capitalism Not Productive

Like most socialists, Kropotkin initially assumed that an abundance of goods was being produced–and thus that the primary problem facing socialists was arranging their distribution. But when Malatesta suggested that this could not be true, Kropotkin investigated the matter, and found that (quoting Malatesta):

this accumulation of products could not possibly exist, because the bosses normally only allow for the production of what they can sell at a profit … Some countries were continually threatened by shortages.

In fact, there was only enough food on hand in most major cities to sustain the population for a few days. Yet upon further investigation, Kropotkin established that the shortages, economic crises and general distress endemic to his age (and which continue to this day) did not result, as was widely believed, from overpopulation, poor soil, or other such material causes. Rather, they resulted from a failure to utilize the means already at hand to meet society’s needs.[3]

Kropotkin presented his findings in Fields, Factories and Workshops—an anarchist classic that proved that people using then-existing technologies could meet all their needs with just a few months of labor per year. Space precludes anything more than the briefest summary of a volume with which every anarchist should have long since made themselves familiar.

He demonstrated that the technical means then existed to produce abundant and healthful food with relatively little effort or expense (a vision quite distinct from today’s factory farms—the precursors of which already existed, but which, he noted, destroyed the soil for generations to come, as well as displacing people who might otherwise derive a comfortable living from the land). Contrary to many economists, Kropotkin argued for decentralizing agriculture and industry, noting that huge industrial establishments were both less common than generally believed, and established less to realize largely dubious economies of scale than to facilitate managerial control. The doctrine of national specialization or competitive advantage±then coming into prominence, and which has since been used as an excuse to ravish “third world” economies—was demonstrably harmful to the interests of the population. (As is well known to peasants compelled to grow coffee beans and sugar cane on land that could otherwise feed their families.) If the debilitating influences of capitalist control and ignorance could be ended, abundance for all was well within reach.

All this has been proved … despite the innumerable obstacles always thrown in the way of every innovative mind …. For thousands of years … to grow one’s own food was the burden, almost the curse, or mankind. But it need be so no longer … To grow the yearly food of a family, under rational conditions of culture, requires so little labor that it might almost be done as a mere change from other pursuits … And again, you will be struck to see with what facility and in how short a time your needs of dress and of thousands of articles of luxury can be satisfied, when production is carried on for satisfying real needs rather than for satisfying shareholders … [4]

And yet, everywhere workers lived in misery. Contrary to the teachings of every economic school, Kropotkin argued that overproduction was far from a problem:

Far from producing more than is needed to assure material riches, we do not produce enough …. If certain economists delight in writing treatises on over-production. and in explaining each industrial crisis by this cause, they would be much at a loss if called upon to name a single article produced by France in greater quantities than are necessary to satisfy the needs of the whole population …. What economists call over-production is but a production that is above the purchasing power of the worker, who is reduced to poverty by capital and State … [5]

Only exploiters, he concluded, were in abundant supply. Today, 94 years later, there may well be overproduction of some goods (nuclear weapons, toxic chemicals, and products that must almost immediately be replaced)–but it is just as obscene today to talk of, for example, an overproduction crisis in agriculture when millions face immediate starvation.

Thus, rather than celebrating capitalism’s development of society’s productive capacity, as Marxists do, Kropotkin demonstrated that capitalism resulted in chronic underproduction and deprivation. Capitalists not only do not equitably distribute the fruits of our production, the entire development of technology is distorted by their short-term profit calculations. Employers faced with the possibility of new labor-saving technologies, for example, often move to drive down labor costs rather than invest in developing the means of production (their historic role, according to Marx). The Social Revolution, then, would not merely expropriate the means of production developed by the capitalists–it would be forced to rapidly develop those means in order to meet even the most basic social needs.

Fortunately, the means for doing so have long been in place, and workers are more than capable of meeting the challenge.

Wage Slavery

Like all socialists, Kropotkin recognized the self-evident truth that workers work for the employing class because they are forced to—without their weekly wages they and their families must starve.

Whence come the fortunes of the rich[?] A little thought would suffice to show that these fortunes have their beginnings in the poverty of the poor. When there are no longer any destitute there will no longer be any rich to exploit them … [7]

If people had the means to support themselves—if they were capable of meeting their daily needs without hiring out their labor—no one would consent to work for wages that must inevitably be (if the capitalist is to derive any profit) a mere fraction of the value of the goods they produce. Even an independent artisan, the labor aristocracy of Kropotkin’s day, could not hope to do better than to support his family and put together an (almost certainly inadequate) pittance for his old age, should he rely on his own effort and diligence:

Assuredly this is not how great fortunes are made. But suppose our shoemaker … takes an apprentice, the child of some poor wretch who will think himself lucky if in five years time his son has learned the trade and is able to earn his living. …

Meanwhile our shoemaker does not lose by him; and if trade is brisk he soon takes a second, and then a third … If he is keen enough and mean enough, his journeymen and apprentices will bring him in nearly a pound a day over and above the product of his own toil … He will gradually become rich … That is what people call “being economical and having frugal temperate habits.”

At bottom it is nothing more nor less than grinding the face of the poor.[8]

Today, to be sure, workers have after a hundred years succeeded in improving their condition–and the apprentice system, already declining in Kropotkin’s time, has all but disappeared. But saving one’s earnings is no more the route to real wealth than it ever was–at best workers can hope to buy a house, afford some time off from the hated job, and put a little money aside for retirement or hard times. To become wealthy, in economic term, requires exploitation—either directly, from workers’ labor, or indirectly, by exploiting workers’ need for the necessities of life.

Under capitalism, “the harder a man works the less he is paid.” But the solution to this manifest injustice could not be found in reversing this equation–in payment according to the service each renders to society. For who is to determine the value of another’s service?

We know what reply we shall get … The bourgeois economists–and Marx too–will be quoted … to prove that the scale of wages has its raison d’etre, since the “labor power” of the engineer will have cost society more than the “labor power” of the laborer …

[But] the employer who pays the engineer twenty times more than the laborer makes the following simple reckoning: if the engineer can save him a hundred thousand francs a year on his production costs, he will pay the. engineer twenty thousand. And when he sees a foreman, able to drive the workers and save ten thousand francs in wages, he loses no time in offering him two or three thousand .. He parts with a thousand francs where he counts on gaining ten thousand, and this in essence is the capitalist system.

So let no one come up with this talk about production costs of the labor force, and tell us that a student who has cheerfully spent his youth at a university has a “right” to a salary ten times that of a miner’s son who has been wasting away down a mine from the age of eleven. [9]

Wage differentials, whether under capitalism or in some future “socialist” society, must be condemned as unjust. Nor is it possible to determine a “just wage” based on an individual’s contribution (even if such a system could be tolerated on ethical grounds, which it cannot).[10]

Production is Social

Production is not carried out by isolated individuals whose economic contribution can be isolated from that of each other worker so that its value can be determined. To illustrate this, Kropotkin turned to coal mining. (At that time, miners worked either individually or in gangs at the coal face, and were paid piece rate. In today’s coal mines, of course, the issue of individual production would never arise.)

One man controls the lift, continually rushing the cage from level to level so that men and coal may be moved about. If he relaxes his concentration for an instant the apparatus will be destroyed, many men killed, and work brought to a standstill. If he loses as little as three seconds at each movement of the lever, production will be reduced by 20 tons a day or more.

Well, is it he who renders the greatest service in the mine? Or is it perhaps that boy who from below signals to him when it is time to raise the cage to the surface? Is it instead the miner who is risking his life at every moment of the day … Or again is it the engineer who would miss the coal seam and have the miners dig into stone if he made the smallest error in his calculations? …

All the workers engaged in the mine contribute within the limits of their powers, their knowledge … and their skill to mine coal. And all we can say is that everybody has the right to live, to satisfy their needs, and even their fantasies, once the most pressing needs of all have been satisfied. But how can one estimate their labors?[ll]

Obviously you can’t–no one but a Marxist would attempt such an absurdity. And yet we still have not identified everyone who contributes to the production of that coal.

What of the construction workers who built the railways to the pit head, without which the coal would sit useless. What of the farmers, who raise the food the coal miners eat? What of those who build the machines that will bum the coal–without which coal is merely a rather useless dirt.

There was a time, Kropotkin concedes, when a family could support itself by agricultural pursuits, supplemented with a few domestic trades, and consider the com they raised and the cloth they weaved as products of their own, and no one else’s, labor.

Even then such a view was not quite correct:

there were forests cleared and roads built by common efforts … But now, in the extremely interwoven state of industry of which each branch supports all others, such an individualistic view can be held no more.

If the iron trade and the cotton industry of this country have reached so high a degree of development, they have done so owing to the parallel growth of thousands of other industries, great and small; to the extension of the railway system; to an increase of knowledge … and, above all, to the world trade which has itself grown up …

The Italians who died from cholera in digging the Suez Canal … have contributed as much towards the enrichment of this country as the British girl who is prematurely growing old in serving a machine at Manchester… How can we pretend to estimate the exact part of each of them in the riches accumulated around us?[12]

And if there is no individual production, then how can private ownership of property be justified? Just as it is impossible to argue that anyone person created a lump of coal or a bolt of cloth, so it is impossible to justify private ownership of buildings or land. Homes, after all, are not built by their owners. Their construction is a cooperative endeavor involving innumerable workers in forestry, timber yards, brickyards, etc.

Moreover—and it is here that the enormity of the whole proceeding becomes most glaring—the house owes its actual value to the profit which the owner can make out of it.

Now, this profit results from the fact that his house is built in a town … which the work of twenty or thirty generations has gone to render habitable, healthy, and beautiful. [13]

Like the ground they stand upon, buildings are a common heritage.

For instance, take the town of Paris—a creation of so many centuries, a product of the genius of a whole nation … How could one maintain to an inhabitant of that town who works every day to embellish it, to purify it, to nourish it, to make it a center of thought and art—how could one assert before one who produces this wealth that the palaces adorning the streets of Paris belong in all justice to those who are the legal proprietors today …. It is by spoliation that they hold these riches! [14]

That this remains so can readily be seen by examining the value of today’s office buildings and shopping complexes. Without even the slightest improvements their value rise so long as the local economy prospers. But no sum of money invested in maintenance or beautification is sufficient to maintain their value when the local economy fails. For their value is not derived from the money invested, or from the bricks and mortar (and plastic, steel and cement) of which they are constructed. Not even the labor of the workers who build and maintain these modem temples to capital determines their value. Their value, in the final analysis, depends almost entirely upon the wealth and prosperity of the greater society. The most luxurious hotel built in a dying city will soon fade with its surroundings, while the meanest hovel increases in value as surrounding properties are developed.

We enrich each other–not only spiritually, but materially as well—as we work, contemplate and play together; and without the efforts of society as a whole, no one prospers.

Private Ownership Absurd

Private ownership, then, is not merely unjust±it is absurd. As early as 1873, when he was only beginning to become active in revolutionary circles, Kropotkin recognized that true equality was impossible under capitalism.

It is desirable that a person beginning to work not enslave himself, not yield part of his labor, his strength, his independence … to private individuals whose arbitrariness always will determine how great that part should be, then it is necessary that private persons control neither the instruments of labor … nor the … earth … nor the means of existence during work … Thus we arrive at the elimination, in that future society whose realization we desire, of any personal property … [16]

All property, no matter how it was created, must become the property of all, available to all who contribute to society through their labor. This was, and remains, necessary not only on grounds of social justice, but because all production is necessarily social.

Production for Needs

Kropotkin refused to separate his analysis of what was from what could be. He insisted on asking not merely if the present economic order worked on its own terms but whether:

the means now in use for satisfying human needs, under the present system of … production for profits, [was] really economical?

Do they really lead to economy in the expenditure of human forces. Or are they not mere wasteful survivals from a past that was plunged into darkness, ignorance and oppression, and never took into consideration the economical and social value of the human being? [16]

The “economical .and social value of the human being,” for Kropotkin, was the key to anarchist economics–to the building of a free society. I will turn to that question in the next issue.

NOTES:

  • 1. ”Modern Science and Anarchism,” p. 180. In: R. Baldwin (ed.), Kropotkin’s Revolutionary Pamphlets (Dover. 1970).
  • 2. “Modem Science and Anarchism,” pp. 177-79.
  • 3. Errico Malatesta, “Peter Kropotkin—Recollections and Criticisms.” In: V. Richards (ed.), Malatesta: Life & Ideas. Freedom Press, 1977, p. 266. Malatesta went on to argue that Kropotkin’s revised view was also wildly optimistic in its assessment of what could be realized. History, however has confirmed that agriculture can indeed produce much greater yields than was generally believed at the time–yields that in fact exceed those Kropotkin discussed.
  • 4. Fields, Factories and Workshops Tomorrow edited by Colin Ward. Freedom Press, 1985, pp 194-97. (This is an abridged and annotated version of Kropotkin’s second edition, eliminating whole chapters of statistical data eclipsed in the 91 years since this work first saw print.)
  • 5. “Anarchism: Its Philosophy and Ideal,” pp. 126-27. In: Baldwin.
  • 6. See, e.g., The Great French Revolution. (Elephant Editionsm 1983) Freed from the landlords, peasants dramatically Increased production. “A new France was born … For the first time in centuries the peasant ate his fill” and the country was immeasurably strengthened. (p. 594)
  • 7. “Expropriation,” p. 162. In: M. Miller (ed, Selected Writings on Anarchism and Revolution. (MIT Press, 1970)
  • 8. ibid. p. 166.
  • 9. “The Wage System,” pp. 101, 99. In: V. Richards (ed.), Why Work? Arguments for the Leisure Society. (Freedom Press, 1983)
  • 10. Many Marxists, and even some who consider themselves anarcho-syndicalists, continue to argue for maintaining the wage system in such a guise. Their arguments will be presented, and refuted, in the next installment. ‘
  • 11. “The Wage System,” pp. 103-04. Emphasis in original.
  • 12. “Anarchist Communism: ‘Its Basis and Principles,” p. 57. In: Baldwin.
  • 13. “Expropriation,” p. 197. In: Miller.
  • 14. “Anarchism: Its Philosophy and Ideal,” p. 125.
  • 15. “Must We Occupy Ourselves with an Examination of the Ideal of a Future System?” p. 50. In: Miller.
  • 16. Fields, Factories and Workshops, p. 193.

The Impossibility of Just Prices

Review by Jon Bekken, ASR 41 (2005)

Frank Ackerman & Lisa Heinzerling, Priceless: On Knowing the Price of Everything and the Value of Nothing. The New Press, 2004, 277 pages, $25.95 hardcover.

Everything important can be bought and sold. Advertisers tell us this every day, offering to solve our most intimate problems (or imagined problems) for a fee. Corporations put price tags on everything as they decide what to make, what towns to destroy, how unsafe they want our workplaces to be, and the extent to which they will poison our communities. (Indeed, there is now a thriving, entirely legal market buying and selling the “right” to pollute our air.) Health insurers decide how much our life, and our pain, is worth as they decide which procedures and drugs to cover, and which to reject. And governments increasingly use cost-benefit analysis to decide everything from environmental regulations to whether to allow the bosses to force workers to put in unlimited overtime. Everything has a price – even our lives.

Even many “leftists” agree. The entire edifice of Participatory Economics is built upon the premise that we can set prices that capture the full social costs (materials and labor, of course, but also externalities such as damage to the environment and the lost opportunities that otherwise could have been met) of fulfilling any need. Anything we truly value, one Parecon advocate haughtily explained, we can put a price on. Would that they were alone (with the capitalists and politicians) in their insanity, but no. An entire school of environmental economists has arisen who develop ever-more-complex formulas to try to measure the value of externalities – less, I think, out of a belief that this is the best way to make decisions than from despair. These economists insist that our calculations take account of the central role of nature in the economy (the natural resources upon which we depend, the interaction of a species within its environment, the competing uses to which nature could be put). Yet while such methods may be better than the profit-based calculations that drives most economic analysis, they still leave us in a world where prices determine what matters and what is worth protecting.

It is against this backdrop that environmental law professor Lisa Heinzerling and Tufts University economist Frank Ackerman have written Priceless, which the publishers describe as “a combative, no-holds-barred debunking of cost-benefit analysis and the derelict logic used to defend it.” While they proceed entirely within the logic of (enlightened) capitalism, the authors nonetheless provide a wealth of examples of just how dangerous (and how commonplace) the absurd notion that a price tag can be put on everything is. They track the most common cost-benefit formulas down to their dubious origins, illustrate just how easily these calculations can be manipulated to obtain the desired result, and challenge the logic that the value of human life or a healthy ecosystem can be measured in dollars and sense in terms that should be accessible to a very wide audience indeed.

While much of the book frames its arguments against a backdrop of Bush-Reagan deregulation, there is enough information presented to make it clear that price-tag analysis is a bipartisan enterprise. Thus, while the current Bush regime’s number crunchers slashed the value of a human life to $3.7 million, who among us would willingly sell their life for even the $6.1 million the Clinton analysts thought it was worth? And who would be willing to give the world’s billionaires the right to kill as many of us as they please, so long as they pay whatever the going rate is determined to be?

Ackerman and Heinzerling conclusively demonstrate that this business of putting prices on our world is fundamentally arbitrary.

Take the wreck of the Exxon Valdez, for example. Many studies have been conducted to try to determine how much the environmental damage was “worth.” Surveys determined that the average household would be willing to spend almost $100 to put in place controls that would prevent another spill like the Exxon Valdez, indicating that the price should be set at $9 billion (a figure that assumes only U.S. residents were affected; one suspects Russians and Canadians, to mention only those most closely impacted, might see things differently).

But if you ask those same people how much they would accept in order to allow Exxon to dump more oil in the ocean, the numbers get much higher – indeed, many people say they would refuse to allow such a thing at any price. And that’s the only sane position to take. Unfortunately, the people who run our society are not sane. U.S. Supreme Court Justice Stephen Breyer (a Clinton appointee), for example, has published a book that severely criticizes out present system for protecting health, safety and the environment not on the grounds that it fails to do so effectively, but rather because it is not cost-effective. Tobacco companies agree, and have given millions to support “risk analysis” studies that – because they value prices and money above all else – usually find that public health measures just don’t make sense. Which brings us to the question of just how much a human life is worth. It’s been illegal for quite some time to buy and sell the right to kill people, so analysts have to figure this out indirectly.

Often they pluck figures from thin air, as in the case of a 1995 study by the Intergovernmental Panel on Climate Change which decided lives in the U.S. were worth $1.5 million, but those in low-income countries were worth only $ 100,000. (The 2001 report uses an international average of $ 1 million to decide whether it is cost-effective to allow the capitalists to continue destroying our planet through global warming.) Many economists estimate how much a person would earn over a lifetime, and figure that’s the value of his or her life. (We are, after all, wage slaves, of no intrinsic value to our masters except for the money they can make off our labor.) Or, to determine how workers value their own lives, they compare two “similar” jobs with different risks of causing death, compare the pay rates, and then figure the difference reflects how much workers are willing to sell our lives for.

That this is an absurd undertaking goes without saying, but when economists take this idea seriously and crunch the numbers, they find that union members value their lives much more than do non-union workers. You have to pay blue-collar and service sector male workers $2.6 million more over the course of a lifetime for a job likely to kill them ($13 million for women); but unionized men get $6.1 million (women $42.3 mill). (The authors show how these figures are arrived at from differences of just pennies an hour on pages 76-81; there is actually a certain twisted logic to it, if you ignore factors like power, how desperate someone is to land a job, and the like.) So we’ve established that non-union workers are either dolts who don’t value their own lives, or who lack the organized power necessary to do so. Policy-makers don’t worry about such questions, they strike an average and voilà: we have the value of a statistical human life.

There are alternative measures of human life, ranging from $900,000 to a bit more than $7 million, which policy makers use to run cost-benefit analysis on workplace safety regulations, the level of poisons that should be allowed in our food, the value of school lunch programs. diseased social order, and environmental regulations. (Somehow the very real costs of maintaining the world’s most deadly military machine and inflicting untold carnage on our fellow workers around the world are never measured by these tools.) Statisticians then discount the figures because many victims will be older, some deaths will occur in the future, etc., in order to arrive at a number that justifies whatever horror is being contemplated. (Not that they deliberately fudge the numbers; people with anti-human proclivities are hired for this sort of work.)

The drive to put a price tag on everything does not stop there. Elaborate surveys have been conducted to determine how much a crippling illness is worth, many of which manipulate data from a study of denizens of a North Carolina shopping mall to determine the value of a case of chronic bronchitis. Researchers didn’t ask what people would charge to be infected, of course, since few would agree at any price. Instead, they described the effects of chronic bronchitis and asked questions about which of two imaginary communities the shoppers would prefer to live in: one with the same cost of living as their actual residence and a specified risk of bronchitis, and the other with a higher cost of living but a lower risk of bronchitis. The interviewers kept changing the numbers until they reached a point where each subject was equally happy with both communities (or perhaps desperate to escape). Researchers then figured the trade-off between higher risk and higher costs – $883,000 per case of chronic bronchitis – was the value people placed on avoiding a crippling disease.

One-third of the people they asked to participate refused to have anything to do with this macabre exercise, and so are not included in the data. Environmental Protection Agency analysts then statistically manipulated the data, dropping the people who valued their health the most (and also those at the bottom of the scale) to arrive at an average of $260,000, which they now use to value health risks such as coming down with a nonfatal case of bladder cancer. (You’d agree to have a mad scientist induce cancer in your body for a quarter-million bucks, wouldn’t you?)

Similar research has been done to determine the value of preserving entire species, of people’s “quality life years,” of an I.Q. point (lead poisoning stunts children’s intelligence, so the manufacturers need to know how much that’s worth), of living with crippling injuries, etc. It is all quite insane, and U.S. law requires this sort of analysis be performed on new regulations.

Priceless does a very good job of explaining how cost-benefit analysis is being employed and whose interests it serves. They demonstrate that even on its own terms, such analyses necessarily exaggerate costs and minimize benefits. And they offer a richly deserved repudiation of the entire scheme, instead calling for policies that reflect human values: “The alternative is not a different formula. The multitude of priceless values [life, health, nature, beauty, etc.] that we have identified cannot be measured on a single scale… At best, such methods can provide useful background information on multiple environmental impacts. At worst, when they offer their own bottom-line evaluations, they make hidden judgments about the relative importance of different impacts – judgments that can be every bit as arbitrary and indefensible as the process of monetization.” (208-09) There is no formula, they conclude; what is needed is public debate and participation, and a value system that does not gamble with the ecosystem on which future generations will depend.

These are useful cautions, so far as they go. But they do not go nearly far enough. Ackerman and Heinzerling seem to believe that capitalism and the state could be reconciled with environmental and human values, with regulatory agencies serving to keep their anti-human (and anti-environmental) tendencies in check. This attempt to reassert a liberal politics – a politics that endeavors to harness the state to human needs – may help Priceless reach a wider audience, but in the real world this sort of politics is everywhere in retreat. States serve power, and those who rule have concluded that they no longer need the welfare state.

The price tag system is utterly incapable of serving human needs in the arena of policy-making. The authors do not address this, but the evidence is overwhelming that it serves no better in determining the production of food and other human necessities, and making sure they reach the people who need them. The attempt to put a price tag on everything is a reflection of a diseased social order, and its symptoms permeate our entire social system. And even if the authors do not draw out the implications, the arguments (and evidence) presented here can be marshaled to support a broader radical project.

The price system does not protect our time from the depredations of the employers. It does not reward effort or skill; quite the contrary, it richly rewards anti-social behavior while condemning the most industrious among us to dire poverty. Capitalism indeed “know[s] the price of everything and the value of nothing,” as the subtitle puts it. We must rid our minds of the notion that a free society can rely upon prices (for our labor, or for our necessities); rather, we must proceed from the basis of identifying real human (and ecological) needs, and rebuild our economy around meeting those needs.

Anarchist Economics

Review Essay from LLR 8 (Winter 1989-1990) by Jon Bekken

The Decline of the American Economy, by Bertrand Bellon and Jorge Niosi. Black
Rose Books, 1988. $16.95
Fields, Factories and Workshops Tomorrow, by Peter Kropotkin (edited by Colin
Ward). Freedom Press, 1985.
“The Wage System” by Peter Kropotkin; in Vernon Richards, ed., Why Work?
Arguments for the Leisure Society. Freedom Press, 1983.

A casual observer of the anarchist movement, restricted to contemporary writings, could be forgiven for concluding that anarchists have no conception of economics. A serious debate recently was carried out in the pages of the British anarchist monthly, Freedom, arguing that all wealth comes from agriculture – that the working class is merely a burden the peasants and other agricultural workers are compelled to shoulder. The only possible conclusion from this line of reasoning is that we should dismantle the cities and factories and all return to agrarian pursuits. One suspects that farmers – suddenly deprived of tractors, books and other useful manufactured items and confronted with thousands of starving city dwellers cluttering up perfectly good farmland that could otherwise be growing crops-might take a somewhat different point of view.
Bertrand Bellon and Jorge Niosi – who nowhere claim to be anarchists, despite the fact that their book is published by the foremost North American anarchist publisher – provide a better-argued, academic analysis that, in the end, is no less absurd. In the course of arguing that the U.S. economy has irretrievably lost its dominant position (and arguing for a new world economic order based upon tight-knit, highly integrated blocs characterized by heavy state intervention in capitalist economies), they make it quite clear that for them the primary economic actors are not classes or corporations but nation-states! Questions like unionization and wage levels are reduced to economic factors influencing the relative economic competitiveness of countries and regions. Indeed, for them the working class would appear to be increasingly irrelevant as we move into a post-industrial age. (Though they are critical of U.S. corporate management for their short-sighted and inept policies, and of the military build-up which is consuming our resources.)
Nor are class struggles permitted to intrude into this tidy economic picture.
Bellon and Niosi blithely inform us, on page 70, that industrial relocation is a
negligible factor in the economic decline confronting the U.S.’s northern industrial
region. Instead, they assure us, the problem is the decline of certain
manufacturing industries on which this area has depended. Yet the world has
not stopped building or consuming cars, steel, clothing or shoes. Rather, the
employing class has chosen to relocate production to regions and countries where
workers can be compelled to work harder for less, and to automate and speed up
production in order to reduce payroll. These are not natural phenomena, nor are
these developments inevitable. They could be changed by an organized working
class determined to wield its economic power in its own behalf.
Notions of power, social transformation, or the impact of the policies they advocate on workers in the real world never occur to Bellon and Niosi. Theirs is the highly abstract world of government policy, which in practice rapidly boils down to capitulation to the demands of capital, and to massive giveaways to our corporate masters.
An anarchist economics would look very different indeed. Although anarchists are of necessity interested in the workings of the capitalist economies, our attention is focussed on the class struggle, not on the battle between nations (in any event a sideshow, as the bosses have no country). An anarchist economics might study the theft of our labor by the bosses, the squandering of social resources by the state, and the channels through which the bosses manipulate markets, finance and production to increase their profits and to pit workers in different parts of the world against each other. Similarly, an anarchist economics would address itself to the problems of maintaining economic life in a revolutionary situation, and to the sort of economic arrangements which might function in a free society.
These are the questions Kropotkin addresses in the two works cited above, and which our Spanish comrades addressed in practice during the Spanish Revolution (efforts which are chronicled in Sam Dolgoff’s The Anarchist Collectives and Gaston Leval’s Collectives in the Spanish Revolution). In Fields, Factories and Workshops, Kropotkin addresses himself to the practical problems of making a revolution – how we are to maintain production and distribution of necessary goods and services in the heat of, and following, a social revolution. In the process he established that, even in his day, a decentralized, self-managed economy could easily meet the needs of the population, and with much greater
efficiency than under the prevailing capitalist (mis)organization. Those who believe that we will somehow be able to eliminate the need for work following the revolution will have little use for Kropotkin’s invaluable study, for he (like nearly all of our fellow workers) had no time to waste on such nonsense. Those interested in a genuine process of social transformation, however, will find much of value here. The Freedom Press edition is condensed from the original, with notes by Colin Ward that help to bring the original up to date.

Kropotkin’s essay on the wage system conclusively demonstrates that a free society must necessarily abolish the wage system and money if it is to remain true to its principles.
Yet while Freedom Press has performed an invaluable service in keeping these works in print (and in affordable editions), our movement stands sorely in need of a more contemporary look at these issues.

Principles of Libertarian Economics: Part 3

by Abraham Guillen (translated by Jeff Stein)

This is the final installment in this three-part series. Part I ran in LLR #14, Part II in LLR #15.

Information and Self-government

A self-managed economy will have to rationally organize the branches of industry and, within each one, integrate the small and medium enterprises with the big enterprises to constitute a unified whole. For example, in the branch of industry of domestic electronics, which seems to have no relationship with the construction industry, it may be suitable to control home heating and cooling not with individual refrigeration and individual furnaces but centrally, with the goal of saving energy. In this sense, the construction industry, to construct new housings, would build them to work in the manner of hotels, with all included services, so the worker would live similar to a present day bourgeois in a great hotel. For this to happen it would be necessary to increase the productivity of labor in the primary and secondary sectors, so that each worker in agriculture and in industry would be capable of producing for many people so that, in compensation, they would proportion him the necessary services of a sort of social hotel, as we have indicated. But for this to happen will require a great revolution in culture and technology, investing much in Research and Development.

The self-managed economy will have to invest a good portion of the national income in the production of both consumer and capital goods, particularly in its first years of operation, so that the productivity of the labor is increased to unprecedented levels. In this order of ideas, economic growth, with libertarian socialism, would be greater than with private capitalism or State capitalism, since the surplus-value wasted on the parasitic classes under capitalism would be invested instead. Consequently, it wouldn’t be necessary to harshly tighten the belts of the workers, as did Stalin; instead the gross national or social income would increase annually in greater proportion than under industrialized capitalism or bureaucratic socialism (which wastes too much in armaments, in salaries of unproductive officials, and slows economic growth to no greater a pace than that of the developing capitalist countries).

By means of the application of information and of computer networks, well supplied with all types of data, the Federative Council of the Economy would have the actual information for each branch of production or of services. Therefore, the economic integration of branches of production and of service would be a positive science, which would know everything necessary in order to avoid crisis of disproportional of growth in those branches, without the production of excesses of personal, of goods not sold, or of raw materials, since it would be known, at each moment, the amount necessary to produce, to distribute or invest so that the social economy has a law of harmonious development.

For example, the central computers of the Federative Council of Economy, with informative contributions of the computer terminals in local factories, provincial and regional, would make known what was everyone’s production, reserves and shipments to the self-managed market. In the case of the industry for manufacturing of paper containers, the central computer would register the number of establishments, the personnel employed in each one of them, total of work-hours, cost of the personnel in stable monetary units, electric power consumed in the process of production, value of the fuels and gas used, value of the consumed raw materials, general expenses, taxes, value of the total production, value of the employed labor, amounts destined to pay debts and for new investments. In sum: programming the economy would be simple, without need of bureaucrats, of capitalist managers or of technocrats.

When we speak of taxes we don’t refer to the tribute of the western capitalist type nor to the business taxes (mainly figured as a business expense usurped from the enterprises by the State in the USSR and in the “popular republics that made up the COMECON), but to the delivery of a pre-determined quota of the economic surplus, extracted by the self-managed enterprises, transferred to the self-governments, responsible for returning those transfers to society in social and public services according to their ability: sanitation, hygiene, paving of streets, highways, roads, ports, railroads, education, public health and other responsibilities of the self-governments which would be too great to enumerate.

Labor-Value Money

In this case we would attempt to strengthen the economy of the free self-managed municipality, not in the traditionally Roman [state-citizen] nor modern bureaucratic sense, but as the social and public enterprise of the citizens; as well as the industrial, agricultural, of research enterprise or certain global services which would constitute the task of the associated workers with their means of production, self-organized into Worker Councils of Self-Management and in Basic Units of Associated Labor, where the economic accounting should be automated by means of computers and take as their unit of calculation, the labor-hour (LH). It would have thus a monetary equivalence of the same value, if the money is intended to remain stable. The LH would circulate monetarily in the form of ticket which would give the right to consume reasonably, always leaving an important portion in order to invest more capital than wornout during a year, so that libertarian socialism would enlarge the social capital, with the goal of progressing more with self-management than under the dominance of capitalists or of bureaucrats.

The LH, as labor-money, wouldn’t lead to monetary inflation like capitalist money or like the soviet ruble, which conceal by being the money of cass, the parasitical incomes of the western bourgeoisie, or of the eastern bureaucracy, inflating the growth of the gross national product (GNP), with salaries of officials or unproductive technocrats, or with dividends, interests, rents and surplus values received by the capitalists, according to the western economic model, where each day there exist a growing parasitical class at the expense of productive workers. Every project of investment would be calculated in hours of labor (LH), as well as in terms of personal and public consumption required. It would be monitored that neither would be excessive in the carrying on of a libertarian, self-managed society, of direct associative democracy, so that a part of the global economic surplus would be invested in achieving a greater automation of industrial production and of agricultural production. It would thus be possible to continue reducing the working day to a range which would allow a more leisure time, so that all the citizens could occupy their time in more relaxation and, above all, in better scientific, cultural and technological preparation.

The LH, as labor-money and as a quantification of the economy, having a stable monetary value would program the economy: to account it; to establish the costs of the goods and services; programming the integrated branches of the division of the labor and correct disharmonies between them; quantifying in the products the cost of raw, energy, amortization of the capital, value of the work, economic contributions to the local self-governments and to the national co-government, etc. All of this would function within a libertarian socialism of a self-managed market, without speculators, hoarders or merchants, in order that competition benefit the workers and the consumers, the cooperative groups and self-managed enterprises, in the manner similar to the way the market functioned in the Spanish libertarian collectives during the Spanish Revolution of 1936-39. The goal would be to avoid the bureaucracy of a centrally planned economy, such as occurred in the USSR and China, where the officials decided everything and the people participated in nothing. As if that were socialism, however much they try to introduce it thus by means of a totalitarian propaganda, as if lies could be converted into truths by force of repeating them as the only truth, thanks to the state monopoly of the radio, the press, the television, the universities, the schools, so that Power regulates knowledge according to their political convenience.

In a libertarian economy, labor-money wouldn’t be money in the capitalist sense such as we understand it and need it today, since it wouldn’t allow the individual accumulation of capital in order to exploit the labor of other people and obtain a surplus value. Rather it would be intended to facilitate the exchange of goods and service, in a self-managed market, where these exchange at their true labor value, so that it fulfill economically the law of equal exchange in equality of condition for all the integrated branches of the social division of the labor and the law of the cooperation of those same branches or federations of production and of service. If, on the other hand, there were no free operation of the self-managed market, things would fall into economic chaos, by trying to centrally plan everything. Prices and their economic calculation, as well as the market that really forms them (without maintaining bureaucratic costs) are only possible within an indicative global programming, but which leave the day-to-day market free, so that all the enterprises are able to produce the best and most economically, about which the consumers must ultimately decide. From this method, there is an invisible hand which self-regulates the social economy, better than thousands of officials and technocrats equipped with thousands of computers who without liberty, order disorganization by being poorly informed or because of the self-interests of the totalitarian bureaucracy, who manage more like inquisitors or cruel police (as happened in the USSR and China).

If the LH, the unit of labor-money, would have, for example, an purchasing power of 1 hour of average social-labor and this were equivalent, roughly speaking, to one dollar, one could establish, among others, the following calculation of economic-accounts:

Calculation in (LH) of an Industrial Enterprise

  • Costs of machinery = $1000 = 1000 LH
  • Raw materials, energy, etc. = $50,000 = 50,000 LH
  • Hours worked in production = 50,000 LH
  • Total of LH = 101,000 LH
  • Units produced during the period of work = 100

Dividing the total number of LH, spent in the process of production, and the total of units produced in that time of work which could be daily, monthly, or yearly, we would have an average of labor value for unit produced of 1.010 of LH or of labor-money.

Now then, as no money could be absolutely stable, since if the productivity of the labor increases, due to improvements in machines, education of the workers and more efficient methods, it would result that the LH will end up having less value of exchange, increasing its value of use, driving this economic process toward an economy of abundance where, overcoming venal value, the value of use would only remain. Consequently, having reached this stage in the economy and technology, with most of the work automated, the value of the produced goods wouldn’t be based much on living labor, but almost everything would be labor of the past (accumulated capital), which would determine thereby a self-regulated production of abundance. Then the wonderful time will have arrived of overcoming finally both money and the commodity, each man receiving according to his necessity, although he only contributes according to his unequal capacity, or in other words, that it would make possible the economic equality between the men: libertarian communism, rationally and scientifically, economically possible, without which it must considered as a beautiful utopia.

Only a self-managed economy, rational and objective, based on scientific laws, from the commencement of the establishment of libertarian socialism, avoiding the fall into one phase or another, into either the socialism of group property, into forms of corporatism or of narrow syndicalism, but towards a condition of always placing the general interest above the particular interest of the professional or work groups.

The Libertarian Society

On the subject of the future of a libertarian and self-managed society, Kropotkin warned and advised:

We are convinced that the mitigated individualism of the collectivist system will not exist alongside the partial communism of possession of all of the soil and of the instruments of labor. A new form of production will not maintain the old form of redistribution. A new form of production will not maintain the old form of consumption, just as it will not accommodate the old forms of political organization.

In this order of ideas, explains Kropotkin, the private ownership the capital and of the earth are attributes of capitalism. Those conditions were consistent with the bourgeoisie as a dominant class, although the public [state] ownership of capital and of the earth is consistent with the capitalism of the soviet-State, which elevates the totalitarian bureaucracy as a new dominant class.

The private ownership of the means of production and of exchange created capitalism as a mode of production and the bourgeoisie as dominant class.

“They were”, says Kropotkin, “the necessary condition for the development of the capitalist production; it will die with her, although some may try disguising it under form of a ‘labor bonus’. The common possession of the instruments of labor will bring necessarily the common enjoyment of the fruits of the common labor.” (The Conquest of Bread, p.28)

If upon changing the mode of production and of distribution, daily life doesn’t change, including distribution, consumption, education, the political system, the legal and social, in the sense that one dominant classes are not substituted by other, then, really, nothing essentially has changed. Thus it happened in the Soviet Union, where the economic categories and the economic laws of the capitalism were hardly modified, with the result that the economic dictatorship of the bourgeoisie was replaced with the political and economic dictatorship of the bureaucracy and, in consequence, private or anonymous capitalism for the capitalism of State. A revolution like this, although it is called socialist, constitutes a great swindle to the detriment of working people, for whom in the majority of cases, it has not meant more than a change of master or of a saddle, to the unfortunate beast of burden. So instead of being the proletarian of the bourgeois, they have a new Patron, that is to say, the technocrat and the bureaucrat. In our way of thinking, the alternative to capitalism is not Marxism Leninism, but libertarian socialism.

The True Social Revolution

For a revolution to be true, in the sense of emancipating working people from the oppression and exploitation of the dominant classes, it has to establish a new mode of production, exchange, distribution and consumption and create new social relationships; new and more powerful productive forces; new political forms of popular direct participation; new legal institutions having as their basis the popular jury, new universities and technical schools integrated with industries, agriculture, mining, energy, fishing, the forests and other sectors; new philosophic, political,social, artistic, and cultural doctrines; new conceptions of national and social defense based more on the people in arms (than on a bureaucratic professional army, expensive and wasteful) in order to defend the society, as much inside as outside of it. It is necessary to affirm the system of popular self-defense, since without which there couldn’t be a guarantee that self-management will be accepted by a professional army, the latter always having tendencies to stage a “coup” in order to take Power.

On the other hand, in order to avoid the coming to power of a one-Party-state, which is the worst and greatest single political wrong, as happened in the USSR, there will need to be created a participatory socialism. This would entail a respect for the free personality within the collective, the self-determination of the local governments within a federalism which coherently maintains a unified market, the social and national self-defense, diplomatic relations with the exterior, the socio-economic system as a relatively homogeneous regime. A federalism which keeps a national and social accounting system in order to estimate and program the authentic valuation of the national or social global income, making it possible to know where we have been and toward where we are going economically, socially, politically, scientifically and technologically.

But a new economic system, based on self-managed socialism, will have to have another way of estimating the annual economic growth on the basis of short, medium and long term plans, constructing a macro-economic picture of the national and social economy, departing from the known figures and projecting toward figures to be attained in the next trimesters, semesters, years. Thus the future, in certain manner, will be anticipated by having a Federative Council of the Economy, where each federation of production or of services knows that which it has and that which it wants, in accordance with the effective demand of the self-managed market. Libertarian socialism, if it wants to distinguish itself from authoritarian soviet communism, must respect the law of the supply and demand, without falling into bourgeois liberalism, since in the self-managed market the federations of production and of social and public services act competitively. Because if the market is suppressed, and with it the law of labor-value, the law of economic competition, the law of formation of just prices in the market, it would not be possible establish a rational economy of costs and prices, necessary investments and appropriate consumption. In its place would be a centralized and bureaucratic planning which places the total-State above the oppressed, exploited Society, as happened in the USSR under a planning of economic decrees, without respect for objective economic laws.

On the other hand, libertarian socialism has to respect the pluralism of ideas, although it wouldn’t provide a space for byzantine struggles. People would be self-organized in their own interest in self-managed enterprises, mutual cooperatives, local self-governments and all types of socio-economic and political forms of direct participation. Politics would be deprofessionalized, abolishing the political class and the political parties as expression of antagonistic interests, since each citizen or worker will participate in their enterprise, local self-government, federation, daily, without falling into the trap of electoralism, where they only participate for a day to elect a government worse than another.

Traps of Bourgeois Economics

Libertarian socialism will have to create a new economic doctrine and a new system of estimating the national or social income. Actually, the concept of gross national product (GNP), of which there is so much talk and is so little understood, counts in unstable monetary units, the total of the goods and services obtained by economic activity: agriculture, industry, services, as large integrated sectors of the national economy.

If the GNP, the way it is constituted in the bourgeois economy, were estimated in monetary units of constant purchasing power, thus deflating the official figures, it is possible that it actually diminishes instead of increasing. On the other hand, the GNP, in its bourgeois form, includes the economic participation of the unproductive “tertiary” and “quaternary” sectors, in the sense not that this should be concealed, but that the GNP shows “growth” when it may have diminished materially, in effective production. Thus, for example, in many countries which are diminishing their industrial and agricultural production during some years, but if salaries increase and the number of tertiaries in the state bureaucracy, commerce, the banks, and in social and public services grow, it is said that the GNP has grown, for example, an annual 3%, when the reality is that this macro-economic figure only represents salaries, incomes without effective work, surplus values taken, parasitic income , etc.

Libertarian socialism, creating a social economy based on truthful figures, would have to estimate the GNP in a different manner than the capitalists. It is necessary to give to the concept of social income, units which are measured or concrete and in constant money based on material output: agriculture, cattle raising, forests, fishing, energy, mining, industry, or whatever is actual production. As for the “services”, only transportation, railroads, trucking, marine and air would be included in the concrete estimate of the effective or material income, since although transportation doesn’t add production, it transports it from one side to another and, in consequence, it should be included in the concrete income of one year to another.

Adding the concrete income alongside gross income (administrative “services”, commerce, banks and other social and public services), it would be seen if these take too great a percentage in the total income by having too many unproductive personal who, in order to not drain the social economy, would have to be recycled as productive personnel. Now then, in the “services” which could be considered as productive, would be included the personnel destined for Research and Development (R &D), without whose presence an economy will stagnate for lack of economic and technological progress; but the personnel of R&D should be, besides in the Institutes or Centers (which tend to be bureaucratic and technocratic), directly in the industrial enterprises, agricultural, energy, forests, mining, fishing, etc., since science and technique should be united directly to labor as immediate factors of production and not as though the ostentation of an academic title should make one a technocrat.

In sum, the net income of a country would have to be estimated, in a libertarian socialism, at costs determined in relatively stable physical and monetary units which don’t mislead, deducting the necessary investments of social capital in order to enlarge production and not simple reproduction as happens to the bourgeois economy in a crisis.

The estimate of the national and social income must be transparent: from the total of the wealth created in a year must be deducted the material consumption of people and that of self-administration (where there should not be much bureaucracy, by reason of better information) and to deduct, set aside or remove the social or national saving destined for investment in order to increase the reproduction of effective wealth, create new enterprises, design improved and more productive machines, carry on scientific investigation, automate industrial production and public services, and mechanize and electrify agriculture.

Liberation of the Working People

In sum, the libertarian economy should liberate the worker from their old employers, either private managers or from the State as Manager, to end that the workers, by means of their Self-Management Enterprise Councils, direct the economy which they create with their labor upon the means of production associated, from the bottom up, by means of the federations of production and of social services composed in a Federative Council of the Economy; only thus could there be planning and liberty, an associative democracy of full participation of the working people, a self-managed socialist society, avoiding any form of totalitarian communism (which, as a matter of fact, is capitalism of the State).

Without economic liberty there can’t be political liberty; since with capitalism there is an economic dictatorship of a plutocratic minority over the majority of working people; and with capitalism of the State, in the soviet manner, the State exploits and oppresses Society by means of the one-Party which is a bad one for the majority and a good one for the bureaucratic, oppressive and exploitive minority. The solution is: neither totalitarian communism nor capitalism but self-management, direct democracy, federalism and socialism.

An Afterword by the Translator

by Jeff Stein

Abraham Guillen has given us some useful concepts for analyzing the economic systems of state-socialist and corporate capitalist countries. Although these economies are no longer dominated by individual capitalist owner-managers, they remain exploitive, class systems. According to Guillen, ownership of the means of production is now collective, spread across a stratum of “techno-bureaucrats.” These techno-bureaucrats are just as much concerned with accumulating capital through exploitation of workers, as the old “robber baron” capitalists. However, the surplus of the system is shared (although not on an equal basis) within the techno-bureaucratic class. Under these systems, legal ownership means less than one’s position in the state or corporate hierarchy. Only a system of worker self-management of their own workplaces, can eliminate this exploitation by the techno-bureaucracy.

This does not mean Guillen’s theory is without problems. His proposals for a “market without capitalists” and the establishment of “labor-money” are built open the assumption that the labor theory of value can provide the basis for a libertarian socialist economy. The labor theory of value provides a powerful argument for the elimination of capitalists and bureaucrats, since their incomes represent an unnecessary drag on the economy. However, in a self-managed economy inequalities having nothing to do with labor productivity would arise between self-managed enterprises, giving some a competitive advantage over others. For instance, the size of the enterprise, the availability of scarce raw materials, the presence or absence of strict environmental regulation by the local municipality, etc., would all come into play, and these are not always factors which are easily calculated in labor-hours.

Augustin Souchy, another anarcho-syndicalist who made extensive studies of various attempts at establishing workers self- management, observed that:

working hours as the only value determinant is unrealistic. Experience shows that the lack of raw material, rarity of quality, differences of consumer goods, highly qualified services, etc. are equally vague determinants. These factors will not change in a socialist economy.” (Beware! Anarchist!, Chicago, 1992. p.42)

One factor which is becoming increasingly important in determining production costs is energy. As the amount of labor decreases due to automation, the amount of energy in terms of fossil fuels, electricity required, etc., increases. This means that while the labor value of many products is going down, their energy value is going up. As long as energy is cheap and abundant, this does not necessarily present a problem. However, in the future, as the southern hemisphere becomes increasingly industrialized and there is a greater demand for energy, and as fossil fuel supplies dwindle, a purely labor-based system of economic accounting would collapse. Energy would either have to be rationed, or some sort of global federation would have to set a tax on energy. Either way, the labor-exchange economy would be forced away from an unregulated market system. On the other hand, the sort of energy accounting based system proposed by some “green” economists is not adequate either, since the energy theory of value does not take into account the qualitative difference between human energy (labor) and non-human energy.

There is no such thing as a perfectly, objective theory of economic value. Each theory has its own hidden biases which will tend to skew the results of any accounting system (this includes the bourgeois scarcity-value system, which favors those who own capital and scarce resources). The best a labor theory of value can do is identify that part of a thing’s (a good or service) value, which is the result of social production. The rest of a thing’s value is contributed by energy, nature, the social infrastructure, and a host of other variables. In a libertarian, self-managed economy, the accounting of these non-labor costs and the distribution of these benefits, therefore needs to go beyond the individual workplaces and their labor accounts. An economic role must be played by the free municipalities (communes), who must set democratic controls over energy, environmental standards, and scarce resources, in order to make sure that those exchanges which take place do not undermine social equality or the capacity of the earth to sustain itself. Therefore, contrary to Guillen, we should insist that whatever exchange or currency system exists in the future, it provide for greater community control and allow all citizens a voice as to how value should be determined.