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Anarchist economics

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Anarchist economics entails theory and practice relating to economic activity within the philosophical outlines of anarchism. Anarchists (most notably anarcho-syndicalists and anarcho-communists) primarily oppose capitalism because its characteristic institutions promote and reproduce various forms of oppression, including private property, hierarchical production relations, collecting rents from private property, taking a profit in exchanges, and collecting interest on loans. Individualist anarchists are mutualist rather than collectivist or communist; they support non-capitalist property rights but oppose usury as well as other capitalist social relationships. - defining usury as profit from others' labor through rent, capital, interest, and wage-labor not paid "full" price. Finally, anarcho-capitalists fully support capitalism, but only the totally free-market laissez-faire kind.

Anarchist Critique of Capitalism[edit]

Alternative Theories of Value and Currency[edit]

Many anarchists advocate the abolition of money, but others call for a replacement of it with new value systems, still others, such as Benjamin Tucker, want simply the end of the government money monopoly, i.e. privatization of minting and banking and the repeal of legal tender laws.

Gift Economy[edit]

Gift economies are those based of free distribution of goods and services. Anarcho-communists are the main proponents of such. However many times this is said to refer to a planned economy which ensures everyones needs are satisfied in a way that allows a good quality of life (the kind of planning advocated by most if not all anarchocommunists differs from that of firms and the so called command economies in that it is democratic and voluntary). There are a number of variations on the concept, but they are centered on the notion of "From each according to ability to each according to need". Primitivists also advocate this kind of economy (although they believe that it is not possible with current modes of production and thus advocate a return to pre-industrial and often pre-agricultural modes of production).

Labor Theory of Value[edit]

A labor theory of value (LTV) was notably advanced in different forms by David Ricardo and Karl Marx. Ricardo held that the relative prices of most reproduceable goods and services were proportional to the amount of present and past labor time required to obtain, manufacture, process, distribute, and transport them. Marx's "Law of Value" is often interpreted as an analytic device elucidating the ways in which capitalism as a whole distributes socially necessary abstract labour time, while revealing that an important characteristic of commodities and their value relations is commodity fetishism obscuring an underlying reality of exploitative social relations.

Recently, some local currencies have taken on LTV characteristics by having a currency based on time although participants are not primarily anarchists. Critics point out that in many of these Time-dollar based currencies, it is really easy to inflate the currency, that there is no way to ensure that people are not paid more than an HOUR per hour, and conversely it ignores factors like value-added work (work that incorporates past labor in order to perform, such as the time spent by a dentist in school). One of the reasons that the IRS has chosen not to tax local currencies is that they are used for charitable purposes, such as community-building.

Some anarchists are interested in LTV currency systems because they make complex free market, fair trade systems possible, although in their current practices they are not applicable for anything other than local (ie. town-sized) economies. Detractors argue that the definition of a free market precludes usage of a normative pricing system, but some anarchist point out that since participation in an LTV currency network is voluntary, any LTV system is merely another choice in a free market of markets.

Energy Theory of Value[edit]

The theory that all values can be evaluated in terms of joules. In the same vein as LTV, this is an attempt to make a normative basis for value by accounting for embodied energy. Accounting for such a system would be vastly more complex than current or other theoretical currency systems because all energy output of workers and energy expenditure on goods/services must be tracked (something that is thought impossible and useless by many anarchists).

One group that has advocated a system using energy is the Technocratic movement with a system based on energy-credits where energy is used to "buy" a product or service without being exchanged, so the effect is that products or services are distributed to the user without gain by the provider (who has the same amount of energy in his or her account regardless) so allegedly making profit impossible.

Examples of Anarchist Economies[edit]

Utopia (sometimes known as Trialville) was an individualist anarchist colony begun in 1847, by Josiah Warren and associates, in the United States on a tract of land approximately 30 miles from Cincinnati, Ohio. see also: mutualism and Cincinnati Time Store.

The anarchist collectives formed during the Spanish Civil War is the most famous example of an anarchist economy operating on a large scale. The collectives were formed under the influence of the anarcho-syndicalist union the CNT in rural and urban areas and successfully practised self-management for a number of years in extremely difficult economic and political circumstances. Other examples of self-management include the factory committee movement during the Russian Revolution and the workplace occupations in Argentina during its crisis at the turn of the 21st century. Attempts at forming co-operatives also appeared during the Paris Commune of 1871 and the Italian Factory Occupations of 1920.

Laissez Faire City was an attempt to create a stateless unregulated laissez-faire economy in cyberspace. Although it eventually failed, many similar attempts, more decentralized, are being made in areas such as of cryptologically secure email and digital currency. Some, such as Davidson and Rees-Mogg in their book The Sovereign Individual, see an inevitable evolution to de-facto anarchy due to the liberating technology of the information age. Many anarchists see cyberspace as an anarchist outpost.

Theoretical Anarchist Economic Systems[edit]

Economic Democracy[edit]

Main article: Inclusive Democracy

The Inclusive Democracy project introduced a state-less, market-less and money-less conception of economic democracy as an integral part of the project.

According to the ID project, economic democracy is the authority of demos (community) in the economic sphere — which requires equal distribution of economic power. Therefore, all 'macro' economic decisions, namely, decisions concerning the running of the economy as a whole (overall level of production, consumption and investment, amounts of work and leisure implied, technologies to be used, etc.) are made by the citizen body collectively and without representation. However, "micro" economic decisions at the workplace or the household levels are made by the individual production or consumption unit through a proposed system of vouchers.

As with the case of direct democracy, economic democracy today is only feasible at the level of the confederated demoi. It involves the ownership and control of the means of production by the demos. This is radically different from the two main forms of concentration of economic power: capitalist and 'socialist' growth economy. It is also different from the various types of collectivist capitalism, such as workers' control and milder versions suggested by post-Keynesian social democrats. The demos, therefore, becomes the authentic unit of economic life.

As David Freeman points out, although Takis Fotopoulos' approach "is not openly anarchism, yet anarchism seems the formal category within which he works, given his commitment to direct democracy, municipalism and abolition of state, money and market economy".[1] James Herod also states that "his approach is the closest to mine (or mine to his) that I have yet seen in contemporary anarchist literature. He believes in direct democracy, promotes both workplace and community assemblies, and most unusually, outlines a radical epistemology to undergird the whole thing. He describes a voucher system that would facilitate exchange within a community without relying on the market or money".[2]

Participatory Economics[edit]

Main article: Parecon

Michael Albert and Robin Hahnel began to write about Parecon in the 1980's. This work builds on their earlier critiques of both market-based and centrally planned economies suggesting instead allocation by participatory planning created by the democratic interaction of a network of production and consumption councils. Parecon is a market abolitionist theory. Though not strictly an "anarchist" idea, its core features of decentralized democratic planning, institutions and remuneration based upon egalitarian norms and self-management, balanced job roles, environmental responsibility, and social efficiency, appeals to many anarchists.


Mutualism is a form of stateless market socialism advocated by Individualist Anarchists such as Benjamin Tucker. They argued that a free market in credit increase competition between lenders, make interest-free loans available. This would enable workers to buy their own means of production rather than having to sell their labour to a capitalist in order to survive, resulting in a form of market socialism where workers' cooperatives and self-employed individuals freely exchange goods and services.

Mutualism features a modification of the principle of private property, whereby communities or private defense agencies would only protect ownership of land, housing or workplaces on the basis of continual occupancy and use. In "What Is Property?" Pierre Jospeph Proudhon highlighted the distinction between ownership coinciding with use (possession) and absentee ownership (property) arguing that communities should only protect the former.

Proudhon also advocated that people create democratically controlled mutual credit associations or "peoples' banks", similar to local currency systems, rather than relying on the market to provide credit. These would lend only to cooperative workplaces, thus preventing the market from causing a relapse into capitalism.

Technological LTV Networks[edit]

A revision of LTV that incorporates information technology, cryptography, and open-source software to create a medium of exchange that precludes all forms of usury and thus requires no oversight or ideological guidance. In contrast to Parecon, there is no planned economy because users of the system will approve of labor that they feel is necessary and so production happens as people fill the labor market as they will.

Crucial to this system is the premise that money (credit for work done) can be improved with the addition of identity, information, and transparency, i.e. all credits created are associated with a particular individual (they are non-transferable), they inform users of the work done to create it, and can be viewed by any user on the system.

There are no specifications for how decisions are made within these Technological LTV Systems - each one is tasked to create its own ruleset. Joining such a network would be akin to signing a contract or EULA so revision of rulesets would resemble the open-source paradigm of updating software and having the user agree to a new ruleset. Decision making would then be implicit in any user's ability to participate in the revision of the system software, even though this approach could be elitist.

Prices on goods and services would be evaluated by the amount of credit earned by laborers involved--requiring that every individual item or service be tracked. Production then represents a mirror of the credit creation, so physical items would require their "negative" credit to be cancelled by a person wishing to own it. Since income distribution would be relatively flat in this system, it is hoped that most of the problems of capitalist accumulation and class structure will be avoided.

Panarchist Synthesis[edit]

This is the theory that all alternative economic systems could exist simultaneously. Though it may imply accepting a greater complexity of day-to-day living, anarchists predicate this overlapping of systems on the removal of states and corporations, and the presence of multiple currency paradigms. In effect, this would be analogous, on an individual level, to having various subscriptions or club memberships--a level of complexity surpassed by the average American middle-class consumer that holds several credit cards with various debts, owes mortage and car payments, and so forth.

The motive to adopt a panarchist approach to economics is the theory that not all goods, services, or resources are best exchanged/regulated within a single system, i.e. energy production is best tracked in kilowatt-hours, but collectible items have highly subjective values and therefore require a different exchange medium. Even Parecon could be incorporated in this approach.

Laissez-faire capitalism[edit]

Separation of economics and State is the goal of anarcho-capitalists. They want an economy free from any coercive regulation or control. Anarcho-capitalists generally see the State as the cause of all monopoly. The place of anarcho-capitalism within anarchism is hotly debated.

Economics as Anarchist Strategy[edit]

Some anti-capitalist anarchists believe that it is not radical political activity that will transform society, but radical economic activity that will make true change. They regard boycotts, consumer advocacy, and class-action lawsuits to be merely liberal actions that do not address the core problem which is capitalism itself.

Some anarchists believe that changing the nature of work itself is the crux of defeating capitalism. Parecon addresses the division of labor question by advocating balanced job complexes wherein all workers at a production facility share in all aspects of labor, i.e. everyone takes part in labor, management, maintenance, and all related work in order to ensure equality and that skills are shared amongst workers

Some anarchists believe that changing personal consumption habits to minimize (or eliminate entirely) involvement in the prevailing capitalist economy is essential to practicing anarchism in their lives. Withdrawing from the system by living on scavenged, stolen, or scammed resources is often touted by situationists, such as CrimethInc., as a viable means of survival and non-participation in the system. Many anarchists support counter-economics, that is, participating in the "black" illegal market.

Use of alternative currencies is growing, largely due to digital currencies offered on the internet, and availability of software to manage local currency systems like LETS.. Since States cannot collect taxes and revenue through use of alternative currencies they will theoretically lose power to the point of collapse. Some of these alternative currencies are designed to prevent usury, others are designed simply as alternatives to state-issued fiat money, as a hedge against inflation. Thus alternative currencies range from labor-time notes to specie-backed warehouse receipts. Three popular alternative currencies are: e-gold, Liberty Dollar, and Ithaca Hours.

Further reading[edit]


  • Albert, Michael Parecon: Life After Capitalism. W. W. Norton & Company (April, 2003). ISBN 185984698X
  • Dolgoff, Sam, editor, The Anarchist Collectives: Workers' Self-Management in the Spanish Revolution. Montreal: Black Rose Books. ISBN 0919618219
  • Dolgoff, Sam The Relevance of Anarchism to Modern Society . Chicago: Charles H. Kerr, 1989.
  • Kropotkin, Peter Fields Factories and Workshops (The Collected Works of Peter Kropotkin, V. 9) Black Rose Books (January 1, 1996). ISBN 1895431387
  • Kropotkin, Peter The Conquest of Bread . New York: New York University Press.
  • Leval, Gastón Collectives in the Spanish Revolution . London: Freedom Press. ISBN 0900384115
  • G.P. Maximoff, Program of Anarcho-Syndicalism. (extract from his Constructive Anarchism, published in English in 1952; this section is not included in the only edition of the work now in print.) Sydney: Monty Miller Press, 1985
  • Proudhon, Pierre What Is Property? (B. Tucker, translator). Cambridge University Press. ISBN 0521405564


See also[edit]





External links[edit]

Alternative Currency[edit]

Ostensibly Anarchist[edit]

General Left-Wing Economic Reporting[edit]

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  1. Review by David Freeman of book Towards An Inclusive Democracy: The Crisis of the Growth Economy and the Need For a New Liberatory Project, published in Thesis Eleven, Vol. 69, No. 1 (Sage Publications, May 2002), pp. 103-106.
  2. Review by James Herod of book Towards An Inclusive Democracy: The Crisis of the Growth Economy and the Need For a New Liberatory Project, published in book Getting Free (Lucy Parsons Center publications, 2007), pp. 137-138, distributed by AK Press Distribution