Anarchist economics
Encyclopedia
Anarchist economics is the set of theories and practices of economics
and economic activity within the political philosophy of anarchism
.
anarchist William Godwin
´s views on economics could be summarized as follows: "he envisages the possibility of specialization in the various crafts, which would lead to a man's following the task for which he had the greatest aptitude, and distributing his surplus products to whoever may need them, receiving what he himself needs of other things from the surplus produced by his neighbours, but always on the basis of free distribution, not of exchange. It is evident that, despite his speculations on the future of machinery, Godwin's ideal society is based on the economics of handcrafts and cultivation."
For the influential German individualist anarchist philosopher Max Stirner
"private property
is a spook which "lives by the grace of law" and it "becomes 'mine' only by effect of the law". In other words, private property exists purely "through the protection of the State, through the State's grace." Recognising its need for state protection, Stirner is also aware that "[i]t need not make any difference to the 'good citizens' who protects them and their principles, whether an absolute King or a constitutional one, a republic, if only they are protected. And what is their principle, whose protector they always 'love'? Not that of labour", rather it is "interesting-bearing possession . . . labouring capital, therefore . . . labour certainly, yet little or none at all of one's own, but labour of capital and of the -- subject labourers"."
Pierre Joseph Proudhon was involved with the Lyons
mutualists and later adopted the name to describe his own teachings
. In What Is Mutualism? Clarence Lee Swartz
gives his own account of the origin of the term, claiming that "[t]he word "mutualism" seems to have been first used by John Gray
, an English writer, in 1832."
sections of the First International proclaimed at the St. Imier Congress (1872) that "the aspirations of the proletariat can have no purpose other than the establishment of an absolutely free economic organization and federation, founded upon the labour and equality of all and absolutely independent of all political government," in which each worker will have the "right to the enjoyment of the gross product of his labours and thereby the means of developing his full intellectual, material and moral powers in a collective setting." This revolutionary transformation could "only be the outcome of the spontaneous action of the proletariat itself, its trades bodies and the autonomous communes." A similar position was adopted by the Workers' Federation of the Spanish Region in 1882, as articulated by an anarchist veteran of the First International, Jose Llunas Pujols, in his essay, "Collectivism."
By the early 1880s, most of the European anarchist movement had adopted an anarchist communist position, advocating the abolition of wage labour and distribution according to need. Ironically, the "collectivist" label then became more commonly associated with Marxist state socialists who advocated the retention of some sort of wage
system during the transition to full communism
. The anarchist communist, Peter Kropotkin
, attacked this position in his essay, "The Collectivist Wages System", which was reprinted in his book The Conquest of Bread
in 1892.
Anarchist communism as a coherent, modern economic-political philosophy was first formulated in the Italian section of the First International by Carlo Cafiero
, Emilio Covelli, Errico Malatesta
, Andrea Costa
and other ex-Mazzinian
Republicans. Out of respect for Mikhail Bakunin
, they did not make their differences with collectivist anarchism
explicit until after Bakunin's death. The collectivist anarchists sought to collectivize ownership of the means of production while retaining payment proportional to the amount and kind of labor of each individual, but the anarcho-communists sought to extend the concept of collective ownership to the products of labor as well. While both groups argued against capitalism
, the anarchist communists departed from Proudhon and Bakunin, who maintained that individuals have a right to the product of their individual labor and to be remunerated for their particular contribution to production. But, Malatesta put it: "...instead of running the risk of making a confusion in trying to distinguish what you and I each do, let us all work and put everything in common. In this way each will give to society all that his strength permits until enough is produced for every one; and each will take all that he needs, limiting his needs only in those things of which there is not yet plenty for every one."
Cafiero explains in Anarchy and Communism (1880) that private property in the product of labor will lead to unequal accumulation of capital and, therefore, the reappearance of social class
es and their antagonisms, and thus the resurrection of the state
: "If we preserve the individual appropriation of the products of labour, we would be forced to preserve money, leaving more or less accumulation of wealth according to more or less merit rather than need of individuals." At the Florence Conference of the Italian Federation of the International in 1876, held in a forest outside Florence
due to police
activity, they declared the principles of anarcho-communism.
the debate between collectivism
and anarcho-communism was revived. "This double base, both industrial and rural, had turned the libertarian communism
of Spanish anarcho-syndicalism
in somewhat divergent directions, the one communalist, the other syndicalist. The communalism was expressed in a more local, more rural spirit, one might almost say: more southern, for one of its principal bastions was in Andalusia
. Syndicalism, on the other hand, was more urban and unitarian in spirit - more northerly, too, since its main center was Catalonia
.
Spanish anarchist theoreticians were somewhat divided on this subject. "Some had given their hearts to Kropotkin
and his erudite but simplistic idealization of the communes of the Middle Ages
which they identified with the Spanish tradition of the primitive peasant community. Their favorite slogan was the "free commune." Bakunin was the founder of the Spanish collectivist, syndicalist, and internationalist workers' movement. Those anarchists who were more realistic, more concerned with the present than the golden age, tended to follow him and his disciple Ricardo Mella
. They were concerned with economic unification and believed that a long transitional period would be necessary during which it would be wiser to reward labor according to the hours worked and not according to need. They envisaged the economic structure of the future as a combination of local trade-union groupings and federations of branches of industry.".
In 1932, the Spanish anarchist theoretician Isaac Puente
published an outline of anarcho-communism; its ideas were taken up by the Saragossa congress of the CNT in May 1936. The Spanish anarchist economist Diego Abad de Santillan
published an influential treatise on economics, El Organismo Economico de la Revolucion (The Economic Organization of the Revolution). He saw that "Our ideal is the commune which is associated, federated, integrated into the total economy of the country, and of other countries in a state of revolution." To replace the single owner by a hydra-headed owner is not collectivism, is not self-management. The land, the factories, the mines, the means of transport are the product of the work of all and must be at the service of all. Nowadays the economy is neither local, nor even national, but world-wide. The characteristic feature of modern life is the cohesion of all the productive and distributive forces. "A socialized economy, directed and planned, is an imperative necessity and corresponds to the trend of development of the modern economic world." Santillan was to play an important part in the Spanish Revolution
. He became a member of the central committee of the anti-fascist militia , a member of the Catalonian Economic Council, and Economics Minister of the Catalonian government.
Anarchist historian George Woodcock reports that "For several months the armed forces in these regions were mostly anarchist controlled militia units. The factories were largely taken over by the workers and run by C.N.T. committees, while hundreds of villages either shared out or collectivized the land, and many of them attempted to set up libertarian communes of the kind advocated by Kropotkin." "The beginnings of collectivization seem to have been similar in villages and factories. The landlords in the villages had fled, the Civil Guards had been killed or chased away, and the village syndicate would transform itself into a popular assembly in which every villager could participate directly in the affairs of the community. An administrative committee would be elected, but this would operate under the constant supervision of the population, meeting at least once a week in full assembly to hasten the achievement of free communism. In the factories the process was similar, with a workers' committee becoming responsible to the general assembly of the syndicate, and technicians (in a few cases the former owners or managers) planning production in accordance with the workers' views."
, who envisioned a society where each person might possess a means of production
, either individually or collectively, with trade representing equivalent amounts of labor in the free market
. Integral to the scheme was the establishment of a mutual-credit bank which would lend to producers at a minimal interest rate only high enough to cover the costs of administration. Mutualism is based on a labor theory of value
which holds that when labor or its product is sold, in exchange, it ought to receive goods or services embodying "the amount of labor necessary to produce an article of exactly similar and equal utility".
Some mutualists believe that if the state did not intervene, as a result of increased competition in the marketplace, individuals would receive no more income than that in proportion to the amount of labor they exert. Mutualists oppose the idea of individuals receiving an income through loans, investments, and rent, as they believe these individuals are not laboring. Some of them argue that if state intervention ceased, these types of incomes would disappear due to increased competition in capital. Though Proudhon opposed this type of income, he expressed: "... I never meant to ... forbid or suppress, by sovereign decree, ground rent and interest on capital. I believe that all these forms of human activity should remain free and optional for all."
Insofar as they ensure the workers right to the full product of their labor, mutualists support market
s and private property
in the product of labor. However, they argue for conditional titles to land, whose private ownership is legitimate only so long as it remains in use or occupation (which Proudhon called "possession.") Proudhon's Mutualism supports labor-owned cooperative firms
and associations for "we need not hesitate, for we have no choice. . . it is necessary to form an ASSOCIATION among workers . . . because without that, they would remain related as subordinates and superiors, and there would ensue two . . . castes of masters and wage-workers, which is repugnant to a free and democratic society" and so "it becomes necessary for the workers to form themselves into democratic
societies, with equal conditions for all members, on pain of a relapse
into feudalism." As for capital goods (man-made, non-land, "means of production
"), mutualist opinion differs on whether these should be commonly managed public assets or private property.
and private ownership
of the means of production
. Instead, it envisions the means of production being owned collectively and controlled and managed by the producers themselves.
For the collectivization of the means of production, it was originally envisaged that workers will revolt and forcibly collectivize the means of production. Once collectivization takes place, workers' salaries would be determined in democratic organizations based on the amount of time they contributed to production. These salaries would be used to purchase goods in a communal market. This contrasts with anarcho-communism where wages would be abolished, and where individuals would take freely from a storehouse of goods "to each according to his need." Thus, Bakunin's "Collectivist Anarchism," notwithstanding the title, is seen as a blend of individualism
and collectivism
.
Collectivist anarchism is most commonly associated with Mikhail Bakunin
, the anti-authoritarian
sections of the First International, and the early Spanish anarchist movement
.
The difference between Collectivist Anarchism and Anarcho-Communism is that collectivist anarchism stresses collective ownership of productive, subsistence and distributary property, while communist anarchism negates the concept of ownership in favor of usage or possession with productive means being a possession not owned by any individual or particular group. Communist Anarchists believe that subsistence, productive and distributive property should be common or social possessions while personal property should be private possessions.
Collectivist anarchists agree with this, but disagree on the subject of remuneration; some collectivist anarchists, such as Mikhail Bakunin, believe in the remuneration of labor, while communist-anarchists, such as Peter Kropotkin
, believe that such remuneration would lead to the recreation of currency and that this would need a State. Thus, it could be said that collectivist anarchists believe in freedom through collective ownership of production and a communal market of sorts to distribute goods and services and compensate workers in the form of remuneration. Thus, collectivist anarchism could be seen as a combination of communism and mutualism.
which advocates the abolition of the state
, private property
, and capitalism
in favor of common ownership
of the means of production
, direct democracy
and a horizontal network of voluntary association
s and workers' council
s with production and consumption based on the guiding principle: "from each according to ability, to each according to need".
The abolition of wage labor is central to anarchist communism. With distribution of wealth being based on self-determined needs, people would be free to engage in whatever activities they found most fulfilling and would no longer have to engage in work for which they have neither the temperament nor the aptitude. Anarchist communists argue that there is no valid way of measuring the value of any one person's economic contributions, thus rejecting the labor theory of value
, because all wealth is a collective product of current and preceding generations. As Kropotkin put it: "No distinction can be drawn between the work of each man. Measuring the work by its results leads us to absurdity; dividing and measuring them by hours spent on the work also leads us to absurdity. One thing remains: put the needs above the works, and first of all recognize the right to live, and later on, to the comforts of life, for all those who take their share in production.."
Anarchist communists argue that any economic system based on wage labor and private property requires a coercive state apparatus to enforce property rights and to maintain unequal economic relationships that inevitably arise from differences in wages or amount of property. They further argue that market
s and systems of currency divide labor into classes and assign arbitrary numerical values to an individual's work and attempt to regulate production, consumption and distribution. They argue that money restricts an individual's ability to consume the products of their labor by limiting their intake with prices and wages.
Some forms of anarchist communism are egoist
and strongly influenced by radical individualism
, believing that anarchist communism does not require a communitarian nature at all. But most other forms of anarchist communism are communal and see human beings as social vessels that contribute to a greater collective whole (which is what most communists in general, including Marxist-Leninists, purport to believe; most anarchist communists and left communists counter that the Marxist-Leninist view is insincere and in actuality is authoritarian).
. They want an economy free from any coercive regulation or control. Anarcho-capitalists generally see the State as the cause of all monopoly. Anarcho-capitalists reject the labor theory of value as flawed and archaic. Thus, like most modern economists, they do not believe that there is any proper price for labor or goods other than the one found at the balance point where what the buyer is willing to pay is equal to what the seller is willing to accept.
At the same time anarcho-capitalists or market anarchists do not support what is considered by many to be capitalism today. They argue that privileges, bailouts, and subsidies have a negative effect on human quality of life. Anarcho-capitalists make a distinction between a free-market or laissez-faire capitalism and a neo-mercantilist or statist capitalism. As Rothbard once wrote, "The difference between free-market capitalism and state capitalism
is precisely the difference between, on the one hand, peaceful, voluntary exchange, and on the other, violent expropriation." Rothbard goes on to write that he is "very optimistic about the future of free-market capitalism. I'm not optimistic about the future of state capitalism—or rather, I am optimistic, because I think it will eventually come to an end."
proposed by activist and political theorist Michael Albert
and radical economist Robin Hahnel
. It uses participatory decision making
as an economic mechanism
to guide the production, consumption
and allocation of resources
in a given society. Proposed as an alternative to contemporary capitalist
market economies
and also an alternative to centrally planned
socialism
, it is described as "an anarchistic economic vision", and it could be considered a form of socialism as under parecon, the means of production are owned by the workers.
The underlying values that parecon seeks to implement are equity
, solidarity, diversity, workers' self-management
and efficiency. (Efficiency here means accomplishing goals without wasting valued assets.) It proposes to attain these ends mainly through the following principles and institutions:
Albert and Hahnel stress that parecon is only meant to address an alternative economic theory and must be accompanied by equally important alternative visions in the fields of politics
, culture
and kinship
. The authors have also discussed elements of anarchism
in the field of politics, polyculturalism
in the field of culture, and feminism
in the field of family and gender relations as being possible foundations for future alternative visions in these other spheres of society. Stephen R. Shalom has begun work on a participatory political vision he calls "parpolity
".
According to the ID project, economic democracy is the authority of demos (community) in the economic sphere — which requires equal distribution of economic power. As with the case of direct democracy, economic democracy today is only feasible at the level of the confederated demoi. It involves the ownership and control of the means of production by the demos
. This is radically different from the two main forms of concentration of economic power : capitalist and 'socialist' growth
economy. It is also different from the various types of collectivist capitalism, such as workers' control
and milder versions suggested by post-Keynesian social democrats. The demos
, therefore, becomes the authentic unit of economic life.
The main characteristic of the proposed model, which also differentiates it from socialist planning models like Parecon, is that it explicitly presupposes a stateless, money-less and market-less economy that precludes private accumulation of wealth and the institutionalisation of privileges for some sections of society, without relying on a mythical post-scarcity state of abundance, or sacrificing freedom of choice. The proposed system aims at satisfying the double aim of:
(a) meeting the basic needs of all citizens—which requires that basic macro-economic decisions have to be made democratically, and
(b) securing freedom of choice—which requires the individual to make important decisions affecting his/her own life (what work to do, what to consume etc.).
Therefore, the system consists of two basic elements: (1) democratic planning, which involves a feedback process between workplace assemblies, demotic assemblies and the confederal assembly, and (2) an artificial market using personal vouchers, which ensures freedom of choice
but avoids the adverse effects of real markets. Although some have called this system "a form of money based on the labour theory of value", it is not a money model since vouchers cannot be used as a general medium of exchange and store of wealth.
Another distinguishing feature of ID is its distinction between basic and non-basic needs. Remuneration is according to need for basic needs, and according to effort for non-basic needs. ID is based on the principle that meeting basic needs is a fundamental human right which is guaranteed to all who are in a physical condition to offer a minimal amount of work. By contrast, Parecon guarantees that basic needs are satisfied only to the extent they are characterized public goods or are covered by compassion and by a guaranteed basic income for the unemployed and those who cannot work
is a branch of anarchism
which focuses on the labour movement
. Syndicalisme is a French word, ultimately derived from the Greek, meaning "trade unionism" – hence, the "syndicalism
" qualification. Syndicalism is an alternative co-operative economic system
. Adherents view it as a potential force for revolutionary social change, replacing capitalism
and the state
with a new society democratically self-managed by workers.
Anarcho-syndicalists seek to abolish the wage system, regarding it as "wage slavery
", and state or private ownership of the means of production
, which they believe lead to class divisions. Not all seek to abolish money per se. Ralph Chaplin
states that "the ultimate aim of the General Strike as regards wages is to give to each producer the full product of his labor. The demand for better wages becomes revolutionary only when it is coupled with the demand that the exploitation of labor must cease."
Additionally, anarcho-syndicalists regard the state as a profoundly anti-worker institution. They view the primary purpose of the State as being the defence of private property
and therefore of economic, social and political privilege, even when such defence denies its citizens the ability to enjoy material independence and the social autonomy which springs from it. In contrast to other bodies of thought (Marxism-Leninism
being a prime example), anarcho-syndicalists deny that there can be any kind of workers' state, or a state which acts in the interests of workers, as opposed to those of the rich and powerful. Reflecting the anarchist philosophy from which it draws its primary inspiration, anarcho-syndicalism holds to the idea that power corrupts.
Although anarcho-syndicalism originated close to the beginning of the twentieth century, it remains a popular and active school of anarchism today and has many supporters as well as many currently active organizations. Anarcho-syndicalist trade unionists, being socialist anarchists, vary in their points of view on anarchist economic arrangements from a collectivist anarchism
type economic system to an anarcho-communist economic system.
that incorporates information technology
, cryptography
, and open-source software
to create a medium of exchange that precludes all forms of usury and thus requires no oversight or ideological guidance. In contrast to Parecon, there is no planned economy
because users of the system will approve of labor that they feel is necessary and so production happens as people fill the labor market as they will.
Crucial to this system is the premise that money (credit for work done) can be improved with the addition of identity, information
, and transparency
, i.e. all credits created are associated with a particular individual (they are non-transferable), they inform users of the work done to create it, and can be viewed by any user on the system.
There are no specifications for how decisions are made within these Technological LTV Systems - each one is tasked to create its own ruleset. Joining such a network would be akin to signing a contract or EULA so revision of rulesets would resemble the open-source paradigm of updating software and having the user agree to a new ruleset. Decision making would then be implicit in any user's ability to participate in the revision of the system software, even though this approach could be elitist.
Prices on goods and services would be evaluated by the amount of credit earned by laborers involved—requiring that every individual item or service be tracked. Production then represents a mirror of the credit creation, so physical items would require their "negative" credit to be cancelled by a person wishing to own it. Since income distribution would be relatively flat in this system, it is hoped that most of the problems of capitalist accumulation and class structure will be avoided.
and american individualist anarchists such as Josiah Warren
, Lysander Spooner
and Benjamin Tucker
adopted the liberal
Labor Theory of Value
of classical economics
but used it to criticize capitalism instead favoring a non-capitalist market system.
Egoist anarchist Max Stirner
did not adhere to anything close to the labor theory of value and affirmed that the only real base for possession is might over it
Collectivist anarchism
as defended by Mikhail Bakunin
defended a form of labor theory of value when it advocated a system where "all necessaries for production are owned in common by the labour groups and the free communes...based on the distribution of goods according to the labour contributed".
Anarcho-communism as defended by Peter Kropotkin
and Errico Malatesta
rejected the labor theory of value and exchange value iself, advocated a gift economy
and to base distribution on need.
The motive to adopt a panarchist approach to economics is the theory that not all goods, services, or resources are best exchanged/regulated within a single system, i.e. energy production is best tracked in kilowatt-hours, but collectible items have highly subjective values and therefore require a different exchange medium. Even Parecon could be incorporated in this approach.
s, consumer advocacy, and class-action lawsuits to be merely liberal actions that do not address the core problem which is capitalism itself.
Some anarchists believe that changing the nature of work
itself is the crux of defeating capitalism. Participatory economics addresses the division of labor question by advocating balanced job complexes wherein all workers at a production facility share in all aspects of labor, i.e. everyone takes part in labor, management, maintenance, and all related work to ensure equality and that skills are shared amongst workers.
Some anarchists (sometimes denoted by the pejorative term "lifestyle anarchists
") believe that changing personal consumption habits to minimize (or eliminate entirely) involvement in the prevailing capitalist economy is essential to practicing anarchism in their lives. Withdrawing from the system by living on scavenged, stolen, or scammed resources is often touted by individuals and groups influenced by the Situationists, such as CrimethInc.
, as a viable means of survival and non-participation in the system. Some anarchists such as agorists
support counter-economics
, that is, participating in the "black" illegal market to undermine monopolies
and the state. The goal of agorists is not simply to opt-out of capitalism/the system, but by developing alternative voluntary solutions to engineer the statist economy's collapse.
and Murray Rothbard, simply want the end of the government money monopoly and the repeal of legal tender
laws, i.e. they want competition between private banks and currencies. Use of alternative currencies
is growing, largely due to digital currencies offered on the internet, and availability of software to manage mutual credit
schemes like Local Exchange Trading Systems. Since states cannot collect taxes and revenue through use of alternative currencies they will theoretically lose power to the point of collapse. Some of these alternative currencies are designed to prevent usury
, others are designed simply as alternatives to state-issued fiat money, as a hedge against inflation—for example, the Liberty Dollar
. Thus alternative currencies range from labor-time notes to specie-backed warehouse receipt
s. Three popular alternative currencies are: community currency, local currency
, and time-based currency
.
.
In this context, the word "free" indicates that the borrowing organisation is free of takeover threats from the provider of capital which form part of the traditional capitalist model. The loan may be interest free (similar to the Scandinavian JAK members bank
model of agricultural finance) or a limited rate of interest may be charged. There may also be other charges e.g. to cover administration costs or to cover against bad debts.
Small-scale practical examples of anarchist free banking initiatives exist in various countries, but banking laws make it hard for them to operate. The Credit Union
uses collective member funds to loan at a small operational cost. In most countries bank regulation
prohibits organisations from describing themselves as banks unless they are legally registered as such, and a collectively run organisation would not meet corporate governance
standards in banking law. Nevertheless, such initiatives sometimes show a much lower bad debt rate than conventional banks, because they are based on solidarity, and failing to repay a loan from a free banking initiative may be seen as culturally equivalent to stealing from friends. The reverse can however also be true, as a trust-based system is open to abuses of that trust. To safeguard completely against such risks would involve a level of cultural vetting more intrusive than anything traditionally done by credit rating
agencies.
The term "free banking" should not be confused with the UK banking concept of free personal banking, which means a current account with no account charges for standard services so long as the account is kept in credit.
are those based on free distribution of goods and services. Anarcho-communists are the main proponents of such. In the social sciences, a gift economy (or gift culture) is a society where valuable goods and services
are regularly given without any explicit agreement for immediate or future rewards (i.e. no formal quid pro quo
exists). Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community. The organization of a gift economy stands in contrast to a barter economy or a market economy
. Informal custom governs exchanges, rather than an explicit exchange of goods or services for money
or some other commodity
.
Anarcho-primitivists
also advocate this kind of economy (although they believe that it is not possible with current modes of production and thus advocate a return to pre-industrial and often pre-agricultural modes of production).
.
are based on time
although participants are not primarily anarchists. In the United States, one of the reasons that the IRS has chosen not to tax local currencies is that they are used for charitable purposes, such as community-building.
Some anarchists are interested in labor note systems because they make complex free market
, fair trade
systems possible, although in their current practices they are not applicable for anything other than local (i.e. town-sized) economies. Detractors argue that the definition of a free market precludes usage of a normative
pricing system, but some anarchists point out that since participation in a labor note network is voluntary, any labor note system is merely another choice in a free market of markets. Other critics argue that labor notes cannot provide price signals, that many of these Time-dollar based currencies are prone to inflation
(since there is no way to ensure that people are not paid more than an hour per hour), and that these ignore factors like value-added work (work that incorporates past labor to perform, such as the time spent by a dentist in school). Other Anarachist Time-dollar based currencies have had exchange rates, based on the job performed. However, another criticism is at large scales workers function at varying skill level, so in a Time-based dollar would reward inefficient workers of efficient one, who produced more in a given unit of time.
. Accounting for such a system would be vastly more complex than current or other theoretical currency systems because all energy output of workers and energy expenditure on goods/services must be tracked (something that is thought impossible and useless by many anarchists).
One group that has advocated a system using energy is the Technocracy movement
with a system based on energy accounting
where energy is used to "buy" a product or service without being exchanged, so the effect is that products or services are distributed to the user without gain by the provider (who has the same amount of energy in his or her account regardless) so allegedly making profit impossible.
and associates, in the United States
on a tract of land approximately 30 miles from Cincinnati, Ohio
. Another example of individual anarchists attempting to put their economic theories into action was the Cincinnati Time Store
, where labor notes
were redeemable for goods.
The anarchist collectives formed during the Spanish Civil War
are the most famous example of an anarchist economy operating on a large scale. The collectives were formed under the influence of the anarcho-syndicalist union
the CNT
in rural and urban areas and successfully practised Workers' self-management
and Collectivist anarchism
for a number of years in extremely difficult economic and political circumstances. Other examples of self-management include the factory committee movement during the Russian Revolution
and the workplace occupations in Argentina
during its crisis at the turn of the 21st century. Attempts at forming co-operatives also appeared during the Paris Commune
of 1871 and the Italian Factory Occupations of 1920.
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
and economic activity within the political philosophy of anarchism
Anarchism
Anarchism is generally defined as the political philosophy which holds the state to be undesirable, unnecessary, and harmful, or alternatively as opposing authority in the conduct of human relations...
.
Early views
The early EnglishEnglish people
The English are a nation and ethnic group native to England, who speak English. The English identity is of early mediaeval origin, when they were known in Old English as the Anglecynn. England is now a country of the United Kingdom, and the majority of English people in England are British Citizens...
anarchist William Godwin
William Godwin
William Godwin was an English journalist, political philosopher and novelist. He is considered one of the first exponents of utilitarianism, and the first modern proponent of anarchism...
´s views on economics could be summarized as follows: "he envisages the possibility of specialization in the various crafts, which would lead to a man's following the task for which he had the greatest aptitude, and distributing his surplus products to whoever may need them, receiving what he himself needs of other things from the surplus produced by his neighbours, but always on the basis of free distribution, not of exchange. It is evident that, despite his speculations on the future of machinery, Godwin's ideal society is based on the economics of handcrafts and cultivation."
For the influential German individualist anarchist philosopher Max Stirner
Max Stirner
Johann Kaspar Schmidt , better known as Max Stirner , was a German philosopher, who ranks as one of the literary fathers of nihilism, existentialism, post-modernism and anarchism, especially of individualist anarchism...
"private property
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
is a spook which "lives by the grace of law" and it "becomes 'mine' only by effect of the law". In other words, private property exists purely "through the protection of the State, through the State's grace." Recognising its need for state protection, Stirner is also aware that "[i]t need not make any difference to the 'good citizens' who protects them and their principles, whether an absolute King or a constitutional one, a republic, if only they are protected. And what is their principle, whose protector they always 'love'? Not that of labour", rather it is "interesting-bearing possession . . . labouring capital, therefore . . . labour certainly, yet little or none at all of one's own, but labour of capital and of the -- subject labourers"."
Pierre Joseph Proudhon was involved with the Lyons
Lyon
Lyon , is a city in east-central France in the Rhône-Alpes region, situated between Paris and Marseille. Lyon is located at from Paris, from Marseille, from Geneva, from Turin, and from Barcelona. The residents of the city are called Lyonnais....
mutualists and later adopted the name to describe his own teachings
Mutualism (economic theory)
Mutualism is an anarchist school of thought that originates in the writings of Pierre-Joseph Proudhon, who envisioned a society where each person might possess a means of production, either individually or collectively, with trade representing equivalent amounts of labor in the free market...
. In What Is Mutualism? Clarence Lee Swartz
Clarence Lee Swartz
Clarence Lee Swartz was an American individualist anarchist.Clarence Lee Swartz' most famous writing is a book entitled What is Mutualism? published in 1927 where he explains the economic system of mutualism. He edited an anarchist journal called Voice of the People and was an assistant editor for...
gives his own account of the origin of the term, claiming that "[t]he word "mutualism" seems to have been first used by John Gray
John Gray (19th century socialist)
John Gray was a British socialist economist.-Life and views:Very little personal information about John Gray is available. He lived mostly in Edinburgh. According to his own account, he was a poor student who dropped out of school early, went to London and took up factory work as a youngster...
, an English writer, in 1832."
The economic discussion in organized mass social anarchism
The anti-authoritarianAnti-authoritarian
Anti-authoritarianism is opposition to authoritarianism, which is defined as a "political doctrine advocating the principle of absolute rule: absolutism, autocracy, despotism, dictatorship, totalitarianism." Anti-authoritarians usually believe in full equality before the law and strong civil...
sections of the First International proclaimed at the St. Imier Congress (1872) that "the aspirations of the proletariat can have no purpose other than the establishment of an absolutely free economic organization and federation, founded upon the labour and equality of all and absolutely independent of all political government," in which each worker will have the "right to the enjoyment of the gross product of his labours and thereby the means of developing his full intellectual, material and moral powers in a collective setting." This revolutionary transformation could "only be the outcome of the spontaneous action of the proletariat itself, its trades bodies and the autonomous communes." A similar position was adopted by the Workers' Federation of the Spanish Region in 1882, as articulated by an anarchist veteran of the First International, Jose Llunas Pujols, in his essay, "Collectivism."
By the early 1880s, most of the European anarchist movement had adopted an anarchist communist position, advocating the abolition of wage labour and distribution according to need. Ironically, the "collectivist" label then became more commonly associated with Marxist state socialists who advocated the retention of some sort of wage
Wage
A wage is a compensation, usually financial, received by workers in exchange for their labor.Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees...
system during the transition to full communism
Communism
Communism is a social, political and economic ideology that aims at the establishment of a classless, moneyless, revolutionary and stateless socialist society structured upon common ownership of the means of production...
. The anarchist communist, Peter Kropotkin
Peter Kropotkin
Prince Pyotr Alexeyevich Kropotkin was a Russian zoologist, evolutionary theorist, philosopher, economist, geographer, author and one of the world's foremost anarcho-communists. Kropotkin advocated a communist society free from central government and based on voluntary associations between...
, attacked this position in his essay, "The Collectivist Wages System", which was reprinted in his book The Conquest of Bread
The Conquest of Bread
The Conquest of Bread is a book by the anarchist communist Peter Kropotkin. Originally written in French, it first appeared as a series of articles in the anarchist journals Le Révolté and La Revolté . It was first published as a book in Paris in 1892 with a preface by Élisée Reclus, who also...
in 1892.
Anarchist communism as a coherent, modern economic-political philosophy was first formulated in the Italian section of the First International by Carlo Cafiero
Carlo Cafiero
Carlo Cafiero was an Italian anarchist and champion of Mikhail Bakunin during the second half of the 19th century.-Early years:...
, Emilio Covelli, Errico Malatesta
Errico Malatesta
Errico Malatesta was an Italian anarcho-communist. He was an insurrectionary anarchist early in his life. He spent much of his life exiled from his homeland of Italy and in total spent more than ten years in prison. He wrote and edited a number of radical newspapers and was also a friend of...
, Andrea Costa
Andrea Costa
Andrea Costa was an Italian socialist activist, born in Imola.He co-founded the Partito dei Lavoratori Italiani in 1892 after renouncing his anarchist principles in 1879. It is probable that this happened due to his marriage to Russian Socialist Anna Kulischov...
and other ex-Mazzinian
Giuseppe Mazzini
Giuseppe Mazzini , nicknamed Soul of Italy, was an Italian politician, journalist and activist for the unification of Italy. His efforts helped bring about the independent and unified Italy in place of the several separate states, many dominated by foreign powers, that existed until the 19th century...
Republicans. Out of respect for Mikhail Bakunin
Mikhail Bakunin
Mikhail Alexandrovich Bakunin was a well-known Russian revolutionary and theorist of collectivist anarchism. He has also often been called the father of anarchist theory in general. Bakunin grew up near Moscow, where he moved to study philosophy and began to read the French Encyclopedists,...
, they did not make their differences with collectivist anarchism
Collectivist anarchism
Collectivist anarchism is a revolutionary doctrine that advocates the abolition of both the state and private ownership of the means of production...
explicit until after Bakunin's death. The collectivist anarchists sought to collectivize ownership of the means of production while retaining payment proportional to the amount and kind of labor of each individual, but the anarcho-communists sought to extend the concept of collective ownership to the products of labor as well. While both groups argued against capitalism
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
, the anarchist communists departed from Proudhon and Bakunin, who maintained that individuals have a right to the product of their individual labor and to be remunerated for their particular contribution to production. But, Malatesta put it: "...instead of running the risk of making a confusion in trying to distinguish what you and I each do, let us all work and put everything in common. In this way each will give to society all that his strength permits until enough is produced for every one; and each will take all that he needs, limiting his needs only in those things of which there is not yet plenty for every one."
Cafiero explains in Anarchy and Communism (1880) that private property in the product of labor will lead to unequal accumulation of capital and, therefore, the reappearance of social class
Social class
Social classes are economic or cultural arrangements of groups in society. Class is an essential object of analysis for sociologists, political scientists, economists, anthropologists and social historians. In the social sciences, social class is often discussed in terms of 'social stratification'...
es and their antagonisms, and thus the resurrection of the state
State (polity)
A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...
: "If we preserve the individual appropriation of the products of labour, we would be forced to preserve money, leaving more or less accumulation of wealth according to more or less merit rather than need of individuals." At the Florence Conference of the Italian Federation of the International in 1876, held in a forest outside Florence
Florence
Florence is the capital city of the Italian region of Tuscany and of the province of Florence. It is the most populous city in Tuscany, with approximately 370,000 inhabitants, expanding to over 1.5 million in the metropolitan area....
due to police
Police
The police is a personification of the state designated to put in practice the enforced law, protect property and reduce civil disorder in civilian matters. Their powers include the legitimized use of force...
activity, they declared the principles of anarcho-communism.
Anarchism economics in practice: the Spanish Revolution
In the strong anarchist movement in SpainAnarchism in Spain
Anarchism has historically gained more support and influence in Spain than anywhere else, especially before Francisco Franco's victory in the Spanish Civil War of 1936–1939....
the debate between collectivism
Collectivist anarchism
Collectivist anarchism is a revolutionary doctrine that advocates the abolition of both the state and private ownership of the means of production...
and anarcho-communism was revived. "This double base, both industrial and rural, had turned the libertarian communism
Libertarian communism
Libertarian communism is a theory of libertarianism which advocates the abolition of the state and private property, and capitalism in favor of common ownership of the means of production, a direct democracy and self-governance....
of Spanish anarcho-syndicalism
Anarcho-syndicalism
Anarcho-syndicalism is a branch of anarchism which focuses on the labour movement. The word syndicalism comes from the French word syndicat which means trade union , from the Latin word syndicus which in turn comes from the Greek word σύνδικος which means caretaker of an issue...
in somewhat divergent directions, the one communalist, the other syndicalist. The communalism was expressed in a more local, more rural spirit, one might almost say: more southern, for one of its principal bastions was in Andalusia
Andalusia
Andalusia is the most populous and the second largest in area of the autonomous communities of Spain. The Andalusian autonomous community is officially recognised as a nationality of Spain. The territory is divided into eight provinces: Huelva, Seville, Cádiz, Córdoba, Málaga, Jaén, Granada and...
. Syndicalism, on the other hand, was more urban and unitarian in spirit - more northerly, too, since its main center was Catalonia
Catalonia
Catalonia is an autonomous community in northeastern Spain, with the official status of a "nationality" of Spain. Catalonia comprises four provinces: Barcelona, Girona, Lleida, and Tarragona. Its capital and largest city is Barcelona. Catalonia covers an area of 32,114 km² and has an...
.
Spanish anarchist theoreticians were somewhat divided on this subject. "Some had given their hearts to Kropotkin
Kropotkin
Peter Kropotkin was a Russian prince and anarchist.Kropotkin may also refer to:*Pyotr Nikolayevich Kropotkin , Soviet/Russian geologist, tectonician, and geophysicist*Mount Kropotkin, a peak in Antarctica...
and his erudite but simplistic idealization of the communes of the Middle Ages
Middle Ages
The Middle Ages is a periodization of European history from the 5th century to the 15th century. The Middle Ages follows the fall of the Western Roman Empire in 476 and precedes the Early Modern Era. It is the middle period of a three-period division of Western history: Classic, Medieval and Modern...
which they identified with the Spanish tradition of the primitive peasant community. Their favorite slogan was the "free commune." Bakunin was the founder of the Spanish collectivist, syndicalist, and internationalist workers' movement. Those anarchists who were more realistic, more concerned with the present than the golden age, tended to follow him and his disciple Ricardo Mella
Ricardo Mella
Ricardo Mella Cea was one of the first writers, intellectuals and anarchist activists of the late nineteenth and early twentieth century in Spain. Was characterized as an erudite in various subjects and versed in languages, mastering French, English and Italian...
. They were concerned with economic unification and believed that a long transitional period would be necessary during which it would be wiser to reward labor according to the hours worked and not according to need. They envisaged the economic structure of the future as a combination of local trade-union groupings and federations of branches of industry.".
In 1932, the Spanish anarchist theoretician Isaac Puente
Isaac Puente
Isaac Puente Amestoy was a Basque physician and Spanish anarchist who adhered to anarcho-naturism, active in the Confederación Nacional del Trabajo...
published an outline of anarcho-communism; its ideas were taken up by the Saragossa congress of the CNT in May 1936. The Spanish anarchist economist Diego Abad de Santillan
Diego Abad de Santillán
Diego Abad de Santillán , born Sinesio Vaudilio García Fernández, was an author, economist and leading figure in the Spanish and Argentine anarchist movements.-Early years:...
published an influential treatise on economics, El Organismo Economico de la Revolucion (The Economic Organization of the Revolution). He saw that "Our ideal is the commune which is associated, federated, integrated into the total economy of the country, and of other countries in a state of revolution." To replace the single owner by a hydra-headed owner is not collectivism, is not self-management. The land, the factories, the mines, the means of transport are the product of the work of all and must be at the service of all. Nowadays the economy is neither local, nor even national, but world-wide. The characteristic feature of modern life is the cohesion of all the productive and distributive forces. "A socialized economy, directed and planned, is an imperative necessity and corresponds to the trend of development of the modern economic world." Santillan was to play an important part in the Spanish Revolution
Spanish Revolution
The Spanish Revolution was a workers' social revolution that began during the outbreak of the Spanish Civil War in 1936 and resulted in the widespread implementation of anarchist and more broadly libertarian socialist organizational principles throughout various portions of the country for two to...
. He became a member of the central committee of the anti-fascist militia , a member of the Catalonian Economic Council, and Economics Minister of the Catalonian government.
Anarchist historian George Woodcock reports that "For several months the armed forces in these regions were mostly anarchist controlled militia units. The factories were largely taken over by the workers and run by C.N.T. committees, while hundreds of villages either shared out or collectivized the land, and many of them attempted to set up libertarian communes of the kind advocated by Kropotkin." "The beginnings of collectivization seem to have been similar in villages and factories. The landlords in the villages had fled, the Civil Guards had been killed or chased away, and the village syndicate would transform itself into a popular assembly in which every villager could participate directly in the affairs of the community. An administrative committee would be elected, but this would operate under the constant supervision of the population, meeting at least once a week in full assembly to hasten the achievement of free communism. In the factories the process was similar, with a workers' committee becoming responsible to the general assembly of the syndicate, and technicians (in a few cases the former owners or managers) planning production in accordance with the workers' views."
Mutualism
Mutualism is an anarchist school of thought which can be traced to the writings of Pierre-Joseph ProudhonPierre-Joseph Proudhon
Pierre-Joseph Proudhon was a French politician, mutualist philosopher and socialist. He was a member of the French Parliament, and he was the first person to call himself an "anarchist". He is considered among the most influential theorists and organisers of anarchism...
, who envisioned a society where each person might possess a means of production
Means of production
Means of production refers to physical, non-human inputs used in production—the factories, machines, and tools used to produce wealth — along with both infrastructural capital and natural capital. This includes the classical factors of production minus financial capital and minus human capital...
, either individually or collectively, with trade representing equivalent amounts of labor in the free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...
. Integral to the scheme was the establishment of a mutual-credit bank which would lend to producers at a minimal interest rate only high enough to cover the costs of administration. Mutualism is based on a labor theory of value
Labor theory of value
The labor theories of value are heterodox economic theories of value which argue that the value of a commodity is related to the labor needed to produce or obtain that commodity. The concept is most often associated with Marxian economics...
which holds that when labor or its product is sold, in exchange, it ought to receive goods or services embodying "the amount of labor necessary to produce an article of exactly similar and equal utility".
Some mutualists believe that if the state did not intervene, as a result of increased competition in the marketplace, individuals would receive no more income than that in proportion to the amount of labor they exert. Mutualists oppose the idea of individuals receiving an income through loans, investments, and rent, as they believe these individuals are not laboring. Some of them argue that if state intervention ceased, these types of incomes would disappear due to increased competition in capital. Though Proudhon opposed this type of income, he expressed: "... I never meant to ... forbid or suppress, by sovereign decree, ground rent and interest on capital. I believe that all these forms of human activity should remain free and optional for all."
Insofar as they ensure the workers right to the full product of their labor, mutualists support market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
s and private property
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
in the product of labor. However, they argue for conditional titles to land, whose private ownership is legitimate only so long as it remains in use or occupation (which Proudhon called "possession.") Proudhon's Mutualism supports labor-owned cooperative firms
Worker cooperative
A worker cooperative is a cooperative owned and democratically managed by its worker-owners. This control may be exercised in a number of ways. A cooperative enterprise may mean a firm where every worker-owner participates in decision making in a democratic fashion, or it may refer to one in which...
and associations for "we need not hesitate, for we have no choice. . . it is necessary to form an ASSOCIATION among workers . . . because without that, they would remain related as subordinates and superiors, and there would ensue two . . . castes of masters and wage-workers, which is repugnant to a free and democratic society" and so "it becomes necessary for the workers to form themselves into democratic
societies, with equal conditions for all members, on pain of a relapse
into feudalism." As for capital goods (man-made, non-land, "means of production
Means of production
Means of production refers to physical, non-human inputs used in production—the factories, machines, and tools used to produce wealth — along with both infrastructural capital and natural capital. This includes the classical factors of production minus financial capital and minus human capital...
"), mutualist opinion differs on whether these should be commonly managed public assets or private property.
Collectivist anarchism
Collectivist anarchism (also known as anarcho-collectivism) is a revolutionary doctrine that advocates the abolition of the stateState (polity)
A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...
and private ownership
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
of the means of production
Means of production
Means of production refers to physical, non-human inputs used in production—the factories, machines, and tools used to produce wealth — along with both infrastructural capital and natural capital. This includes the classical factors of production minus financial capital and minus human capital...
. Instead, it envisions the means of production being owned collectively and controlled and managed by the producers themselves.
For the collectivization of the means of production, it was originally envisaged that workers will revolt and forcibly collectivize the means of production. Once collectivization takes place, workers' salaries would be determined in democratic organizations based on the amount of time they contributed to production. These salaries would be used to purchase goods in a communal market. This contrasts with anarcho-communism where wages would be abolished, and where individuals would take freely from a storehouse of goods "to each according to his need." Thus, Bakunin's "Collectivist Anarchism," notwithstanding the title, is seen as a blend of individualism
Individualism
Individualism is the moral stance, political philosophy, ideology, or social outlook that stresses "the moral worth of the individual". Individualists promote the exercise of one's goals and desires and so value independence and self-reliance while opposing most external interference upon one's own...
and collectivism
Collectivism
Collectivism is any philosophic, political, economic, mystical or social outlook that emphasizes the interdependence of every human in some collective group and the priority of group goals over individual goals. Collectivists usually focus on community, society, or nation...
.
Collectivist anarchism is most commonly associated with Mikhail Bakunin
Mikhail Bakunin
Mikhail Alexandrovich Bakunin was a well-known Russian revolutionary and theorist of collectivist anarchism. He has also often been called the father of anarchist theory in general. Bakunin grew up near Moscow, where he moved to study philosophy and began to read the French Encyclopedists,...
, the anti-authoritarian
Anti-authoritarian
Anti-authoritarianism is opposition to authoritarianism, which is defined as a "political doctrine advocating the principle of absolute rule: absolutism, autocracy, despotism, dictatorship, totalitarianism." Anti-authoritarians usually believe in full equality before the law and strong civil...
sections of the First International, and the early Spanish anarchist movement
Anarchism in Spain
Anarchism has historically gained more support and influence in Spain than anywhere else, especially before Francisco Franco's victory in the Spanish Civil War of 1936–1939....
.
The difference between Collectivist Anarchism and Anarcho-Communism is that collectivist anarchism stresses collective ownership of productive, subsistence and distributary property, while communist anarchism negates the concept of ownership in favor of usage or possession with productive means being a possession not owned by any individual or particular group. Communist Anarchists believe that subsistence, productive and distributive property should be common or social possessions while personal property should be private possessions.
Collectivist anarchists agree with this, but disagree on the subject of remuneration; some collectivist anarchists, such as Mikhail Bakunin, believe in the remuneration of labor, while communist-anarchists, such as Peter Kropotkin
Peter Kropotkin
Prince Pyotr Alexeyevich Kropotkin was a Russian zoologist, evolutionary theorist, philosopher, economist, geographer, author and one of the world's foremost anarcho-communists. Kropotkin advocated a communist society free from central government and based on voluntary associations between...
, believe that such remuneration would lead to the recreation of currency and that this would need a State. Thus, it could be said that collectivist anarchists believe in freedom through collective ownership of production and a communal market of sorts to distribute goods and services and compensate workers in the form of remuneration. Thus, collectivist anarchism could be seen as a combination of communism and mutualism.
Anarchist communism
Anarchist communism is a theory of anarchismAnarchism
Anarchism is generally defined as the political philosophy which holds the state to be undesirable, unnecessary, and harmful, or alternatively as opposing authority in the conduct of human relations...
which advocates the abolition of the state
State (polity)
A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...
, private property
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
, and capitalism
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
in favor of common ownership
Common ownership
Common ownership is a principle according to which the assets of an enterprise or other organization are held indivisibly rather than in the names of the individual members or by a public institution such as a governmental body. It is therefore in contrast to public ownership...
of the means of production
Means of production
Means of production refers to physical, non-human inputs used in production—the factories, machines, and tools used to produce wealth — along with both infrastructural capital and natural capital. This includes the classical factors of production minus financial capital and minus human capital...
, direct democracy
Direct democracy
Direct democracy is a form of government in which people vote on policy initiatives directly, as opposed to a representative democracy in which people vote for representatives who then vote on policy initiatives. Direct democracy is classically termed "pure democracy"...
and a horizontal network of voluntary association
Voluntary association
A voluntary association or union is a group of individuals who enter into an agreement as volunteers to form a body to accomplish a purpose.Strictly speaking, in many jurisdictions no formalities are necessary to start an association...
s and workers' council
Workers' council
A workers' council, or revolutionary councils, is the phenomenon where a single place of work or enterprise, such as a factory, school, or farm, is controlled collectively by the workers of that workplace, through the core principle of temporary and instantly revocable delegates.In a system with...
s with production and consumption based on the guiding principle: "from each according to ability, to each according to need".
Labor theory of value
The labor theories of value are heterodox economic theories of value which argue that the value of a commodity is related to the labor needed to produce or obtain that commodity. The concept is most often associated with Marxian economics...
, because all wealth is a collective product of current and preceding generations. As Kropotkin put it: "No distinction can be drawn between the work of each man. Measuring the work by its results leads us to absurdity; dividing and measuring them by hours spent on the work also leads us to absurdity. One thing remains: put the needs above the works, and first of all recognize the right to live, and later on, to the comforts of life, for all those who take their share in production.."
Anarchist communists argue that any economic system based on wage labor and private property requires a coercive state apparatus to enforce property rights and to maintain unequal economic relationships that inevitably arise from differences in wages or amount of property. They further argue that market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
s and systems of currency divide labor into classes and assign arbitrary numerical values to an individual's work and attempt to regulate production, consumption and distribution. They argue that money restricts an individual's ability to consume the products of their labor by limiting their intake with prices and wages.
Some forms of anarchist communism are egoist
Egoist anarchism
Egoist anarchism is a school of anarchist thought that originated in the philosophy of Max Stirner, a nineteenth century Hegelian philosopher whose "name appears with familiar regularity in historically orientated surveys of anarchist thought as one of the earliest and best-known exponents of...
and strongly influenced by radical individualism
Individualism
Individualism is the moral stance, political philosophy, ideology, or social outlook that stresses "the moral worth of the individual". Individualists promote the exercise of one's goals and desires and so value independence and self-reliance while opposing most external interference upon one's own...
, believing that anarchist communism does not require a communitarian nature at all. But most other forms of anarchist communism are communal and see human beings as social vessels that contribute to a greater collective whole (which is what most communists in general, including Marxist-Leninists, purport to believe; most anarchist communists and left communists counter that the Marxist-Leninist view is insincere and in actuality is authoritarian).
Anarcho-capitalism
Separation of economics and state is the goal of anarcho-capitalistsAnarcho-capitalism
Anarcho-capitalism is a libertarian and individualist anarchist political philosophy that advocates the elimination of the state in favour of individual sovereignty in a free market...
. They want an economy free from any coercive regulation or control. Anarcho-capitalists generally see the State as the cause of all monopoly. Anarcho-capitalists reject the labor theory of value as flawed and archaic. Thus, like most modern economists, they do not believe that there is any proper price for labor or goods other than the one found at the balance point where what the buyer is willing to pay is equal to what the seller is willing to accept.
At the same time anarcho-capitalists or market anarchists do not support what is considered by many to be capitalism today. They argue that privileges, bailouts, and subsidies have a negative effect on human quality of life. Anarcho-capitalists make a distinction between a free-market or laissez-faire capitalism and a neo-mercantilist or statist capitalism. As Rothbard once wrote, "The difference between free-market capitalism and state capitalism
State capitalism
The term State capitalism has various meanings, but is usually described as commercial economic activity undertaken by the state with management of the productive forces in a capitalist manner, even if the state is nominally socialist. State capitalism is usually characterized by the dominance or...
is precisely the difference between, on the one hand, peaceful, voluntary exchange, and on the other, violent expropriation." Rothbard goes on to write that he is "very optimistic about the future of free-market capitalism. I'm not optimistic about the future of state capitalism—or rather, I am optimistic, because I think it will eventually come to an end."
Participatory Economics
Participatory economics, often abbreviated parecon, is an economic systemEconomic system
An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...
proposed by activist and political theorist Michael Albert
Michael Albert
Michael Albert is an American activist, economist, speaker, and writer. He is co-editor of ZNet, and co-editor and co-founder of Z Magazine. He also co-founded South End Press and has written numerous books and articles...
and radical economist Robin Hahnel
Robin Hahnel
Robin Hahnel is a Professor of Economics at Portland State University. He is best known for his work on participatory economics with Z Magazine editor Michael Albert. He is currently a visiting professor at Lewis & Clark College....
. It uses participatory decision making
Participation (decision making)
Participation in social science refers to different mechanisms for the public to express opinions - and ideally exert influence - regarding political, economic, management or other social decisions. Participatory decision making can take place along any realm of human social activity, including...
as an economic mechanism
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
to guide the production, consumption
Consumption (economics)
Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined in part by comparison to production. But the precise definition can vary because different schools of economists define production quite differently...
and allocation of resources
Factors of production
In economics, factors of production means inputs and finished goods means output. Input determines the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called a production function...
in a given society. Proposed as an alternative to contemporary capitalist
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
market economies
Market economy
A market economy is an economy in which the prices of goods and services are determined in a free price system. This is often contrasted with a state-directed or planned economy. Market economies can range from hypothetically pure laissez-faire variants to an assortment of real-world mixed...
and also an alternative to centrally planned
Planned economy
A planned economy is an economic system in which decisions regarding production and investment are embodied in a plan formulated by a central authority, usually by a government agency...
socialism
Socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
, it is described as "an anarchistic economic vision", and it could be considered a form of socialism as under parecon, the means of production are owned by the workers.
The underlying values that parecon seeks to implement are equity
Equity (economics)
Equity is the concept or idea of fairness in economics, particularly as to taxation or welfare economics. More specifically it may refer to equal life chances regardless of identity, to provide all citizens with a basic minimum of income/goods/services or to increase funds and commitment for...
, solidarity, diversity, workers' self-management
Workers' self-management
Worker self-management is a form of workplace decision-making in which the workers themselves agree on choices instead of an owner or traditional supervisor telling workers what to do, how to do it and where to do it...
and efficiency. (Efficiency here means accomplishing goals without wasting valued assets.) It proposes to attain these ends mainly through the following principles and institutions:
- workers'Workers' councilA workers' council, or revolutionary councils, is the phenomenon where a single place of work or enterprise, such as a factory, school, or farm, is controlled collectively by the workers of that workplace, through the core principle of temporary and instantly revocable delegates.In a system with...
and consumers' councils utilizing self-managerial methods for decision making, - balanced job complexBalanced job complexA balanced job complex is a way of organizing a workplace or group that is both directly democratic and also creates relative equal empowerment among all people involved....
es, - remunerationRemunerationRemuneration is the total compensation that an employee receives in exchange for the service they perform for their employer. Typically, this consists of monetary rewards, also referred to as wage or salary...
according to effort and sacrifice, and - Participatory Planning.
Albert and Hahnel stress that parecon is only meant to address an alternative economic theory and must be accompanied by equally important alternative visions in the fields of politics
Politics
Politics is a process by which groups of people make collective decisions. The term is generally applied to the art or science of running governmental or state affairs, including behavior within civil governments, but also applies to institutions, fields, and special interest groups such as the...
, culture
Culture
Culture is a term that has many different inter-related meanings. For example, in 1952, Alfred Kroeber and Clyde Kluckhohn compiled a list of 164 definitions of "culture" in Culture: A Critical Review of Concepts and Definitions...
and kinship
Kinship
Kinship is a relationship between any entities that share a genealogical origin, through either biological, cultural, or historical descent. And descent groups, lineages, etc. are treated in their own subsections....
. The authors have also discussed elements of anarchism
Anarchism
Anarchism is generally defined as the political philosophy which holds the state to be undesirable, unnecessary, and harmful, or alternatively as opposing authority in the conduct of human relations...
in the field of politics, polyculturalism
Polyculturalism
"Polyculturalism" is a term for an assertion that all of the world's cultures are inter-related. It is thus opposed to the concept of multiculturalism, which its supporters argue is divisive. Polyculturalism was the subject of the 2001 book Everybody Was Kung Fu Fighting: Afro-Asian Connections and...
in the field of culture, and feminism
Feminism
Feminism is a collection of movements aimed at defining, establishing, and defending equal political, economic, and social rights and equal opportunities for women. Its concepts overlap with those of women's rights...
in the field of family and gender relations as being possible foundations for future alternative visions in these other spheres of society. Stephen R. Shalom has begun work on a participatory political vision he calls "parpolity
Participatory politics
Participatory politics or parpolity is a theoretical political system proposed by Stephen R. Shalom, professor of political science at William Paterson University in New Jersey....
".
Economic Democracy
According to the ID project, economic democracy is the authority of demos (community) in the economic sphere — which requires equal distribution of economic power. As with the case of direct democracy, economic democracy today is only feasible at the level of the confederated demoi. It involves the ownership and control of the means of production by the demos
Demos
Demos may refer to:* Demos, a rhetorical term for the population of an ancient Greek state** Deme or Demoi, the term for an ancient subdivision of Attica, Greece...
. This is radically different from the two main forms of concentration of economic power : capitalist and 'socialist' growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
economy. It is also different from the various types of collectivist capitalism, such as workers' control
Workers' control
Workers' control is a term meaning participation in the management of factories and other commercial enterprises by the people who work there. It has been variously advocated by anarchists, socialists, Communists, Social Democrats and Christian Democrats, and has been combined with various...
and milder versions suggested by post-Keynesian social democrats. The demos
Demos
Demos may refer to:* Demos, a rhetorical term for the population of an ancient Greek state** Deme or Demoi, the term for an ancient subdivision of Attica, Greece...
, therefore, becomes the authentic unit of economic life.
The main characteristic of the proposed model, which also differentiates it from socialist planning models like Parecon, is that it explicitly presupposes a stateless, money-less and market-less economy that precludes private accumulation of wealth and the institutionalisation of privileges for some sections of society, without relying on a mythical post-scarcity state of abundance, or sacrificing freedom of choice. The proposed system aims at satisfying the double aim of:
(a) meeting the basic needs of all citizens—which requires that basic macro-economic decisions have to be made democratically, and
(b) securing freedom of choice—which requires the individual to make important decisions affecting his/her own life (what work to do, what to consume etc.).
Therefore, the system consists of two basic elements: (1) democratic planning, which involves a feedback process between workplace assemblies, demotic assemblies and the confederal assembly, and (2) an artificial market using personal vouchers, which ensures freedom of choice
Choice
Choice consists of the mental process of judging the merits of multiple options and selecting one of them. While a choice can be made between imagined options , often a choice is made between real options, and followed by the corresponding action...
but avoids the adverse effects of real markets. Although some have called this system "a form of money based on the labour theory of value", it is not a money model since vouchers cannot be used as a general medium of exchange and store of wealth.
Another distinguishing feature of ID is its distinction between basic and non-basic needs. Remuneration is according to need for basic needs, and according to effort for non-basic needs. ID is based on the principle that meeting basic needs is a fundamental human right which is guaranteed to all who are in a physical condition to offer a minimal amount of work. By contrast, Parecon guarantees that basic needs are satisfied only to the extent they are characterized public goods or are covered by compassion and by a guaranteed basic income for the unemployed and those who cannot work
Workers issues and anarcho-syndicalism
Anarcho-syndicalismAnarcho-syndicalism
Anarcho-syndicalism is a branch of anarchism which focuses on the labour movement. The word syndicalism comes from the French word syndicat which means trade union , from the Latin word syndicus which in turn comes from the Greek word σύνδικος which means caretaker of an issue...
is a branch of anarchism
Anarchism
Anarchism is generally defined as the political philosophy which holds the state to be undesirable, unnecessary, and harmful, or alternatively as opposing authority in the conduct of human relations...
which focuses on the labour movement
Labor rights
Labor rights or workers' rights are a group of legal rights and claimed human rights having to do with labor relations between workers and their employers, usually obtained under labor and employment law. In general, these rights' debates have to do with negotiating workers' pay, benefits, and safe...
. Syndicalisme is a French word, ultimately derived from the Greek, meaning "trade unionism" – hence, the "syndicalism
Syndicalism
Syndicalism is a type of economic system proposed as a replacement for capitalism and an alternative to state socialism, which uses federations of collectivised trade unions or industrial unions...
" qualification. Syndicalism is an alternative co-operative economic system
Co-operative economics
Co-operative economics is a field of economics, socialist economics, co-operative studies, and political economy, which is concerned with co-operatives.-History:...
. Adherents view it as a potential force for revolutionary social change, replacing capitalism
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
and the state
State (polity)
A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...
with a new society democratically self-managed by workers.
Anarcho-syndicalists seek to abolish the wage system, regarding it as "wage slavery
Wage slavery
Wage slavery refers to a situation where a person's livelihood depends on wages, especially when the dependence is total and immediate. It is a negatively connoted term used to draw an analogy between slavery and wage labor, and to highlight similarities between owning and employing a person...
", and state or private ownership of the means of production
Means of production
Means of production refers to physical, non-human inputs used in production—the factories, machines, and tools used to produce wealth — along with both infrastructural capital and natural capital. This includes the classical factors of production minus financial capital and minus human capital...
, which they believe lead to class divisions. Not all seek to abolish money per se. Ralph Chaplin
Ralph Chaplin
Ralph Hosea Chaplin was an American writer, artist and labor activist. At the age of seven, he saw a worker shot dead during the Pullman strike in Chicago, Illinois. He had moved with his family from Ames, Kansas to Chicago in 1893...
states that "the ultimate aim of the General Strike as regards wages is to give to each producer the full product of his labor. The demand for better wages becomes revolutionary only when it is coupled with the demand that the exploitation of labor must cease."
Additionally, anarcho-syndicalists regard the state as a profoundly anti-worker institution. They view the primary purpose of the State as being the defence of private property
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
and therefore of economic, social and political privilege, even when such defence denies its citizens the ability to enjoy material independence and the social autonomy which springs from it. In contrast to other bodies of thought (Marxism-Leninism
Marxism-Leninism
Marxism–Leninism is a communist ideology, officially based upon the theories of Marxism and Vladimir Lenin, that promotes the development and creation of a international communist society through the leadership of a vanguard party over a revolutionary socialist state that represents a dictatorship...
being a prime example), anarcho-syndicalists deny that there can be any kind of workers' state, or a state which acts in the interests of workers, as opposed to those of the rich and powerful. Reflecting the anarchist philosophy from which it draws its primary inspiration, anarcho-syndicalism holds to the idea that power corrupts.
Although anarcho-syndicalism originated close to the beginning of the twentieth century, it remains a popular and active school of anarchism today and has many supporters as well as many currently active organizations. Anarcho-syndicalist trade unionists, being socialist anarchists, vary in their points of view on anarchist economic arrangements from a collectivist anarchism
Collectivist anarchism
Collectivist anarchism is a revolutionary doctrine that advocates the abolition of both the state and private ownership of the means of production...
type economic system to an anarcho-communist economic system.
Technological LTV networks
A revision of LTVLabor theory of value
The labor theories of value are heterodox economic theories of value which argue that the value of a commodity is related to the labor needed to produce or obtain that commodity. The concept is most often associated with Marxian economics...
that incorporates information technology
Information technology
Information technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications...
, cryptography
Cryptography
Cryptography is the practice and study of techniques for secure communication in the presence of third parties...
, and open-source software
Open-source software
Open-source software is computer software that is available in source code form: the source code and certain other rights normally reserved for copyright holders are provided under a software license that permits users to study, change, improve and at times also to distribute the software.Open...
to create a medium of exchange that precludes all forms of usury and thus requires no oversight or ideological guidance. In contrast to Parecon, there is no planned economy
Planned economy
A planned economy is an economic system in which decisions regarding production and investment are embodied in a plan formulated by a central authority, usually by a government agency...
because users of the system will approve of labor that they feel is necessary and so production happens as people fill the labor market as they will.
Crucial to this system is the premise that money (credit for work done) can be improved with the addition of identity, information
Information
Information in its most restricted technical sense is a message or collection of messages that consists of an ordered sequence of symbols, or it is the meaning that can be interpreted from such a message or collection of messages. Information can be recorded or transmitted. It can be recorded as...
, and transparency
Transparency (humanities)
Transparency, as used in science, engineering, business, the humanities and in a social context more generally, implies openness, communication, and accountability. Transparency is operating in such a way that it is easy for others to see what actions are performed...
, i.e. all credits created are associated with a particular individual (they are non-transferable), they inform users of the work done to create it, and can be viewed by any user on the system.
There are no specifications for how decisions are made within these Technological LTV Systems - each one is tasked to create its own ruleset. Joining such a network would be akin to signing a contract or EULA so revision of rulesets would resemble the open-source paradigm of updating software and having the user agree to a new ruleset. Decision making would then be implicit in any user's ability to participate in the revision of the system software, even though this approach could be elitist.
Prices on goods and services would be evaluated by the amount of credit earned by laborers involved—requiring that every individual item or service be tracked. Production then represents a mirror of the credit creation, so physical items would require their "negative" credit to be cancelled by a person wishing to own it. Since income distribution would be relatively flat in this system, it is hoped that most of the problems of capitalist accumulation and class structure will be avoided.
Value theory
Pierre Joseph Proudhon´s mutualismMutualism (economic theory)
Mutualism is an anarchist school of thought that originates in the writings of Pierre-Joseph Proudhon, who envisioned a society where each person might possess a means of production, either individually or collectively, with trade representing equivalent amounts of labor in the free market...
and american individualist anarchists such as Josiah Warren
Josiah Warren
Josiah Warren was an individualist anarchist, inventor, musician, and author in the United States. He is widely regarded as the first American anarchist, and the four-page weekly paper he edited during 1833, The Peaceful Revolutionist, was the first anarchist periodical published, an enterprise...
, Lysander Spooner
Lysander Spooner
Lysander Spooner was an American individualist anarchist, political philosopher, Deist, abolitionist, supporter of the labor movement, legal theorist, and entrepreneur of the nineteenth century. He is also known for competing with the U.S...
and Benjamin Tucker
Benjamin Tucker
Benjamin Ricketson Tucker was a proponent of American individualist anarchism in the 19th century, and editor and publisher of the individualist anarchist periodical Liberty.-Summary:Tucker says that he became an anarchist at the age of 18...
adopted the liberal
Liberalism
Liberalism is the belief in the importance of liberty and equal rights. Liberals espouse a wide array of views depending on their understanding of these principles, but generally, liberals support ideas such as constitutionalism, liberal democracy, free and fair elections, human rights,...
Labor Theory of Value
Labor theory of value
The labor theories of value are heterodox economic theories of value which argue that the value of a commodity is related to the labor needed to produce or obtain that commodity. The concept is most often associated with Marxian economics...
of classical economics
Classical economics
Classical economics is widely regarded as the first modern school of economic thought. Its major developers include Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Malthus and John Stuart Mill....
but used it to criticize capitalism instead favoring a non-capitalist market system.
Egoist anarchist Max Stirner
Max Stirner
Johann Kaspar Schmidt , better known as Max Stirner , was a German philosopher, who ranks as one of the literary fathers of nihilism, existentialism, post-modernism and anarchism, especially of individualist anarchism...
did not adhere to anything close to the labor theory of value and affirmed that the only real base for possession is might over it
Collectivist anarchism
Collectivist anarchism
Collectivist anarchism is a revolutionary doctrine that advocates the abolition of both the state and private ownership of the means of production...
as defended by Mikhail Bakunin
Mikhail Bakunin
Mikhail Alexandrovich Bakunin was a well-known Russian revolutionary and theorist of collectivist anarchism. He has also often been called the father of anarchist theory in general. Bakunin grew up near Moscow, where he moved to study philosophy and began to read the French Encyclopedists,...
defended a form of labor theory of value when it advocated a system where "all necessaries for production are owned in common by the labour groups and the free communes...based on the distribution of goods according to the labour contributed".
Anarcho-communism as defended by Peter Kropotkin
Peter Kropotkin
Prince Pyotr Alexeyevich Kropotkin was a Russian zoologist, evolutionary theorist, philosopher, economist, geographer, author and one of the world's foremost anarcho-communists. Kropotkin advocated a communist society free from central government and based on voluntary associations between...
and Errico Malatesta
Errico Malatesta
Errico Malatesta was an Italian anarcho-communist. He was an insurrectionary anarchist early in his life. He spent much of his life exiled from his homeland of Italy and in total spent more than ten years in prison. He wrote and edited a number of radical newspapers and was also a friend of...
rejected the labor theory of value and exchange value iself, advocated a gift economy
Gift economy
In the social sciences, a gift economy is a society where valuable goods and services are regularly given without any explicit agreement for immediate or future rewards . Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community...
and to base distribution on need.
Panarchist synthesis
This is the theory that all alternative economic systems could exist simultaneously. Though it may imply accepting a greater complexity of day-to-day living, anarchists predicate this overlapping of systems on the removal of states and corporations, and the presence of multiple currency paradigms. In effect, this would be analogous, on an individual level, to having various subscriptions or club memberships—a level of complexity surpassed by the average American middle-class consumer that holds several credit cards with various debts, owes mortgage and car payments, and so forth.The motive to adopt a panarchist approach to economics is the theory that not all goods, services, or resources are best exchanged/regulated within a single system, i.e. energy production is best tracked in kilowatt-hours, but collectible items have highly subjective values and therefore require a different exchange medium. Even Parecon could be incorporated in this approach.
Economics as anarchist strategy
Some anti-capitalist anarchists believe that it is not radical political activity that will transform society, but radical economic activity that will make true change. They regard boycottBoycott
A boycott is an act of voluntarily abstaining from using, buying, or dealing with a person, organization, or country as an expression of protest, usually for political reasons...
s, consumer advocacy, and class-action lawsuits to be merely liberal actions that do not address the core problem which is capitalism itself.
Some anarchists believe that changing the nature of work
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...
itself is the crux of defeating capitalism. Participatory economics addresses the division of labor question by advocating balanced job complexes wherein all workers at a production facility share in all aspects of labor, i.e. everyone takes part in labor, management, maintenance, and all related work to ensure equality and that skills are shared amongst workers.
Some anarchists (sometimes denoted by the pejorative term "lifestyle anarchists
Lifestyle anarchism
Lifestyle anarchism is a term derived from Murray Bookchin's polemical essay "Social Anarchism or Lifestyle Anarchism: An Unbridgeable Chasm." He used it to criticize those anarchists who dress the look or live in certain ways, but who don't really act on the basic tenets of anarchism at the...
") believe that changing personal consumption habits to minimize (or eliminate entirely) involvement in the prevailing capitalist economy is essential to practicing anarchism in their lives. Withdrawing from the system by living on scavenged, stolen, or scammed resources is often touted by individuals and groups influenced by the Situationists, such as CrimethInc.
CrimethInc.
CrimethInc., also known as CWC , is a decentralized anarchist collective of autonomous cells. CrimethInc. emerged in the mid-1990s, initially as the hardcore zine Inside Front, and began operating as a collective in 1996...
, as a viable means of survival and non-participation in the system. Some anarchists such as agorists
Agorism
Agorism is a political philosophy founded by Samuel Edward Konkin III and developed with contributions by J. Neil Schulman that holds as its ultimate goal bringing about a society in which all "relations between people are voluntary exchanges – a free market." The term comes from the Greek...
support counter-economics
Counter-economics
Counter-economics is a term originally used by Samuel Edward Konkin III and J. Neil Schulman, libertarian activists and theorists. Konkin defined it as "the study and/or practice of all peaceful human action which is forbidden by the State." The term is short for "counter-establishment economics"...
, that is, participating in the "black" illegal market to undermine monopolies
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
and the state. The goal of agorists is not simply to opt-out of capitalism/the system, but by developing alternative voluntary solutions to engineer the statist economy's collapse.
Alternate currency
Many anarchists advocate the abolition of money, others call for its replacement with new currency systems, and others, such as Benjamin TuckerBenjamin Tucker
Benjamin Ricketson Tucker was a proponent of American individualist anarchism in the 19th century, and editor and publisher of the individualist anarchist periodical Liberty.-Summary:Tucker says that he became an anarchist at the age of 18...
and Murray Rothbard, simply want the end of the government money monopoly and the repeal of legal tender
Legal tender
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency is a common form of legal tender in many countries....
laws, i.e. they want competition between private banks and currencies. Use of alternative currencies
Alternative currency
Alternative currency is a term that refers to any currency used as an alternative to the dominant national or multinational currency systems...
is growing, largely due to digital currencies offered on the internet, and availability of software to manage mutual credit
Mutual credit
Mutual credit is a type of alternative currency in which the currency used in a transaction can be created at the time of the transaction. LETS are mutual credit systems.Typically this involves keeping track of each individual's credit or debit balance...
schemes like Local Exchange Trading Systems. Since states cannot collect taxes and revenue through use of alternative currencies they will theoretically lose power to the point of collapse. Some of these alternative currencies are designed to prevent usury
Usury
Usury Originally, when the charging of interest was still banned by Christian churches, usury simply meant the charging of interest at any rate . In countries where the charging of interest became acceptable, the term came to be used for interest above the rate allowed by law...
, others are designed simply as alternatives to state-issued fiat money, as a hedge against inflation—for example, the Liberty Dollar
Liberty Dollar
The Liberty Dollar was a private currency produced in the United States. The currency was issued in minted metal rounds similar to coins, gold and silver certificates and electronic currency . ALD certificates are "warehouse receipts" for real gold and silver owned by the bearer, ALD certificate...
. Thus alternative currencies range from labor-time notes to specie-backed warehouse receipt
Warehouse receipt
A warehouse receipt is a document that provides proof of ownership of commodities that are stored in a warehouse, vault, or depository for safekeeping....
s. Three popular alternative currencies are: community currency, local currency
Local currency
In economics, a local currency, in its common usage, is a currency not backed by a national government , and intended to trade only in a small area. As a tool of fiscal localism, local moneys can raise awareness of the state of the local economy, especially among those who may be unfamiliar or...
, and time-based currency
Time-based currency
In economics, a time-based currency is an alternative currency where the unit of exchange is the man-hour.Some time-based currencies value everyone’s contributions equally. One hour equals one service credit...
.
Free banking
Before any form of enterprise, whether a conventional business or an autonomous workers' collective, can produce goods or services, it must obtain items such as premises, tools and raw materials. This involves an up-front cost which is incurred before the enterprise starts. Under capitalism, this up-front cost is traditionally met by investing capital with the aim of making a profit. Communists, are opposed to investing capital for profit because of the exploitation of workers it entails, so another mechanism must be found to cover the up-front costs. "Free banking" is one possible mechanism. A new autonomous workers' organisation borrows the up-front cost from supporters or existing organisations. This can be by means of a loan in conventional or alternative currency, by borrowing the items needed such as tools, or a combination of the two. In time, this loan is either repaid to the lender, or lent on to another new organisation creating a revolving loan fundRevolving Loan Fund
A Revolving Loan Fund is a source of money from which loans are made for multiple small business development projects. Revolving loan funds share many characteristics with microcredit, micro-enterprise, and village banking, namely providing loans to persons or groups of people that do not qualify...
.
In this context, the word "free" indicates that the borrowing organisation is free of takeover threats from the provider of capital which form part of the traditional capitalist model. The loan may be interest free (similar to the Scandinavian JAK members bank
JAK members bank
The JAK Members Bank, or JAK Medlemsbank, is a cooperative, member-owned financial institution based in Skövde, Sweden. JAK is an acronym for Jord Arbete Kapital in Swedish or Land Labour Capital....
model of agricultural finance) or a limited rate of interest may be charged. There may also be other charges e.g. to cover administration costs or to cover against bad debts.
Small-scale practical examples of anarchist free banking initiatives exist in various countries, but banking laws make it hard for them to operate. The Credit Union
Credit union
A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...
uses collective member funds to loan at a small operational cost. In most countries bank regulation
Bank regulation
Bank regulations are a form of government regulation which subject banks to certain requirements, restrictions and guidelines. This regulatory structure creates transparency between banking institutions and the individuals and corporations with whom they conduct business, among other things...
prohibits organisations from describing themselves as banks unless they are legally registered as such, and a collectively run organisation would not meet corporate governance
Corporate governance
Corporate governance is a number of processes, customs, policies, laws, and institutions which have impact on the way a company is controlled...
standards in banking law. Nevertheless, such initiatives sometimes show a much lower bad debt rate than conventional banks, because they are based on solidarity, and failing to repay a loan from a free banking initiative may be seen as culturally equivalent to stealing from friends. The reverse can however also be true, as a trust-based system is open to abuses of that trust. To safeguard completely against such risks would involve a level of cultural vetting more intrusive than anything traditionally done by credit rating
Credit rating
A credit rating evaluates the credit worthiness of an issuer of specific types of debt, specifically, debt issued by a business enterprise such as a corporation or a government. It is an evaluation made by a credit rating agency of the debt issuers likelihood of default. Credit ratings are...
agencies.
The term "free banking" should not be confused with the UK banking concept of free personal banking, which means a current account with no account charges for standard services so long as the account is kept in credit.
Gift economy
Gift economiesGift economy
In the social sciences, a gift economy is a society where valuable goods and services are regularly given without any explicit agreement for immediate or future rewards . Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community...
are those based on free distribution of goods and services. Anarcho-communists are the main proponents of such. In the social sciences, a gift economy (or gift culture) is a society where valuable goods and services
Goods and services
In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility. It is often used when referring to a Goods and Services Tax....
are regularly given without any explicit agreement for immediate or future rewards (i.e. no formal quid pro quo
Quid pro quo
Quid pro quo most often means a more-or-less equal exchange or substitution of goods or services. English speakers often use the term to mean "a favour for a favour" and the phrases with almost identical meaning include: "give and take", "tit for tat", "this for that", and "you scratch my back,...
exists). Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community. The organization of a gift economy stands in contrast to a barter economy or a market economy
Market economy
A market economy is an economy in which the prices of goods and services are determined in a free price system. This is often contrasted with a state-directed or planned economy. Market economies can range from hypothetically pure laissez-faire variants to an assortment of real-world mixed...
. Informal custom governs exchanges, rather than an explicit exchange of goods or services for money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
or some other commodity
Commodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
.
Anarcho-primitivists
Anarcho-primitivism
Anarcho-primitivism is an anarchist critique of the origins and progress of civilization. According to anarcho-primitivism, the shift from hunter-gatherer to agricultural subsistence gave rise to social stratification, coercion, and alienation...
also advocate this kind of economy (although they believe that it is not possible with current modes of production and thus advocate a return to pre-industrial and often pre-agricultural modes of production).
Peer-to-Peer (P2P)
While many anarcho-communists are opposed to trade, some post-left, post-scarcity anarcho-communists, and ones with syndicalist sympathies are not opposed to trade. Some support a non-monetary form of trade in the form of post-monetary trade unions and commons. Others such as Tiziana Terranova easily see anarcho-communism being compatible with a non-hierarchical, open access, free association, post-monetary form of trade such as P2PPeer-to-peer (meme)
Peer-to-peer is not restricted to technology, but covers every social process with a peer-to-peer dynamic, whether these peers are humans or computers. Peer-to-peer as a term originated from the popular concept of P2P distributed application architecture that partitions tasks or workloads between...
.
Labor notes
Recently, some local currenciesLocal currency
In economics, a local currency, in its common usage, is a currency not backed by a national government , and intended to trade only in a small area. As a tool of fiscal localism, local moneys can raise awareness of the state of the local economy, especially among those who may be unfamiliar or...
are based on time
Time-based currency
In economics, a time-based currency is an alternative currency where the unit of exchange is the man-hour.Some time-based currencies value everyone’s contributions equally. One hour equals one service credit...
although participants are not primarily anarchists. In the United States, one of the reasons that the IRS has chosen not to tax local currencies is that they are used for charitable purposes, such as community-building.
Some anarchists are interested in labor note systems because they make complex free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...
, fair trade
Fair trade
Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as higher social and environmental standards...
systems possible, although in their current practices they are not applicable for anything other than local (i.e. town-sized) economies. Detractors argue that the definition of a free market precludes usage of a normative
Normative economics
Normative economics is that part of economics that expresses value judgments about economic fairness or what the economy ought to be like or what goals of public policy ought to be....
pricing system, but some anarchists point out that since participation in a labor note network is voluntary, any labor note system is merely another choice in a free market of markets. Other critics argue that labor notes cannot provide price signals, that many of these Time-dollar based currencies are prone to inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
(since there is no way to ensure that people are not paid more than an hour per hour), and that these ignore factors like value-added work (work that incorporates past labor to perform, such as the time spent by a dentist in school). Other Anarachist Time-dollar based currencies have had exchange rates, based on the job performed. However, another criticism is at large scales workers function at varying skill level, so in a Time-based dollar would reward inefficient workers of efficient one, who produced more in a given unit of time.
Energy credits
The theory that all values can be evaluated in terms of joules. In the same vein as LTV, this is an attempt to make a normative basis for value by accounting for embodied energyEmbodied energy
Embodied energy is defined as the sum of energy inputs that was used in the work to make any product, from the point of extraction and refining materials, bringing it to market, and disposal / re-purposing of it...
. Accounting for such a system would be vastly more complex than current or other theoretical currency systems because all energy output of workers and energy expenditure on goods/services must be tracked (something that is thought impossible and useless by many anarchists).
One group that has advocated a system using energy is the Technocracy movement
Technocracy movement
The technocracy movement is a social movement which arose in the early 20th century. It put forth a plan for operating the North American continent as a non-monetary society. Technocracy was highly popular in the USA for a brief period in the early 1930s, when it overshadowed many other proposals...
with a system based on energy accounting
Energy accounting
Energy accounting is a system used within industry, where measuring and analyzing the energy consumption of different activities is done to improve energy efficiency.-Energy management:...
where energy is used to "buy" a product or service without being exchanged, so the effect is that products or services are distributed to the user without gain by the provider (who has the same amount of energy in his or her account regardless) so allegedly making profit impossible.
Examples of anarchist economies
Utopia (sometimes known as Trialville) was an individualist anarchist colony begun in 1847, by Josiah WarrenJosiah Warren
Josiah Warren was an individualist anarchist, inventor, musician, and author in the United States. He is widely regarded as the first American anarchist, and the four-page weekly paper he edited during 1833, The Peaceful Revolutionist, was the first anarchist periodical published, an enterprise...
and associates, in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
on a tract of land approximately 30 miles from Cincinnati, Ohio
Cincinnati, Ohio
Cincinnati is a city in the U.S. state of Ohio. Cincinnati is the county seat of Hamilton County. Settled in 1788, the city is located to north of the Ohio River at the Ohio-Kentucky border, near Indiana. The population within city limits is 296,943 according to the 2010 census, making it Ohio's...
. Another example of individual anarchists attempting to put their economic theories into action was the Cincinnati Time Store
Cincinnati Time Store
The Cincinnati Time Store was a successful retail store that was created by American individualist anarchist Josiah Warren to test his theories that were based on his strict interpretation of the labor theory of value. The experimental store operated from May 18, 1827 until May 1830...
, where labor notes
Labor notes (currency)
Labor notes are an alternative currency based on exchange of hours of labor.Two early attempts at implementing labor notes were made by social reformers Josiah Warren and Robert Owen following their experiences attempting to establish a utopian community at New Harmony, Indiana, in which currency...
were redeemable for goods.
The anarchist collectives formed during the Spanish Civil War
Spanish Civil War
The Spanish Civil WarAlso known as The Crusade among Nationalists, the Fourth Carlist War among Carlists, and The Rebellion or Uprising among Republicans. was a major conflict fought in Spain from 17 July 1936 to 1 April 1939...
are the most famous example of an anarchist economy operating on a large scale. The collectives were formed under the influence of the anarcho-syndicalist union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
the CNT
Confederación Nacional del Trabajo
The Confederación Nacional del Trabajo is a Spanish confederation of anarcho-syndicalist labor unions affiliated with the International Workers Association . When working with the latter group it is also known as CNT-AIT...
in rural and urban areas and successfully practised Workers' self-management
Workers' self-management
Worker self-management is a form of workplace decision-making in which the workers themselves agree on choices instead of an owner or traditional supervisor telling workers what to do, how to do it and where to do it...
and Collectivist anarchism
Collectivist anarchism
Collectivist anarchism is a revolutionary doctrine that advocates the abolition of both the state and private ownership of the means of production...
for a number of years in extremely difficult economic and political circumstances. Other examples of self-management include the factory committee movement during the Russian Revolution
Russian Revolution of 1917
The Russian Revolution is the collective term for a series of revolutions in Russia in 1917, which destroyed the Tsarist autocracy and led to the creation of the Soviet Union. The Tsar was deposed and replaced by a provisional government in the first revolution of February 1917...
and the workplace occupations in Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
during its crisis at the turn of the 21st century. Attempts at forming co-operatives also appeared during the Paris Commune
Paris Commune
The Paris Commune was a government that briefly ruled Paris from March 18 to May 28, 1871. It existed before the split between anarchists and Marxists had taken place, and it is hailed by both groups as the first assumption of power by the working class during the Industrial Revolution...
of 1871 and the Italian Factory Occupations of 1920.
See also
- free store
- safe tradeSafe tradeSafe trade is a slogan advocated by Greenpeace in its desire to "green" the World Trade Organisation and the Doha Development Round. It is designed to compete with "free trade" as a concept....
- autonomismAutonomismAutonomism refers to a set of left-wing political and social movements and theories close to the socialist movement. As an identifiable theoretical system it first emerged in Italy in the 1960s from workerist communism...
- Community-based economicsCommunity-based economicsCommunity-based economics or community economics is an economic system that encourages local substitution. It is most similar the lifeways of those practicing voluntary simplicity, including traditional Mennonite, Amish, and modern eco-village communities...
- Decentrally planned economyDecentrally planned economyA decentrally planned economy or decentralised planned economy is an economy where members of a society, acting with equal economic power, democratically plan economic activity in the absence of a central authority.The 1970 Chilean computer controlled planned economy cybersyn was pioneered by...
- Michael AlbertMichael AlbertMichael Albert is an American activist, economist, speaker, and writer. He is co-editor of ZNet, and co-editor and co-founder of Z Magazine. He also co-founded South End Press and has written numerous books and articles...
- Economic crisis
- Takis FotopoulosTakis FotopoulosTakis Fotopoulos , born , is a political philosopher and economist who founded the inclusive democracy movement. He is noted for his synthesis of the classical democracy with the libertarian socialism and the radical currents in the new social movements...
- Robin HahnelRobin HahnelRobin Hahnel is a Professor of Economics at Portland State University. He is best known for his work on participatory economics with Z Magazine editor Michael Albert. He is currently a visiting professor at Lewis & Clark College....
- Inclusive DemocracyInclusive DemocracyInclusive Democracy is a political theory and political project that aims for direct democracy, economic democracy in a stateless, moneyless and marketless economy, self-management and ecological democracy...
- Alexander BerkmanAlexander BerkmanAlexander Berkman was an anarchist known for his political activism and writing. He was a leading member of the anarchist movement in the early 20th century....
- Political economyPolitical economyPolitical economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...
Books
- Albert, MichaelMichael AlbertMichael Albert is an American activist, economist, speaker, and writer. He is co-editor of ZNet, and co-editor and co-founder of Z Magazine. He also co-founded South End Press and has written numerous books and articles...
, Parecon: Life After Capitalism (W. W. Norton & Company, April 2003). ISBN 1-85984-698-X - Carson, Kevin, Studies in Mutualist Political EconomyStudies in Mutualist Political EconomyStudies in Mutualist Political Economy is a book on political economy published on 2007 by american mutualist anarchist Kevin Carson. In its preface Carson describes this work as "an attempt to revive individualist anarchist political economy, to incorporate the useful developments of the last...
(BookSurge Publishing, 2007). isbn=9781419658693 - Dolgoff, Sam, editor, The Anarchist Collectives: Workers' Self-Management in the Spanish Revolution (Montreal: Black Rose Books). ISBN 0-919618-21-9
- Dolgoff, Sam The Relevance of Anarchism to Modern Society (Chicago: Charles H. Kerr, 1989).
- Fotopoulos, TakisTakis FotopoulosTakis Fotopoulos , born , is a political philosopher and economist who founded the inclusive democracy movement. He is noted for his synthesis of the classical democracy with the libertarian socialism and the radical currents in the new social movements...
, Towards An Inclusive Democracy (Cassell/Continuum, London/New York, 1997). ISBN 0-304-33628-9 - Fotopoulos, Takis, "The Multidimensional Crisis and Inclusive Democracy", Athens 2005.
- Guillen, Abraham. Anarchist Economics: An alternative for a world in crisis. The economics of the Spanish Libertarian Collectives 1936-39 DAM & La Presa. 1992.
- Hahnel, RobinRobin HahnelRobin Hahnel is a Professor of Economics at Portland State University. He is best known for his work on participatory economics with Z Magazine editor Michael Albert. He is currently a visiting professor at Lewis & Clark College....
. The ABC's of Political Economy (Pluto, 2002) - Hahnel, Robin.Robin HahnelRobin Hahnel is a Professor of Economics at Portland State University. He is best known for his work on participatory economics with Z Magazine editor Michael Albert. He is currently a visiting professor at Lewis & Clark College....
Economic Justice and Democracy (Routledge, 2005) - Kropotkin, PeterPeter KropotkinPrince Pyotr Alexeyevich Kropotkin was a Russian zoologist, evolutionary theorist, philosopher, economist, geographer, author and one of the world's foremost anarcho-communists. Kropotkin advocated a communist society free from central government and based on voluntary associations between...
Fields Factories and WorkshopsFields, Factories and WorkshopsFields, Factories and Workshops: or Industry Combined with Agriculture and Brain Work with Manual Work is a landmark anarchist text by Peter Kropotkin, and arguably one of the most influential and positive statements of the anarchist political philosophy. It is viewed by many as the central work of...
(The Collected Works of Peter Kropotkin, V. 9) (Black Rose Books, 1 January 1996). ISBN 1-895431-38-7 - Kropotkin, Peter The Conquest of BreadThe Conquest of BreadThe Conquest of Bread is a book by the anarchist communist Peter Kropotkin. Originally written in French, it first appeared as a series of articles in the anarchist journals Le Révolté and La Revolté . It was first published as a book in Paris in 1892 with a preface by Élisée Reclus, who also...
(New York: New York University Press). - Leval, GastónGaston LevalGaston Leval was an anarcho-syndicalist, combatant and historian of the Spanish Revolution....
Collectives in the Spanish Revolution (London: Freedom Press). ISBN 0-900384-11-5 - G.P. Maximoff, Program of Anarcho-Syndicalism. (extract from his Constructive Anarchism, published in English in 1952; this section is not included in the only edition of the work now in print.) (Sydney: Monty Miller Press, 1985).
- Proudhon, Pierre, http://www.marxists.org/reference/subject/economics/proudhon/philosophy/index.htmThe System of Economic Contradictions, or The Philosophy of PovertyThe System of Economic Contradictions, or The Philosophy of PovertyThe System of Economic Contradictions, or Philosophy of Poverty is a work published in 1847 by Pierre-Joseph Proudhon. It inspired Karl Marx to write his rejoinder The Poverty of Philosophy.-External links:*...
] - Proudhon, Pierre What Is Property?What Is Property?What Is Property?: or, An Inquiry into the Principle of Right and of Government is an influential work of nonfiction on the concept of property and its relation to anarchist philosophy by the French anarchist and mutualist Pierre-Joseph Proudhon, first published in 1840.In the book, Proudhon most...
(B. Tucker, translator). (Cambridge University Press). ISBN 0-521-40556-4 - Solidarity FederationSolidarity FederationThe Solidarity Federation, also known by the abbreviation SolFed, is a federation of class struggle anarchists active in Britain. The organisation advocates a strategy of anarcho-syndicalism as a method of abolishing capitalism and the state...
and IWA. The Economics of Freedom: An anarcho-syndicalist alternative to capitalism . SolFed Booklets. 2003
Articles
- Anarchist Economics compiled by Jon Bekken (overview of the topic with extensive reading lists from Syndicalist.org).
- Open Source Currency - article by Douglas Rushkoff on The Feature Archives
- The Future of Payment Systems - discussion paper by Bernard Lietaer (the chapter on Complementary Currency Systems starts on page 23)
The extensive sections of An Anarchist FAQ on economics
- Section B - Why do anarchists oppose the current system?
- Section C - What are the myths of capitalist economics?
- An Anarchist FAQ - Section D - How does statism and capitalism affect society?
- *I.4 How could an anarchist economy function?
- I.3 What could the economic structure of anarchy look like?
Films
- "Vivir la utopía - Living Utopia", Juan Gamero 1997. (About Anarchism in Spain and the Collectives in the Spanish Revolution).
External links
- Economics Kiosk at Infoshop.orgInfoshop.org- History :Infoshop was founded in January 1995 as the Mid-Atlantic Infoshop by Chuck Munson. Having previously co-founded an online archive of anarchist texts, the Spunk Library, in 1992, Munson established Infoshop as a general resource on anarchism, moving to the domain name Infoshop.org in 1998...
- Institute for Social Ecology
- Parecon.org - information on participatory economicsParticipatory economicsParticipatory economics, often abbreviated parecon, is an economic system proposed primarily by activist and political theorist Michael Albert and radical economist Robin Hahnel, among others. It uses participatory decision making as an economic mechanism to guide the production, consumption and...
- Anarchist Economics PDF from Invisible Molotov