Property as Theft: The Libertarian Socialist Critique of Property (Part 3)

In the first two posts in this series, I discussed the libertarian socialist critique of property. I explained why it is that libertarian socialists hold that capitalistic property arrangements involve a sort of theft, I demonstrated that the institution of capitalistic property was historically rooted in theft, and I argued that capitalistic property is incompatible with comprehensive libertarianism. Up to this point, the series has been critical of capitalistic property and has not proposed any viable alternative to capitalism and capitalistic property. In this final part of the series, I want to explain some of the libertarian socialist alternatives. I will go into detail on the proposals of the three main schools of libertarian socialist (anarchist) thought—mutualism, communist anarchism, and individualist anarchism. Then I will give a brief intro to a related school of thought known as Georgism.

Mutualism

Mutualism is the school of libertarian socialist thought that originated with Pierre-Joseph Proudhon. I must start by observing that the ideas of Proudhon have very little to do with the “mutualism” of individualist anarchists like Clarence Lee Swartz and Kevin A. Carson. Proudhon focused on free contract, confederation, reciprocity, and seems to have rejected the “occupancy and use” sort of property advocated by individualist mutualists. And the modern American mutualists don’t seem to be too fond of the sort of reforms proposed by Proudhon. In this section, I will talk about the proposals of Proudhon. The American mutualists are more influenced by individualism than by Proudhonian thought, so I will lump them in with the individualists and address their proposals separately below. Here I am concerned with mutualism as advocated by Proudhon himself.

As I explained in Part 1 of this series, Proudhon viewed property as theft because it allows a mortgagee (bank) to foreclose on land or a house and appropriate all the improvement upon the land made by the mortgagor. Capitalistic property arrangements also allow the mortgagee to foreclose on a property after having collected 50,000 dollars in payments towards a 70,000 dollar mortgage without either requiring the bank to refund the 50,000 or requiring the bank to share an equivalent share of the profits with the insolvent mortgagor upon re-selling the property.

Proudhon’s solution to the problem is multi-faceted, and I am sure that I will miss some important points here, but I will summarize to the best of my ability. Proudhon says, “The Revolution has two things to accomplish about property, its dissolution and its reconstitution.”(The General Idea of the Revolution in the Nineteenth Century, Fifth Study) A large part of the problem with capitalism seems to be linked to banking and lending, so Proudhon proposes drastic reforms there. Proudhon advocated the democratization of the central bank—not a national bank, but a literal bank of the people. He argues that the banking industry ought also to be opened up to free competition from credit union type mutual banking associations. Furthermore, the money monopoly should be abolished. Gold was recognized as legal currency in Proudhon’s day, but that meant that the possessors of gold had an advantage over everyone else. Gold is just the product of one industry, the gold mining industry. Why not allow for the monetization of the products of all industries? In Proudhon’s estimation, the competition would force down interest rates, nearly to zero. Then, he suggests that government debt should be written off by refinancing government debt at the new low rate so that the State no longer has a need to tax citizens for revenue (keep in mind that Proudhon also calls for the abolition of the State altogether). He writes, “I will say that, in my opinion, the wisest course to follow, the most just, would be to do with the Debt the same as with the Bank, to abolish interest at one blow.”(ibid.) In other words, Proudhon was effectively advocating something isomorphic to what modern economists call quantitative easing.

“It is, then, inevitable that this truly privileged product should become the object of all the ambitions…the palladium of monopoly…. that, in this capacity as instrument of exchange, gold should be taken in its turn for an object of speculation and serve as the basis of a great commerce; that, finally, protected by public opinion, loaded with public favour, it should obtain power, and by the same stroke destroy the social fabric! The means of destroying this formidable force does not lie in the destruction of the medium—I almost said the depository; it is in generalizing its principle….
“But if it is true that, in international commerce, the precious metals have lost their preponderance, this means that, in international commerce, all values have reached the same degree of determination, and like money, are equally acceptable…. Then, let them formulate this law; let them explain this organization, and, instead of talking of credit and forging new chains for the labouring class, let them teach, by an application of the principle of international equilibrium, all the manufacturers who ruin themselves because they are not exchanging, teach those workers, who die of hunger because they have no work, how their products, how the work of their hands are values which they can use for their consumption, as well as if they were bank-bills or money.”—Pierre-Joseph Proudhon (System of Economic Contradictions, or the Philosophy of Poverty, Volume II, Ch. 10)

Proudhon holds that the first big step is to ensure that land and buildings are “relieved of mortgages.” Interest is the price one pays for a loan. When free competition forces down the price of a loan and makes the interest rate less than 1%, it will lead to a reduction in predatory lending. Furthermore, Proudhon holds that the cultivator or tenant must be granted the “right to the value of improvements” to the property. (ibid.) Also, he holds that each rent payment made should confer a greater share of ownership to the tenant, until the original proprietor is deprived of any share of ownership, and that the municipalities should ultimately take public-ownership of land.

“From the date of the decree which shall be passed by future representatives, all payments made as rental shall be carried over to the account of the purchase of the property, at a price estimated at twenty times the annual rental.
“Every such payment shall purchase for the tenant a proportional undivided share in the house he lives in, and in all buildings erected for rental, and serving as a habitation for citizens.
“The property thus paid for shall pass under the control of the town administration, which shall take a first mortgage upon it, in the name of all the tenants, and shall guarantee them all a domicile, in perpetuity, at the cost price of the building.
“Towns may bargain with owners for the purchase and immediate payment for rented buildings…
“For repairs, management and upkeep of buildings, as well as for new constructions, the towns shall deal with masons’ Unions, or associations of building trades, according to the rules and principles of the new social contract.
“Proprietors who occupy their own houses shall retain property therein, as long as suits their interests….
Every payment of rent for the use of real estate shall give title to the farmer for a share of the real estate, and shall be a lien upon it.
“When the property has been entirely paid for, it shall revert to the town, which shall take the place of the former proprietor, and shall share the fee-simple and the economic rent with the farmer….
“As soon as all landed property shall have been completely paid for, all the towns of the Republic shall come to an understanding for equalizing among them the quality of tracts of land, as well as accidents of culture. The part of the rent to which they are entitled upon their respective territories shall serve for compensation and for general insurance.
“Beginning with the same date, the former proprietors who have held their title by working their properties themselves, shall be placed on the same footing as the new, subjected to the same rental payments, and invested with the same rights; in such a manner that the chance of locality or of succession may favor no one, and that conditions of culture shall be equal for all.
“The tax on land shall be abolished.
“The rural police are placed under the control of the municipal councils.”—Pierre-Joseph Proudhon (General Idea of the Revolution in the Nineteenth Century, Fifth Study)

Proudhon seems to end up proposing a sort of municipal socialism in which the municipality confiscates economic rent (and presumably redistributes it) and leaves the workers and tenants as proprietors who no longer have to pay rent to landlords and capitalists. However, it must be remembered that the “municipality” of Proudhon would be restructured along anarchist lines of free contract, confederation, and direct democracy.

“Rousseau said truly: No one should obey a law to which he has not consented; and M. Rittinghausen too was right when he proved that in consequence the law should emanate directly from the sovereign, without the intermediary of representatives.
“But it was in the application that both these writers failed. With suffrage, or the universal vote, it is evident that the law is neither direct nor personal, any more than collective. The law of the majority is not my law, it is the law of force; hence the government based upon it is not my government; it is government by force.
“That I may remain free; that I may not have to submit to any law but my own, and that I may govern myself, the authority of the suffrage must be renounced: we must give up the vote, as well as representation and monarchy. In a word, everything in the government of society which rests on the divine must be suppressed, and the whole rebuilt upon the human idea of CONTRACT.
“When I agree with one or more of my fellow citizens for any object whatever, it is clear that my own will is my law; it is I myself, who, in fulfilling my obligation, am my own government.
“Therefore if I could make a contract with all, as I can with some; if all could renew it among themselves, if each group of citizens, as a town, county, province, corporation, company, &c., formed by a like contract, and considered as a moral person, could thereafter, and always by a similar contract, agree with every and all other groups, it would be the same as if my own will were multiplied to infinity. I should be sure that the law thus made on all questions in the Republic, from millions of different initiatives, would never be anything but my law; and if this new order of things were called government, it would be my government.”—Pierre-Joseph Proudhon (General Idea of the Revolution in the Nineteenth Century, Sixth Study)

The legitimacy of the municipal government would ultimately be predicated on consent and consensus. If all property in land and buildings were to be transferred over to the “control of the town administration,” it would be legitimate insofar as the private owners of the land and buildings would be consenting participants in the municipal government.

For Proudhon, restructuring government does not go far enough. The economy, like the government, must be democratized. The workplace, like the political arena, must be restructured in an egalitarian and directly democratic fashion. Proudhon advocated replacing hierarchical capitalistic corporations with egalitarian workingmen’s associations or workers’ cooperatives. It is fundamentally unjust for society to be divided into “two industrial castes of masters and wage-workers.” Thus, capitalistic hierarchical firms and corporations need to be restructured along egalitarian and cooperative lines. And Proudhon wanted these workingmen’s associations to be egalitarian and democratic, owned and controlled by the workers themselves. If a person wants to start a small business or practice a small craft, then there is “no reason for association, unless for individual preference.” So Proudhon allows for individualistic appropriation when production is done individualistically.

“It is otherwise with certain industries, which require the combined employment of a large number of workers, a vast array of machines and hands, and, to make use of a technical expression, a great division of labor, and in consequence, a high concentration of power. In such cases, workman is necessarily subordinate to workman, man dependent upon man. The producer is no longer, as in the fields, a sovereign and free father of a family; it is a collectivity. Railroads, mines, factories, are examples.
“In such cases, it is one of two things; either the workman, necessarily a piece-worker, will be simply the employee of the proprietor-capitalist-promoter; or he will participate in the chances of loss or gain of the establishment, he will have a voice in the council, in a word, he will become an associate.
“In the first case the workman is subordinated, exploited: his permanent condition is one of obedience and poverty. In the second case he resumes his dignity as a man and citizen, he may aspire to comfort, he forms a part of the producing organization, of which he was before but a slave; as, in the town, he forms a part of the sovereign power, of which he was before but the subject.
“Thus, we need not hesitate, for we have no choice. In cases in which production requires great division of labor, and considerable collective force, it is necessary to form an ASSOCIATION among the workers in this industry; because without that, they would remain related as subordinates and superiors, and there would ensue two industrial castes of masters and wage-workers, which is repugnant to a free and democratic society.”—Pierre-Joseph Proudhon (General Idea of the Revolution in the Nineteenth Century, Sixth Study)

Proudhon’s mutualism is based upon reciprocity and what Josiah Warren would have called “equitable commerce.” According to Proudhon, profit constitutes a form of usury that is tantamount to theft. The idea is that pure competition ought to keep prices as low as possible, “at a price as nearly as possible that of cost.” Mutualism is a form of anarchism that entails markets, but the markets will be fundamentally cooperative and socialistic. The democratic society would have “a universal and tacit agreement to renounce increase, that is to say, to sell and pay at the only just price, which is the average cost.” There should be “special formal agreements” between enterprises to sell their products and services at cost of production and each workingmen’s association should have its books and records published so that they can be held accountable. And the associations should “state the basis of their prices, the mode of delivery, the period of their engagement, and their means of execution.” Profit would thereby be abolished and all exchanges would be relatively equal—neither party would benefit at the expense of the other. Furthermore, the community ought to have a right to dissolve any company and exercise control over it. Here we see that there is an implicit public ownership or control of industrial and commercial enterprises to some degree under Proudhonian mutualism.

“Large-scale industry may be likened to a new land, discovered, or suddenly created out of the air, by the social genius; to which society sends a colony to take possession of it and to work it, for the advantage of all.
“This colony will be ruled by a double contract, that which gives it title, establishes its property, and fixes its rights and obligations towards the mother-country; and the contract which unites the different members among themselves, and determines their rights and duties.
“Toward Society, of which it is a creation and a dependence, this working company promises to furnish always the products and services which are asked of it, at a price as nearly as possible that of cost, and to give the public the advantage of all desirable betterments and improvements.
“To this end, the working company abjures all combinations, submits itself to the law of competition, and holds its books and records at the disposition of Society, which, upon its part, reserves the power of dissolving the working company, as the sanction of its right of control.
“Towards the individuals and families whose labor is the subject of the association, the company makes the following rules:
“That every individual employed in the association, whether man, woman, child, old man, head of department, assistant head, workman or apprentice, has an undivided share in the property of the company;
“That he has a right to fill any position, of any grade, in the company, according to suitability of sex, age, skill, and length of employment;
“That his education, instruction, and apprenticeship should therefore be so directed that, while permitting him to do his share of unpleasant and disagreeable tasks, they may also give variety of work and knowledge, and may assure him, from the period of maturity, an encyclopedic aptitude and a sufficient income;
“That all positions are elective, and the by-laws subject to the approval of the members;
“That pay is to be proportional to the nature of the positions, the importance of the talents, and the extent of responsibility;
“That each member shall participate in the gains and in the losses of the company, in proportion to his services;
“That each member is free to leave the company, upon settling his account, and paying what he may owe; and reciprocally, the company may take in new members at any time.”—Pierre-Joseph Proudhon (General Idea of the Revolution in the Nineteenth Century, Sixth Study)

The anarchism/mutualism of Proudhon seems to be very similar to the ideas of Mikhail Bakunin. And it doesn’t seem to have very much at all in common with the ideas of Benjamin Tucker and the individualist anarchists. Proudhon does not seem to have been an advocate of what people call “mutualism” these days. Proudhon was a market-anarchist, but he was not a classical liberal laissez-faire individualist as the early American anarchists were. Proudhon held that the community should exercise control over companies, reserving the right to dissolve a company and thus to regulate the market in such a way as to foster pure competition. Proudhon, unlike the individualist anarchists, did not assume that the market would automatically self-regulate and produce pure competition under laissez-faire conditions. Society has to exercise democratic control and impose the rules and regulations that have the capacity to produce a free market. A free market must be designed. A truly free market is predicated on rules and social order, which ought to be established through a participatory democratic process. While the American individualist anarchists thought that the private sector should replace the public sector, that private courts and private police should replace governmental institutions, Proudhon looked to contract, consent, and confederation as a way of establishing a legitimate libertarian government on an anarchic basis. Proudhon was not so much for the privatization of government as for the democratization of it. Thus, he was clearly not in the same camp as Gustave de Molinari and Benjamin Tucker, the individualist anarchists, who generally opposed democracy and looked to privatization and laissez-faire market competition as the most suitable alternative to State monopoly. So Proudhon was much closer to the anarcho-syndicalists and communists than he was to the individualists and modern “mutualists.” But unlike latter European anarchists, Proudhon did not advocate a wholesale abolition of money and markets. Proudhon did not advocate “full communism.”

Communist Anarchism

Joseph Déjacque was an early anarchist and critic of Proudhon. Déjacque coined the term “libertarian” in reference to anarchists, identifying himself as a libertarian communist. He argued that a person is not necessarily entitled to the product of their labor as much as to the satisfaction of their basic needs. If a person has a physical or mental disability, should that disability deprive them of human rights? Isn’t life a basic human right? Does it not, therefore, follow that the necessities for sustaining life should be provided regardless of contribution as long as society can afford it? According to Déjacque, the ideal society would embrace a communistic arrangement of “from each according to their ability, to each according to their need.” Thus, an ideal libertarian society would guarantee the provision of necessities to all of its members.

The surplus value that social labor produces currently goes towards the profits of rentiers who own the means of production. Under mutualistic arrangements, the surplus value would simply go to the members of the cooperatives or workingmen’s associations. A far better arrangement, in the estimation of communist anarchists, would be for the community as a whole to take ownership of the means of production so that the community could use that wealth to take care of the needs of the entire populace.

“If a society, a city, or a territory, were to guarantee the necessaries of life to its inhabitants (and we shall see how the conception of the necessaries of life can be so extended as to include luxuries), it would be compelled to take possession of what is absolutely needed for production; that is to say—land, machinery, factories, means of transport, etc. Capital in the hands of private owners would be expropriated and returned to the community.”—Peter Kropotkin (The Conquest of Bread, Ch. 8)

Kropotkin holds that the problem with capitalism “is not only that capitalists seize a large share of the profits of each industrial and commercial enterprise, thus enabling them to live without working, but that all production has taken a wrong direction, as it is not carried on with a view to securing well-being to all.”(ibid.) The purpose of production should not be for profit or enriching oneself by outcompeting others, but rather for the provision of well-being to society. People should not work in order to earn money but in order to fulfil a social duty. Thus, the economy should be restructured on a cooperative basis rather than a competitive one. There should be a sort of social contract in which the people, according to their ability, agree to work so many hours in fields of work deemed to be necessary, and the society would “in return guarantee well-being to all its members.”(ibid.)

The communist anarchists criticized Proudhon’s mutualism (and, by extension, Josiah Warren’s equitable commerce) on the grounds that they could not conceive of a market economy without arbitrary pricing in accordance with supply-and-demand. This arbitrary pricing, the communists held, is largely what allows for profits. A product will have a market price that is higher than the cost of production. The amount of the price above cost of production constitutes profit. Thus, profit and exploitation and surplus value are built into the market system as such, so it is theoretically impossible to disassociate markets and profits. Profits lead to inequality and the disparity of wealth, which ultimately leads to a division of society into castes, with one group working for the other. Thus, it would be impossible to create a non-capitalistic market system.

“The exchange of commodities by means of price leads to profit making, to taking advantage and exploitation; in short, to some form of capitalism. If you do away with profits, you cannot have any price system, nor any system of wages or payment. That means that exchange must be according to value. But as value is uncertain or not ascertainable, exchange must consequently be free, without ‘equal’ value, since such does not exist. In other words, labour and its products must be exchanged without price, without profit, freely according to necessity. This logically leads to ownership in common and to joint use. Which is a sensible, just, and equitable system, and is known as communism.”—Alexander Berkman (The ABC of Anarchism, Ch. 5)

There is a difference between value and price, and “there is no way by which value can be measured.” Value is subjective and unquantifiable: “value cannot be determined. The same thing may be worth a lot to one person while it is worth nothing or very little to another…. Therefore the real value of a thing cannot be ascertained… But the price is easily found out.”(ibid.) Thus, any system of remuneration in terms of wages or payment for services is subjective and arbitrary. It is impossible to determine the true value of a person’s labor, so no system based on payment for services could ever be equitable. Furthermore, modern production makes it impossible to distinguish the product of one person’s labor from that of another. A single product can be the joint product of collective labor and there is no possible objective criteria for determining how much of the product’s final value came from which individual contributor. Consequently, no system of remuneration or payment could ever be completely rational.

The communist anarchists concluded that a truly liberatory society would have to abandon markets and money altogether and restructure the economy on the basis of “from each according to their ability, to each according to their need.” If we are to do away with markets and money and restructure society so as to guarantee well-being to all members, it follows that we must eliminate private property. If a proprietor cannot profit or hire workers, then he is no proprietor.

“Economically he will permit no exclusive possession of the sources of life in order to preserve his opportunity of free access.
“Monopoly of land, private ownership of the machinery of production, distribution, and communication can therefore not be tolerated under anarchy. Opportunity to use what everyone needs in order to live must be free to all.
“In a nutshell, the meaning of communist anarchism is this: the abolition of government, of coercive authority and all its agencies, and joint ownership—which means free and equal participation in the general work and welfare.”—Alexander Berkman (The ABC of Anarchism, Ch. 5)

Under communist anarchism, decisions would be made on the basis of consensus or direct democracy. The community would collectively own all industrial and commercial enterprises, and there would be a social contract wherein the members of the community (each also a participant in the governmental decision-making process) would agree to work insofar as they are able and the community in turn would be bound to provide them with everything that they need for survival.

But if a community is going to guarantee the provision of necessities to the best of its ability, then the community must be in charge of production and distribution. Private property in industrial and commercial enterprises must be abolished so that the community can take control and organize production and consumption in order to guarantee the provision of necessities to its members. When resources are low, the community might have to engage in rationing. When resources and products are in abundance, people would be able to take more or less freely what they desire and the members of the community would live in luxury. I know that you are already having that knee-jerk reaction and revolting against the very idea of rationing, but this isn’t something peculiar to communism. Scarcity can sometimes happen, even under capitalism. The only difference is that without rationing, you have rampant poverty, homelessness, and starvation unnecessarily because you allow the wealthy and well-off to hoard supplies while the masses suffer. Even in capitalistic societies, you will see a tendency to revert to more communistic arrangements like rationing when there are major crises. Rationing was necessary in England and the United States during WWII. Natural disasters and ecological crises can also make rationing necessary at times. However, it must be remembered that communist anarchism does not recommend rationing except in times of scarcity.

“ ‘But suppose there is not enough of a certain product to go around. What will you do then?’
“Then we’ll do what is done in capitalistic society in time of war and scarcity: the people are rationed, with the difference that in the free community rationing will be managed on principles of equality.”—Alexander Berkman (The ABC of Anarchism, Ch. 12)

Alexander Berkman observes that “rationing” also happened under statist communism, but he notes that the Bolsheviks’ rationing was done entirely differently than the egalitarian rationing proposed by communist anarchists and that it was done for entirely different reasons. Under the Bolsheviks, more supplies were allotted to soldiers and bureaucrats than to farmers and factory workers. “This initial discrimination and the many others which followed were not dictated by the needs of the situation but solely by political party considerations.”(ibid.) The statist communists gave more to police and soldiers in order to strengthen their political party by ensuring that the authorities were on their side. This is diametrically opposed to the sort of rationing that might occur under anarchism.

“Let us take up the organization of consumption first, because people have to eat before they can work and produce.
“ ‘What do you mean by the organization of consumption?’ your friend asks.
“ ‘He means rationing, I suppose,’ you remark.
“I do. Of course, when the social revolution has become thoroughly organized and production is functioning normally there will be enough for everybody. But in the first stages of the revolution, during the process of re-construction, we must take care to supply the people as best we can, and equally, which means rationing.”—Alexander Berkman (The ABC of Anarchism, Ch. 12)

Rationing is only needed under extreme conditions. Under normal condition, everything will be exchanged freely. Instead of private companies producing for profit and selling their products at the highest price possible, organized labor will produce in order to meet the needs of the community and the supplies will go to public warehouses, where people will go to get the things they need. The communist anarchist society will have an economy based on equality and sharing.

“ ‘Let me get this straight,’ you remark. ‘There is to be equal sharing, you say. Then you won’t be able to buy anything?’
“No, there will be no buying or selling. The revolution abolishes private ownership of the means of production and distribution, and with it goes capitalistic business. Personal possession remains only in the things you use. Thus, your watch is your own, but the watch factory belongs to the people: land, machinery, and all other public utilities will be collective property, neither to be bought nor sold.
“Actual use will be considered the only title—not to ownership but to possession. The organization of the coal miners, for example, will be in charge of the coal mines, not as owners but as the operating agency. Similarly will the railroad brotherhoods run the railroads, and so on. Collective possession, co-operatively managed in the interests of the community, will take the place of personal ownership privately conducted for profit.
“ ‘But if you can’t buy anything, then what’s the use of money?’ you ask.
“None whatever; money becomes useless. You can’t get anything for it. When the sources of supply, the land, factories, and products become public property, socialized, you neither buy nor sell. As money is only a medium for such transactions, it loses its usefulness.
“ ‘But how will you exchange things?’
“Exchange will be free. The coal miners, for instance, will deliver the coal they mined to the public yards for the use of the community. In their turn the miners will receive from the community’s warehouses the machinery, tools, and other commodities they need. That means free exchange without the medium of money and without profit, on the basis of requirement and the supply on hand.”—Alexander Berkman (The ABC of Anarchism, Ch. 12)

Communist anarchism does not advocate a centrally-planed economy. Instead, it advocates radical decentralization. Autonomous communities will be govered locally through direct democracy. The people will make decisions in general assemblies or councils at the local level. And industry will be carried on by organized labor.

Under communist anarchism, scarcity would be less of a problem than under capitalism. Under capitalism, industrial and commercial enterprises are driven by the profit motive. It is in the interest of the companies to keep the price as high as possible, so corporations may conspire together in order to keep prices artificially high. The easiest way to ensure that prices stay high is to ensure that the product is in short supply. Most of the scarcity that we encounter in the modern world is artificial. Big businesses and the capitalist class withhold, hoard, or destroy part of the supply in order to create artificial scarcity to drive up prices and increase profits. Alternatively, capital and business may collude in order to intentionally produce less than is demanded by the market, thereby ensuring artificial scarcity and high prices.

“…price depends on supply and demand and varies accordingly. The price of coal rises if there is a scarcity of it; it becomes cheaper if the supply is greater than the demand. To make bigger profits the coal owners artificially limit the output, and the same methods obtain throughout the capitalistic system. With the abolition of capitalism no one will be interested in raising the price of coal or limiting its supply. As much coal will be mined as will be necessary to satisfy the need. Similarly will as much food be raised as the country needs. It will be the requirements of the community and the supply obtaining which will determine the amount it is to receive. This applies to coal and food as to all other needs of the people.”—Alexander Berkman (The ABC of Anarchism, Ch. 12)

Most communist anarchists have arrived at its corollary, the notion of anarcho-syndicalism. It is held by anarcho-syndicalists that the appropriate way to bring about this communist anarchist revolution is through the organization of labor. The workers should be organized and they should actively seek to take over industry and kick the capitalists out. Labor unions ought not to be just for collective bargaining and seeking better wages and working conditions. The unions ought to be focused on educating the proletariat and undermining the capitalist system. The ultimate goal for the union should be to put the workers in control of the means of production: the land, factories, machines, and such must be placed in the possession of the workers. The exploitative role of the capitalists must be eliminated altogether. Berkman writes, “The same principles of freedom and voluntary co-operation must also direct the re-organization of the industries…. The organized agricultural and industrial proletariat takes possession of the land, factories, shops, mines and mills.”(The ABC of Anarchism, Ch. 13)

“Capitalistic production is for profit; more labour is used today to sell things than to produce them. The social revolution re-organizes the industries on the basis of the needs of the populace. Essential needs come first, naturally. Food, clothing, shelter—these are the primal requirements of man. The first step in this direction is the ascertainment of the available supply of provisions and other commodities. The labour associations in every city and community take the work in hand for the purposes of equitable distribution. Workers’ committees in every street and district assume charge, co-operating with similar committees in the city and state, and federating their efforts throughout the country by means of general councils of producers and consumers.
“Great events and upheavals bring to the fore the most active and energetic elements. The social revolution will crystalize the class-conscious labour ranks. By whatever name they will be known—as industrial unions, revolutionary syndicalist bodies, co-operative associations, leagues of producers and consumers—they will represent the most enlightened and advanced part of labour, the organized workers aware of their aims and how to attain them. It is they who will be the moving spirit of the revolution.”—Alexander Berkman (The ABC of Anarchism, Ch. 13)

Individualist Anarchism

In America, Josiah Warren came to the anarchist conclusion at the same time as Proudhon did in Europe, although Warren knew nothing about Proudhon and his ideas. Josiah Warren advocated equitable commerce and radical individualism. Like Proudhon, Warren thought that all transactions ought to be equitable. All trades ought to be equal so that neither party profits or benefits at the expense of the other. Both parties to the transaction ought to benefit equally. All products ought to be sold at cost of production and all workers ought to be paid the equivalent of the value produced by their labor. The individualists thought that competition under free-market conditions would force prices down to the lowest possible level, which would be the cost of production. As the various producers compete, they attempt to undercut the prices of their competitors in order to sell more, until all producers are selling their product at roughly what it cost them to produce it. Under such conditions, there would be no profits because everything would be sold at cost. Production would continue because the production process would be a way of converting labor into currency.

To help facilitate equitable commerce, Josiah Warren wanted to replace conventional money with a system of labor notes, which would represent a certain amount of labor of a particular kind and could be exchanged for other goods and services. Latter individualist anarchists, like William B. Greene and Lysander Spooner, abandoned Warren’s idea of labor notes and began advocating a system of mutual banking similar to Proudhon’s proposal. These latter individualist anarchist thinkers had read Proudhon and were influenced by some of his ideas. This is why some individualist anarchists, like Clarence Lee Swartz, have referred to themselves as “mutualists.” The philosophy of individualist anarchism came to be developed most thoroughly in the works of Benjamin Tucker.

Unlike Proudhon, the individualist anarchists were laissez-faire market-anarchists, heavily influenced by classical liberalism. They followed much of the conventional socialist critique of capitalism and property, but proposed solutions that are at odds with conventional socialism. The individualists thought that you could arrive at a just and equitable economy by replacing capitalistic property with usufructuary property and abolishing the State—the mother of all monopolies—in order to create pure competition and drive all prices down to the cost of production.

“The economic principles of Modern Socialism are a logical deduction from the principle laid down by Adam Smith in the early chapters of his ‘Wealth of Nations,’—namely, that labor is the true measure of price. But Adam Smith, after stating this principle most clearly and concisely, immediately abandoned all further considerations of it to devote himself to showing what actually does measure price, and how, therefore, wealth is at present distributed…. Half a century or more after Smith enunciated the principle above stated, Socialism picked it up where he had dropped it, and in following it to its logical conclusions, made it the basis of a new economic philosophy.
“This seems to have been done independently by three different men, of three different nationalities, in three different languages: Josiah Warren, an American; Pierre J. Proudhon, a Frenchman; Karl Marx, a German Jew….
“From Smith’s principle that labor is the true measure of price—or, as Warren phrased it, that cost is the proper limit of price—these three men made the following deductions: that the natural wage of labor is its product; that this wage, or product, is the only just source of income (leaving out, of course, gift, inheritance, etc.); that all who derive income from any other source abstract it directly or indirectly from the natural and just wage of labor; that this abstraction process generally takes one of three forms,—interest, rent, and profit; that these three constitute the trinity of usury… that the only reason why the banker, the stockholder, the landlord, the manufacturer, and the merchant are able to exact usury from the labor lies in the fact that they are backed by legal privilege, or monopoly; and that the only way to secure labor the enjoyment of its entire product, or natural wage, is to strike down monopoly….
“It was at this point — the necessity of striking down monopoly — that came the parting of their ways. Here the road forked. They found that they must turn either to the right or to the left, — follow either the path of Authority or the path of Liberty. Marx went one way; Warren and Proudhon the other. Thus were born State Socialism and Anarchism.
“First, then, State Socialism, which may be described as the doctrine that all the affairs of men should be managed by the government, regardless of individual choice.
“Marx, its founder, concluded that the only way to abolish the class monopolies was to centralize and consolidate all industrial and commercial interests, all productive and distributive agencies, in one vast monopoly in the hands of the State…. The remedy for monopolies is monopoly.
“Such is the economic programme of State Socialism as adopted from Karl Marx….
“When Warren and Proudhon, in prosecuting their search for justice to labor, came face to face with the obstacle of class monopolies, they saw that these monopolies rested upon Authority, and concluded that the thing to be done was, not to strengthen this Authority and thus make monopoly universal, but to utterly uproot Authority and give full sway to the opposite principle, Liberty, by making competition, the antithesis of monopoly, universal. They saw in competition the great leveler of prices to the labor cost of production. In this they agreed with the political economists. The query then naturally presented itself why all prices do not fall to labor cost; where there is any room for incomes acquired otherwise than by labor; in a word, why the usurer, the receiver of interest, rent, and profit, exists. The answer was found in the present one-sidedness of competition. It was discovered that capital had so manipulated legislation that unlimited competition is allowed in supplying productive labor, thus keeping wages down to the starvation point, or as near it as practicable; that a great deal of competition is allowed in supplying distributive labor, or the labor of the mercantile classes, thus keeping, not the prices of goods, but the merchants’ actual profits on them down to a point somewhat approximating equitable wages for the merchants’ work; but that almost no competition at all is allowed in supplying capital, upon the aid of which both productive and distributive labor are dependent for their power of achievement, thus keeping the rate of interest on money and of house-rent and ground-rent at as high a point as the necessities of the people will bear.
On discovering this, Warren and Proudhon charged the political economists with being afraid of their own doctrine. The Manchester men were accused of being inconsistent. They believed in liberty to compete with the laborer in order to reduce his wages, but not in liberty to compete with the capitalist in order to reduce his usury. Laissez Faire was very good sauce for the goose, labor, but was very poor sauce for the gander, capital. But how to correct this inconsistency, how to serve this gander with this sauce, how to put capital at the service of business men and laborers at cost, or free of usury, — that was the problem….
“And when the light burst in upon them, they saw that this could be done by subjecting capital to the natural law of competition, thus bringing the price of its own use down to cost, — that is, to nothing beyond the expenses incidental to handling and transferring it. So they raised the banner of Absolute Free Trade; free trade at home, as well as with foreign countries; the logical carrying out of the Manchester doctrine; laissez faire the universal rule. Under this banner they began their fight upon monopolies, whether the all-inclusive monopoly of the State Socialists, or the various class monopolies that now prevail.”—Benjamin Tucker (Individual Liberty, Ch. 1)

Josiah Warren’s views were remarkably similar to the views of Proudhon. However, the mutualism of Proudhon is very different from the market-worshipping ideology of Benjamin Tucker. As I said before, Proudhon was no laissez-faire market-anarchist. So Tucker is mistaken in his interpretation of Proudhon as an advocate of laissez-faire. There are striking similarities between Proudhon and Warren, but it must be remembered that the systems of anarchism that each proposed were very different from one another. Furthermore, Benjamin Tucker is mistaken in his assertion that Proudhon, Warren, and Marx were the first socialists. In reality, Henri de Saint-Simon and Robert Owen, along with several others, had propounded socialism before Proudhon and Warren. Proudhon was familiar with the ideas of Saint-Simon. Warren actually knew Robert Owen and lived in a socialistic community founded by him. The philosophies of Proudhon, Warren, and Marx were the result of the refinement of socialist ideas that had already been circulating.

According to the individualists, the State is the primary monopoly in our society. The State is a monopoly on law, a monopoly on courts, a monopoly on law-enforcement, a monopoly on defense, etc. And it is this monopoly that creates the rules and regulations and the system of violence upon which all other monopolies are predicated. If you want to abolish monopoly, you must start by abolishing the State’s monopoly on law and law-enforcement. There are four primary monopolies that the individualist anarchists identified and condemned.

“Of the latter they distinguished four of principal importance: the money monopoly, the land monopoly, the tariff monopoly, and the patent monopoly.
“First in the importance of its evil influence they considered the money monopoly, which consists of the privilege given by the government to certain individuals, or to individuals holding certain kinds of property, of issuing the circulating medium, a privilege which is now enforced in this country by a national tax of ten per cent., upon all other persons who attempt to furnish a circulating medium, and by State laws making it a criminal offense to issue notes as currency. It is claimed that the holders of this privilege control the rate of interest, the rate of rent of houses and buildings, and the prices of goods, — the first directly, and the second and third indirectly. For, say Proudhon and Warren, if the business of banking were made free to all, more and more persons would enter into it until the competition should become sharp enough to reduce the price of lending money to the labor cost, which statistics show to be less than three-fourths of one per cent. In that case the thousands of people who are now deterred from going into business by the ruinously high rates which they must pay for capital with which to start and carry on business will find their difficulties removed. If they have property which they do not desire to convert into money by sale, a bank will take it as collateral for a loan of a certain proportion of its market value at less than one per cent. discount. If they have no property, but are industrious, honest, and capable, they will generally be able to get their individual notes endorsed by a sufficient number of known and solvent parties; and on such business paper they will be able to get a loan at a bank on similarly favorable terms. Thus interest will fall at a blow. The banks will really not be lending capital at all, but will be doing business on the capital of their customers, the business consisting in an exchange of the known and widely available credits of the banks for the unknown and unavailable, but equality good, credits of the customers and a charge therefor of less than one per cent., not as interest for the use of capital, but as pay for the labor of running the banks. This facility of acquiring capital will give an unheard of impetus to business, and consequently create an unprecedented demand for labor, — a demand which will always be in excess of the supply, directly to the contrary of the present condition of the labor market. Then will be seen and exemplification of the worlds of Richard Cobden that, when two laborers are after one employer, wages fall, but when two employers are after one laborer, wages rise. Labor will then be in a position to dictate its wages, and will thus secure its natural wage, its entire product. Thus the same blow that strikes interest down will send wages up. But this is not all. Down will go profits also. For merchants, instead of buying at high prices on credit, will borrow money of the banks at less than one per cent., buy at low prices for cash, and correspondingly reduce the prices of their goods to their customers. And with the rest will go house-rent. For no one who can borrow capital at one per cent. with which to build a house of his own will consent to pay rent to a landlord at a higher rate than that. Such is the vast claim made by Proudhon and Warren as to the results of the simple abolition of the money monopoly.
“Second in importance comes the land monopoly, the evil effects of which are seen principally in exclusively agricultural countries, like Ireland. This monopoly consists in the enforcement by government of land titles which do not rest upon personal occupancy and cultivation. It was obvious to Warren and Proudhon that, as soon as individuals should no longer be protected by their fellows in anything but personal occupancy and cultivation of land, ground-rent would disappear, and so usury have one less leg to stand on....
“Third, the tariff monopoly, which consists in fostering production at high prices and under unfavorable conditions by visiting with the penalty of taxation those who patronize production at low prices and under favorable conditions….
“Fourth, the patent monopoly, which consists in protecting inventors and authors against competition for a period long enough to enable them to extort from the people a reward enormously in excess of the labor measure of their services….
“The development of the economic programme which consists in the destruction of these monopolies and the substitution for them of the freest competition led its authors to a perception of the fact that all their thought rested upon a very fundamental principle, the freedom of the individual, his right of sovereignty over himself, his products, and his affairs, and of rebellion against the dictation of external authority.”—Benjamin Tucker (Individual Liberty, Ch. 1)

The individualist anarchists observed that usury (i.e. interest, rent, and profit) had a tendency to allow wealth to accumulate into the hands of those who already possess a significant amount of property. But usury is not natural; it is made possible by arbitrary human law. On a free market, pure competition would force prices down to the lowest possible level, making profits minimal or virtually nil. Without the State enforcing capitalistic property rights, unused land would be up for grabs and could be acquired by anyone through homesteading. If the State did not uphold a money monopoly, competition in the credit industry would force interest rates down to nearly zero. In a stateless laissez-faire free-market economy, there would be neither profit, nor rent, nor interest—usury would not exist. Labor would be the sole means of acquiring wealth.

Thomas Hodgskin made a distinction between natural property and artificial property. According to Hodgskin, natural property rights are usufructuary. Following the analysis of John Locke, he held that property is naturally acquired and justified by labor. A person can naturally take possession of land by tilling the soil, cultivating the land, homesteading, and such. If the land was vacant beforehand, then the labor they exerted in the process of cultivating and maintaining the land gives them a natural right to the land, since everyone is naturally entitled to the product of their own labor. Under a system of natural property, property rights are based on acquisition through labor and occupancy and use. The necessity of property rights stems from the fact that land is scarce and that two people can’t use the same piece of land for different and contradictory purposes at the same time. So the right to the land ought naturally to be given to the person who first acquires it fairly through labor and it ought to remain their personal property until they cease to occupy and use it. Once the person abandons the property and stops using it, then the property returns to a state of nature and can be freely acquired by anyone. Hodgskin contrasts this natural sort of usufructuary property with the artificial property arrangements under capitalism. Capitalistic property arrangements are based upon legal privilege rather than occupancy and use. Under capitalism, the “right” to a piece of land is conferred to the proprietor by the State and that “right” is enforced by the State. The “right” is not linked to a natural and objective criteria like occupancy and use. Instead, capitalistic property is linked to a title or deed, a legal document. Capitalistic property is based on legal privilege rather than natural rights. The individualist anarchists rejected capitalistic property in favor of a system of usufructuary property, which they deemed to be derived from natural law and objective criteria. (Cf. Thomas Hodgskin’s The Natural and Artificial Right of Property Contrasted)

Under a system of usufructuary property, rental arrangements wouldn’t occur. The landlord would have no legitimate claim to the land—ownership would automatically be transferred to the tenant. Anyone would be able to homestead land in order to acquire it as property; and interest would be near zero, so anyone could secure a cheap loan for the construction of a house or building or even to buy a machine for manufacturing purposes. Consequently, the landlords and capitalists would cease to exist as members of a distinct class since everyone would be able to secure property for themselves. The average man would be able to own some means of production.

Gustave de Molinari argued for the abolition of the State’s monopoly on policing. He held that competitive security companies might be a better way of providing law and order in a free society.

“If there is one well-established truth in political economy, it is this:
“That in all cases, for all commodities that serve to provide for the tangible or intangible needs of the consumer, it is in the consumer’s best interest that labor and trade remain free, because the freedom of labor and of trade have as their necessary and permanent result the maximum reduction of price.
“And this:
“That the interests of the consumer of any commodity whatsoever should always prevail over the interests of the producer.
“Now in pursuing these principles, one arrives at this rigorous conclusion:
“That the production of security should, in the interests of the consumers of this intangible commodity, remain subject to the law of free competition.
“Whence it follows:
“That no government should have the right to prevent another government from going into competition with it, or to require consumers of security to come exclusively to it for this commodity.”—Gustave de Molinari (The Production of Security)

The individualist anarchists thought that we could replace the State’s monopoly on law and order with a system of private police and private courts. Benjamin Tucker developed this line of thinking much further than Molinari did. Tucker held that people should insure their persons and property against theft and violence with private security companies and that these companies could ultimately take the place of government. If damage is done to your property by a vandal or some of your property is stolen, you would file an insurance claim with the security company, and the company would pay you accordingly. The company would then have an incentive to locate and prosecute the criminal responsible for the crime in order to force the criminal to reimburse the company for damages. By supplanting the State with a non-monopolistic and anarchistic sort of government, the individualist anarchists thought that they could abolish all monopolies at once, since all of the other forms of monopoly are predicated on legal privilege that is upheld by the State. (Cf. Benjamin Tucker, Individual Liberty, Ch. 2)

Georgism

In Progress and Poverty, Henry George proposed a system of public-ownership of land. However, he held that existing private owners should become sub-owners and continue to have possession of the land, but they would be charged rent—a land value tax—that could be used to fund government. Thomas Paine advocated a similar sort of system, but he held that the revenue from the tax should be divided up and given back out as a citizens’ dividend in order to redistribute wealth in an egalitarian fashion. Georgists advocate a single tax to replace all other forms of taxation. A land value tax as rent to the community for the use of land would be the only tax. The land value tax would tax unearned increase or money earned from speculation rather than labor, so this tax would not constitute theft as income tax does. A speculator is not entitled to make money off of the labor of the community in which his land happens to be situated. If the municipality builds roads, people develop the surrounding land, and schools and grocery stores are put in by the local community, the value of the land speculator’s property goes up without him contributing any labor. Thus, the land speculator profits off of the labor of others. A Georgist land value tax would eliminate the possibility of unearned increase and allow the community to take its share in compensation for the value it produced.

According to Henry George, the private owner should be taxed on the value of the land alone, excluding the value of buildings and improvements. More valuable land would be taxed at a higher price and less valuable land at a lower price. If some corporation wants to monopolize a diamond mine, gold mine, or oil field, then that corporation should have to pay taxes on the high value of the land that it monopolizes. No individual or organization has any natural right to monopolize land, so it is only fair for them to have to pay for their privilege of exclusive use. And if all land is regarded as public property rather than private property, the tax would just be rent owed to the community and would be totally legitimate.

If a landlord owns property and the value of his land increases due to the progress of society—e.g. the creation of public roads, utilities, and schools in the area as the surrounding land is developed—, then the landlord will be able to charge a higher rent and make more profits. Nevertheless, the increase in the value of his land is the result of other peoples’ labor and not his own, so he is not naturally entitled to those profits. It is only fair that he should have to pay more in taxes in order to fund the public services that increased the value of his land. If someone owns a gold mine and is allowed to exploit natural resources in order to profit, it is only fair that they should have to pay more taxes than their neighbors who are deprived of the same privilege of access to those resources. The revenue produced by this land value tax could be used to ensure that the basic needs of the members of the community are met. Once the provision of basic needs is taken care of, people will be free to work towards humanitarian and creative goals that are more fulfilling and meaningful.

For the sake of brevity, I have only briefly touched on the ideas of Henry George, but I would encourage you to look into these matters for yourself. In order to do true justice to Georgism, I would have to devote more words to this portion alone than to the rest of this post, but I am hoping that the little bit I have written is sufficient to spark your interest in the subject.