Economics for Democratic Socialism

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Economics for Democratic Socialism

• Drexel University
• Spring Quarter 2009

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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).

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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.

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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.

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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.

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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).

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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 1960s.

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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.

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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.

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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 thats 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.

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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.

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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.

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A Sketch of Guild Socialism 3
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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.

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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)

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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.

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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.

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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.

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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.