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An Anarchist FAQ — Section I the Problem of Socialism As a Method. one central authority". Thus the "one central authority has to solve the economic problem of distributing a limited amount of resources between a practically infinite number of competing purposes" with "a reasonable degree of accuracy, with a degree of success equally or ap- proaching the results of competitive capitalism" is what "constitutes An Anarchist FAQ — Section I the problem of socialism as a method." ["The Nature and History of the Problem", pp. 1-40, Op. Cit., p. 35, p. 19 and pp. 16-7] While this was a common idea in Marxian social democracy (and the Leninism that came from it), centralised organisations are re- jected by anarchism. As Bakunin argued, "where are the intellects powerful enough to embrace the infinite multiplicity and diversity of real interests, aspirations, wishes, and needs which sum up the collec- tive will of the people? And to invent a social organisation that will not be a Procrustean bed upon which the violence of the State will more or less overtly force unhappy society to stretch out?" Moreover, a socialist government, "unless it were endowed with omniscience, omnipresence, and the omnipotence which the theologians attribute to God, could not possibly know and foresee the needs of its people, or satisfy with an even justice those interests which are most legitimate and pressing." [Bakunin on Anarchism, pp. 268-9 and p. 318] For Malatesta, such a system would require "immense centralisation" and would either be "an impossible thing to achieve, or, if possible, would end up as a colossal and very complex tyranny." [At the Café, p. 65] Kropotkin, likewise, dismissed the notion of central planning as the "economic changes that will result from the social revolution will be so immense and so profound . that it will be impossible for one or even a number of individuals to elaborate the social forms to which a further society must give birth. The elaboration of new social forms can only be the collective work of the masses." [Words of a Rebel, p. 175] The notion that a "strongly centralised Government" could "command that a prescribed quantity" of a good "be sent to such a place on such a day" and be "received on a given day by a specified official and stored in particular warehouses" was not only "undesir- 52 man mind cannot orient itself properly among the bewildering mass of intermediate products and potentialities without such aid. It would simply stand perplexed before the problems of management and lo- cation." Thus we would quickly see "the spectacle of a socialist eco- nomic order floundering in the ocean of possible and conceivable eco- nomic combinations without the compass of economic calculation." ["Economic Calculation in the Socialist Commonwealth", pp. 87-130, Collectivist Economic Planning, F.A. von Hayek (ed.), p. 104, p. 103 and p. 110] Hence the claim that monetary calculation based on market prices is the only solution. This argument is not without its force. How can a producer be expected to know if tin is a better use of resources than iron when creating a product if all they know is that iron and tin are available and suitable for their purpose? Or, if we have a consumer good which can be made with A + 2B or 2A + B (where A and B are both input factors such as steel, oil electricity, etc.) how can we tell which method is more efficient (i.e. which one used least resources and so left the most over for other uses)? With market prices, Mises' argued, it is simple. If A cost $10 and B $5, then clearly method one would be the most efficient ($20 versus $25). Without the market, Mises argued, such a decision would be impossible and so every decision would be "groping in the dark." [Op. Cit., p. 110] Mises' argument rests on three flawed assumptions, two against communism and one for capitalism. The first two negative assump- tions are that communism entails central planning and that it is im- possible to make investment decisions without money values. We discuss why each is wrong in this section. Mises' positive assump- tion for capitalism, namely that markets allow exact and efficient allocation of resources, is discussed in section I.1.5 . Firstly, Mises assumes a centralised planned economy. As Hayek summarised, the crux of the matter was "the impossibility of a ratio- nal calculation in a centrally directed economy from which prices are necessarily absent", one which "involves planning on a most exten- sive scale – minute direction of practically all productive activity by 51 that a socialism that abolishes the market (such as libertarian com- munism) is impossible? Given that the vast majority of anarchists seek a libertarian communist society, this is an important question. We address it in the next section. Contents I.1.2 Is libertarian communism impossible? In a word, no. While the "calculation argument" (see last section) Section I: What would an anarchist society look is often used by propertarians (so-called right-wing "libertarians") like? 7 as the basis for the argument that communism (a moneyless soci- I.1 Isn’t libertarian socialism an oxymoron? 20 ety) is impossible, it is based on certain false ideas of what prices I.1.1 Is socialism impossible? . 29 do, the nature of the market and how a communist-anarchist so- I.1.2 Is libertarian communism impossible? . 50 ciety would function. This is hardly surprising, as Mises based his I.1.3 What is wrong with markets anyway? . 73 theory on a variation of neo-classical economics and the Marxist I.1.4 If capitalism is exploitative, then isn't socialism as social-democratic (and so Leninist) ideas of what a "socialist" econ- well? .......................... 83 omy would look like. So there has been little discussion of what I.1.5 Does capitalism efficiently allocate resources? . 90 a true (i.e. libertarian) communist society would be like, one that utterly transformed the existing conditions of production by work- I.2 Is this a blueprint for an anarchist society? 115 ers' self-management and the abolition of both wage-labour and I.2.1 Why discuss what an anarchist society would be like money. However, it is useful here to indicate exactly why commu- at all? . 123 nism would work and why the "calculation argument" is flawed as I.2.2 Will it be possible to go straight to an anarchist so- an objection to it. ciety from capitalism? . 126 Mises argued that without money there was no way a social- I.2.3 How is the framework of an anarchist society created? 135 ist economy would make "rational" production decisions. Not even Mises denied that a moneyless society could estimate what is likely I.3 What could the economic structure of anarchy look to be needed over a given period of time (as expressed as physi- like? 148 cal quantities of definite types and sorts of objects). As he argued, I.3.1 What is a "syndicate"? . 156 "calculation in natura in an economy without exchange can em- I.3.2 What is workers' self-management? . 169 brace consumption-goods only." His argument was that the next step, I.3.3 What does socialisation mean? . 180 working out which productive methods to employ, would not be I.3.4 What relations would exist between individual syn- possible, or at least would not be able to be done "rationally," i.e. dicates? . 191 avoiding waste and inefficiency. The evaluation of producer goods I.3.5 What would confederations of syndicates do? . 200 "can only be done with some kind of economic calculation. The hu- I.3.6 What about competition between syndicates? . 212 50 3 I.3.7 What about people who do not want to join a syn- producer co-operatives that are owned by the workers within them. dicate? . 222 Such co-operatives sell their products on markets, with genuine ex- I.3.8 Do anarchists seek "small autonomous communities, changes of property rights" (somewhat annoyingly, Hodgson incor- devoted to small scale production"? . 224 rectly asserts that "Proudhon described himself as an anarchist, not a socialist" when, in reality, the French anarchist repeatedly referred I.4 How would an anarchist economy function? 231 to himself and his mutualist system as socialist). [Economics and I.4.1 What is the point of economic activity in anarchy? . 238 Utopia, p. 20, p. 37 and p. 20] I.4.2 Why do anarchists desire to abolish work? . 243 Thus it is possible for a socialist economy to allocate resources I.4.3 How do anarchists intend to abolish work? . 249 using markets. By suppressing capital markets and workplace I.4.4 What economic decision making criteria could be hierarchies, a mutualist system will improve upon capitalism used in anarchy? . 262 by removing an important source of perverse incentives which I.4.5 What about "supply and demand"? . 273 hinder efficient use of resources as well as long term investment I.4.6 Surely communist-anarchism would just lead to de- and social responsibility in addition to reducing inequalities and mand exceeding supply? . 283 increasing freedom. As David Ellerman once noted, many "still I.4.7 What will stop producers ignoring consumers? . 291 look at the world in bipolar terms: capitalism or (state) socialism." I.4.8 What about investment decisions? . 295 Yet there "are two broad traditions of socialism: state socialism I.4.9 Should technological advance be seen as anti- and self-management socialism. State socialism is based on anarchistic? . 304 government ownership of major industry, while self-management I.4.10 What would be the advantage of a wide basis of socialism envisions firms being worker self-managed and not owned surplus distribution? .
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