What Would An Anarcho-Socialist Economy Look Like?

by Keith Preston

I have been asked by readers of Anti-State.com to expound a bit upon my own anarcho-socialist perspective. Specifically, I have been asked to describe how a socialist-anarchist economy might come into being, how such an economy might sustain itself over the long haul and how the typical town’s McDonald’s or Wal-Mart might be communalized. Before I attempt to answer these questions, it might be useful to the reader if I first sketch a very general outline of the overall conceptual framework I am operating in and the theory of political economy to which I subscribe.

I am a socialist-anarchist in the classical Bakuninist tradition. Like Noam Chomsky, I consider this tradition to be the proper heir to classical liberalism and its critique of concentrated power-political, economic, military, ecclesiastical and otherwise. (1) For me, at least, Bakuninist anarchism is simply classical liberalism updated to include a critique of the role of business corporations in perpetrating modern systems of power relations. Unlike his enemies, the Marxists, Bakunin recognized that the state is an artificially privileged social class unto itself, above and beyond that of economic and social authorities. In his day (mid-nineteenth century Central Europe), the class structure consisted of the state, first of all, the state-protected feudal landlords, the state church and the nascent industrial bourgeoise class created by state intervention into the emerging market economy. (2) Bakunin’s antidote to this system of oppression involved the insurrectionary efforts of the workers and peasants to remove the state and the state-privileged exploiter classes in favor of a decentralized confederation of peasant communes and workers’ collectives tending the land and the industrial machinery minus the upper strata of oppressors. (3)

What I attempt to do is apply Bakuninist analysis to the modern world. An indispensable aspect of classical Bakuninism is its critique of state socialism. Bakunin predicted that if state socialism ever came to power it would produce a type of “red bureaucracy” that would in turn generate the bloodiest tyranny in history. This prophecy was unfortunately realized in the infamous communist, fascist and national socialist regimes of the twentieth century. Likewise, Bakunin argued that the ruling classes would seek to avoid their own ultimate dislocation and expropriation via popular revolution and seek to subjugate and pacify the working classes by means of a paternalistic welfare state, the purpose of which would be to essentially co-opt and destroy working class movements for self-determination. Hence, the rise of Fabianism, Progressivism, Social Democracy and the New Class bureaucrats and intellectuals criticized by thinkers ranging from George Orwell to James Burnham. (4) Modern state systems have created what is largely a two-tiered class structure that in many ways mirrors the feudal system of old.

Professor Thomas Dye of Florida State University estimates that the number of true powerholders in American society amounts to approximately seven thousand people. This figure includes those who hold the top positions in government, corporate, educational, cultural, legal and civic institutions. (5) It is this tiny oligarchy, seven thousand people in a nation of nearly three hundred million, that might be said to constitute the ruling class proper in American society, comparable to the royal families of old. Directly beneath them in the class structure are the New Class apparatchik who have replaced the feudal aristocracy, the Church and the industrial bourgeoisie in the domination of the economic, cultural and educational life of the society. George Orwell described this element:

“The new aristocracy was made up for the most part of bureaucrats, scientists, technicians, trade-union organizers, publicity experts, sociologists, teachers, journalists and professional politicians. These people, whose origins lay in the salaried middle class and the upper grades of the working class, had been shaped and brought together by the barren world of monopoly industry and centralized government.” (6)

It is for the benefit of this class that most state intervention into the economy and into society is done. It is this class who are the primary beneficiaries of the most extravagant entitlements such as social security, Medicare, civil service pensions and agricultural subsidies. It is the New Class who make their living staffing the government’s social engineering programs, teaching in state schools and universities, working for state-financed foundations and managing the bureaucracy of corporations that are dependent on state subsidies and contracts. Tariffs and other forms of protectionism are set up in part to protect the employment interests of state-connected unions. Professional licensing schemes create monopolistic guilds for New Class professionals. Zoning and land use regulations serve to inflate the real estate values of affluent New Class property owners. These examples are just a drop in the bucket.

The lower tier of this system of artificial class stratification includes rank and file workers and lower management who are the most burdened by personal income, payroll, excise and other taxes and whose labor marketability is devalued through state intervention, persons unemployed by state actions that constrict the supply of employment opportunities, persons subjugated by the state’s welfare system, poor and minority persons herded into the urban reservations of “public” housing, persons rendered homeless by the state’s constriction of the supply of available and affordable housing, small businessmen and self-employed persons regulated to death by coercive state agencies, farmers dispossessed of their traditional lands by state-supported agribusiness cartels and central banks, persons made disabled or infirm by state constriction of available and affordable medical care, persons dispossessed of homes and lands by eminent domain and asset forfeiture laws, those who livelihoods are relegate to the “illegal” market by the state (gamblers, peddlers, vendors, beggars, drug sellers, prostitutes, loansharks, smugglers, etc.), persons imprisoned in the state’s gulags, psychiatric prisons (“mental hospitals”), educational prisons (“public schools”), pseudo-military concentration camps (“boot camps”) and so on. These and other similar groups constitute the modern “proletariat”, to use a classical term. The modern version of the “class struggle” involves the ongoing brutal conflict between those who most benefit from the system of mass democratic, special interest-dominated, welfare-warfare corporate statism on one hand and those who are most victimized by it on the other hand. (7)

As a revolutionary anarcho-socialist, I aim to abolish the state’s military forces, police, courts, prisons, schools, social engineering programs, welfare system, corporate charters and corporate laws, antidiscrimination statutes, state ownership of land, currency monopoly, subsidies to infrastructure, regulatory agencies, trade restrictions, licensing schemes and so forth. In short, I aim to abolish the state altogether. On this point, anarcho-capitalists and I would agree. However, I also wish to go a step further and convert from an economic order where capital commands labor to one where labor commands capital. The pertinent question at this point is the matter of how this can be done without a coercive state apparatus. Indeed, a systemic economic conversion of this type must be done non-coercively and without a state. Otherwise, the centralization of capital into the hands of the state would produce a new type of ruling class as we have seen in such political degenerations as the Soviet Union, Peoples’ Republic of China, Democratic Republic of Vietnam and so on.

I have noticed that many if not most anarcho-capitalists and free market libertarians take the corporate dominated economy for granted. For them, a “free market” is simply the present system minus taxes, welfare and government social service agencies. As a correlation to this, most anarcho-socialists foolishly reject the free market viewing it as a source of “capitalist exploitation”. But authentic free market economics provides the proper path to working class liberation. The removal of state-imposed impediments to economic activity-taxes, regulations, prohibitions, licenses, currency monopoly, patents, subsidies-would naturally result in the dramatic expansion of the quantity and variety of businesses, partnerships and enteprenuerial associations of virtually every kind. If mutual banks of the Proudhonian variety were allowed to issue private banknotes with the output of future production used as collateral, then the capacity for self-employment would be readily available for anyone with marketable skills. A dramatic increase in the number of businesses and employers would mean that workers would have a much larger number of potential employers to choose from in addition to greatly expanded opportunities for self-employment. This would in turn radically increase the bargaining power of workers in terms of their dealings with employers. The cost of wage labor would increase as the market for employees became drastically more competitive. Workers in large scale industrial operations would have the option of demanding the right of self-management if they so desired and, given the expanded availability of credit and capital, workers would be able to buy out capitalists and essentially become their own employers. So the dominant forms of economic organization in an authentic free market would be worker-owned and operated industries, partnerships, cooperatives, a mass of small businesses, modestly sized private companies and self-employed persons. Industries that remained nominally owned by outside shareholders would largely function on a co-determined basis, that is, as partnerships between shareholders and labor with labor having the upper hand. (8) So the traditional anarcho-syndicalist ideal of an industrial system owned and operated by the workers could, for the most part, be achieved in the context of a stateless free market.

Removal of statist obstacles to the creation of housing and health care and the production of services would simultaneously increase the supply and reduce the cost of such goods. As the overall cost of living declined, workers would be able to work less, retire at an earlier age or opt for part time employment. A stable currency would stall the advancement of inflation thereby increasing the security of elderly and retired persons. Rents, mortage payments and credit debts would undergo an overall decrease and home ownership would become more accessible to the average working person. Greater accessibility to land resulting from the elimination of federal government and agribusiness related land monopolies and the application of the homesteading principle would result in the revival of traditional family farms. Similarly, a lowered cost of living would reduce the need for two-income households thereby reviving traditional households and increasing the degree of attentiveness of parents to children. It would probably take volumes to completely describe the effect that the removal of the state would likely have on the nature and structure of the economy and the types of institutions that might exist in anarcho-socialist system. Suffice to say that such a system would be as different from what we are familiar with as the current system is from the old feudal order.

The question of getting there from here is obviously a monumental one. Drastic reconstructions or alterations of social systems usually follow a crisis of some severe sort. The conversion to an entirely different order, of whatever kind, will likely occur after the current system has run its course. A social apocalypse of this type may not be that far away. Professor Hoppe has warned of the likely consequences of the path currently being pursued by the welfare-warfare corporate states of the advanced countries. (9) As the liabilities of modern states for social insurance payments and public debts become ever more exorbitant, taxes and bureaucracy consume more and more of the gross national product, real wages and productivity decline, and currency devaluation continues, an eventual economic meltdown seems quite likely. These factors combined with military-imperial overstretch and persistent ethnic and cultural strife generated by the state’s “divide and conquer” strategy of population control may well result in an overall systemic collapse similar to that experienced by the Communist states of the East. The type of politico-economic system that would emerge after such an event is obviously quite difficult to predict.

Like Confucious, Machiavelli and Hume before him, and Mises and Rothbard later on, Bakunin recognized that a natural aristocracy of cultural and intellectual leaders typically set the tone of the society. He conceived of the idea of “principled militants” leading large popular organizations and carrying out social reconstruction by example and inspiration. To some degree this was realized by the Bakuninist-influenced Spanish anarchist movement with the core of militants and intellectuals gathered around the Iberran Anarchist Federation (FAI) leading the much, much larger anarchist labor movement. The Velvet Revolutions of Eastern Europe featured intellectuals such as Vaclav Havel as de facto leaders of a broader popular revolt. Hoppe specifically recommended the application of a modified version of the traditional syndicalist program to the economies of the Eastern European nations. (10) They would have done well to heed his advice. Following a similar revolution in the West, popular organizations would have to emerge whose leaders were committed to anarchist objectives.

There are “non-market” anarcho-socialists as well as advocates of the “free market socialism” that I have outlined above. Prototypes for non-market socialism already exist in the form of the various intentional communities to be found here and there. There is such a community about an hour’s drive from my residence that has been in existence for about thirty years and maintains a steady population of about one hundred or so. It is possible that communes of a hundred people could be grouped together with one another into larger units of, say, ten communes who were then federated with ten other groups of ten communes and so on thereby creating a fairly large anarcho-communist federation involving tens of thousands of people. However, the larger such activities became the more an explicit market would be needed for the determination of prices and the productive allocation of resources. I have come across some anarcho-communists who believe it is possible to have a global communist system that includes a form of central planning that does not involve a state, but the less said about such ideas the better, in my view. (11)

The sustainability of a socialist-anarchist economy would largely be dependent upon the natural system of checks and balances resulting from the dramatic alteration of the labor market that would occur following the abolition of the state. Additional checks and balances might involve the making of shares in worker owned industries non-marketable and the defining of property rights according to usufructuary (ownership based on use and occupation) rather than Lockean principles as an impediment to the centralization of control over resources. It is on this point that there is likely to be the greatest amount of disagreement between anarcho-socialists and anarcho-capitalists. I believe the two can co-exist. The overall society-wide meta-system that I favor is one of local option. Some communities could choose to recognize absentee ownership rights while others might not. The end result might be a geographical division similar to that found in the current American states where local laws pertaining to capital punishment, gambling, the regulation of alcohol, etc. differ from place to place. Other issues on which anarchists and libertarians often disagree-abortion, animal rights, ecology, children’s rights- might be handled in a similar manner. Lastly, it is widely recognized that the survival of any social system is largely dependent on, first, the consensus of the cultural and intellectual elite, and, secondly, popular opinion. Over time, customs, traditions and habits might develop that were conducive to the maintenance of the anarchist system through diffuse sanctions and social pressure. As Jefferson said, “Eternal vigilance is the price of liberty”.

As for the specific question asked by a reader related to the issue of how a Wal-Mart or McDonald’s might be communalized, I am skeptical as to whether or not large retail and fast food chains of the type we are currently familiar with could even exist in a genuine free market. The success of these chains results from their ability to undercut their local competitors with lower prices. But their lower prices are possible only because of the massive state subsidies to trucking, shipping, infrastructure, aviation, etc. If such corporations had to cover their own costs in these areas, they might not be able to compete with local alternatives.(12) Barring such a scenario, however, I suspect these industries might be “communalized” through either an employee buyout or through implementation of a general strike for worker self-management. There is also the possibility of a buyout by federations of community, environmental, consumer and other types of popular organizations. Saul Alinsky once envisioned an industrial system where large groups of small shareholders meet in stadiums to determine corporate policy. Whether this would be feasible or not, I’m not sure. But it’s an interesting idea.

Lastly, let me say that I consider anarcho-capitalists and other libertarians to be valuable and reliable allies in the broader struggle against the state itself. I regard this struggle as the overriding priority. I believe there is plenty of room for different economic beliefs and institutions to co-exist just as it is possible for a plurality of cultures, religions and ethnic groups to co-exist as well. I am sympathetic to anyone who is in sincere opposition to what Nock described as “our enemy, the state”. To use a slogan that some would regard as an oxymoron, “Anarchists Unite!”


(1) Noam Chomsky, Secrets, Lies and Democracy

(2) Kevin A. Carson, “The Iron Fist Behind the Invisible Hand”

(3) Incidentally, Bakunin believed the federalist structure of the Confederate States of America to be a prototype for a decentralized anarchist federation, a fact that would make most of today’s politically correct anarcho-leftoids gag if they were aware of it.

(4) Kevin A. Carson, “Liberalism and Social Control: The New Class’ Will to Power”

(5) Charley Reese, 6/10/02 column.

(6) Quoted in “Liberalism and Social Control”, by Carson

(7) I have discussed some of these matters in several other essays. See “Conservatism is Not Enough”, “Anarchism or Anarcho-Social Democracy” and “Reply to Brian Oliver Sheppard’s ‘Anarchism Vs. Right-Wing Anti-Statism” at http://www.attackthesystem.com/commentary.html

(8) “Iron Fist”, by Carson. See also my review of Carson, “Capitalism Versus Free Enteprise”

(9) Hans Hermann Hoppe, “Democracy: The God That Failed”. See my review of Hoppe at www.anti-state.com/preston/preston2.html or www.attackthesystem.com/hoppe.html.

(10) “Democracy”, by Hoppe.

(11) For an example of this see “The Northeastern Anarchist: Magazine of the North Eastern Federation of Anarchist-Communists”, Spring/Summer 2002.

(12) “Iron Fist”, by Carson.

Copyright 2002. American Revolutionary Vanguard. All rights reserved.

1 reply »

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