“Not whether we accomplish anarchism today, tomorrow, or within ten centuries, but that we walk towards anarchism today, tomorrow, and always.”—Errico Malatesta

Examining the History of Anarchist Economics to See the Future

Chris Spannos

Situating “Anarchist Economics”

Beyond economy, an anarchist society should provide new socialization of children and future generations, stateless and self-governing adjudication and law-making, and cultural and ethnic diversity and equality—all based on mutual aid and participatory self-management in all spheres of life. But here, considering only the history of anarchist economics, imagine scenarios where the 1871 Paris Commune had not come to a tortured end; the Factory Committees and Soviets of the Russian Revolution had not fallen under Bolshevik control (1917–1921); the 1936–1939 Spanish anarchists had not been abandoned by the West, betrayed by the Stalinists, and shattered by the Fascists; the 1956 worker uprisings and council formations in Hungary and Poland had blossomed; the May 1968 uprising in France had carried forward its objectives rather than dissipating back into the normalcy of everyday life; that this century’s worker takeovers in Argentina spread and continue marching forward; or that today’s anti-authoritarian uprisings in North Africa and the Middle East continue to spread inspiration—beyond the mass occupations and general assemblies arriving in Europe and North America in 2011—and all win the day. What institutions should be employed to best realize the social and material objectives of a new anarchist economy?

Russian anarchist Pyotr Kropotkin (1842–1921) wrote his theory of mutual aid (1890–1896)[49] as a scientific endeavor combining observation, hypothesis, testing, and theorizing into a theory of evolution that had implications for how social and material relations should be ethically reorganized for a new society that he called anarcho-communism. Nowadays, fearing sectarian excess or mistakes, some doubt the value of vision such as he sought, but in the words of Italian anarchist Errico Malatesta (1853–1932), “Anarchy may be a perfect form of social life” but “we have no desire to take a leap in the dark.” Malatesta suggested that people “meet, discuss, agree and differ, and then divide according to their various opinions, putting into practice the methods which they respectively hold to be the best,” so that “that method, which when tried, produces the best results, will triumph in the end.”[50]

So What Is an Economy and Why Do We Need One?

Consider any aspect of our material lives: our homes, workplaces, hospitals, or schools. Or consider the materials needed for leisure activities, making music, or playing any sport. All require complex interactions. Inputs combine into outputs. Wood, stone, and brick become homes. Tools craft guitars and baseball bats. Community gardens require shovels and rakes, which must be produced somewhere, with most of their inputs coming from yet another place and, after being assembled, require shipping and transportation before seeing use. An economy is needed for production, consumption, and allocation of the material means of life to serve both simple and complex human needs.

Any economy has a small set of defining institutions that, taken together, determine its broad character. For example, despite the possibility of great variation, a capitalist or “socialist” economy will have common attributes with others of like type such as property relations, divisions of labor, remuneration schemes, and allocation mechanisms. Specifically, capitalism has private ownership of productive assets, hierarchical divisions of labor, remuneration for property, output, or bargaining power, and markets for allocation. State socialist economies of the twentieth Century included state or public ownership of productive assets, hierarchical divisions of labor, remuneration for output or bargaining power, and central planning or markets for allocation. Referencing past anarchist and libertarian criticisms of capitalist and state socialist economic institutions as well as their positive proposals for reorganizing material life can help us formulate our own ideas.

Property Relations

Anarchists have traditionally rejected inequalities in power and privilege arising from private ownership of the means of production. For Russian anarchist Mikhail Bakunin (1814–1876), property meant that not only did those who owned productive assets have the right to live without working, but “since neither property nor capital produces anything when not fertilized by labor” the owners also had the power “to live by exploiting the work of … those who possess neither property nor capital” and so were forced to sell their productive power to the “lucky owners of both.”[51]

Writing in 1911 anarchist Emma Goldman (1869–1949) saw that property had “robbed” humanity of its “birthright,” and turned the worker into a “pauper and outcast.” Goldman wrote that the “student of economics knows that the productivity of labor within the last few decades far exceeds normal demand.” “But,” she asked of private property, “what are normal demands to an abnormal institution?”[52] In the twenty-first century, labor and technology produce much more than Goldman could probably have ever imagined and certainly far beyond the productive levels during the time of her writing. Yet workers are still cast out and even pauperized while outputs remain outside the control of producers themselves. One of the earliest self-proclaimed anarchists, Pierre-Joseph Proudhon (1809–1865) wrote What Is Property? An Inquiry into the Principle of Right and of Government in 1840 in which he queried:

If I were asked to answer the following question: What is slavery? and I should answer in one word, It is murder, my meaning would be understood at once. No extended argument would be required to show that the power to take from a man his thought, his will, his personality, is a power of life and death; and that to enthralled a man is to kill him. Why, then, to this other question: What is property! May I not likewise answer, It is robbery, without the certainty of being misunderstood; the second proposition being no other than a transformation of the first?[53]

Leaping from theory to practice for a two-month period between March and May 1871, the Paris Communards sought to consciously implement the practice of abolition of private property and attempted the administration of society for themselves and by themselves. As Karl Marx (1818–1883) expounded in his 1871 “The Civil War in France”:

The Commune, they exclaim, intends to abolish property, the basis of all civilization! Yes, gentlemen, the Commune intended to abolish that class property which makes the labor of the many the wealth of the few. It aimed at the expropriation of the expropriators.[54]

Though Versailles troops ended the Paris Commune in a bloody massacre, the ideals inspired by abolition of privately owned productive property lived on. The son of a French Communard, anarcho-syndicalist Gaston Leval (1895–1978) became a militant fighter in the Spanish Civil War (1936–1939) and in his Collectives in Spain (1938) he described agrarian socialization and the orientation towards property during the formation of the Aragonese collectives:

One of the first steps was to gather in the crop not only in the fields of the small landowners who still remained, but, what was even more important, also on the estates of the large landowners all of whom were conservatives and rural “caciques” or chiefs. Groups were organized to reap and thresh the wheat which belonged to these large landowners. Collective work began spontaneously. Then, as this wheat could not be given to anyone in particular without being unfair to all, it was put under the control of a local committee, for the use of all the inhabitants, either for consumption or for the purpose of exchange for manufactured goods, such as clothes, boots, etc., (for those who were most in need.)[55]

Leval wrote that in this reorganization small property had near completely disappeared so that in Aragon 75 percent of “small proprietors have voluntarily adhered to the new order of things.”[56] Moreover, in the early months of the Spanish Civil War, anarchist, economist, and revolutionary Diego Abad de Santillán (1897–1983) presented his program for an anarcho-syndicalist society in After the Revolution (1936–1937). Quoting John Stuart Mill’s rejection of society permitting “a class which does not work” while other people “are excused from taking part in the labor incumbent on the human species,” Santillán said:

Stuart Mill is right. We believe that such a society has no right to existence and we desire its total transformation. We want a socialized economy in which the land, the factories, the homes, the means of transport cease to be the monopoly of private ownership and become the collective property of the entire community.[57]

Anarchists have stood principled against private ownership and control of the means of production including rejecting not only workers selling their labor to capitalists, but also workers taking orders from managers or the state. Indeed, one of the defining features of so-called “socialist” economies of the twentieth century, contrary to anarchism, was state ownership and control of productive assets. The way state ownership was rationalized by “socialist” central planners and managers was by their asserting they knew best how to use those assets. Bureaucratic planners and managers believed that everyone else was unfit to make effective decisions. The statists claimed that people had false consciousness and little skill and were therefore not able to decide how best to plan their own lives. The bureaucratic planners and managers of these economies, what I and others call the “coordinator class,” asserted that they alone were free from false consciousness and thus knew what was in the best interest of the people and, of course, this paternalistic rationale for state control over productive assets dovetailed nicely with the material interests of the elite. The negative effects of central planning on people were built into the economic institutions and affected the overall society.

So far I have briefly noted two orientations toward productive property: (1) private ownership of productive assets as in capitalism, and (2) state ownership of productive assets as in centrally planned and market “socialist” economies. We clearly need a third orientation toward property relations, “anarchist economy,” which in accord with Bakunin, Goldman, and the Spanish anarchists, and others abolishes not only private ownership, but also state or other central control. In this new system, ownership could plausibly be conceived in either of two equally satisfactory and equivalent ways:

1. The concept of ownership over productive assets is abolished so that ownership becomes a non-issue, meaning that no one owns productive property. Or…

2. Society as a whole owns all productive property but again ownership conveys no special rights or privileges.

In either orientation class rule due to ownership of productive property is abolished and the way is cleared to also establish anarchist self-managed decision-making.

Class and Division of Labor

Class affects not only social and material relations, behaviors, and outcomes within the economic sphere of society, but also in other realms of social life. Of course variations exist across societies and cultures, but, broadly speaking, people in the same class, for example, the working class, typically have similar kinship arrangements, cultural tastes, and self-perceptions. They share common material positions in society, which affects their collective bargaining power and decision-making control over their lives both in relation to property and also within the division of labor. Classes typically conflict with one another. For example, the capitalist, coordinator, and working classes all have contrary interests due to their position in relation to the means of production and in the division of labor.

Anarchist treatments of class and the division of labor trace back to two primary historical and theoretical influences—the towering figures of Karl Marx and Mikhail Bakunin. Marx’s work overwhelmingly emphasizes a two-class theory based on ownership relations while Bakunin had a three-class theory based not only on ownership, but also on the division between mental and manual labor. In his Economic and Philosophical Manuscripts of 1844, in the section on “Estranged Labor,” Marx provided early rationale for the two-class theory:

We have started out from the premises of political economy. We have accepted its language and its laws. We presupposed private property; the separation of labor, capital, and land, and likewise of wages, profit, and capital; the division of labor; competition; the conception of exchange value, etc. From political economy itself, using its own words, we have shown that the worker sinks to the level of a commodity, and moreover the most wretched commodity of all; that the misery of the worker is in inverse proportion to the power and volume of his production; that the necessary consequence of competition is the accumulation of capital in a few hands and hence the restoration of monopoly in a more terrible form; and that, finally, the distinction between capitalist and landlord, between agricultural worker and industrial worker, disappears and the whole of society must split into the two classes of property owners and propertyless workers.[58]

Bakunin took an additional step to see a third class between “the two classes of property owners and propertyless workers.” He predicted the “Red Bureaucracy” that arose within the Russian Revolution and plagued the “Actually Existing Socialism” of the twentieth century based on the existence of this class. He specifically called into question the “dictatorship of the proletariat,” while exposing the self-aggrandizing beliefs of the Coordinator Class. Bakunin wrote:

Of course, production would be badly crippled, if not altogether suspended, without efficient and intelligent management. But from the standpoint of elementary justice and even efficiency, the management of production need not be exclusively monopolized by one or several individuals....The monopoly of administration, far from promoting the efficiency of production, on the contrary only enhances the power and privileges of the owners and their managers.[59]

Bakunin’s theoretical concerns and forecasts were validated in the Russian Revolution (1917). In his pamphlet of 1918 titled “The Immediate Tasks of the Soviet Government,” V. I. Lenin (1870–1924) wrote that it was necessary to learn how to harmonize the democracy of the working masses “with iron discipline while at work,” and with “unquestioning obedience to the will of a single person, the Soviet leader.”[60]

The betrayal of workers’ control in the aftermath of the Russian Revolution is chronicled by libertarian socialist Maurice Brinton (1923–2005) in his 1975 pamphlet “The Bolsheviks and Workers Control 1917–1921.” Brinton’s criterion for evaluating the Russian Revolution was “workers’ management of production—implying as it does the total domination [by] the producer over the productive process.” For Brinton this was not “a marginal matter” but rather “the core of our politics” and “is the only means whereby authoritarian (order-giving, order-taking) relations in production can be transcended and a free, communist or anarchist, society introduced.” He went on to write:

In 1917 the Russian workers created organs (Factory Committees and Soviets) that might have ensured the management of society by the workers themselves. But the soviets passed into the hands of Bolshevik functionaries. A state apparatus, separate from the masses, was rapidly reconstituted. The Russian workers did not succeed in creating new institutions through which they would have managed both industry and social life. This task was therefore taken over by someone else, by a group whose specific task it became. The bureaucracy organized the work process in a country of whose political institutions it was also master.[61]

What are the implications of this history for truly “communist or anarchist” class relations of the future? If an anarchist economy adopts property relations such as those proposed in the earlier section, i.e., either fully eliminating ownership of productive assets or having everyone own them equally, and in both cases everyone also having self-managed decision-making in proportion to how they are affected, then class hierarchies based on ownership or control of the means of production will be abolished. However, how does one accomplish that self-management at work? What about the division of labor? Is it enough to say like Bakunin that “the management of production need not be exclusively monopolized by one or several individuals?” There are many possibilities for how class rule in society could reemerge even with this as a guiding desire, unless a new economic model has institutional features and decision-making norms that propel classlessness, solidarity, and self-management, while suppressing possibilities for class rule coming back to haunt us.

The 1960s and 1970s saw many innovations in understanding class analysis and the division of labor, some of which elaborated on early attempts at a three-class analysis. One notable example was put forward in Between Labor and Capital (1979),[62] a book organized around the lead essay “The Professional-Managerial Class” by Barbara and John Ehrenreich. In summary, the Professional-Managerial Class (PMC), as the Ehrenreichs called it, was a third class between capitalists and workers with its own relations and interests. Broadly consistent with Bakunin’s early formulation, the PMC approach differed from popular notions of the “middle class,” in that it saw this third class as being structurally as important as capitalists and workers and defined not firstly by income, but by position. The PMC as the Ehrenreichs described it, included doctors, managers, “cultural workers,” teachers, and others who do largely conceptual and empowering work. The PMC thus differed from capitalists who own and control society’s productive assets, as well as from workers who do mostly manual labor on assembly lines, agricultural work, sales, bussing tables, and so on. The relations and antagonisms between capitalists, the PMC, and workers persist and, according to the Ehrenreichs, cause us to need to consider “the historical alternative of a society in which mental and manual work are re-united to create whole people.”[63] What is consequential for anarchism is that this insight provides a jumping off point for envisioning how the division of labor can be altered to allow and even entail classlessness.

Also consistent with the classical anarchist thrust towards a three-class theory, Michael Albert and Robin Hahnel made their own contribution in the same book. In their essay, “A Ticket to Ride: More Locations on the Class Map,” they outlined their proposal for a three-class analysis introducing what they called the “Coordinator Class,” thereby laying the groundwork for what would eventually become their vision of a classless participatory economic system.[64] To Paraphrase Albert and Hahnel, the Coordinator Class, like the PMC, is positioned above workers who do rote and un-empowering tasks and who want higher wages, better working conditions, more control over their work, and so on, and positioned below capitalists who own the means of production and want to lower wages while extracting more labor and progressively weaken the bargaining power of workers in order to gain more profit. Standard two-class analysis highlights ownership relations but fails to emphasize a highly significant actor within economics: the Coordinator Class. On the one hand, coordinators have authority and power over workers. They do mostly empowering and conceptual work, and so benefit from their elite position. On the other hand, workers do mostly rote and executionary work. This matters, not only in the unjust distribution of desirable conditions, but also because the kinds of work we do helps shape and inform our capacities for decision-making and participation both in our workplaces and also in the institutions of society more broadly. This modern approach to class and the division of labor points to the need for innovation, not only regarding ownership, mental, and/or manual labor, but also empowerment in terms of the labor we perform and the decisions we make.

In later works, Albert and Hahnel refine their vision, which includes, among other aspects, a positive reorganization of the workplace so that everyone has in their work a comparably empowering array of responsibilities. Combining tasks to equalize empowerment ensures that no single group, or class, monopolizes decision-making power nor gets complacent or apathetic doing only rote tasks.

Remuneration Schemes

Society needs and values things. Whether something as simple as a kite for a child or something more complex like a hospital or telecommunications system—people produce what others desire and in the process sacrifice socially valuable time and energy that could have been used for other ends, whether producing something else, or simply socializing in diverse ways. People also work under more or less desirable conditions, with better or worse tools, with more or less innate gifts such as bigger muscles or more stamina. People can also work longer or harder than one another, have better training, or have more effective workmates. So what should compensation be?

Under capitalism bargaining power determines incomes. Production and consumption seeks, first, to aggrandize those at the top. Obviously anarchists reject this. But the principle of remuneration proposed by Marx for socialism where income is proportional to contribution, where again contribution is determined by the luck of better genetics, tools, workmates, or land—all circumstances out of our control—is likewise out of touch with anarchist notions of justice.

We saw in the section on property how private ownership of the means of production forces workers to sell their own labor and how state ownership of productive assets forces workers to give up control over their own labor. In both cases workers have little bargaining power with capitalists or the state to negotiate fair remuneration for their work. Another method based on the communist principle of remuneration according to need is proposed by Kropotkin in his anarcho-communist work, The Conquest of Bread (1892).[65] For Kropotkin if private ownership of productive property in capitalism produces scarcity of goods for those at the bottom, then the new economy, based on abolition of private ownership of productive assets combined with the introduction of mutual aid and voluntary cooperation, should distribute the abundant fruits of society’s productivity to all based on what they need. Anarchists quickly reject the principle of remuneration according to contribution, because hierarchies emerge due to some having better tools or genetics, or producing in a sector of more value. The fact that some produce more or less due to circumstances largely out of their control should not be cause for them to receive more or less income. But what about remuneration according to need?

Historically, it was during anarchist experimentation in the Spanish Civil War that we first saw the mass application of remuneration according to need. Gaston Leval described the scenario:

It is the first time in modern society that the anarchist principle “to each according to his needs,” has been practiced. It has been applied in two ways: without money in many villages in Aragon and by a local money in others, and in the greater part of collectives established in other regions. The family wage is paid with this money and it varies according to the number of members in each family. A household in which the man and his wife both work because they have no children receives, for the sake of argument, say 5 pesetas a day. Another household in which only the man works, as his wife has to care for two, three or four children, receives six, seven or eight pesetas respectively. It is the “needs” and not only the “production” taken in the strictly economic sense which control the wage scale or that of the distribution of products where wages do not exist.[66]

Applying this method of remuneration in the real world, especially under near impossible circumstances during a time of internal and external war, is quite a remarkable achievement. But we should note that it is amending remuneration for hours worked with a need component, not simply remunerating need, which would deliver income regardless of work.

In Marx’s “Critique of the Gotha Program” (1875) he proposes, “In a higher phase of communist society…after labor has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of cooperative wealth flow more abundantly—only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!”[67] This is an ethical proposal for a morally good society. Yet there remains a fuzzy middle ground between theory and practice where many interesting and important questions hide. For example, how do we know what is desirable for society without knowing the relative benefits of alternative allocations of society’s human and natural resources? How are costs determined and shared equitably? To the extent remuneration according to need means “take what you feel you need” and “anything goes” it is not only utopian, but also dysfunctional, hiding the relative benefits and costs of alternative options that we must choose among. Such sentiments should be tossed into the “anti-social waste basket.” Determining incomes in a socially responsible way means introducing another remuneration method different from “people can have what they want and do as they choose.” In fact, the real underlying desire of most advocates of remuneration for need is that people should get a responsible amount of the social product and do their fair share of the labor that is required to produce the social product. But of course, how do we know how much income and how much labor are responsible and fair?

Anarchists might seek the answer by looking at the work of a valued doctor, lawyer, or artist. In the third volume of his Political and Social Writings, Greek philosopher Cornelius Castoriadis (1922–1997) asked, “What sense is there in saying that the competency of a good surgeon is worth exactly as much as—or more, or less, than—that of a good engineer? And why is it not worth exactly as much as that of a good train engineer or good teacher?”[68] Or, more directly, why is a surgeon not remunerated less than a garbage collector?

Castoriadis saw that “competence,” “merit,” and “intelligence,” were similar to the luck of better tools or workplace circumstance and was just as much out of our control as genes inherited from the genetic lottery, and so was not deserving of more income (even if society paid for the education to nurture its development). But don’t producers of great value need the incentive of high income? Castoriadis wrote:

To the extent that someone has a gift, the exercise of this gift is in itself a source of pleasure when it is not hindered. And as for the rare exceptionally gifted individuals, what really matters is not monetary reward but creating what they are irresistibly driven to create. If Einstein had been interested in money, he would not have become Einstein—and it is likely that he would have made a rather mediocre boss or financier.[69]

Or, as Lucy Parsons (1853–1942), founding member of the International Working People’s Association (IWPA) and co-founder of the Industrial Workers of the World (IWW), said in her speech on “The Principles of Anarchism,” “The grandest works of the past were never performed for the sake of money.”[70] She was aware that there is a social reward for the scientist who makes an important discovery, the artist who brings great joy, or the surgeon who saves a life that is beyond the realm of material value. Saving a life or making a discovery, like all other work, should receive material compensation for how long one does it, how hard one does it, and the onerousness of conditions under which one does it. That is, work is rewarded for longer hours, greater intensity, or being less pleasant or more onerous or dangerous, though this remuneration is of course tempered by payment according to need in cases of ill health, age, or some other condition that inhibits us from working.

Allocation

Every economy needs a way to decide how to distribute inputs and outputs for the production and consumption of the material means of life. This is called allocation. As a simple example, consider books. Two basic ingredients for books are ink and paper. The printer needs to order both, which in turn requires ink and paper producers to consume pigments, dyes, solvents, and additives, and paper finishing according to weight, size, and other physical properties. Without an allocation system, books could not be made, medicine could not cure, schools would not be built, nor computers assembled. Indeed, society would attain very little, if it would exist at all. So allocation needs to facilitate the democratic and non-wasteful distribution of inputs and outputs for production and consumption.

Since I have presented some components of anarchist economic theory and practice in prior sections of this chapter, we already have filters for easily ruling out allocative options that do not satisfy anarchist criteria and see other possibilities that provide as close an approximation of the best possible anarchist economic system as we can imagine today.

The first allocation mechanism is the one we find in capitalism. The main institutions that define capitalism are private ownership of productive assets, which we rejected in the section on property, hierarchical divisions of labor, which we jettisoned in the section on divisions of labor, unfair compensation for work, which we decided against in the section on remuneration, and finally market allocation, which we now consider.

Markets entail buyers and sellers each trying to “buy cheap and sell dear.” Markets pit people against one another and the deciding factor is who has the most bargaining power. For example, in the labor market, “Mr. Money Bags” wants to hire “Lucy the Laborer” at very low wages, speed up her work, worsen her conditions, lengthen her workday, and so on. Lucy wants to avoid being thusly fleeced by the capitalist, and so she seeks to raise wages, reduce the pace of work, improve conditions, shorten the workday, and so on. This is class struggle. But even when selling products, or buying items, the same motives prevail, getting as much as you can while paying as little as you can.

Beyond the site of exchange, moreover, if someone purchases a car at a dealership, even though the buyer and seller alone negotiate the cost, many others are affected as soon as the car leaves the parking lot and carbon dioxide emissions increase greenhouse gases propelling global climate change. Many people are excluded from decisions that in fact affect them.

Because market transactions such as buying and selling favor those with more power, wealth, and privilege—over long periods of time they warp production and consumption in elites’ favor. Overall, on a society-wide scale, this means that markets bias transactions toward more private rather than public outcomes, for example private health care, education, and transportation, rather than more public forms. For these and additional reasons, markets are antithetical to anarchism.

Another allocation possibility, even easier for anarchists to reject, is central planning. Centrally planned “socialist” economies are defined by state ownership and control of productive property, corporate divisions of labor in the work place, and central planners and managers who comprise the “Red Bureaucracy” that Bakunin spoke of. Most anarchists would oppose this system on principle, arguing that it is authoritarian, and they would be right.

Anarchist rejection of central planning and markets is appropriate but a question arises when we tell people we must get rid of each. What have we to offer in their place? Well, we know that formations of neighborhood assemblies, workers’ councils or soviets, and industrial syndicalism sprout up everywhere that people seek to take control over the material means of life and self-manage society. However, if uprisings create new institutional forms then what happens when these forms grow and blossom? What role will they play in the future society beyond their role to escape the past and present one? Will they be good only as vehicles of struggle or will they constitute the foundation of the new society and help create new social and material relations while being the glue that holds it all together?

Providing context for the historical model of the soviet, German anarcho-syndicalist theorist and historian Rudolf Rocker (1873–1958) sketched the origins and goals in his essay “Anarchism & Sovietism”:

The idea of soviets is not a new one, nor is it one thrown up, as is frequently believed, by the Russian Revolution. It arose in the most advanced wing of the European labor movement at a time when the working class emerged from the chrysalis of bourgeois radicalism to become independent. That was in the days when the International Workingmen’s Association achieved its grandiose plan to gather together workers from various countries into a single huge union, so as to open up to them a direct route towards their real emancipation. Although the International has been thought of as a broad based organization composed of professional bodies, its statutes were drafted in such a way as to allow all the socialist tendencies of the day to join with the sole proviso that they agree with the ultimate objective of the organization: the complete emancipation of the workers.[71]

An institutional tradition providing “emancipation of the workers” is offered as anarcho-syndicalism which allows for all means of production, consumption, and allocation of the material means of life to be brought under direct control and administration of, for, and by the workers themselves. Industry is organized into federations locally, regionally, and nationally. The Paris Commune offered an early glimpse into “what could have been” as Friedrich Engels (1820–1895) informed us in his introduction to Marx’s “The Civil War in France,” which he wrote on the twentieth anniversary of the commune and also twenty years after Marx published his original text:

On April 16 the Commune ordered a statistical tabulation of factories which had been closed down by the manufacturers, and the working out of plans for the carrying on of these factories by workers formerly employed in them, who were to be organized in cooperative societies, and also plans for the organization of these co-operatives in one great union.[72]

The opening of the twentieth century saw syndicalism reemerge again when factory committees and soviets rose up in the Russian Revolution, providing a nucleus for workers’ control that was, however, crushed by the Bolskeviks. In September of 1920, Italian workplace takeovers spread across auto factories, steel mills, breweries, steamships and much more, involving at its peak 600,000 workers in massive assemblies.[73] Syndicalism later achieved one if its highest points during the Spanish Civil War. Along with federated and self-governing assemblies across urban neighborhoods and rural villages, the Spanish anarchists attempted the syndicalization of industry as outlined by Gaston Leval:

Each industry is centralized in the Syndical Administrative Committee. This committee is divided into as many sections as there are principal industries. When an order is received by the Sales Section it is passed on to the production section whose task it is to decide which workshops are best equipped to produce the required articles. Whilst settling this question they order the required raw materials from the corresponding section. The latter gives instructions to the shops to supply the materials and finally, the Buying Section receives details of the transaction so that it can replace the material used.[74]

For Dutch astronomer and Marxist Anton Pannekoek (1873–1960) council organization was both the means by which workers would struggle to take self-managed control over society and the form in which they would administer that new society themselves. Written in the 1940s, Pannekoek’s book Workers’ Councils proposes that council allocation could occur on a grand scale and

will be possible only by combining all the factories, as the separate members of one body, into a well organized system of production. The connection that under capitalism is the fortuitous outcome of blind competition and marketing, depending on purchase and sale, is then the object of conscious planning. Then instead of the partial and imperfect attempts at organization of modern capitalism, that only lead to fiercer fight and destruction, comes the perfect organization of production, growing into a world-wide system of collaboration. For the producing classes cannot be competitors, only collaborators.[75]

Sharing similar institutional aspirations, especially after being influenced by the 1956 uprisings against Soviet bureaucracy in Hungary and Poland, Cornelius Castoriadis published his 1957 classic “Workers’ Councils and the Economics of Self-Managed Society.” Although Castoriadis, like Brinton, was not an anarchist, his vision was one of the first to deal with the economics of what Brinton called an anarchist or communist society. His essay was republished as a pamphlet by the London Solidarity Group in 1972, and their preface states: “To the best of our knowledge [until Castoriadis] there had been no serious attempts by modern libertarian revolutionaries to grapple with the economic and political problems of a totally self-managed society.”[76]

In Castoriadis’ vision of a self-managed society, economic life is organized by federated workers’ councils, council administration, and economic planning. To avoid the command structures and bureaucracy of centrally planned economies, the councils were to “collect, transmit and disseminate information collected and conveyed to them by local groups.” The center and periphery of a council society, as Castoriadis proposed, was to have a “two-way flow of information” and there would also be a reorganization and transformation of work including the division of labor. For Castoriadis, equitable and full participation in the economy was key. However, there is a problem with one of the main institutional features that Castoriadis proposed to facilitate allocation, which was what he called “The Plan Factory,” where data for possible economic plans would be calculated and then voted on. Castoriadis assumed this was simply a technical matter and therefore, despite his intentions, overlooked the qualitative aspects of how removing these decisions from workers and consumers could lessen the autonomy and self-management of both while empowering those in the Plan Factory. While Castoriadis was a pioneer in championing a non-market worker council vision, much has been learned by others who have developed more effective planning procedures that allow for greater council self-management than his early model from 1957.

The same problem of how to realize the fullest possible means of self-management and autonomy in economic planning appeared in anarchist Murray Bookchin’s (1921–2006) vision of libertarian municipalism. Influenced by communal and assembly formations from both the Paris Commune and Spanish Civil War, Bookchin proposed a network of councils whose members are elected from face-to-face democratic neighborhood assemblies which would coordinate decision-making on city, municipal, and “confederal” levels by sharing responsibilities and accountability through recallable community delegates and mandated representatives. The problem for autonomy and self-management arises when Bookchin proposes the “municipalization of the economy” where he stated this would “bring the economy as a whole into the orbit of the public sphere, where economic policy could be formulated by the entire community.”[77] Two problems arise. All decisions are by majority vote, yet not all decisions in fact affect everyone equally. But even more, suddenly people in neighborhood assemblies have more decision-making say about what should go on in a workplace and in production and consumption than the workers who work there or those who want their goods. As a consequence workers and consumers lose their ability to cooperatively negotiate with one another about what to produce, how to produce it, and where it should be distributed throughout society. Individual and collective autonomy and self-management, where people decide their own objectives and have decision-making say to the degree they are affected are rendered obsolete for the worker in Bookchin’s vision.

Anarchist allocation should deliver many traditional anarchist and libertarian socialist values such as classlessness, autonomy, self-management, solidarity, mutual aid, and diversity, and also, since we are talking about economics and the material means of life, equity and efficiency. We have embarked on an introductory overview of some of the most common and effective ways that people have sought to take control over their lives throughout recent history. Any model that offers itself up for the future should be composed of the best features from the past, as well as some new and original attributes to overcome problems that plagued previous efforts, and should weave all this into a synthesis where the new whole is greater than the sum of its parts. We have looked at a few historical and theoretical methods used for economic allocation, such as markets and central planning. Now, let us consider the modern-day participatory economic model and its method of decentralized participatory planning as offered by Michael Albert and Robin Hahnel. It should be noted, however, that the simple sketch provided here, like many of the models offered throughout this chapter, has been spelled out in much greater detail in many books.[78]

The method of decentralized participatory planning uses many institutions familiar from past struggles but in a new context and serving a new purpose. Allocation takes place in an institutional setting where balanced job complexes—the new division of labor in which we all have a fair apportionment of empowering tasks—and remuneration for duration, intensity, and onerousness of work deliver classlessness and self-managed decision-making over production and consumption. The council organization of society and the syndicalization of industry provide the means for people to directly control the economic system, but with a few new twists. For example, self-managed councils provide workers with means to negotiate what to produce and how to produce it with self-managed consumers’ councils who propose what they want to consume. The decentralized workers’ and consumers’ councils together cooperatively and comprehensively negotiate economic plans, without any central authority and with self-management. Where markets pushed the negative costs of economic activity onto the weaker party and privatized the positive aspects of a transaction for the more powerful participant, decentralized participatory planning considers the full positive and negative costs and consequences of economic decision-making, including apportioning benefits and costs justly. Councils arrive at a plan seeking to minimize waste and obtain maximum results from the least amount of socially valued effort and resources.

Closing Comments

Any history of anarchism or “anarchist economics” is bound to be incomplete and will require many more pages and authors than present in this single chapter. Indeed, when put into future practice, on a society-wide scale, we will all be its authors. On my own here though, instead of providing a catalog or chronology, and without being definitive, I have tried to pull out the best and most well-known parts that I am aware of, with the space available, and without assuming any prior knowledge about anarchism that the reader may or may not hold, to give an introduction to what could be called “anarchist economics” as well as to point towards how these different historical tendencies may relate to one another, providing building blocks for an emancipatory society. If closer scrutiny reveals, as I believe, that participatory economics fulfills anarchist economic aims as outlined above, then we can advocate and seek it, along with complementary and revolutionary changes in other spheres of life. Otherwise, in accord with Malatesta, we can “meet, discuss, agree and differ, and then divide according to [our] various opinions, putting into practice the methods which [we] respectively hold to be the best,” so that “that method, which when tried, produces the best results, will triumph in the end.”

Laying the Foundations: Proudhon’s Contribution to Anarchist Economics[79]

Iain McKay

Anyone sketching the positive vision of libertarian economics would, undoubtedly, include such features as common ownership of land, socialization of industry, workers’ self-management of production, and federations of workers’ councils. Such a vision can be found in the works of such noted revolutionary anarchists as Mikhail Bakunin, Peter Kropotkin, and Rudolf Rocker.

What may be less well known is that these ideas can be found in the works of Pierre-Joseph Proudhon (1809–1865), the first person to proudly proclaim himself an anarchist and, consequently, the founder of anarchism as a named socio-economic theory: “the land is indispensable to our existence, —consequently a common thing”; “all accumulated capital being social property, no one can be its exclusive proprietor”; “democratically organized workers’ associations”; “industrial democracy”; “that vast federation of companies and societies woven into the common cloth of the democratic and social Republic”; “an agricultural-industrial federation.”

As with later anarchists, Proudhon rejected the twin evils of capitalism (“monopoly and what follows”) and nationalization (“exploitation by the State”) in favor of “a solution based upon equality,—in other words, the organization of labor, which involves the negation of political economy and the end of property.” This insight, from 1846, is at the heart of anarchism.

First a point of clarification. The term “anarchist economics” contains two related concepts. One is the anarchist critique of capitalism, the other the suggestions for how an anarchist economy would function. Both are interrelated. What we are opposed to in capitalism will be reflected in our visions of a libertarian economy just as our hopes and dreams of a free society will inform our analysis of the current system. Both need to be understood as both are integral to each other.

This dual perspective can be found in the ideas of Proudhon. Here I will sketch both aspects of the Frenchman’s anarchist economics, showing how the critique of property fed into his positive vision of libertarian socialism and vice versa. In so doing, I will also be shedding light on a key anarchist thinker who is better known for a few quotes than for his substantial contributions to both the critique of capitalism and of our visions of anarchy.

What Is Property?

Proudhon’s fame and influence was secured in 1840 when he wrote What Is Property? and answered “theft.” This book contains a searing critique of private property as well as sketches of a new, free society: anarchy. Rejecting both capitalism and (authoritarian) communism, Proudhon called for a “synthesis of communism and property,” a “union” which “will give us the true form of human association.” “This third form of society,” he stated, “we will call liberty.”

Proudhon’s critique rested on two key concepts. Firstly, property allowed the owner to exploit its user (“property is theft”). Secondly, that property created oppressive social relationships between the two (“property is despotism”). These are interrelated, as it is the relations of oppression that property creates which allows exploitation to happen and the appropriation of our common heritage by the few gives the rest little alternative but to agree to such domination and let the owner appropriate the fruits of their labor.

Proudhon’s genius and the power of his critique was that he took all the defenses of, and apologies for, property and showed that, logically, they could be used to attack that institution.

To claims that property was a natural right, he explained that the essence of such rights was their universality and that private property ensured that this right could not be extended to all. To those who argued that property was required to secure liberty, Proudhon rightly objected that “if the liberty of man is sacred, it is equally sacred in all individuals; that, if it needs property for its objective action, that is, for its life, the appropriation of material is equally necessary for all.” To claims that labor created property, he noted that most people have no property to labor on and the product of such labor was owned by capitalists and landlords rather than the workers who created it. As for occupancy, he argued that most owners do not occupy all the property they own while those who do use and occupy it do not own it.

Proudhon showed that the defenders of property had to choose between self-interest and principle, between hypocrisy and logic. If it is right for the initial appropriation of resources to be made (by whatever preferred rationale) then, by that very same reason, it is right for others in the same and subsequent generations to abolish private property in favor of a system which respects the liberty of all rather than a few. (“If the right of life is equal, the right of labor is equal, and so is the right of occupancy.”) This means that “those who do not possess today are proprietors by the same title as those who do possess; but instead of inferring therefrom that property should be shared by all, I demand, in the name of general security, its entire abolition.”

Property allows the creation of authoritarian social relationships and exploitation. For Proudhon, the notion that workers are free when capitalism forces them to seek employment was demonstrably false. He was well aware that in such circumstances property “violates equality by the rights of exclusion and increase, and freedom by despotism.” It has “perfect identity with robbery” and the worker “has sold and surrendered his liberty” to the proprietor. Anarchy was “the absence of a master, of a sovereign” while “proprietor” was “synonymous” with “sovereign” for he “imposes his will as law, and suffers neither contradiction nor control.” Thus “property is despotism” as “each proprietor is sovereign lord within the sphere of his property” and so freedom and property were incompatible.

Hence the pressing need, if we really seek liberty for all, to abolish property and the oppressive social relationships it generates. With wage-workers and tenants, property became “the right to use [something] by his neighbor’s labor” and so resulted in “the exploitation of man by man” for to “live as a proprietor, or to consume without producing, it is necessary, then, to live upon the labor of another.” Like Marx, but long before him, Proudhon argued that workers produced more value than they received in wages:

Whoever labors becomes a proprietor … 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 he creates, and by which the master alone profits … The worker retains, even after he has received his wages, a natural right in the thing he has produced.”

The capitalist also unjustly appropriates the additional value (termed “collective force”) produced by cooperative activity:

A force of one thousand men working twenty days has been paid the same wages that one would be paid for working fifty-five years; but this force of one thousand has done in twenty days what a single man could not have accomplished, though he had labored for a million centuries. Is the exchange an equitable one? Once more, no; when you have paid all the individual forces, the collective force still remains to be paid … which you enjoy unjustly.

Property meant “another shall perform the labor while [the proprietor] receives the product.” So the “free worker produces ten; for me, thinks the proprietor, he will produce twelve” and so to “satisfy property, the worker must first produce beyond his needs.” Little wonder “property is theft!”

His classic work did not limit itself to critique and gave a few sketches of an anarchist economy. Property would be socialized as the “land cannot be appropriated” and “all capital, whether material or mental, being the result of collective labor, is, in consequence, collective property.” People “are proprietors of their products—not one is proprietor of the means of production.” Thus “right to product is exclusive” while “the right to means is common.” Workers’ control would prevail as managers “must be chosen from the workers by the workers themselves, and must fulfill the conditions of eligibility. It is the same with all public functions, whether of administration or instruction.” So whether on the land or in industry, Proudhon’s aim was to create a society of “possessors without masters.”

The following year saw Proudhon pen a second memoir (Letter to M. Blanqui) in which he clarified certain issues raised in the first memoir and answered his critics. He again argued for socialized property and use rights for “wealth, produced by the activity of all, is by the very fact of its creation collective wealth, the use of which, like that of the land, may be divided, but which as property remains undivided.” Proudhon aimed to “reduce” property “to the right of possession” and “organize industry, associate workers” in order to “apply on a large scale the principle of collective production.” He called this “non-appropriation of the instruments of production” the “destruction of property.” Thus use rights replace property rights with common ownership ensuring individuals and groups controlled the product of their labor, the labor itself and as the means of production used. In short: “I preach emancipation to the proletarians; association to the workers.”

System of Economic Contradictions

Proudhon’s next major work was 1846’s two-volume System of Economic Contradictions. It was this work which first saw his use of the term “mutualism” to describe his libertarian socialism. This term was not invented by him but by workers in Lyon during the 1830s. Proudhon stayed there in 1843 and was deeply influenced by the workers’ ideas and practice.

This book is best known for Marx’s 1847 reply The Poverty of Philosophy. While Marx does make a few valid points against Proudhon, his distortions, selective quoting, quote tampering, and other intellectually dishonest practices drain it of most of its value. Suffice to say, reading Proudhon’s work quickly shows a radically different thinker than the one readers of Marx would expect.

It must be stressed, given the prevalent myths begat by Marx to the otherwise, that Proudhon supported large-scale industry. Indeed, he explicitly rejected a return to small-scale production as “retrograde” and “impossible.” He also supported workers’ associations, unsurprisingly once you understand that Proudhon locates exploitation within capitalism firmly in production as a consequence of wage labor. As this analysis informs his vision for an anarchist economy, it is worth discussing—particularly as, ironically, Proudhon was the first to expound many of the key concepts of Marxist economics.

First, Proudhon stressed that labor did not have a value but what it created did and so produces value only as active labor engaged in the production process:

Labor is said to have value, not as merchandise itself, but in view of the values supposed to be contained in it potentially. The value of labor is a figurative expression, an anticipation of effect from cause … it becomes a reality through its product.

Second, consequently, when workers are hired there is no guarantee that the value of the goods produced equals their wage. Under capitalism wages cannot equal product as the proprietor secures a profit by controlling both product and labor:

Do you know what it is to be a wage-worker? It is to labor under a master, 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 have to make is none of your business; you do not control it.

Third, this hierarchical relationship allowed exploitation to occur:

the worker … create[s], on top of his subsistence, a capital always greater. Under the regime of property, the surplus of labor, essentially collective, passes entirely, like the revenue, to the proprietor: now, between that disguised appropriation and the fraudulent usurpation of a communal good, where is the difference?

The consequence of that usurpation is that the worker, whose share of the collective product is constantly confiscated by the entrepreneur, is always on his uppers, while the capitalist is always in profit … political economy, that upholds and advocates that regime, is the theory of theft.

In short, the capitalist firm “with its hierarchical organization” means that workers had “parted with their liberty” and “have sold their arms” to a boss who controls them, appropriates the product of their labor and, consequently, the “collective force” and “surplus of labor” they create. This produced the economic contradictions Proudhon analyzed. Thus, for example, the introduction of machinery within capitalism “promised us an increase of wealth” but it also produced “an increase of poverty” as well as bringing “us slavery” and deepening “the abyss which separates the class that commands and enjoys from the class that obeys and suffers.” Such contradictions could only be resolved by abolishing the system that creates them.

His analysis of how exploitation occurred in production and the oppressive nature of the capitalist workplace feeds directly into Proudhon’s arguments for workers’ associations and socialization (“to unfold the system of economic contradictions is to lay the foundations of universal association”). As “all labor must leave a surplus, all wages [must] be equal to product” and “[b]y virtue of the principle of collective force, workers are the equals and associates of their leaders.” The association of the future would be based on free access (“should allow access to all who might present themselves”) and self-management (“to straightway enjoy the rights and prerogatives of associates and even managers”). Hence “it is necessary to destroy or modify the predominance of capital over labor, to change the relations between employer and worker, to solve, in a word, the antinomy of division and that of machinery; it is necessary to ORGANIZE LABOR.” Here we see how critique feeds directly into the vision of a free economy.

This argument was rooted in Proudhon’s awareness that societies change and develop. He denounced “the radical vice of political economy” of “affirming as a definitive state a transitory condition, —namely, the division of society into patricians and proletaires.” The “period through which we are now passing” was “distinguished by a special characteristic: WAGE-LABOR.” Just as capitalism had replaced feudalism, so capitalism and its system of property rights would be replaced by an economy based on associated labor and socialized property: mutualism.

These two volumes were primarily a work of critique, with positive visions few and far between. What there is shows a keen understanding of the necessity to transform the relations of production, to seek a solution at the point of production to the exploitation and oppression of capitalism. However, the work’s focus was destructive and not constructive—he explicitly stated that he would “reserve” discussion on the organization of labor “for the time when, the theory of economic contradictions being finished, we shall have found in their general equation the program of association, which we shall then publish in contrast with the practice and conceptions of our predecessors.” The February revolution of 1848 forced him to do just that.

Solution of the Social Problem

Proudhon considered his work of the 1840s as essentially critique, although tantalizing glimpses of his vision of libertarian socialism do come through. The February revolution of 1848 saw him develop his positive theories on anarchist economics and politics as he sought to influence it towards libertarian ends or, as his first work after the revolution put it, to formulate the Solution of the Social Problem. For, as he correctly predicted, “either property will overrule the Republic or the Republic will overrule property.”

He stressed that to be permanent the revolution had to move from just political changes to economic transformation. He urged that “a provisional committee be set up to orchestrate exchange, credit and commerce between workers” and this would “liaise with similar committees” across France in order that “a body representative of the proletariat be formed ... in opposition to the bourgeoisie’s representation.” And so “a new society [would] be founded in the heart of the old society,” created only “from below” as “the organization of labor must not emanate from the powers-that-be; it ought to be SPONTANEOUS.”

This would be achieved by means of a “Bank of the People.” Its aim was “to organize credit democratically” and this “organization of credit” was considered as the means to achieve the organization of labor, with socialized credit producing socialized property. Thus “the Exchange Bank is the organization of labor’s greatest asset” and allowed “the new form of society to be defined and created among the workers.” Significantly he linked his ideas to the working-class self-activity going on around him, pointing to those workers who “have organized credit among themselves” and the “labor associations” which have grasped “spontaneously” that the “organization of credit and organization of labor amount to one and the same.” By organizing both, the workers “would soon have wrested alienated capital back again, through their organization and competition.” Mutual banks would support “all efforts of associations of workers, and organizations of workers” to ensure that “all the workshops are owned by the nation, even though they remain and must always remain free.” Workers’ control would “make every citizen simultaneously, equally and to the same extent capitalist, worker and expert or artist,” this being “the first principle of the new economy, a principle full of hope and of consolation for the worker ... but a principle full of terror for the parasite and for the tools of parasitism, who see reduced to naught their celebrated formula: Capital, labor, talent!”

Proudhon took care to base his arguments not on abstract ideology but on the actual practices he saw around him. He was well aware that banks issued credit and so increased the money supply in response to market demand. As such, he was an early exponent of the endogenous theory of the money supply. He recognized that a money economy, one with an extensive banking and credit system, operates in a fundamentally different way than the barter economy assumed by most economics. He saw that income from property violated the axiom that products exchanged for products and that interest reflected no sacrifice which required payment as the rich person “lends it … precisely because the loan is not a deprivation to him; he lends it because he has no use for it himself, being sufficiently provided with capital without it.” For both economic and ethical reasons we “must destroy the royalty of gold; we must republicanize specie, by making every product of labor ready money.”

It must be stressed that in today’s economies neither credit nor money is backed by gold. So Proudhon has been vindicated when he mocked bourgeois political economy for arguing that “the idea of abolishing specie is supremely absurd, as absurd as the thought of abolishing property!” Only partially, though, as credit has not been republicanized via a mutual bank to achieve the organization of labor.

For all his talk of “the organization of credit,” the socialization of property and organization of labor remained his goals with the mutual bank seen as a means to achieve that end. In December 1849 he irately denied that he sought the “individual ownership and non-organization of the instruments of labor” stating categorically that he had “never penned nor uttered any such thing” and had “argued the opposite a hundred times over.” He “den[ied] all kinds of proprietary domain” and so did “precisely because I believe in an order wherein the instruments of labor will cease to be appropriated and instead become shared.” The previous year he had publicly presented this vision in a manifesto:

Under the law of association, transmission of wealth does not apply to the instruments of labor, so cannot become a cause of inequality … We are socialists … under universal association, ownership of the land and of the instruments of labor is social ownership … We want the mines, canals, railways handed over to democratically organized workers’ associations … We want these associations to be models for agriculture, industry and trade, the pioneering core of that vast federation of companies and societies woven into the common cloth of the democratic and social Republic.

As in the Paris Commune of 1871, this “organizing [of] the workers’ mutual solidarity” would be based on elected delegates whom the voters can “recall and dismiss” for the “imperative mandate and permanent revocability are the most immediate and incontestable consequences of the electoral principle.” Like the Commune, any assembly would “exercise executive power, just the way it exercises legislative power through its joint deliberations and votes,” through “organization of its committees.”

All through the revolutionary period we see the interplay between critique and vision, with each informing the other. Under capitalism “a worker, without property, without capital, without work, is hired by [the capitalist], who gives him employment and takes his product” and his wages fail to equal the price of the products he produces. “In mutualist society,” however, “the two functions” of worker and capitalist “become equal and inseparable in the person of every worker” and so he “alone profits by his products” and the “surplus” he creates.

General Idea of the Revolution

Proudhon’s hectic activity during the revolution saw him vilified by the Right and imprisoned on spurious charges. In prison he wrote another classic of libertarian politics, his 1851 General Idea of the Revolution in the Nineteenth Century. This was considered by Proudhon as a constructive summary for social change, the positive complement to the critiques of 1846.

Its aim was modest: “Capitalist and landlord exploitation stopped everywhere, wage labor abolished, equal and just exchange guaranteed.” As would be expected, “the organization of credit, the deprivation of the power of increase of money” was a focal point of his book but it was just one part of a series of reforms which included “the limitation of property” and “the establishment of workers companies.” Proudhon, Marxist myths notwithstanding, did not aim just to abolish interest, he aimed to abolish the extraction of surplus from the workers in all its forms.

Socialization still played a key part of his vision of a free society and Proudhon made various suggestions on how to achieve it. Rental payments “shall be carried over to the account of the purchase” of the resource used and once the property “has been entirely paid for, it shall revert immediately to the commune.” In the case of housing, such payments would result in “a proportional undivided share in the house he lives in, and in all buildings erected for rental, and serving as a habitation for citizens.” Thus land and housing would become socialized as the property “thus paid for shall pass under the control of the communal administration” and for “repairs, management, and upkeep of buildings, as well as for new constructions, the communes shall deal with bricklayers companies or building workers associations.”

Proudhon spent considerable space arguing for workers’ associations (while attacking centralized state-run association). Either, he argued, the worker “will be simply the employee of the proprietor-capitalist-entrepreneur; or he will participate in … the establishment, he will have a voice in the council, in a word, he will become an associate.” Under capitalism, “the worker is subordinated, exploited: his permanent condition is one of obedience and poverty.” Under libertarian socialism, “he resumes his dignity as a man and citizen, he may aspire to comfort, he forms a part of the producing organization, of which he was before but the slave … he forms a part of the sovereign power, of which he was before but the subject.” Without association people “would remain related as subordinates and superiors, and there would ensue two industrial castes of masters and wage-workers, which is repugnant to a free and democratic society.”

In short, “all workers must associate, inasmuch as collective force and division of labor exist everywhere, to however slight a degree” and so “association, due to the immorality, tyranny and theft suffered, seems to me absolutely necessary and right.” Otherwise, capitalists would continue to “plunder the bodies and souls of the wage-workers” which would be “a violation of the rights of the public, an outrage upon human dignity and personality.”

Significantly, his practical suggestions for workplace self-management map exactly to his previous arguments (particularly his comments from 1846). Thus “every individual employed in the association ... has an undivided share in the property of the company” as well as “the right to fill any position” for “all positions are elective, and the by-laws subject to the approval of the members.” Wages would be equal to output as “each member shall participate in the gains and in the losses of the company, in proportion to his services” and “the collective force, which is a product of the community, ceases to be a source of profit to a small number of managers and speculators: it becomes the property of all the workers.” Thus there would be a new form of economic organization based on “the cooperation of all who take part in the collective work” with “equal conditions for all members.”

Public utilities would be under the “initiative of communes and departments” with “workers companies … carrying the works out.^” This decentralization, this “direct, sovereign initiative of localities, in arranging for public works that belong to them, is a consequence of the democratic principle and the free contract.”

This associative socialism would be universal, for there “will no longer be nationality, no longer fatherland, in the political sense of the words: they will mean only places of birth. Whatever a man’s race or color, he is really a native of the universe; he has citizen’s rights everywhere.”

The Federative Principle

With the revolution crushed, first by the onslaught of the Right and then by President Louis-Napoleon’s coup d’état of December 1851, Proudhon’s work was naturally affected as there was little working-class self-activity to inspire him and he was constantly under the watchful eyes of the emperor’s censors and police.

His first major work, published anonymously initially, was the Stock Exchange Speculator’s Manual whose title hid a subversive message—the abolition of wage-labor, the end of the capitalist company, and the advocacy of producer and consumer associations. It asked how “the ownership and management of companies” instead “of remaining individual” could become “collective” so ensuring the “emancipation” of the workers and “a revolution in the relationship between labor and capital.” It concluded:

Workers’ associations are the home of a new principle and model of production that must replace current corporations.… There is mutuality … when in an industry, all the workers, instead of working for an owner who pays them and keeps their product, work for each other and thereby contribute to a common product from which they share the profit … extend the principle of mutuality that unites the workers of each association to all the workers’ associations as a unit, and you will have created a form of civilization that, from all points of view—political, economic, esthetic—differs completely from previous civilizations.”

The message of 1840, one of the core concepts of anarchist economists, remained at the fore of Proudhon’s ideas and the Frenchman added another expression to the arsenal of hope within anarchist theory: “industrial democracy.”

Proudhon’s next work in 1858 was his magum opus, his Justice in the Revolution and in the Church. Economic justice required that labor be “reconciled by its free nature with capital and property, from which wage-labor banished it.” This meant: “The land to those who cultivate it”; “capital to those who use it”; “the product to the producer.” Such a self-managed economy “cannot cause a distinction of classes” and “makes society, as well as [economic] science, safe from any contradiction.”

The early 1860s saw Proudhon turn increasingly to political issues, notably the questions of federalism, centralism, and nationalism. However, he always recognized the links between the economy and the political structure and so his 1863 The Federative Principle discusses economic reforms in a federal system as “political right must have the buttress of economic right.”

Building on his previous ideas for “universal association,” he argued for the necessity of an “agricultural-industrial federation” as “industries are sisters; they are parts of the same body; one cannot suffer without the others suffering because of it. I wish that they federate then, not to absorb one another and merge, but to mutually guarantee the conditions of prosperity that are common to them all and that none can claim the monopoly of.” Without this, there would be “economic serfdom or wage-labor, in a word, the inequality of conditions and fortunes.” The agricultural-industrial federation “tends to approximate more and more equality” as well as “guaranteeing work and education” and “allow[ing] each worker to evolve from a mere laborer to a skilled worker or even an artist, and from a wage-earner to their own master.” He termed “this political-economic guaranteeism” and considered it both as “the highest expression of federalism” and “the strongest barrier to feudalism of the land and capital, toward which unitary powers inevitably go.”

Proudhon died in January 1865. On his deathbed, enthused by the rebirth of the labor movement, he dictated The Political Capacity of the Working Classes. He outlined the economics and politics of mutualism, and his continued support for “the mutualist and federative theory of Property, the critique of [property] which I published twenty-five years ago,” and reaffirmed the necessity for free access and association:

in virtue of the principle which characterizes it, the ranks of the Association are open to whomever, having recognized the spirit and the goal, asks to join; exclusion is contrary to it, and the more it grows in number the more advantages it gains. From the point of view of personnel, the mutualist association is therefore by nature unlimited, which is the opposite of all other associations.… [It] admits … everyone in the world, and tends towards universality … one is required to contribute neither money nor other valuables … the only condition demanded is to be faithful to the mutualist pact; —once formed, its nature is to generalize itself and to have no end.

He, as before, attacked both capitalism and state socialism as neither expressed “the great hopes that the workers’ Democracy had placed in the idea of the association.” Instead he urged self-management and re-iterated “the importance accorded in the New Democracy to workers’ associations which are deemed to constitute economic agencies and mutual institutions.” Cooperatives (“workers’ companies”) continued to play a key role in his vision of a free economy: “The revolution, in democratizing us, has launched us on the paths of industrial democracy.”

Conclusion: From Proudhon to Kropotkin

Anyone familiar with Proudhon’s work can quickly see the debt later anarchists owe him. His placing of anti-capitalism alongside anti-statism defined anarchism. His critique of property, his analysis of exploitation occurring in production, and his rejection of wage labor, all fed into revolutionary anarchist (and Marxist) analysis of capitalism. His arguments for self-management, socialization, possession, use rights, and socio-economic federalism are all found in the works of Bakunin, Kropotkin, and other revolutionary anarchists. As he summarized in 1851:

socialism is … the elimination of misery, the abolition of capitalism and of wage-labor, the transformation of property, the decentralization of government, the organization of universal suffrage, the effective and direct sovereignty of the workers, the equilibrium of economic forces, the substitution of the contractual regime for the legal regime, etc.

The key differences with libertarian communist theory are on means (revolution replacing reform) and on the extension of the critique of wage labor into an opposition to the wages system. This involved developing a stronger critique of competition and a greater awareness of the problems associated with market forces than can be found in Proudhon (who, myths notwithstanding, was well aware of the negative sides of markets and so recommended various institutional means of limiting them and their impact). It also meant raising ethical objections to distribution by labor cost, recognizing that needs are not proportional to a person’s ability to labor, and that some, due to illness and age, simply cannot work at all.

By the mid-1870s, most anarchists had embraced distribution according to need rather than Proudhon’s according to deed (labor). The rationales for this move to (libertarian) communism were elegantly and convincingly expounded by Kropotkin in many works (most obviously, The Conquest of Bread). Yet in terms of the critiques of capitalism, property, and wage labor, and of the positive vision of a decentralized, self-managed, associated, and federated libertarian socialism, the links are obvious. The only significant difference is the rejection of Proudhon’s socialism based on a market in the products of labor in favor of one inspired by the maxim “from each according to their abilities, to each according to their needs.”

It is for these reasons that Bakunin proclaimed Proudhon “the master of us all” and his own ideas simply “Proudhonism widely developed and pushed right to these, its final consequences.”