Keith Preston: Anarchist Economics Compared and Contrasted: Anarcho-Capitalism vs Anarcho-Syndicalism/Communism

Keith Preston

The Market for Liberty” by Morris and Linda Tannehill was published in 1969, and was one of the first books to really provide a fine-tuned description of how an anarcho-capitalist economy might work. It continues to be perhaps the most detailed of any work describing anarcho-capitalism in practice. Excerpts from the book are available online from the Mises Institute.

The book was also recently translated into Spanish by Jorge Trucco. This is a video of Trucco giving a talk about “The Market for Liberty”:

It’s interesting to compare the anarcho-capitalism of “The Market for Liberty” with the anarcho-communism/anarcho-syndicalism of Diego Abad de Santillan. “After the Revolution” by Santillan is one of the most comprehensive descriptions of anarcho-syndicalism in practice that has ever been written, and Santillan was the leading economic theorist of the Spanish Revolution in 1936. The entire text of “After the Revolution” is available online from the Anarchist Library website.

Part 1: A General Survey

The Essential Factors of Production

Work and Bread for Everybody

The Population of Spain and its Distribution

A Society of Producers and Consumers

Social and Economic Iniquity

Part 2: The New Structure

Organization of Work

Council of Foodstuffs Branch

Council of Construction Industries

Council of the Clothing Industries

Council of Agriculture

Council of Livestock Production

Council of Forestry

Council of Mining and Fishing Industries

Council of Public Utilities Industries

Council of Transport Industry

Council of Communications

Council of Chemical Industries

Council of Sanitation

Council of Metallurgical Industries

Local Council of Economy

Regional Councils of Economy

Federal Council of Economy

Council of Credit and Exchange

Council of Publishing and Cultural Activities

Part 3: The Revolution of Liberty

Economy and Liberty

The Libertarian Revolution

Spain and the Revolution

Of course, there are plenty of middle of the road approaches to anarchist economics beyond the hard-core anarcho-capitalism of thinkers like Murray Rothbard, David Friedman and the Tannehills, or the hard-core anarcho-communism or anarcho-syndicalism of the Spanish anarchists. There is mutualism, Georgism/geoism, the decentralism of Ralph Borsodi, various theories of market socialism, co-operative economics, distributism and much else as even a cursory look at the Wikipedia entries on Anarchist economics and libertarian socialism will reveal. While I have my disagreements with fellows like Kevin Carson and Shawn Wilbur, these guys deserve a tremendous amount of credit and respect for their efforts to publicize and elaborate on alternative economic perspectives.

The big question that arises from an examination of these ideas is which set of economic values are most compatible with an anti-authoritarian society. For myself, the answer to the question more or less amounts to “I don’t know.” There are difficulties associated with many of the schools of libertarian or decentralist economics, ranging from their practical feasibility to their ability to prevent re-concentrations of power. Critics of anarcho-capitalism will argue that anarcho-capitalism in practice could just as easily become a system where company towns and agricultural plantations are owned and controlled by an oligarchy that is protected by mercenary armies in a way that amounts to an industrial serfdom. And it is not uncommon to see some “right-wing libertarians” praising fascist Singapore (where chewing gum is illegal) or the fiefdom of Dubai (where they still have debtors’ prisons). However, it is also easy to imagine the syndicalist model developed by Santillan developing into a statist bureaucracy over time (see Bryan Caplan’s critique). This is why I tend to lean towards some of the more middle of the road approaches beyond anarcho-capitalism or anarcho-communism.

Some years back I wrote an extensive essay for the Libertarian Alliance outlining a general theory of political economy which argued that modern systems of state-corporate economics are neither “free market” nor “socialist” in nature, but instead represent a kind of “new manorialism” and oligarchical plutocracy. It was my one contribution to anarchist economic theory. However, while economic questions are certainly important, often vitally important, I tend to reject the economic determinism that is implicit in some models of anarchist and libertarian thought, whether of a Marxist, Austrian, or some other model. If I am any kind of determinist, I would be a political determinist in the vein of Machiavelli or Carl Schmitt. As Schmitt pointed out, the ultimate question in politics is “Who decides?” and ultimately fundamental decisions about who has rightful control over resources, how legitimate ownership is defined, what the rules of contract or exchange will be and how they will be enforced, what kind of medium of exchange will be used, etc. are made by those who have the power to make such decisions whether they are states, corporations, market enterprises, workers councils, communes, militias, common law courts, or whatever else. In other words, the political precedes the economic rather than vice versa.

Additionally, I tend to believe that anarchists could learn a great deal from the work of Max Weber, who argued that economic power is only one strand of power in society, along with political power, charismatic power, social power, and the like (other thinkers, ranging from Bertrand Russell to C. Wright Mills, have argued this as well). Weber further argued that economic systems are to a great degree an outgrowth of pre-existing cultural systems. For example, he argued that capitalism and the industrial revolution developed more easily in historically Protestant countries because capitalist development requires a certain break with feudal and other comparable pre-modern traditions, and that Protestant culture already had the experience of breaking with Catholic tradition and was therefore more amenable to economic, technological, and cultural innovation.

The insights of elite theory indicate that any kind of organization of any size will ultimately be an oligarchy. The key to restraining the power of oligarchy is scale. The smaller the scale of an organization or institution, the shorter the reach of its oligarchy will be. See the work of Kirk Sale and the late great Tom Naylor on this. Therefore, the key to controlling excesses of power is to cultivate small-scale institutions irrespective of their particular ideological foundations or structural specifics.



  1. I haven’t read The Managerial Revolution. As a general point though, one thing that I observed early on in my discovery of libertarianism- when I was still engaged with a lot of progressivist types- is that the progressive assumption is that the more complex a society becomes, the more management it requires. Whereas the countervailing (libertarian) assumption is that the more complex a society becomes, the less management is possible.

    As an example, if you are the quartermaster for an army- a relatively simple society- it is quite feasible to have a central command economy- there are a limited range of goods which are chosen by central authorities and have particular function. None- weapons, food or clothes- have to take into consideration individual preferences. It can be done. Likewise, for a primitive economy in which there are a limited range of foodstuffs- grain, olive oil, togas- it is feasible. For a modern economy of billions of products, central management is impossible. Which is the central Austrian point. This is why managerialists try to simplify central command economies- which is one reason for preferring big businesses over small ones. You can comprehend three giant corporations. You can’t comprehend a million craft businesses.

    One might therefore suggest that attempts at economic management will cause an ever-increasing central planning burden which is less and less effective; attempts to patch it by piling on more managers just makes the system worse. Which is how we might interpret the current situation we live in.

  2. Well there is only one form of economics – as Ludwig Von Mises makes plain in “Human Action” and other works. Economics shows that different policies, different “social systems” if you like, have different results – but they do not have different economics, any more than different “races” or “historical periods” do. In the end there is no “right and left”, just right and wrong – truth and error.

    There is no libertarian reason why various forms of communes (religious or atheist) should not be allowed to exist – indeed even if they collapse the people in them can still perform useful tasks. For example the people from the failed Owenite community near where Dallas now stands helped create the city in its early days.

    As for specific economic fallacies – well the only interesting thing about them is that no matter how many times the are refuted they keep coming back. I do not believe that bring back long refuted economic fallacies deserve any thinks (rather the contrary), but such people exist – and one must, therefore, oppose them (again and again and again), such is life. The only true peace is death – and even that may not be peaceful (we do not know).

    For example the Labour Theory of Value (the basis for the “exploitation” theory) was refuted many times even whilst David Ricardo and James Mill were still alive (and not just by foreign writers – Richard Whately and Samuel Bailey were British). But it had to be refuted all over again by Carl Menger and so on.

    The “land question” of Henry George and co really goes back to the economics of David Ricardo – it was refuted by Frank Fetter (amongst others) more than a century ago, but it keeps coming back and keeps needing to be dealt with (again – such is life), because some people envy (convert) the land of others (whether individuals or private organisations such as Churches) and look for intellectual excuses to either the tax the land or just take it.

    Relative (I stress – relative) security of large scale landholdings has been the defining feature of Western Civilisation since at least the French Edict of Q in 877 AD – as opposed to “Oriental Despotism” (Islamic or other) where the ruler make take the land “for fair distribution”. But it still has to be defended – evil never sleeps and one just has to get used to eternal war against those who wish to destroy large scale land holdings.

    One also (again and again) comes upon claims that limited liability (of clubs, societies, fraternities, trading companies, churches – and on and on) was the “invention of the state” – so one points out (again and again) that it was actually developed by private Law Merchant and Church Canon Law (often used in commercial matters) as long ago as the Middle Ages.

    That does not mean that people should be forbidden to, for example, buy insurance from unlimited liability “Lloyds Names” or whatever (if they are willing to pay the expensive prices that people will demand for risking everything), any more than people should be forbidden to form communes (whether they call it “syndicalism” or whatever) as long as they are not subsidised by the state (as Israeli ones were up to the mid 1970s – in spite of the subsidies they still did not attract more than 5% of the population).

    And, of course, there is the eternal “fools gold” of credit expansion – of lending out money that no one really saved (lending without the equal sacrifice of consumption – i.e. real saving).

    Once this fallacy was the province of the “monetary cranks” refuted by the Classical economists (again and again), even David Ricardo and Karl Marx refuted (and mocked) what we would not call “Keynesianism” (long before Keynes was born) – but the classic refutation is by J. B. Say (hence “Say’s Law” – which Keynes misstates and then pretends to refute).

    Whether Henry Hazlitt and W.H. Hutt in the 1950s or people such as Hunter Lewis (“Where Keynes Went Wrong”) in modern times, the expand-credit argument has to be defeated – again and again. And, no, it does not really help if one hand out the money to “the people” directly – rather than via the banking system.

    Lastly on “Plutocracy”.

    Most government spending (government spending is now almost half the entire economy in many countries) in Western nations is on the Welfare States – and these Welfare States were not created to please big business or in response to “problems” created by “big business” – the creation of the Welfare States was basically an IDEOLOGICAL development and their expansion (for example the explosion of the American Welfare State since the mid 1960s) is largely a matter of internal dynamics and the vast social (cultural) harm they do. The collapse of the family and so on is not a plot of “the capitalists” and it is not a unintended side effect of “capitalism” either.

    It is also unlikely that most (although, yes, there are some who do like it) American “capitalists” like a situation where “the rich” provide a higher share of Federal government revenue than ever before, and where “big business” is so highly taxed and regulated that companies are moving out of the United States.

    About the only real element of truth in the government-helps-the-rich argument is the that the expansion of the credit money supply does indeed tend to benefit the rich at the expense of the poor – that has been the story of most of Latin America for more than a hundred years, and Richard Cantillon noted this effect of boom-bust-ism as long ago as the 1700s. However, Keynes was no friend of “the rich” and neither are Keynesians such as the vile Krugman and Stiglitz now, helping the rich is not the intention of their monetary policy (although it is the effect – at least for some rich people, the rich who are more involved in financial dealing than they are in enterprises that produce physical goods). Also it is odd for “anti capitalist” “anarchists” to denounce the policy of low (or no) interest rates and general credit money expansion (lending that is not 100% from real saving) – as, historically, this is their own policy (indeed as far back as the 19th century they were suggesting it – in various forms).

    The true nature of government regulation is best summed up by the ALCO case, where American Supreme Court “Justice” Learned Hand said the following, about the aluminium company he was attacking with “Anti Trust” doctrine…..

    “It was not inevitable that it [ALCOA] should always anticipate increases in the demand for ingot and be prepared to supply them. Nothing compelled it to keep doubling and redoubling its capacity before others entered the field. It insists that it never excluded competitors; but we can think of no more effective exclusion than progressively to embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organisation, having the advantage of experience, trade connections and the elite of personal”.

    Well there you have it – as with Standard Oil of old, cutting prices and provide higher quality products is some sort of “crime” (at least according to Progressives and their statutes). G. Kolko (assuming this socialist was really sincere – which I do not think he was) was wrong – government regulation does not tend to be benefit “big business”. On the contrary government regulation tends to harm the productive, the hard working and the innovative (whether the enterprises are small or big) – Progressive “law” turns virtues (such as hard work and innovation) into some sort of “crime”.

    To the government someone like Jon Huntsman (senior) must be some sort of sordid fellow – after all he did not know his place in life (born in a “house” made of cardboard), how DARE he build up a vast industrial enterprise…….

    It was different all the way back with Plato – producers and traders were sordid fellows they had no real rights (“producers and traders” did not have real liberty rights even to Mr John Stuart Mill – see my recent post on this person at the “Counting Cats” blog).

    Old points I know (but then everything has to be repeated – eternally), it was old, but true, long before someone like Dominick Armentano, or even Ayn Rand.

    People such as J.J. Hill (of the Great Northern railroad) knew the truth more than a century ago – government may give to a productive enterprise with one hand, but it will take from that enterprise with two hands.

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