Economics for Democratic Socialism

1. Economics for Democratic Socialism Drexel University Spring Quarter 2009

2. Libertarian Socialism? • Not everyone who hates the government loves capitalism. • P.-J. Proudhon, known as a founder of anarchism, said “Property is Theft.” • The idea is that capitalist property is exploitative, and cannot exist without a strong state to enforce it. • (Proudhon was also notoriously antisemetic).

3. Anarchism 1 • Anarchism advocates the abolition of all domination of one person by another, including government. • There may be some disagreement about timing. • Philosophic anarchists expect government eventually to be eliminated. • Revolutionary anarchists say: now. • A fairly common argument (from Proudhon) is that once artificial restraints such as government are removed, natural human solidarity will emerge. • There seems to be no basis in experience for this romantic view.

4. Anarchism 2 • Anarchist tendencies have emerged from a number of political movements: • American abolitionism: Garrison • Individualist anarchism: Benjamin Tucker • The Russian Terrorist Party • Anarcho-Communism: Bakunin, Kropotkin • Labor Unions • Anarcho-syndicalism • Anarchists reject majority rule because the minority is dominated by the majority.

5. Anarcho-Communism • The synthesis of anarchism and communism is based on the idea that small-scale local communities would control nonhuman means of production, on a basis of consensus, and that larger-scale organization would be coordinated by agreement or, if necessary, markets. (Kropotkin: The Conquest of Bread) • This may be said to be utopian in the sense of Martin Buber: proposals for social organization as if human aspiration were a determinant. (Paths in Utopia) • Labor Zionism -- a highly successful collectivist movement, in many ways -- was strongly influenced by Anarcho-Communism.

6. Anarcho-Synicalism • The Anarcho-Syndicalists advocated that labor unions take over control of production and build up a new state by their federation. • Some anarcho-syndicalists envisioned society as constituted from the bottom up by a very complex system of voluntary organizations. (Giovanni Baldelli, Social Anarchism) • A related tendency, Guild Socialism, advocated something like a return to the structure of the medieval city, with the unions transforming themselves into guilds and constituting a state (and an economic plan) from the bottom up.(G. D. H. Cole, Guild Socialism Restated).

7. Individualist Anarchism • American individualist anarchism was not pro-capitalist. • Tucker attacked government measures to suppress labor unions in his time and defended the labor unions as voluntary associations of individual workers. • Thus individualist anarchism was closer to anarcho-syndicalism than to the anarcho-capitalism that emerged from free-market thinking in the 1960’s.

8. Libertarian • The word “libertarian” was synonymous with anarcho-communism about 1858-1960. (JOSEPH DEJACQUE, Le Libertaire, New York, 1858-1862) • In about 1960, extreme free-market conservative coined the word for the first time (so far as they knew) for their own tendency. • Needless to say, anarchists are more than a little bitter about this act of theft.

9. Anarchism 3 • In a very few instances, anarchist groups have found themselves in control of territory in the context of civil war. • The Makhnovchina in the Ukraine. • Catalonia in the Spanish Civil War. • They did make some compromises, arguably unavoidable in wartime, but lost anyway.

10. Minarchist Libertarian Socialism • One useful idea from free-market “libertarians” is the distinction of anarchism and minarchism. • A minarchist is a libertarian whose aim is to reduce domination or command relations to their least practical extent, rather than doing away with them. • (The least practical extent could still be pretty comprehensive, but that’s not what minarchists suppose.) • One strategy is to have many “power centers,” each limited and balanced by the others. • In practice, anarcho-syndicalists and social anarchists seem minarchist, rather than strictly anarchist.

11. A Sketch of Guild Socialism 1 • In a local community, the workers in various activities organize themselves into guilds to administer their production, and the guilds into a guild congress. • Those who produce public goods are grouped as the “civil guilds.” • Councils are formed for other functions, such as health, cultural, collective (public utilities) and consumers’ cooperative societies. • “It follows that there must be, in the Society,as many separately elected groups of representatives as there are distinct essential groups of functions to be performed.”

12. A Sketch of Guild Socialism 2 • These groupings are federated to form the local commune and they send representatives to a communal council. • At the same time, the local guilds for coal mining, leather-working, wind-power generation, and so on, are federated into regional, national and perhaps international guilds for these purposes. • Similarly, health councils, cultural councils, consumers’ coops, and so on have their own regional, national, and perhaps international federations. • The regional or national commune is simultaneously a federation of the communes at the next lower level and the guilds and functional federations at its own level.

13. A Sketch of Guild Socialism 3

14. Supply and Demand • The Guilds Congress concerns itself with “the adjustment of supply and demand.” • Prices and targets of production are determined by negotiation among the various guilds and councils. • In case of impasses, decisions are arbitrated by the next, more inclusive council. • For example, if the auto production guild and the steel guild disagree on prices and production targets for steel, the issue would be arbitrated by the Communal Council. • In this way, in effect, the Guilds Congress generates an “economic plan” by negotiation.

15. Anarchism • “The civic services are funded by direct transfers between the industrial and civic guilds.” (Again, by negotiation). • Thus, no taxation of individuals. • Since individuals are not taxed, the commune is indeed not a state as Schumpeter uses the term. (Capitalism, Socialism and Democracy, p. 169)

16. Markets? • Cole, writing before 1920, did not envision a role for markets. • Indeed, he wanted no material incentives for production, the workers being put “on their honor to do their best.” • However, markets could play a big role, especially if enterprises were free to determine their outputs locally, while prices were negotiated at the level of the national commune.

17. Assessment 1 • The dispersion of power into many groups might secure the greatest possible individual liberty consistent with equality and more or less efficient production. • Perhaps there would be a practical approximation of "unanimous direct democracy" or of equity in the sense of non-envy. • But can we be sure of these things? • If negotiation is costly, the approximation to efficiency might be rather poor. There would be a lot of negotiation.

18. Assessment 2 • There are real-world precedents. It seems that medieval city-states were (at least in some cases) composed by their guilds somewhat in this way. • However, this picture is postrevolutionary. • Precisely because it envisions the reconstitution of the state “from below,” it presupposes that the capitalist state no longer exists. • Unless we suffer a quite general social collapse (which God forbid!) it seems unlikely to be relevant.

19. Summary • Capitalism and liberty march together only on the town square, not on the highway. • For one (older) sort of libertarian, capitalism requires state-enforced property, and so a strong state; both should be rejected. • However, the rejection of all compulsory organization poses problems for predictably efficient use of resources. • Some compromises seem inevitable. • Guild socialism provides one instance of a carefully thought-out set of compromises.