Thoughts on “free markets” in an anarchist society

The terms “capitalism” and “the free market” carry a lot of historical weight and baggage.

For the right, they are basic neccesities for freedom and prosperity. For the left, they are the root of social and class inequality, the primary source of misery and injustice in the name of human greed. For the vast majority on both sides, they are synonymous.

Needless to say, the spectrum of opinion is more complex than that outlined above. However, that brief charicature is roughly accurate of the main strands of economic thinking. In this simplification I, as anarchist communists and anarcho-syndicalists more generally, fall very definitively on the left. As a trawl through the archives of this site, particularly on the subject of capitalism, should tell you.

However, I am one of those for whom the free market and capitalism are not automatically synonymous.

Capitalism is an economic system wherein capital goods (that is, land, raw materials, tools, industrial machines, and factories) are owned by a separate class of people to those who use them to produce consumer goods (televisions, cars, computers, houses, etc). The owners, reaping the profits of the workers’ productivity, have dominion over the latter, who must sell their labour to survive.

If the owners of capital are state bureaucrats rather than private bosses, this is still capitalism. That is, in Kevin Carson’s words, “a system of power in which ownership and control are divorced from labor.”

If this is the case, then clearly capitalism doesn’t automatically entail a free market. The “communism” of the USSR was actually state-capitalism. Both Mussolini’s fascism and the military Keynesianism that has dominated the world economy since World War II are corporatist, the apparatus of the state being used to aggressively enforce the interests of capital and the ruling class.

In Why the “free” market isn’t free, I went further. Citing Carson’s point that capitalism, as he defined it, “cannot occur without state coercion to maintain the privilege of usurer, landlord, and capitalist,” I argued that “capitalism, as a system, descends directly from feudalism” and that it “makes a mockery of [anarcho-capitalist Murray] Rothbard’s conception of “voluntary agreement” for the “exchange” of “economic goods.”” As such, “a truly free market without any form of coercion would not be capitalist.”

Why does this matter?

Put simply, because it goes to the heart of the economic debates and struggles that have shaped the past 150 years, at least.

By conceding that capitalism is a free market without so much as a pedantic whine, we accept the ideological framework of the ruling class. This not only hands over the economic debate to those who advocate the dominant socio-economic model, it makes it harder to present the argument against that model and convince people of why it is worth fighting for something different.

It’s a simple point, but nonetheless one that needs to be made.

Returning to the main issue of free markets, what does this mean in practical terms?

In the preface to Studies in Mutualist Political Economy, Carson describes his politics as “both a socialist movement and a subcurrent of classical liberalism.” The book is part of his effort to “provid[e] a new theoretical and practical foundation for free market socialist economics.”

But what is a non-capitalist free market? Does it fit into anarchist communism? And if so where?

When explaining What I believe in, I wrote the following;

But what if people don’t want to be part of a commune or collective? That’s fine, you don’t have to be, it certainly wan’t forced during the Spanish Revolution and to do so would be contrary to anarchist principles. Even if someone chooses to live within the bounds of a community, but not to participate in collective works, anarchists would not have an issue. Obvioulsy they could not benefit from the fruits of the labour they had no part in and may have to trade for services, but they would not be ostracised or forced out. In Errico Malatesta’s words, “free and voluntary communism is ironical if one has not the right and the possibility to live in a different regime, collectivist, mutualist, individualist – as one wishes, always on condition that there is no oppression or exploitation of others.”

What if people want to trade in an open market for currency? That’s fine too, with the above reservations in regard to capitalism. In an anarchist world, each community would be autonomous and interaction between each community would be through loose federation and free association. So, even with each community operating “from each according to his ability, to each according to his need” when a community lacks something that another has excess of, there clearly has to be some kind of trade system in place, taking any form those trading so choose.

Carson speculates that “had not the anarchism of [mutualist thinker Benjamin] Tucker been marginalized and supplanted by that of [Emma] Goldman, it might have been the center of a uniquely American version of populist radicalism.” I don’t neccesarily agree.

For instance, I share the reservations of other anarcho-syndicalists over the practical applications of market anarchism. There are technical details such as “who, for instance, would issue money in his anarcho-market economy and guarantee its value?” But there are also the broader issues. For instance, the fact that “in a market system the prices of products are determined according to their relative scarcity,” and so we have the tendency “towards economic depressions.”

As previously stated, I see no justification for prohibiting people from trading or separating themselves from communist or collectivist organisation. A market, after all, is just a platform for the voluntary exchange of goods and services. In itself, it is no more intrinsically evil than intrinsically good.

What I do distrust is the Mutualists‘ “ultimate vision” of “a society in which the economy is organized around free market exchange.”

They claim to “favor a society in which all relationships and transactions are non-coercive, and based on voluntary cooperation, free exchange, or mutual aid.” However, it is questionable how far this would go in practice when “the market” is not just an option but the central form of economic organisation and interaction.

I won’t say that it can’t work. But I will say that I am highly sceptical. The mutualists do not hold to absolutist property rights in the same way as right-”libertarians.” But they offer more concessions to it than communists would, and openly admit to “petty bourgeois tendencies,” claiming that they “make us relevant to the needs of average work[ers].”

These tendencies, combined with the inclination towards an extremely gradual progress from the current system, borne of a desire to “not deliberately provok[e] the state to repression,” suggests an ineffectiveness in moving from theory to practice. The seeming lack of mutualist organising in communities and workplaces, as we see from anarcho-syndicalists and anarchist communists, testifies to this. It is the working class who are fighting and organising, whilst – as is the case with the Tea Party movement – the more privileged “petty bourgeois” seem more drawn to reaction.

This is all aside from the quite obvious risk that a movement by the petty bourgeois will become a movement for them.

Carson admits that “most people who call themselves “individualist anarchists” today are followers of Murray Rothbard’s Austrian economics, and have abandoned the labor theory of value” since “much of the movement created by Benjamin Tucker was absorbed or colonized by the right.” After all, “the market” is their driving principle.

There is a high justification, then, to follow suit. Especially as even a “non-capitalist” market would allow for the accumulation of individual wealth. It is not a leap from that to private property in the capitalist sense of the word, and thus the pitfalls of the “libertarian” right.

Ultimately, it would be unlibertarian to “ban” markets. The voluntary self-organisation of communities in an anarchist communist society would provide the appropriate checks against force, fraud, and physical or economic coercion. But, where the market is the basis of social and economic organisation, that is not the case.

Markets can exist within libertarian socialism, but it would be folly to try and build libertarian socialism out of markets.

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Comments
10 Responses to “Thoughts on “free markets” in an anarchist society”
  1. john "goodiemonster" says:

    Hi Phil,
    You know that Kevin Carson runs, Mutualist.org, right? and that anarchist mutualism essentially started Proudhon? Just curious, not trolling.

    On a side note, did you catch David Graeber’s article “Debt: The First Five Thousand Years”? He has some interesting insights regarding markets and commodity monies versus credit monies. While I do consider myself a left leaning mutualist, I’ve always assumed that if there were a market, the currency would be decided by the local community as is currently being done in Germany (though still tied to the Euro): http://www.npr.org/templates/story/story.php?storyId=128546325

    Debt: The First Five Thousand Years by David Graeber

  2. Lori says:

    Perhaps the market socialists or market anarchists are enchanted by the mathematical elegance of certain aspects of the market such as equilibrium, or the digestion of price signals. There seems to be an element of ‘pick and choose’ when it comes to delineating just what the market is and what are it’s essential properties. For example, one can accept markets while rejecting property. This seems counterintuitive to me since it seems to me that a market transaction is, by definition, a transfer of property. Kevin’s brand of mutualism also seems to embrace a sort of competition, between worker cooperatives. I don’t understand the mechanism by which this competition between ‘institutions’ is prevented from contaminating the community of individuals and resulting in competition among individuals. Competition creates the categories of ‘winner’ and ‘loser,’ which seems to me to imply a hierarchy. Now over at Eternal Vigilance, Ricketson performs some apologetics on behalf of competition, claiming that complaints with actually-existing-competition within actually-existing-markets are actually ‘hypercompetition,’ characterized by ‘winner takes all.’ This leaves me unconvinced. Either participation in production is a right or it is a privilege. The right to participate is not the right to attempt to participate. Either we automate to the point where we don’t need to work, or participation in work is without exclusion, and hence without competition. Exclusion is privilege. Privilege is not freedom.

  3. jakking says:

    I would argue that there cannot be free markets under capitalism. The very nature of government regulation and profit automatically takes them away from any definition of “free”. But profitless anarchist “markets” are essential tools in allowing skill sets to be shared as required. Without such “markets” some form of repressive system of service will quickly come into play.

    • Lori says:

      Well, at least jakking has enough sense of dignity to put “markets” in quotes.

      My biggest complaint with the status quo is having to “market” myself. It’s not my strong suit, and more importantly, it doesn’t fit my interpretation of the Golden Rule, as I don’t like being “marketed” to. Neither do a lot of people, from what I can see, based on all the ‘no peddlers’ signs, and the widespread use of spam filters and popup blockers. So to me, the ‘necessity of selling’ is a repressive system of service. Profitless “markets” (let alone profitless anarchist “markets”) sounds like a contradiction in terms. Again, what exactly are those properties of the market mechanism that are worth keeping? The mutualists seem to be sold on the allocative efficiency of the market mechanism, but not (entirely?) on property or profit. Is it possible to pry these things apart? Perhaps it would be better to invent an artificial allocative method. As long as its implementation is truly decentralized, it cannot be characterized as a command economy. Anarchists have a long tradition, when presented with an apparent dichotomy, of insisting on, and if necessary inventing, a third way, viz. Neither East nor West, or A Pox on Both their Houses. Both market economics and command economics violate the spirit of anarchy. My own belief is that economic freedom implies freedom from economics via post-scarcity. Absent that accomplishment, it is just that work be a prerequisite for survival, but it is not just that winning a contest should be a prerequisite for work.

  4. Anarcho says:

    It should be noted that there are differences between European Mutualism and American mutualism, better described as individualist anarchism. Tucker, unlike Proudhon, was not particularly interested in co-operatives and had no notion that exploitation happened due to wage-labour. I discuss this in my introduction to the new Proudhon Reader Property is Theft!.

    And I should also note that Proudhon, unlike Tucker, recognised the negative effects of competition and argued for socio-economic institutions (such as the agro-industrial federation) to stop mutualism descending back into capitalism. How successful this would be is unclear, but at least he was aware of it. I should also note that while Proudhon was in favour of markets he was not into free markets and stated there was a need to regulate them by mutualist institutions, unlike Tucker.

    I would agree that markets need to be transcended and cannot be abolished (how could that be enforced?). And I would agree that capitalism cannot be reformed away, as Proudhon hoped, and that market libertarian-socialism would still have market forces and these would force cooperatives to do things they don’t want (like work longer and harder) to survive on the market. I discuss this in my article Mutualism, yes and no

    • john "goodiemonster" says:

      Anarcho and all,

      Sorry if this a dumb question, but where can one read up on Proudhon discussing a need to regulate markets via mutualist institutions? Is this covered in the Proudhon reader? I’m very interested in reading more on this.

    • Rad Geek says:

      Anarcho:

      Tucker, unlike Proudhon, was not particularly interested in co-operatives ….

      Depends on what you mean by “co-operatives,” I suppose. Tucker’s central economic proposal was the creation of a Mutual Bank, which was supposed to be a credit cooperative owned and operated by the people using it Tucker was sympathetic to, but generally not much interested in, the cooperative movement outside of the realm of banking, but to describe this as a difference between American and European mutualism would make sense only if Tucker were the only American mutualist, or if most American mutualists shared his views. But Tucker’s studied disinterest was in part a reaction against the earlier American mutualists (e.g. Warren), who could hardly talk about anything other than forming co-ops and intentional communities. Tucker’s views on the matter were also different from those of, e.g., Ingalls, Lum, Labadie, and not to mention contemporary American mutualists like Shawn, Kevin, et al.

      And I should also note that Proudhon, unlike Tucker, recognised the negative effects of competition ….

      Well, he also considered competition to be among “the principal forms of activity” of the “organization, which is as essential to society as it is incompatible with the present system.” Of course, he recognizes that it’s potentially dangerous. (For Proudhon, just about everything is potentially dangerous.) I don’t know if that’s all you meant to say, or if you meant to portray his view as more resolutely negative than just that. If the former, I agree; if the latter, I don’t.

      … and argued for socio-economic institutions (such as the agro-industrial federation) to stop mutualism descending back into capitalism.

      Seems to me that the Mutual Bank, and defense associations limiting themselves to occupancy-and-use rules for land tenure, are both pretty clearly intended as social institutions to prevent a free market economy from being captured by usury.

      Proudhon was in favour of markets he was not into free markets and stated there was a need to regulate them by mutualist institutions, unlike Tucker.

      I honestly have no idea what you mean by this. If the suggestion is that the kind of mutualist institutions Proudhon suggested would “regulate” markets in such a way as to make them something other than “free markets,” then it seems to me you’re using “free markets” in a peculiar way that has nothing to do with how either Tucker or contemporary market Anarchists use the term. Tucker talks all the time about the reorganization of credit and commerce; like Proudhon, he wanted to accomplish this through economic means rather than by means of laws — although the two differed on the sorts of economic means that needed to be employed. The notion is certainly not that if you remove the monopolies, the problems of usury will simply vanish of their own accord; it’s that the elimination of the monopolies will free people up to devise specific institutions that Tucker recommended as ways of dissolving usury. When he talks about a laissez-faire being the universal rule, he certainly does not mean a market which is free of unions, mutual aid associations, co-ops, or other mutualist institutions! He means a market free of government and legal coercion. Tucker is less emphatic than Proudhon is about what specific institutions he’d like to see take the leading role in such a society — he tends to suggest that whatever institutions take the lead, it will be the ones that best realize equity for workers. But given everything that he says about the organization of markets through mutual credit, it’s hard for me to figure out how he would be proposing markets that are simply “unregulated,” if “regulation” is now being used in a sense that may include not only political coercion but also consensual economic coordination of the kind Proudhon advocates.

  5. Lori says:

    When [Benjamin Tucker] talks about a laissez-faire being the universal rule, he certainly does not mean a market which is free of unions, mutual aid associations, co-ops, or other mutualist institutions!

    When I talk about unions, mutual aid associon, co-ops, or similar organizations, I think of them as a strategy for obtaining outcomes which are a negotiated compromise between the Reality of the Agora and the interests of flesh-and-blood human beings. Unions are supposed to be anticompetitive. That is the whole point. Co-ops are supposed to be an alternative to competition. Cooperation-within-competition and the like is management-speak.

  6. Rad Geek says:

    When I talk about unions, mutual aid associon, co-ops, or similar organizations, I think of them as a strategy for obtaining outcomes which are a negotiated compromise between the Reality of the Agora and the interests of flesh-and-blood human beings.

    Well, O.K., I agree with you about that. I don’t think that it’s something special about unions, mutual aid associations, or co-ops: every freely-negotiated market transaction involves some means or another of trying to balance flesh-and-blood interests against the limitations of the social and natural world. These kind of grassroots organization are often the best way to do that, although they are not the only way. (There are lots of ways to accomplish that kind of thing through informal networks and relationships of love or solidarity, apart from formally organized institutions. On the other hand, sometimes there are also benefits to dealing with a situation impersonally. Etc.) In any case, I certainly think that unions, mutual aid associations, and co-ops are all vital institutions that are part of the process of discovering and negotiating humane outcomes in a free society.

    I think Tucker agrees with you too. He was simply more interested in a different question — the question of ensuring the framework of freedom, without saying as much about the details of organization within the scope of that freedom (besides his singular interest in the technicalities of mutual banking and credit). Maybe he was wrong about that; I’m inclined to think that it made him miss some important points, but also freed him up to see some other important points.

    Unions are supposed to be anticompetitive. That is the whole point. Co-ops are supposed to be an alternative to competition.

    Well, that depends on what you mean by “competition,” doesn’t it, and who you take to be competing? Unions and co-ops are aimed at redirecting energy away from one form of competition (the scramble for artificially scarce access to capital and wages). Not necessarily to eradicate all forms of competition from society. I imagine there will still be chess tournaments in a free and equal society; or if there won’t be, it won’t be because unions have any special concern with the matter. More seriously, there may also be open processes of discovery for people to determine who can make the best use of scarce natural resources, which come to consensus, not by means of ensuring conformity before-the-fact, but rather by means of letting a lot of people have at it and see whose projects work out to be the best and most sustainable But that is all Tucker means by economic competition: the opening up of production and social relationships to wide-ranging experimentation. The point actually is not cooperation-within-competition; it’s competition as a means of reconciling interests, coming to social consensus through experimentation and open debate, ultimately competition within, and as a means to, discovery and cooperation.

  7. Dave says:

    I don’t think it’s even that relevent as there’s no active mutualist movement anyway, as was noted in the article. If one arises then it will be more worthy of discussion and debate.

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