Anarchism is all about "do it yourself," people helping each other out in order to secure a good society to live within and to protect, extend and enrich their personal freedom. As such anarchists are keenly aware of the importance of building alternatives to both capitalism and the state in the here and now. Only by creating practical alternatives can we show that anarchism is a viable possibility and train ourselves in the techniques and responsibilities of freedom:
"If we put into practice the principles of libertarian communism within our organisations, the more advanced and prepared we will be on that day when we come to adopt it completely." [C.N.T. member, quoted by Graham Kelsey, Anarchosyndicalism, Libertarian Communism and the State,p. 79]
By building the new world in the shell of the old, we help create the environment within which individuals can manage their own affairs and develop their abilities to do so. In other words, we create "schools of anarchism" which lay the foundations for a better society as well as promoting and supporting social struggle against the current system. Make no mistake, the alternatives we discuss in this section are not an alternative to direct action and the need for social struggle - they are an expression of social struggle and a form of direct action. They are the framework by which social struggle can build and strengthen the anarchist tendencies within capitalist society which will ultimately replace it.
Therefore it is wrong to think that anarchists are indifferent to making life more bearable, even more enjoyable, under capitalism. A free society will not just appear from nowhere, it will be created be individuals and communities with a long history of social struggle and organisation. For as Wilheim Reich so correctly pointed out:
"Quite obviously, a society that is to consist of 'free individuals,' to constitute a 'free community' and to administer itself, i.e. to 'govern itself,' cannot be suddenly created by decrees. It has to evolve organically." [The Mass Psychology of Fascism, p. 241]
And it is this organic evolution that anarchists promote when they create anarchist alternatives within capitalist society. The alternatives anarchists create (be they workplace or community unions, co-operatives, mutual banks, and so on) are marked by certain common features such as being self-managed, being based upon equality and decentralisation and working with other groups and associations within a confederal network based upon mutual aid and solidarity. In other words, they are anarchist in both spirit and structure and so create a practical bridge between what is and what is possible.
Therefore, anarchists consider the building of alternatives as a key aspect of their activity under capitalism. This is because they, like all forms of direct action, are "schools of anarchy" and also because they make the transition to a free society easier. "Through the organisations set up for the defence of their interests," in Malatesta's words, "the workers develop an awareness of the oppression they suffer and the antagonism that divides them from the bosses and as a result begin to aspire to a better life, become accustomed to collective struggle and solidarity and win those improvements that are possible within the capitalist and state regime." [The Anarchist Revolution, p. 95] By creating viable examples of "anarchy in action" we can show that our ideas are practical and convince people of anarchist ideas by "good examples." Therefore this section of the FAQ will indicate the alternatives anarchists support and why we support them.
The approach anarchists take to this activity could be termed "social unionism" -- the collective action of groups to change certain aspects (and, ultimately, all aspects) of their lives. This "social unionism" takes many different forms in many different areas (some of which, not all, are discussed here) -- but they share the same basic aspects of collective direct action, self-organisation, self-management, solidarity and mutual aid. These "social unions" would be a means (like the old labour movement) "of raising the morale of the workers, accustom them to free initiative and solidarity in a struggle for the good of everyone and render them capable of imagining, desiring and putting into practice an anarchist life." [Errico Malatesta, The Anarchist Revolution, p. 28]
As will quickly become obvious in this discussion (as if it had not been so before!) anarchists are firm supporters of "self-help," an expression that has been sadly corrupted (like freedom) by the right in recent times. Like "freedom", "self-help" should be saved from the clutches of the right who have no real claim to that expression. Indeed, anarchism was created from and based itself upon working class self-help -- for what other interpretation can be gathered from the famous slogan of the First International that "the emancipation of the working class must be the task of the working class itself"? So, Anarchists have great faith in the abilities of working class people to work out for themselves what their problems are and act to solve them.
Anarchist support, and promotion, of alternatives is a key aspect of this process of self-liberation, and so a key aspect of anarchism. While strikes, boycotts, and other forms of high profile direct action may be more sexy than the long and hard task of creating and building social alternatives, these are the nuts and bolts of creating a new world as well as the infrastructure which supports the "high profile" activities. Hence the importance of highlighting the alternatives anarchists support and build. The alternatives we discuss here is part of the process of building the new world in the shell of the old -- and involve both combative organisations (such as community and workplace unions) as well as more defensive/supportive ones (such as co-operatives and mutual banks). Both have their part to play in the class struggle, although the combative ones are the most important in creating the spirit of revolt and the possibility of creating an anarchist society (which will be reflected in the growth of supportive organisations to aid that struggle).
We must also stress that anarchists look to "natural" tendencies within social struggle as the basis of any alternatives we try to create. As Kropotkin put it, anarchism is based "on an analysis of tendencies of an evolution that is already going on in society, and on induction thereform as to the future." It is "representative . . . of the creative, instructive power of the people themselves who aimed at developing institutions of common law in order to protect them from the power-seeking minority." In other words, anarchism bases itself on those tendencies that are created by the self-activity of working class people and while developing within capitalism are in opposition to it -- such tendencies are expressed in organisational form as trade unions and other forms of workplace struggle, cooperatives (both productive and credit), libertarian schools, and so on. For anarchists, anarchism is "born among the people - in the struggles of real life and not in the philosopher's studio" and owes its "origin to the constructive, creative activity of the people . . . and to a protest - a revolt against the external force which hd thrust itself upon [communal] . . . institutions." [Kropotkin's Revolutionary Pamphlets, p. 158, p. 147, p. 150, p. 149] This "creative activity" is expressed in the organisations created in the class struggle by working people, some of which we discuss in this section of the FAQ. Therefore, the alternatives anarchists support should not be viewed in isolation of social struggle and working class resistance to hierarchy - the reverse in fact, as these alternatives are almost always expressions of that struggle.
Lastly, we should note that this list of alternatives does not list all the forms of organisation anarchists create. For example, we have ignored solidarity groups and organisations which are created to campaign against or for certain issues or reforms. Anarchists are in favour of such organisations and work within them to spread anarchist ideas, tactics and organisational forms. However, these interest groups (while very useful) do not provide a framework for lasting change as do the ones we highlight below although we stress that anarchists do not ignore such organisations and struggles (see sections J.1.4 and J.1.5 for more details on anarchist opinions on such "single issue" campaigns).
We have also ignored what have been called "intentional communities". This is when a group of individuals squat or buy land and other resources within capitalism and create their own anarchist commune in it. Most anarchists reject this idea as capitalism and the state must be fought, not ignored. In addition, due to their small size, they are rarely viable experiments in communal living and nearly always fail after a short time (for a good summary of Kropotkin's attitude to such communities, which can be taken as typical, to such schemes see Graham Purchase's book Evolution & Revolution, pp. 122-125). Dropping out will not stop capitalism and the state and while such communities may try to ignore the system, they will find that the system will not ignore them -- they will come under competitive and ecological pressures from capitalism whether they like it or not.
Therefore the alternatives we discuss here are attempts to create anarchist alternatives within capitalism and which aim to change it (either by revolutionary or evolutionary means). They are based upon challenging capitalism and the state, not ignoring them by dropping out. Only by a process of direct action and building alternatives which are relevant to our daily lives can we revolutionise and change both ourselves and society.
Community unionism is our term for the process of creating participatory
communities (called "communes" in classical anarchism) within the state.
Basically, a community union is the creation of interested members of a
community who decide to form an organisation to fight against injustice
in their local community and for improvements within it. It is a forum
by which inhabitants can raise issues that affect themselves and others
and provide a means of solving these problems. As such, it is a means
of directly involving local people in the life of their own communities
and collectively solving the problems facing them as both individuals
and as part of a wider society. Politics, therefore, is not separated
into a specialised activity that only certain people do (i.e. politicians).
Instead, it becomes communalised and part of everyday life and in the
hands of all.
As would be imagined, like the participatory communities that would
exist in an anarchist society, the community union would be based
upon a mass assembly of its members. Here would be discussed the
issues that effect the membership and how to solve them. Like the
communes of a future anarchy, these community unions would be
confederated with other unions in different areas in order to
co-ordinate joint activity and solve common problems. These
confederations, like the basic union assemblies themselves, would
be based upon direct democracy, mandated delegates and the
creation of administrative action committees to see that the
memberships decisions are carried out.
The community union could also raise funds for strikes and other
social protests, organise pickets and boycotts and generally aid
others in struggle. By organising their own forms of direct action
(such as tax and rent strikes, environmental protests and so on)
they can weaken the state while building an self-managed
infrastructure of co-operatives to replace the useful functions
the state or capitalist firms currently provide.
So, in addition to organising resistance to the state and capitalist
firms, these community unions could play an important role in
creating an alternative economy within capitalism. For example,
such unions could have a mutual bank or credit union associated
with them which could allow funds to be gathered for the creation
of self-managed co-operatives and social services and centres. In
this way a communalised co-operative sector could develop, along
with a communal confederation of community unions and their
co-operative banks.
Such community unions have been formed in many different countries
in recent years to fight against particularly evil attacks on the
working class. In Britain, groups were created in neighbourhoods across
the country to organise non-payment of the conservative government's
community charge (popularly known as the poll tax). Federations of these
groups and unions were created to co-ordinate the struggle and pull
resources and, in the end, ensured that the government withdrew the
hated tax and helped push Thatcher out of government. In Ireland,
similar groups were formed to defeat the privatisation of the water
industry by a similar non-payment campaign.
However, few of these groups have been taken as part of a wider strategy
to empower the local community but the few that have indicate the potential
of such a strategy. This potential can be seen from two examples of
community organising in Europe, one in Italy and another in Spain.
In Italy, anarchists have organised a very successful Municipal Federation
of the Base (FMB) in Spezzano Albanese (in the South of that country). This
organisation is "an alternative to the power of the town hall" and provides
a "glimpse of what a future libertarian society could be" (in the words of
one activist). The aim of the Federation is "the bringing together of all
interests within the district. In intervening at a municipal level, we
become involved not only in the world of work but also the life of the
community. . . the FMB make counter proposals [to Town Hall decisions],
which aren't presented to the Council but proposed for discussion in
the area to raise people's level of consciousness. Whether they like
it or not the Town Hall is obliged to take account of these proposals."
["Community Organising in Southern Italy", pp. 16-19, Black Flag
no. 210, p. 17, p. 18]
In this way, local people take part in deciding what effects them and their
community and create a self-managed "dual power" to the local, and national,
state. They also, by taking part in self-managed community assemblies,
develop their ability to participate and manage their own affairs, so
showing that the state is unnecessary and harmful to their interests.
In addition, the FMB also supports co-operatives within it, so creating
a communalised, self-managed economic sector within capitalism. Such a
development helps to reduce the problems facing isolated co-operatives
in a capitalist economy -- see section J.5.11 -- and was actively done
in order to "seek to bring together all the currents, all the problems
and contradictions, to seek solutions" to such problems facing co-operatives
[Ibid.].
Elsewhere in Europe, the long, hard work of the C.N.T. in Spain has also
resulted in mass village assemblies being created in the Puerto Real
area, near Cadiz. These community assemblies came about to support
an industrial struggle by shipyard workers. As one C.N.T. member explains,
"[e]very Thursday of every week, in the towns and villages in the area,
we had all-village assemblies where anyone connected with the particular
issue [of the rationalisation of the shipyards], whether they were
actually workers in the shipyard itself, or women or children or
grandparents, could go along. . . and actually vote and take part
in the decision making process of what was going to take place."
[Anarcho-Syndicalism in Puerto Real: from shipyard resistance to
direct democracy and community control, p. 6]
With such popular input and support, the shipyard workers won their
struggle. However, the assembly continued after the strike and
"managed to link together twelve different organisations within the
local area that are all interested in fighting. . . various aspects
[of capitalism]" including health, taxation, economic, ecological and
cultural issues. Moreover, the struggle "created a structure which
was very different from the kind of structure of political parties,
where the decisions are made at the top and they filter down. What
we managed to do in Puerto Real was make decisions at the base
and take them upwards." [Ibid.]
In these ways, a grassroots movement from below has been created, with
direct democracy and participation becoming an inherent part of a local
political culture of resistance, with people deciding things for
themselves directly and without hierarchy. Such developments are the
embryonic structures of a world based around direct democracy and
participation, with a strong and dynamic community life. For, as
Martin Buber argued, "[t]he more a human group lets itself be represented
in the management of its common affairs. . . the less communal life there
is in it and the more impoverished it becomes as a community." [Paths
in Utopia, p. 133]
Anarchist support and encouragement of community unionism, by creating
the means for communal self-management, helps to enrich the community
as well as creating the organisational forms required to resist the
state and capitalism. In this way we build the anti-state which will
(hopefully) replace the state. Moreover, the combination of community
unionism with workplace assemblies (as in Puerto Real), provides a
mutual support network which can be very effective in helping winning
struggles. For example, in Glasgow, Scotland in 1916, a massive rent
strike was finally won when workers came out in strike in support of
the rent strikers who been arrested for non-payment.
Such developments indicate that Isaac Puente was correct to argue that:
"The union: in it combine spontaneiously the workers from factories
and all places of collective exploitation.
"And the free municipality: an assembly with roots stretching back
into the past where, again in spontaneity, inhabitants of village
and hamlet combine together, and which points the way to the solution
of problems in social life in the countryside.
"Both kinds of organisation, run on federal and democratic principles,
will be soveriegn in their decision making, without being beholden to
any higher body, their only obligation being to federate one with
another as dictated by the economic requirement for liaison and
communications bodies organised in industrial federations.
"The union and the free municipality will assume the collective
or common ownership of everything which is under private ownership
at present [but collectively used] and will regulate production and
consumption (in a word, the economy) in each locality.
"The very bringing together of the two terms (communism and
libertarian) is indicative in itself of the fusion of two ideas:
one of them is collectivist, tending to bring about harmony in the
whole through the contributions and cooperation of individuals,
without undermining their independence in any way; while the other
is individualist, seeking to reassure the individual that his
independence will be respected."
The combination of community unionism, along with industrial unionism
(see next section), will be the key of creating an anarchist society,
Community unionism, by creating the free commune within the state,
allows us to become accustomed to managing our own affairs and seeing
that an injury to one is an injury to all. In this way a social power
is created in opposition to the state. The town council may still be
in the hands of politicians, but neither they nor the central government
can move without worrying about what the people's reaction might be,
as expressed and organised in their community unions and assemblies.
Simply because it is effective, expresses our ideas on how industry will
be organised in an anarchist society and is a key means of ending
capitalist oppression and exploitation. As Max Stirner pointed out the
"labourers have the most enormous power in their hands, and, if they
once become thoroughly conscious of it and used it, nothing could withstand
them; they would only have to stop labour, regard the product of labour as
theirs, and enjoy it. This is the sense of the labour disturbances which
show themselves here and there." [The Ego and Its Own, p. 116]
Libertarian workplace organisation is the best way of organising and
exercising this power. However, before discussing why anarchists support
industrial unionism, we must point out that the type of unionism anarchists
support has very little in common with that associated with reformist or
business unions like the TUC in Britain or the AFL-CIO in the USA (see
next section).
In such unions, as Alexander Berkman points out, the "rank and file
have little say. They have delegated their power to leaders, and
these have become the boss. . . Once you do that, the power you
have delegated will be used against you and your interests every
time." [The ABC of Anarchism, p. 58] Reformist unions, even if
they do organise by industry rather than by trade or craft, are
top-heavy and bureaucratic. Thus they are organised in the same
manner as capitalist firms or the state -- and like both of these,
the officials at the top have different interests than those
at the bottom. Little wonder anarchists oppose such forms of
unionism as being counter to the interests of their members. The
long history of union officials betraying their members is proof
enough of this.
Therefore anarchists propose a different kind of workplace organisation,
one that is organised in a totally different manner than the current,
mainstream, unions. We will call this new kind of organisation "industrial
unionism" (although perhaps industrial syndicalism or workplace
assemblies may be a better, less confusing, name for it).
Industrial unionism is based upon the idea that workers should directly
control their own organisations and struggles. As such, it is based
upon workplace assemblies and their confederation between different
workplaces in the same industry as well as between different workplaces
in the same locality. An industrial union is a union which organises all
workers in a given type of industry together into one body. This means
that all workers regardless of their actual trade would ideally be in
the one union. On a building site, for example, brick-layers, plumbers,
carpenters and so on would all be a member of the Building Workers
Union. Each trade may have its own sections within the union (so
that plumbers can discuss issues relating to their trade for
example) but the core decision making focus would be an assembly
of all workers employed in a workplace. As they all have the same
boss it is logical for them to have the same union.
However, industrial unionism should not be confused with a closed
shop situation where workers are forced to join a union when they
become a wage slave in a workplace. While anarchists do desire to
see all workers unite in one organisation, it is vitally important
that workers can leave a union and join another. The closed shop
only empowers union bureaucrats and gives them even more power
to control (and/or ignore) their members. As anarchist unionism has
no bureaucrats, there is no need for the closed shop and its voluntary
nature is essential in order to ensure that a union be subject to
"exit" as well as "voice" for it to be responsive to its members wishes.
As Albert Meltzer argues, the closed shop means that "the [trade union]
leadership becomes all-powerful since once it exerts its right to expel
a member, that person is not only out of the union, but out of a job."
Anarcho-syndicalism, therefore, "rejects the closed shop and relies on
voluntary membership, and so avoids any leadership or bureaucracy."
[Anarchism: Arguments for and against, p. 56 -- also see Tom Wetzel's
excellent article "The Origins of the Union Shop", part 3 of the series
"Why does the union bureaucracy exist?" in Ideas & Action no. 11,
Fall 1989 for a fuller discussion of these issues] Without voluntary
membership even the most libertarian union may become bureaucratic and
unresponsive to the needs of its members and the class struggle (even
anarcho-syndicalist unions are subject to hierarchical influences by
having to work within the hierarchical capitalist economy although
voluntary membership, along with a libertarian structure and tactics,
helps combat these tendencies -- see section
J.3.9).
Obviously this means that anarchist opposition to the closed shop has
nothing in common with boss, conservative and right-wing libertarian
opposition to it. These groups, while denouncing coercing workers into
trades unions, support the coercive power of bosses over workers without
a second thought (indeed, given their justifications of sexual harassment
and other forms of oppressive behaviour by bosses, we can imagine that
they would happily support workers having to join company unions to
keep their jobs -- only when bosses dislike mandatory union membership
do these defenders of "freedom" raise their opposition). Anarchist
opposition to the closed shop (like their opposition to union bureaucracy)
flows from their opposition to hierarchy and authoritarian social
relationships. The right-wing's opposition is purely a product of their
pro-capitalist and pro-authority position and the desire to see the worker
subject only to one boss during working hours, not two (particularly
if this second one has to represent workers interests to some degree).
Anarchists, on the other hand, want to get rid of all bosses during
working hours.
In industrial unionism, the membership, assembled in their place of
work, are the ones to decide when to strike, when to pay strike pay,
what tactics to use, what demands to make, what issues to fight over
and whether an action is "official" or "unofficial". In this way the
rank and file is in control of their unions and, by confederating with
other assemblies, they co-ordinate their forces with their fellow workers.
As syndicalist activist Tom Brown makes clear:
"Delegates are subject to instant recall by the persons who elected
them. None may sit for longer than two successive years, and four
years must elapse before his [or her] next nomination. Very few will
receive wages as delegates, and then only the district rate of wages
for the industry. . .
"It will be seen that in the Syndicate the members control the
organisation - not the bureaucrats controlling the members. In a
trade union the higher up the pyramid a man is the more power he
wields; in a Syndicate the higher he is the less power he has.
"The factory Syndicate has full autonomy over its own affairs. . ."
[Syndicalism, pp. 35-36]
Given the fact that workers wages have been stagnating (or, at
best, falling behind productivity increases) across the world as
the trade unions have been weakened and marginalised (partly
because of their own tactics, structure and politics) it is clear that
there exists a great need for working people to organise to defend
themselves. The centralised, top-down trade unions we are accustomed
to have proved themselves incapable of effective struggle (and, indeed,
the number of times they have sabotaged such struggle are countless
- a result not of "bad" leaders but of the way these unions organise
and their role within capitalism). Hence anarchists support industrial
unionism (co-operation between workers assemblies) as an effective
alternative to the malaise of official trade unionism. How anarchists
aim to encourage such new forms of workplace organisation and struggle
will be discussed in the next section.
We are sure that many radicals will consider that such decentralised,
confederal organisations would produce confusion and disunity. However,
anarchists maintain that the statist, centralised form of organisation
of the trades unions would produce indifference instead of involvement,
heartlessness instead of solidarity, uniformity instead of unity, and
elites instead of equality, nevermind killing all personal initiative
by lifeless discipline and bureaucratic ossification and permitting
no independent action. The old form of organisation has been tried
and tried again - it has always failed. The sooner workers recognise
this the better.
One last point. We must note that many anarchists, particularly
communist-anarchists, consider unions, even anarchosyndicalist ones, as
having a strong reformist tendency (as discussed in section
J.3.9).
However, all anarchists recognise the importance of autonomous class
struggle and the need for organisations to help fight that struggle.
Thus anarchist-communists, instead of trying to organise industrial
unions, apply the ideas of industrial unionism to workplace struggles.
In other words, they would agree with the need to organise all workers
into a mass assembly and to have elected, recallable administration
committees to carry out the strikers wishes. This means that such
anarchists they do not call their practical ideas "anarcho-syndicalism"
nor the workplace assemblies they desire to create "unions," there are
extremely similar in nature and so we can discuss both using the term
"industrial unionism". The key difference is that many (if not most)
anarcho-communists consider that permanent workplace organisations that
aim to organise all workers would soon become reformist. Because of
this they also see the need for anarchist to organise as anarchists
in order to spread the anarchist message within them and keep their
revolutionary aspects at the forefront (and so support industrial
networks -- see next section).
Therefore while there are slight differences in terminology and practice,
all anarchists would support the ideas of industrial unionism we have
outlined above.
As noted in the last section, anarchists desire to create organisations
in the workplace radically different from the existing trade unions.
The question now arises, what attitude do anarchists generally take to
these existing unions?
Before answering that question, we must stress that anarchists, no matter
how hostile to trade unions as bureaucratic, reformist institutions, are
in favour of working class struggle. This means that when trade union
members or other workers are on strike anarchists will support them
(unless the strike is totally reactionary -- for example, no anarchist
would support a strike which is racist in nature). This is because almost
all anarchists consider it basic to their politics that you don't scab and
you don't crawl (a handful of individualist anarchists are the exception).
So, when reading anarchist criticisms of trade unions do not for an
instant think we do not support industrial struggles -- we do, we
are just very critical of the unions that are sometimes involved.
So, what do anarchists think of the trade unions?
For the most part, one could call the typical anarchist opinion toward
them as one of "hostile support." It is hostile insofar as anarchists
are well aware of how bureaucratic these unions are and how they
continually betray their members. Given that they
are usually little more than "business" organisations, trying to sell
their members labour-power for the best deal possible, it is unsurprising
that they are bureaucratic and that the interests of the bureaucracy
are at odds with those of its membership. However, our attitude is
"supportive" in that even the worse trade union represents an
attempt at working class solidarity and self-help, even if the attempt
is now far removed from the initial protests and ideas that set the union
up. For a worker to join a trade union means having to recognise, to some
degree, that he or she has different interests from their boss. There is no
way to explain the survival of the unions other than the fact that there
are different class interests, and workers have understood that to promote
their own interests they have to organise on class lines.
No amount of conservatism, bureaucracy or backwardness within the unions
can obliterate the essential fact of different class interests. The very
existence of trade unions testifies to the existence of some level of
basic class consciousness -- even though most trade unions claim otherwise
and that capital and labour have interests in common. As we have argued,
anarchists reject this claim with good reason, and the very existence of
trade unions show that this is not true. If workers and capitalists have
the same interests, trade unions would not exist. Moreover, claiming that
the interests of workers and bosses are the same theoretically disarms
both the unions and its members and so weakens their struggles (after all,
if bosses and workers have similar interests then any conflict is bad
and the decisions of the boss must be in workers' interests!).
Thus anarchist viewpoints reflect the contradictory nature of business/trade
unions -- on the one hand they are products of workers' struggle, but on
the other they are very bureaucratic, unresponsive and centralised and
(therefore) their full-time officials have no real interest in fighting
against wage labour as it would put them out of a job. Indeed, the very
nature of trade unionism ensures that the interests of the union (i.e.
the full-time officials) come into conflict with the people they claim
to represent.
This can best be seen from the disgraceful activities of the TGWU with
respect to the Liverpool dockers in Britain. The union officials (and
the TUC itself) refused to support their members after they had been
sacked in 1995 for refusing to cross a picket line. The dockers
organised their own struggle, contacting dockers' unions across the
world and organising global solidarity actions. Moreover, a network
of support groups sprung up across Britain to gather funds for their
struggle (and, we are proud to note, anarchists have played their role
in supporting the strikers). Many trade unionists could tell similar
stories of betrayal by "their" union.
This occurs because trade unions, in order to get recognition from
a company, must be able to promise industrial pieces. They need to
enforce the contracts they sign with the bosses, even if this goes
against the will of its members. Thus trade unions become a third
force in industry, somewhere between management and the workers and
pursuing its own interests. This need to enforce contracts soon ensures
that the union becomes top-down and centralised -- otherwise its
members would violate the unions agreements. They have to be able
to control their members - which usually means stopping them
fighting the boss - if they are to have anything to bargain with
at the negotiation table. This may sound odd, but the point is that
the union official has to sell the employer labour discipline and
freedom from unofficial strikes as part of its side of the bargain.
Otherwise the employer will ignore them. The nature of trade unionism
is to take power away from out of local members and centralise it
into the hands of officials at the top of the organisation.
Thus union officials sell out their members because of the role trade
unions play within society, not because they are nasty individuals
(although some are). They behave as they do because they have too much
power and, being full-time and highly paid, are unaccountable, in any real
way, to their members. Power -- and wealth -- corrupts, no matter who you
are. (also see Chapter 11 of Alexander Berkman's What is Communist
Anarchism? for an excellent introduction to anarchist viewpoints on
trade unions).
While, in normal times, most workers will not really question the nature
of the trade union bureaucracy, this changes when workers face some threat.
Then they are brought face to face with the fact that the trade union
has interests separate from theirs. Hence we see trade unions agreeing to
wage cuts, redundancies and so on -- after all, the full-time trade union
official's job is not on the line! But, of course, while such a policy
is in the short term interests of the officials, in the longer term it goes
against their interests -- after all, who wants to join a union which rolls
over and presents no effective resistance to employers? Little wonder
Michael Moore has a chapter entitled "Why are Union Leaders So F#!@ing
Stupid?" in his book Downsize This! -- essential reading to realise how
moronic trade union bureaucrats can actually be. Sadly trade union
bureaucracy seems to afflict all who enter it with short-sightedness, as
seen by the countless times the trade unions have sold-out their members --
although the chickens do, finally, come home to roost, as the bureaucrats
of the AFL, TUC and other trade unions are finding out in this era of
global capital and falling membership. So while the activities of trade
union leaders may seem crazy and short-sighted, these activities are
forced upon them by their position and role within society -- which
explains why they are so commonplace and why even radical leaders end
up doing exactly the same thing in time.
Few anarchists would call upon members of a trade union to tear-up their
membership cards. While some anarchists, particularly communist anarchists
and some anarcho-syndicalists have nothing but contempt (and rightly so)
for trade unions (and so do not work within them -- but will support trade
union members in struggle), the majority of anarchists take a more pragmatic
viewpoint. If no alternative syndicalist union exists, anarchists will work
within the existing unions (perhaps becoming shop-stewards -- few anarchists
would agree to be elected to positions above this in any trade union,
particularly if the post was full-time), spreading the anarchist message and
trying to create a libertarian undercurrent which would hopefully blossom
into a more anarchistic labour movement.
So most anarchists "support" the trade unions only until they have created
a viable libertarian alternative. Thus we will become trade union members
while trying to spread anarchist ideas within and outwith them. This means
that anarchists are flexible in terms of their activity in the unions. For
example, many IWW members were "two-carders." This meant that as well
as being members of the IWW, they were also in the local AFL branch in
their place of work and turned to the IWW when the AFL hierarchy refused
to back strikes or other forms of direct action. Anarchists encourage
rank and file self-activity, not endless calls for trade union
bureaucrats to act for us (as is unfortunately far too common on
the left).
Anarchist activity within trade unions reflects our ideas on hierarchy and
its corrupting effects. We reject totally the response of left-wing social
democrats, Stalinists and mainstream Trotskyists to the problem of trade
union betrayal, which is to try and elect and/or appoint 'better' officials.
They see the problem primarily in terms of the individuals who hold the posts.
However this ignores the fact that individuals are shaped by the environment
they live in and the role they play in society. Thus even the most left-wing
and progressive individual will become a bureaucrat if they are placed
within a bureaucracy -- and we must note that the problem of corruption
does not spring from the high-wages officials are paid (although this is a
factor), but from the power they have over their members (which partly
expresses itself in high pay).
Any claim that electing "radical" full-time officials who refuse to take
the high wages associated with the position will be better is false. The
hierarchical nature of the trade union structure has to be changed, not
side-effects of it. As the left has no problem with hierarchy as such,
this explains why they support this form of "reform." They do not actually
want to undercut whatever dependency the members has on leadership, they
want to replace the leaders with "better" ones (i.e. themselves or members
of their party) and so endlessly call upon the trade union bureaucracy to
act for its members. In this way, they hope, trade unionists will see
the need to support a "better" leadership -- namely themselves. Anarchists,
in stark contrast, think that the problem is not that the leadership of the
trade unions is weak, right-wing or does not act but that the union's
membership follows them. Thus anarchists aim at undercutting reliance on
leaders (be they left or right) by encouraging self-activity by the rank
and file and awareness that hierarchical leadership as such is bad, not
individual leaders.
Instead of "reform" from above (which is doomed to failure), anarchists work
at the bottom and attempt to empower the rank and file of the trade unions.
It is self-evident that the more power, initiative and control that lies with
the rank & file membership on the shop floor, the less it will lie with the
bureaucracy. Thus anarchists work within and outwith the trade unions in order
to increase the power of workers where it actually lies: at the point of
production. This is usually done by creating networks of activists who
spread anarchist ideas to their fellow workers (see next section --
"What are Industrial Networks?").
These groups "within the unions should strive to ensure that they [the trade
unions] remain open to all workers of whatever opinion or party on the sole
condition that there is solidarity in the struggle against the bosses. They
should oppose the corporatist spirit and any attempt to monopolise labour or
organisation. They should prevent the Unions from becoming the tools of the
politicians for electoral or other authoritarian ends; they should preach and
practice direct action, decentralisation, autonomy and free initiative. They
should strive to help members learn how to participate directly in the life
of the organisation and to do without leaders and permanent officials.
"They must, in short, remain anarchists, remain always in close touch with
anarchists and remember that the workers' organisation is not the end but
just one of the means, however important, of preparing the way for the
achievement of anarchism." [Errico Malatesta, The Anarchist Revolution,
pp. 26-27]
As part of this activity anarchists promote the ideas of Industrial
Unionism we highlighted in the last section -- namely direct workers
control of struggle via workplace assemblies and recallable committees
-- during times of struggle. However, anarchists are aware that economic
struggle (and trade unionism as such) "cannot be an end in itself, since
the struggle must also be waged at a political level to distinguish the
role of the State." [Errico Malatesta, Life and Ideas, p, 115] Thus,
as well as encouraging worker self-organisation and self-activity,
anarchist groups also seek to politicise struggles and those involved
in them. Only this process of self-activity and political discussion
between equals within social struggles can ensure the process of
working class self-liberation and the creation of new, more libertarian,
forms of workplace organisation.
The result of such activity may be a new form of workplace organisation
(either workplace assemblies or an anarcho-syndicalist union) or a reformed,
more democratic version of the existing trade union (although few anarchists
believe that the current trade unions can be reformed). But either way,
the aim is to get as many members of the current labour movement to become
anarchists as possible or, at the very least, take a more libertarian and
radical approach to their unions and workplace struggle.
Industrial networks are the means by which revolutionary industrial unions
and other forms of libertarian workplace organisation can be created.
The idea of Industrial Networks originated with the British section of the
anarcho-syndicalist International Workers' Association in the late 1980s. It
was developed as a means of promoting anarcho-syndicalist/anarchist ideas
within the workplace, so creating the basis on which a workplace movement
based upon the ideas of industrial unionism (see section J.5.2) could grow
and expand.
The idea is very simple. An Industrial Network is a federation of
militants in a given industry who support the ideas of anarchism and/or
anarcho-syndicalism, namely direct action, solidarity and organisation
from the bottom up (the difference between purely anarchist networks
and anarcho-syndicalist ones will be highlighted later). In other words,
it would "initially be a political grouping in the economic sphere, aiming
to build a less reactive but positive organisation within the industry.
The long term aim. . . is, obviously, the creation of an anarcho-syndicalist
union." [Winning the Class War, p. 18]
The Industrial Network would be an organisation of groups of anarchists
and syndicalists within a workplace united into an industrial basis. They
would pull their resources together to fund a regular bulletin and other
forms of propaganda which they would distribute within their workplace
and industry. These bulletins and leaflets would raise and discuss issues
related to work and how to right back and win as well as placing workplace
issues in a social and political context. This propaganda would present
anarchist ideas of workplace organisation and resistance as well as general
anarchist ideas and analysis. In this way anarchist ideas and tactics
would be able to get a wider hearing and anarchists can have an input as
anarchists into workplace struggles.
Traditionally, many syndicalists and anarcho-syndicalists advocated the
One Big Union strategy, the aim of which was to organise all workers into
one organisation representing the whole working class. Today, however, most
anarcho-syndicalists and all social anarchists advocate workers assemblies
for decision making during struggles (the basic form of which we discussed
in section J.5.2). The role of the anarchist group or anarcho-syndicalist
(or revolutionary) union would basically be to call such workplace assemblies,
argue for direct workers control of struggle by these mass assemblies, promote
direct action and solidarity, put across anarchist ideas and politics and
keep things on the boil, so to speak.
This support for industrial networks exists because most anarcho-syndicalists
recognise that they face dual unionism (which means there are more than one
union within a given workplace or country). This was the case, historically,
in all countries with a large anarcho-syndicalist union movement - in Spain
and Italy there were the socialist unions along with the syndicalist ones
and so on). Therefore most anarcho-syndicalists do not expect to ever get
a majority of the working class into a revolutionary union before a
revolutionary situation develops. In addition, anarcho-syndicalists
recognise that a revolutionary union "is not just an economic fighting
force, but also an organisation with a political context. To build such
a union requires a lot of work and experience" of which the Industrial
Networks are but one aspect. [Ibid.]
Thus industrial networks are intended to deal with the actual situation
that confronts us, and provide a strategy for moving from our present
reality toward out ultimate goals. Where one has only a handful of
anarchists and syndicalists in a workplace or scattered across several
workplaces there is a clear need for developing ways for these fellow
workers to effectively act in union, rather than be isolated and
relegated to more general agitation. A handful of anarchists cannot
meaningfully call a general strike. But we can agitate around specific
industrial issues and organise our fellow workers to do something about
them. Through such campaigns we demonstrate the advantages of
rank-and-file unionism and direct action, show our fellow workers
that our ideas are not mere abstract theory but can be implemented
here and now, attract new members and supporters, and further develop
our capacity to develop revolutionary unions in our workplaces.
Thus the creation of Industrial Networks and the calling for workplace
assemblies is a recognition of where we are now -- with anarchist ideas
very much in the minority. Calling for workers assemblies is not
an anarchist tactic per se, we must add, but a working class one developed
and used plenty of times by workers in struggles (indeed, it was how the
current trade unions were created). It also puts the onus on the reformists
and reactionary unions by appealing directly to their members as workers
and showing their bureaucrat organisations and reformist politics by
creating an effective alternative to them.
A few anarchists reject the idea of Industrial Networks and instead support
the idea of "rank and file" groups which aim to put pressure on the current
trade unions to become more militant and democratic (a few anarcho-syndicalists
think that such groups can be used to reform the trade-unions into libertarian,
revolutionary organisations -- called "boring from within" -- but most reject
this as utopia, viewing the trade union bureaucracy as unreformable as
the state's). Moreover, opponents of "rank and file" groups argue that
they direct time and energy away from practical and constructive activity
and instead waste them "[b]y constantly arguing for changes to the union
structure. . . the need for the leadership to be more accountable, etc.,
[and so] they not only [offer] false hope but [channel] energy
and discontent away from the real problem - the social democratic
nature of reformist trade unions." [Winning the Class War, p. 11]
Supporters of the "rank and file" approach fear that the Industrial Networks
will isolate anarchists from the mass of trade union members by creating
tiny "pure" syndicalist unions or anarchist groups. But such a claim is
rejected by supporters of Industrial Networks. They maintain that they
will be working with trade union members where it counts, in the
workplace and not in badly attended, unrepresentative branch
meetings. So:
"It has been argued that social democratic unions will not tolerate this
kind of activity, and that we would be all expelled and thus isolated.
So be it. We, however, don't think that this will happen until. . .
workplace militants had found a voice independent of the trade unions
and so they become less useful to us anyway. Our aim is not to
support social democracy, but to show it up as irrelevant to the
working class." [Op. Cit., p. 19]
Whatever the merits and disadvantages of both approaches are, it seems
likely that the activity of both will overlap in practice with Industrial
Networks operating within trade union branches and "rank and file" groups
providing alternative structures for struggle.
As noted above, there is a slight difference between anarcho-syndicalist
supporters of Industrial Networks and communist-anarchist ones. This is to
do with how they see the function and aim of these networks. While both
agree that such networks should agitate in their industry and call and
support mass assemblies to organise resistance to capitalist exploitation
and oppression they disagree on who can join the network groups and what
they aims should be. Anarcho-syndicalists aim for the Industrial
Networks to be the focal point for the building of permanent syndicalist
unions and so aim for the Industrial Networks to be open to all workers
who accept the general aims of the organisation. Anarcho-communists,
however, view Industrial Networks as a means of increasing anarchist
ideas within the working class and are not primarily concerned about
building syndicalist unions (while many anarcho-communists would
support such a development, some do not).
These anarchists, therefore, see the need for workplace-based branches
of an anarchist group along with the need for networks of militant
'rank and file' workers, but reject the idea of something that is one
but pretends to be the other. They argue that, far from avoiding the
problems of classical anarcho-syndicalism, such networks seem to emphasise
one of the worst problems -- namely that of how the organisation
remains anarchist but is open to non-anarchists.
But the similarities between the two positions are greater than the
differences and so can be summarised together, as we have done here.
Anarchists tend to support must forms of co-operation, including those
associated with credit and money. This co-operative credit/banking takes
many forms, such as credit unions, LETS schemes and so on. In this
section we discuss two main forms of co-operative credit, mutualism
and LETS.
Mutualism is the name for the ideas associated with Proudhon and his Bank
of the People. Essentially, it is a confederation of credit unions in
which working class people pool their funds and savings. This allows
credit to be arranged at cost, so increasing the options available to
working people as well as abolishing interest on loans by making increasing
amount of cheap credit available to working people. LETS stands for Local
Exchange Trading Schemes and is a similar idea in many ways (and apparently
discovered independently) -- see Bringing the Economy Home from the
Market by V.G. Dobson for a detailed discussion on LETS.
Both schemes revolve around creating an alternative form of currency and
credit within capitalism in order to allow working class people to work
outwith the capitalist money system by creating "labour notes" as a
new circulating medium. In this way, it is hoped, workers would be able
to improve their living and working conditions by having a source of
community-based (very low interest) credit and so be less dependent on
capitalists and the capitalist banking system. Some supporters of mutualism
considered it as the ideal way of reforming capitalism away. By making
credit available to the ordinary worker at very cheap rates, the end of
wage slavery would soon occur as workers would work for themselves by
either purchasing the necessary tools required for their work or, by their
increased bargaining power within the economy, gain industrial democracy
from the capitalists by buying them out.
Such ideas have had a long history within the socialist movement, originating
in the British socialist movement in the early 19th century. Robert Owen
and other Socialists active at the time considered the idea of labour
notes and exchanges as a means of improving working class conditions within
capitalism and as the means of reforming capitalism into a society of
confederated, self-governing communities. Indeed, "Equitable Labour Exchanges"
were "founded at London and Birmingham in 1832" with "Labour notes and the
exchange of small products" [E.P. Thompson, The Making of the English
Working Class, p. 870] Apparently independently of these early attempts
in England at what would later be called mutualism, P-J Proudhon arrived
at the same ideas decades later in France. In his words, "The People's Bank
quite simply embodies the financial and economic aspects of the principle
of modern democracy, that is, the sovereignty of the People, and of the
republican motto, 'Liberty, Equality, Fraternity.'" [Selected Writings of
P-J Proudhon, p. 75] Similarly, in the USA (partly as a result of Joshua
Warren's activities, who got the idea from Robert Owen) there was extensive
discussion on labour notes, exchanges and free credit as a means of protecting
workers from the evils of capitalism and ensuring their independence and
freedom from wage slavery. When Proudhon's works appeared in North America,
the basic arguments were well known.
Therefore the idea that mutual banking using labour money as a means
to improve working class living conditions, even, perhaps, to achieve
industrial democracy, self-management and the end of capitalism has a long
history in Socialist thought. Unfortunately this aspect of socialism became
less important with the rise of Marxism (which called these early socialists
"utopian") attempts at such credit unions and alternative exchange schemes
were generally replaced with attempts to build working class political
parties. With the rise of Marxian social democracy, constructive socialistic
experiments and collective working class self-help was replaced by working
within the capitalist state. Fortunately, history has had the last laugh
on Marxism with working class people yet again creating anew the ideas of
Mutualism (as can be seen by the growth of LETS and other schemes of
community money).
Mutualism, as noted in the last section, is a form of credit co-operation,
in which individuals pull their resources together in order to benefit
themselves as individuals and as part of a community. LETS is another form
of mutualism which developed recently, and apparently developed independently
(from its start in Canada, LETS has spread across the world and there are
now hundreds of schemes involved hundreds of thousands of people). Mutual
banks and LETS have the following key aspects:
It is hoped, by organising credit, working class people will be able to
work for themselves and slowly but surely replace capitalism with
a co-operative system based upon self-management. While LETS schemes
do not have such grand schemes, historically mutualism aimed at
working within and transforming capitalism to socialism. At the very
least, LETS schemes reduce the power and influence of banks and finance
capital within society as mutualism ensures that working people
have a viable alternative to such parasites.
This point is important, as the banking system and money is often
considered "neutral" (particularly in capitalist economics). However,
as Malatesta correctly argues, it would be "a mistake to believe . . .
that the banks are, or are in the main, a means to facilitate
exchange; they are a means to speculate on exchange and currencies,
to invest capital and to make it produce interest, and to fulfil
other typically capitalist operations." [Life and Ideas, p. 100]
Within capitalism, money is still to a large degree a commodity which
is more than a convenient measure of work done in the production
of goods and services. As a commodity it can and does go anywhere in
the world where it can get the best return for its owners, and so it
tends to drain out of those communities that need it most. It is the
means by which capitalists can buy the liberty of working people and
get them to produce a surplus for them (wealth is, after all, "a power
invested in certain individuals by the institutions of society, to
compel others to labour for their benefit." [William Godwin, The
Anarchist Writings of William Godwin, p. 130]. From this
consideration alone, working class control of credit and money
is an important part of the class struggle as having access to
alternative sources of credit can increase working class options
and power.
Moreover, credit is also an important form of social control --
people who have to pay their mortgage or visa bill are more pliable,
less likely to strike or make other forms of political trouble. And,
of course, credit expands the consumption of the masses in the face
of stagnant or falling wages while allowing capitalists to profit
from it. Indeed, there is a link between the rising debt burden on
households in the 1980s and 1990s and the increasing concentration
of wealth. This is "because of the decline in real hourly wages and
the stagnation in household incomes, the middle and lower classes
have borrowed to stay in place; they've borrowed from the very rich
who have gotten richer. The rich need a place to earn interest on
their surplus funds, and the rest of the population makes a juicy
lending target." [Doug Henwood, Wall Street, pp. 64-65]
Little wonder that the state (and the capitalists who run it) is so
concerned to keep control of money in its own hands or the hands
of its agents. With an increase in mutual credit, interest rates
would drop, wealth would stay more in working class communities,
and the social power of working people would increase (for people
would be more likely to struggle for higher wages and better
conditions -- as the fear of debt repayments would be less).
Therefore, mutualism is an example of what could be termed
"counter-economics". By counter-economics we mean
the creation of
community-based credit unions that do not put their money into
"Capital Markets" or into capitalist Banks. We mean finding ways
for workers to control their own retirement funds. We mean finding
ways of using money as a means of undermining capitalist power
and control and supporting social struggle and change.
In this way working people are controlling more and more of the
money supply and using it ways that will stop capital from using
it to oppress and exploit the working class. An example of why
this can be important can be seen from the results of the existing
workers' pension fund system. Currently workers pension funds are
being used to invest in capitalist firms (particularly transnationals
and other forms of Big Business) and these companies use the invested
money to fund their activities. The idea is that by so investing,
workers will receive an adequate pension in their old age.
However, the only people actually winning are bankers and big companies.
Unsurprisingly, the managers of these pension fund companies are
investing in those firms with the highest returns, which are usually
those who are downsizing or extracting most surplus value from their
workforce (which in turn forces other companies to follow the same
strategies to get access to the available funds in order to survive).
Basically, if you are lending your money to be used to put your
fellow worker out of work or increase the power of capital,
then you are not only helping to make things harder for others
like you, you are also helping making things worse for yourself.
No person is an island, and increasing the clout of capital over
the working class is going to affect you directly or indirectly.
And, of course, it seems crazy to suggest
that workers desire to experience insecurity, fear of downsizing
and stagnating wages during their working lives in order to have
slightly more money when they retire.
This highlights one of the tricks the capitalists are using against
us, namely to get us to buy into the system through our fear of old age.
Whether it is going into lifelong debt to buy a home or lending our
money to capitalists, we are being encouraged to buy into something
which we value more than what is right and wrong. This allows us to
be more easily controlled by the government. We need to get away
from living in fear and stop allowing ourselves to be deceived
into behaving like "stakeholders" in Capitalistic and Plutocratic
systems. As can be seen from the use of pension funds to buy
out firms, increase the size of transnationals and downsize
the workforce, such "stakeholding" amounts to trading in the
present and the future while others benefit.
The real enemies are not working people who take part in such
pension schemes. It is the people in power, those who manage the
pension schemes and companies, who are trying to squeeze every
last cent out of working people to finance higher profits and stock
prices -- which the unemployment and impoverishment of workers on
a world-wide scale aids. They control the governments of the world.
They are making the "rules" of the current system. Hence the
importance of limiting the money they have available, of creating
community-based credit unions and mutual risk insurance
co-operatives to increase our control over our money and create our
own, alternative, means of credit and exchange (as presented as
mutualism) which can be used to empower ourselves, aid our struggles
and create our own alternatives. Money, representing as it does the
power of capital and the authority of the boss, is not "neutral" and
control over it plays a role in the class struggle. We ignore such
issues at our own peril.
The short answer is no, they do not. While the Individualist Anarchists
and Mutualists (followers of Proudhon) do think that mutual banking is
the only sure way of abolishing capitalism, most anarchists do not see
mutualism as an end in itself. Few think that capitalism can be
reformed away in the manner assumed by Proudhon. Increased access to
credit does not address the relations of production and market power
which exist within the economy and so any move for financial transformation
has to be part of a broader attack on all forms of capitalist social power
in order to be both useful and effective (see section B.3.2 for more
anarchist views on mutual credit and its uses). So, for most anarchists,
it is only in combination with other forms of working class self-activity
and self-management that mutualist institutions could play an important
role in the class struggle.
By creating a network of mutual banks to aid in creating co-operatives, union
organising drives, supporting strikes (either directly by gifts/loans or
funding food and other co-operatives which could supply food and other
essentials free or at a reduction), mutualism can be used as a means of
helping build libertarian alternatives within the capitalist system. Such
alternatives, while making life better under the current system, also can
play a role in overcoming that system by being a means of aiding those in
struggle make ends meet and providing alternative sources of income for
black-listed or sacked workers. Thus Bakunin's comments:
Therefore, while few anarchists think that mutualism would be enough
in itself, it can play a role in the class struggle. As a compliment to
direct action and workplace and community struggle and organisation,
mutualism has an important role in working class self-liberation. For
example, community unions (see section J.5.1) could create their own
mutual banks and money which could be used to fund co-operatives and
support strikes and other forms of social struggle. In this way a
healthy communalised co-operative sector could develop within capitalism,
overcoming the problems of isolation facing workplace co-operatives
(see section J.5.11) as well as providing a firm framework of support
for those in struggle.
Moreover, mutual banking can be a way of building upon and strengthening
the anarchistic social relations within capitalism. For even under
capitalism and statism, there exists extensive mutual aid and, indeed,
anarchistic and communistic ways of living. For example, communistic
arrangements exist within families, between friends and lovers and
within anarchist organisations.
Mutual banking could be a means of creating a bridge between this
alternative (gift) "economy" and capitalism. The mutualist alternative
economy would help strength communities and bonds of trust between
individuals, and this would increase the scope for increasing the scope
of the communistic sector as more and more people help each other out
without the medium of exchange - in other words, mutualism will help
the gift economy that exists within capitalism to grow and develop.
The mutual banking ideas of Proudhon could be adapted to the conditions of
modern society, as will be described in what follows. (Note: Proudhon is
the definitive source on mutualism, but for those who don't read French,
there are the works of his American disciples, e.g. William B. Greene's
Mutual Banking, and Benjamin Tucker's Instead of a Book by a Man
Too Busy to Write One).
One scenario for an updated system of mutual banking would be for a
community barter association to begin issuing an alternative currency
accepted as money by all individuals within the system. This "currency"
would not at first take the form of coins or bills, but would be
circulated entirely through transactions involving the use of barter-cards,
personal checks, and "e-money" transfers via modem/Internet. Let's call
this currency-issuing type of barter association a "mutual barter
clearinghouse," or just "clearinghouse" for short.
The clearinghouse would have a twofold mandate: first, to extend credit
at cost to members; second, to manage the circulation of credit-money within
the system, charging only a small service fee (probably one percent or less)
which is sufficient to cover its costs of operation, including labour costs
involved in issuing credit and keeping track of transactions, insuring
itself against losses from uncollectable debts, and so forth.
The clearinghouse would be organised and function as follows. Members
of the original barter association would be invited to become
subscriber-members of the clearinghouse by pledging a certain amount of
property as collateral. On the basis of this pledge, an account would be
opened for the new member and credited with a sum of mutual dollars
equivalent to some fraction of the assessed value of the property pledged.
The new member would agree to repay this amount plus the service fee
by a certain date. The mutual dollars in the new account could then be
transferred through the clearinghouse by using a barter card, by writing a
personal check, or by sending e-money via modem to the accounts of other
members, who have agreed to receive mutual money in payment for all
debts.
The opening of this sort of account is, of course, the same as taking out
a "loan" in the sense that a commercial bank "lends" by extending credit
to a borrower in return for a signed note pledging a certain amount of
property as security. The crucial difference is that the clearinghouse
does not purport to be "lending" a sum of money that it already has, as
is fraudulently claimed by commercial banks. Instead it honestly admits
that it is creating new money in the form of credit. New accounts can
also be opened simply by telling the clearinghouse that one wants an
account and then arranging with other people who already have balances to
transfer mutual money into one's account in exchange for goods or
services.
Another form is that associated with LETS systems. In this a number of
people get together to form an association. They create a unit of exchange
(which is equal in value to a unit of the national currency usually),
choose a name for it and offer each other goods and services priced in
these units. These offers and wants are listed in a directory which is
circulated periodically to members. Members decide who they wish to
trade with and how much trading they wish to do. When a transaction is
completed, this is acknowledged with a "cheque" made out by the buyer
and given to the seller. These are passed on to the system accounts
administration which keeps a record of all transactions and periodically
sends members a statement of their accounts. The accounts administration
is elected by, and accountable to, the membership and information about
balances is available to all members.
Unlike the first system described, members do not have to present property
as collateral. Members of a LETS scheme can go into "debt" without it,
although "debt" is the wrong word as members are not so much going into
debt as committing themselves to do some work within the system in the
future and by so doing they are creating spending power. The willingness
of members to incur such a commitment could be described as a service to
the community as others are free to use the units so created to trade
themselves. Indeed, the number of units in existence exactly matches
the amount of real wealth being exchanged. The system only works if
members are willing to spend and runs on trust and builds up trust
as the system is used.
It is likely that a fully functioning mutual banking system would
incorporate aspects of both these systems. The need for collateral may be
used when members require very large loans while the LETS system of
negative credit as a commitment to future work would be the normal
function of the system. If the mutual bank agrees a maximum limit for
negative balances, it may agree to take collateral for transactions
that exceed this limit. However, it is obvious that any mutual banking
system will find the best means of working in the circumstances it
finds itself.
Let's consider an example of how business would be transacted in the new
system. There are two possibilities, depending on whether the mutual
credit is based upon whether the creditor can provide collateral or
not. we will take the case with collateral first.
Suppose that A, an organic farmer, pledges as collateral a certain plot
of land that she owns and on which she wishes to build a house. The land
is valued at, say, $40,000 in the capitalist market. By pledging the land,
A is able to open a credit account at the clearinghouse for, say, $30,000
in mutual money (a ratio of 3/4). She does so knowing that there are
many other members of the system who are carpenters, electricians,
plumbers, hardware dealers, and so on who are willing to accept mutual
dollars in payment for their products or services.
It's easy to see why other subscriber-members, who have also obtained
mutual credit and are therefore in debt to the clearinghouse for mutual
dollars, would be willing to accept such dollars in return for their goods
and services. For they need to collect mutual dollars to repay their
debts. But why would someone who is not in debt for mutual dollars be
willing to accept them as money?
To see why, let's suppose that B, an underemployed carpenter, currently
has no account at the clearinghouse but that he knows about the
clearinghouse and the people who operate it. After examining its list of
members and becoming familiar with the policies of the new organisation,
he's convinced that it does not extend credit frivolously to untrustworthy
recipients who are likely to default. He also knows that if he contracts
to do the carpentry on A's new house and agrees to be paid for his work in
mutual money, he'll then be able to use it to buy groceries, clothes, car
repairs, and other goods and services from various people in the community
who already belong to the system.
Thus B will be willing, and perhaps even eager (especially if the economy
is in recession and regular money is tight) to work for A and receive
payment in mutual dollars. For he knows that if he is paid, say, $8,000
in mutual money for his labour on A's house, this payment constitutes, in
effect, 20 percent of a mortgage on her land, the value of which is
represented by her mutual credit. B also understands that A has promised
to repay this mortgage by producing new value -- that is, by growing
organic fruits and vegetables and selling them for mutual dollars to other
members of the system -- and that it is this promise to produce new wealth
which gives her mutual credit its value as a medium of exchange.
To put this point slightly differently, A's mutual credit can be thought
of as a lien against goods or services which she has guaranteed to create
in the future. As security of this guarantee, she agrees that if she is
unable for some reason to fulfil her obligation, the land she has pledged
will be sold for mutual dollars to other members. In this way, a value
sufficient to cancel her debt (and probably then some) will be returned to
the system. This provision insures that the clearinghouse is able to
balance its books and gives members confidence that mutual money is sound.
It should be noticed that since new wealth is continually being created,
the basis for new mutual credit is also being created at the same time.
Thus, suppose that after A's new house has been built, her daughter, C,
along with a group of friends D, E, F, . . . , decide that they want to
start a collectively owned and operated organic restaurant (which will
incidentally benefit A, as an outlet for her produce), but that C and her
friends do not have enough collateral to obtain a start-up loan. A,
however, is willing to co-sign a note for them, pledging her new house
(valued at say, $80,000) as security. On this basis, C and her partners
are able to obtain $60,000 worth of mutual credit, which they then use to
buy equipment, supplies, furniture, advertising, etc. and lease the
building necessary to start their restaurant.
This example illustrates one way in which people without property are able
to obtain credit in the new system. Another way -- for those who cannot
find (or perhaps don't wish to ask) someone with property to co-sign for
them -- is to make a down payment and then use the property which is to be
purchased on credit as security, as in the current method of obtaining a
home or auto loan. With mutual credit, however, this form of financing
can be used to purchase anything, including capital goods.
Which brings us to the case of an individual without means for providing
collateral - say, for example A, the organic farmer, does not own the
land she works. In such a case, A, who still desires work done, would
contact other members of the mutual bank with the skills she requires.
Those members with the appropriate skills and who agree to work with
her commit themselves to do the required tasks. In return, A gives
them a check in mutual dollars which is credited to their account and
deducted from hers. She does not pay interest on this issue of credit
and the sum only represents her willingness to do some work for other
members of the bank at some future date.
The mutual bank does not have to worry about the negative balance, as
this does not create a loss within the group as the minuses which have
been incurred have already created wealth (pluses) within the system
and it stays there. It is likely, of course, that the mutual bank
would agree an upper limit on negative balances and require some form
of collateral for credit greater than this limit, but for most exchanges
this would be unlikely to be relevant.
It is important to remember that mutual dollars have no intrinsic value,
since they can't be redeemed (at the mutual bank) in gold or anything else.
All they are promises of future labour. Thus, as Greene points out in
his work on mutual banking, mutual dollars are "a mere medium for the
facilitation of barter." In this respect they are closely akin to the
so-called "barter dollars" now being circulated by barter associations
through the use of checks and barter cards. To be precise, then, we
should refer to the units of mutual money as "mutual barter dollars." But
whereas ordinary barter dollars are created at the same time that a barter
transaction occurs and are used to record the values exchanged in that
transaction, mutual barter dollars are created before any actual barter
transaction occurs and are intended to facilitate future barter
transactions. This fact is important because it can be used as the basis
for a legal argument that clearinghouses are essentially barter
associations rather than banks, thrifts, or credit unions, and therefore
should not be subject to the laws governing the latter institutions.
Support for co-operatives is a common feature in anarchist writings. Indeed,
anarchist support for co-operatives is as old as use of the term anarchist to
describe our ideas is. So why do anarchists support co-operatives? Basically
it is because a co-operative is seen as an example of the future social
organisation anarchists want in the present. As Bakunin argued, "the
co-operative system. . . carries within it the germ of the future economic
order." [The Philosophy of Bakunin, p. 385]
Anarchists support all kinds of co-operatives - housing, food, credit unions
and productive ones. All forms of co-operation are useful as they accustom
their members to work together for their common benefit as well as ensuring
extensive experience in managing their own affairs. As such, all forms of
co-operatives are useful examples of self-management and anarchy in action
(to some degree). However, here we will concentrate on productive
co-operatives, i.e. workplace co-operatives. This is because workplace
co-operatives, potentially, could replace the capitalist mode of production
with one based upon associated, not wage, labour. As long as capitalism
exists within industry and agriculture, no amount of other kinds of
co-operatives will end that system. Capital and wealth accumulates by
oppression and exploitation in the workplace, therefore as long as wage
slavery exists anarchy will not.
Co-operatives are the "germ of the future" because of two facts. Firstly,
co-operatives are based on one worker, one vote. In other words those who do
the work manage the workplace within which they do it (i.e. they are based
on workers' self-management in some form). Thus co-operatives are an example
of the "horizontal" directly democratic organisation that anarchists support
and so are an example of "anarchy in action" (even if in an imperfect way)
within the economy. In addition, they are an example of working class
self-help and self-activity. Instead of relying on others to provide work,
co-operatives show that production can be carried on without the existence
of a class of masters employing a class of order takers.
Workplace co-operatives also present evidence of the viability of an anarchist
"economy." It is well established that co-operatives are usually more
productive and efficient than their capitalist equivalents. This indicates
that hierarchical workplaces are not required in order to produce
useful goods and indeed can be harmful. Indeed, it also indicates that
the capitalist market does not actually allocate resources efficiently
(as we will discuss in section J.5.12).
So why should co-operatives be more efficient?
Firstly there are the positive effects of increased liberty associated
with co-operatives.
Co-operatives, by abolishing wage slavery, obviously increases the liberty
of those who work in them. Members take an active part in the management
of their working lives and so authoritarian social relations are replaced
by libertarian ones. Unsurprisingly, this liberty also leads to an increase
in productivity - just as wage labour is more productive than slavery, so
associated labour is more productive than wage slavery. Little wonder
Kropotkin argued that "the only guarantee not to be robbed of the fruits
of your labour is to possess the instruments of labour. . . man really
produces most when he works in freedom, when he has a certain choice in
his occupations, when he has no overseer to impede him, and lastly, when
he sees his work bringing profit to him and to others who work like him,
but bringing in little to idlers." [The Conquest of Bread, p. 145]
There are also the positive advantages associated with participation
(i.e. self-management, liberty in other words). Within a self-managed,
co-operative workplace, workers are directly involved in decision
making and so these decisions are enriched by the skills, experiences
and ideas of all members of the workplace. In the words of Colin
Ward:
"Perhaps the greatest crime of the industrial system is the way
it systematically thwarts the investing genius of the majority
of its workers." [Anarchy in Action, p. 41]
Secondly, the increased efficiency of co-operatives results from the benefits
associated with co-operation itself. Not only does co-operation increase
the pool of knowledge and abilities available within the workplace and
enriches that source by communication and interaction, it also ensures that
the workforce are working together instead of competing and so wasting
time and energy. As Alfie Kohn notes (in relation to investigations of
in-firm co-operation):
(The question of co-operation and participation within capitalist firms will
be discussed in section J.5.12).
Thirdly, there are the benefits associated with increased equality. Studies
prove that business performance deteriorates when pay differentials become
excessive. In a study of over 100 businesses (producing everything from
kitchen appliances to truck axles), researchers found that the greater the
wage gap between managers and workers, the lower their product's quality.
[Douglas Cowherd and David Levine, "Product Quality and Pay Equity,"
Administrative Science Quarterly no. 37 (June 1992), pp. 302-30] Businesses
with the greatest inequality were plagued with a high employee turnover
rate. Study author David Levine said: "These organisations weren't able to
sustain a workplace of people with shared goals." [quoted by John Byrne in
"How high can CEO pay go?" Business Week, April 22, 1996]
(In fact, the negative effects of income inequality can be seen on a national
level as well. Economists Torsten Persson and Guido Tabellini conducted a
thorough statistical analysis of historical inequality and growth, and found
that nations with more equal incomes generally experience faster productive
growth. ["Is Inequality Harmful for Growth?", American Economic Review
no. 84, June 1994, pp. 600-21] Numerous other studies have also confirmed
their findings. Real life yet again disproves the assumptions of
capitalism - inequality harms us all, even the capitalist economy which
produces it).
This is to be expected. Workers, seeing an increasing amount of the value
they create being monopolised by top managers and a wealthy elite and not
re-invested into the company to secure their employment prospects, will
hardly be inclined to put in that extra effort or care about the quality
of their work. Managers who use the threat of unemployment to extract
more effort from their workforce are creating a false economy. While they
will postpone decreasing profits in the short term due to this adaptive
strategy (and enrich themselves in the process) the pressures placed
upon the system will bring a harsh long term effects - both in terms of
economic crisis (as income becomes so skewed as to create realisation
problems and the limits of adaptation are reached in the face of
international competition) and social breakdown.
As would be imagined, co-operative workplaces tend to be more egalitarian
than capitalist ones. This is because in capitalist firms, the incomes of
top management must be justified (in practice) to a small number of
individuals (namely, those shareholders with sizeable stock in the firm),
who are usually quite wealthy and so not only have little to lose in
granting huge salaries but are also predisposed to see top managers as
being very much like themselves and so are entitled to comparable incomes.
In contrast, the incomes of top management in worker controlled firms
have to be justified to a workforce whose members experience the relationship
between management incomes and their own directly and who, no doubt, are
predisposed to see their top managers as being workers like themselves
and accountable to them. Such an egalitarian atmosphere will have a positive
impact on production and efficiency as workers will see that the value
they create is not being accumulated by others but distributed according
to work actually done (and not control over power). In the Mondragon
co-operatives, for example, the maximum pay differential is 14 to 1
(increased from 3 to 1 in a response to outside pressures after much
debate, with the actual maximum differential at 9 to 1) while (in the
USA) the average CEO is paid over 140 times the average factory worker
(up from 41 times in 1960).
Therefore, we see that co-operatives prove (to a greater or lesser extent)
the advantages of (and interrelationship between) key anarchist principles
such as liberty, equality, solidarity and self-management. Their application,
whether all together or in part, has a positive impact on efficiency and
work -- and, as we will discuss in section J.5.12, the capitalist market
actively blocks the spread of more efficient productive techniques instead
of encouraging them. Even by its own standards, capitalism stands condemned
- it does not encourage the efficient use of resources and actively places
barriers in the development of human "resources."
From all this its clear to see why co-operatives are supported by anarchists.
We are "convinced that the co-operative could, potentially, replace capitalism
and carries within it the seeds of economic emancipation. . . The workers
learn from this precious experience how to organise and themselves conduct
the economy without guardian angels, the state or their former employers."
[Michael Bakunin, Op. Cit., p. 399] Co-operatives give us a useful insight
into the possibilities of a free, socialist, economy. Even within the
hierarchical capitalist economy, co-operatives show us that a better
future is possible and that production can be organised in a co-operative
fashion and that by so doing we can reap the individual and social
benefits of working together as equals.
However, this does not mean that all aspects of the co-operative movement
find favour with anarchists. As Bakunin pointed out, "there are two kinds
of co-operative: bourgeois co-operation, which tends to create a privileged
class, a sort of new collective bourgeoisie organised into a stockholding
society: and truly Socialist co-operation, the co-operation of the future
which for this very reason is virtually impossible of realisation at
present." [Op. Cit., p. 385] In other words, while co-operatives
are the
germ of the future, in the present they are often limited by the
capitalist environment they find themselves and narrow their vision to
just surviving within the current system.
For most anarchists, the experience of co-operatives has proven without
doubt that, however excellent in principle and useful in practice, if they
are kept within the narrow circle of "bourgeois" existence they cannot
become dominant and free the masses. This point is argued in Section
J.5.11
and so will be ignored here. In order to fully develop, co-operatives must
be part of a wider social movement which includes community and industrial
unionism and the creation of a anarchistic social framework which can
encourage "truly Socialist co-operation" and discourage "bourgeois
co-operation." As Murray Bookchin correctly argues, "[r]emoved from
a libertarian municipalist [or other anarchist] context and movement
focused on achieving revolutionary municipalist [or communalist] goals
as a dual power against corporations and the state, food [and other
forms of] co-ops are little more than benign enterprises that capitalism
and the state can easily tolerate with no fear of challenge." [Democracy
and Nature no. 9, p. 175]
Therefore, while co-operatives are an important aspect of anarchist ideas and
practice, they are not the be all or end all of our activity. Without a
wider social movement which creates all (or at least most) of the future
society in the shell of the old, co-operatives will never arrest the growth
of capitalism or transcend the narrow horizons of the capitalist economy.
Supporters of capitalism suggest that producer co-operatives would spring
up spontaneously if workers really wanted them. Their argument is that
co-operatives could be financed at first by "wealthy radicals" or by
affluent workers pooling their resources to buy out existing capitalist
firms; then, if such co-operatives were really economically viable and
desired by workers, they would spread until eventually they undermined
capitalism. They conclude that since this is not happening, it must be
because workers' self-management is either economically unfeasible or is
not really attractive to workers or both (see, for example, Robert Nozick,
Anarchy, State, and Utopia, pp. 250-52).
David Schweickart has decisively answered this argument by showing that
the reason there are not more producer co-operatives is structural:
There are other structural problems as well. For one thing, since their
pay levels are set by members' democratic vote, co-operatives tend to be
more egalitarian in their income structure. But this means that in a
capitalist environment, co-operatives are in constant danger of having
their most skilled members hired away. Moreover, there is a difficulty in
raising capital:
In addition, co-operatives face the negative externalities generated
by a capitalist economy. The presence of wage labour and investment capital
in the economy will tempt successful co-operatives to increase their flexibility
to adjust to changes in market changes by hiring workers or issuing shares
to attract new investment. In so doing, however, they may end up losing their
identities as co-operatives by diluting ownership or by making the co-operative
someone's boss:
Hence the pressures of working in a capitalist market may result in
co-operatives pursuing activities which may result in short term gain or
survival, but are sure to result in harm in the long run. Far from
co-operatives slowly expanding within and changing a capitalist environment
it is more likely that capitalist logic will expand into and change the
co-operatives that work in it (this can be seen from the Mondragon
co-operatives, where there has been a slight rise in the size of wage
labour being used and the fact that the credit union, since 1992, has
invested in non-co-operative firms). These externalities imposed upon
isolated co-operatives within capitalism (which would not arise within a
fully co-operative context) block local moves towards anarchism. The idea
that co-operation will simply win out in competition within well developed
capitalist economic systems is just wishful thinking. Just because a
system is more liberatory and just does not mean it will survive in an
authoritarian economic and social environment.
There are also cultural problems as well. As Jon Elster points out, it is
a "truism, but an important one, that workers' preferences are to a large
extent shaped by their economic environment. Specifically, there is a
tendency to adaptive preference formation, by which the actual mode of
economic organisation comes to be perceived as superior to all others."
["From Here to There", in Socialism, p. 110] In other words, people
view "what is" as given and feel no urge to change to "what could be."
In the context of creating alternatives within capitalism, this can
have serious effects on the spread of alternatives and indicates the
importance of anarchists encouraging the spirit of revolt to break
down this mental apathy.
This acceptance of "what is" can be seen, to some degree, by some
companies which meet the formal conditions for co-operatives, for
example ESOP owned firms in the USA, but lack effective workers' control.
ESOP (Employee Stack Ownership Plans) firms enable a firms workforce
to gain the majority of a companies shares but the unequal distribution
of shares amongst employees prevents the great majority of workers from
having any effective control or influence on decisions. Unlike real
co-operatives (based on "one worker, one vote") these firms are based
on "one share, one vote" and so have more in common with capitalist
firms than co-operatives.
Moreover, we have ignored such problems as natural barriers to entry
into, and movement within, a market (which is faced by all firms) and
the difficulties co-operatives can face in finding access to long term
credit facilities required by them from capitalist banks (which would
effect co-operatives more as short term pressures can result in their
co-operative nature being diluted). As Tom Cahill notes, the "old co-ops
[of the nineteenth century] also had the specific problem of . . .
giving credit . . . [as well as] problems . . . of competition
with price cutting capitalist firms, highlighting the inadequate
reservoirs of the under-financed co-ops." ["Co-operatives and
Anarchism: A contemporary Perspective", in For Anarchism, edited
by Paul Goodway, p. 239]
In addition, the "return on capital is limited" in co-operatives [Tom
Cahill, Op. Cit., p. 247] which means that investors are less-likely
to invest in co-operatives, and so co-operatives will tend to suffer
from a lack of investment. Which also suggests that Nozick's argument
that "don't say that its against the class interest of investors to
support the growth of some enterprise that if successful would end
or diminish the investment system. Investors are not so altruistic.
They act in personal and not their class interests" is false
[Op. Cit.,
pp. 252-3]. Nozick is correct, to a degree -- but given a choice between
high returns from investments in capitalist firms and lower ones
from co-operatives, the investor will select the former. This does
not reflect the productivity or efficiency of the investment --
quite the reverse! -- it reflects the social function of wage
labour in maximising profits and returns on capital (see next section for more on this).
In other words, the personal interests of investors will generally
support their class interests (unsurprisingly, as class interests
are not independent of personal interests and will tend to reflect
them!).
Tom Cahill outlines the investment problem when he writes that
the "financial problem" is a major reason why co-operatives failed
in the past, for "basically the unusual structure and aims of
co-operatives have always caused problems for the dominant sources
of capital. In general, the finance environment has been hostile
to the emergence of the co-operative spirit. . ." And he also
notes that they were "unable to devise structuring to maintain
a boundary between those who work and those who own or control. . .
It is understood that when outside investors were allowed to have
power within the co-op structure, co-ops lost their distinctive
qualities." [Op. Cit., pp. 238-239] Meaning that even if
co-operative do attract investors, the cost of so doing may be
to transform the co-operatives into capitalist firms.
Thus, in spite of "empirical studies suggest[ing] that co-operatives are
at least as productive as their capitalist counterparts," with many
having "an excellent record, superior to conventionally organised firms
over a long period" [Jon Elster, Op. Cit., p. 96], co-operatives are more
likely to adapt to capitalism than replace it and adopt capitalist
principles of rationality in order to survive. All things being equal,
co-operatives are more efficient than their capitalist counterparts - but
when co-operatives compete in a capitalist economy, all things are not
equal.
In spite of these structural and cultural problems, however, there has been
a dramatic increase in the number of producer co-operatives in most Western
countries in recent years. For example, Saul Estrin and Derek Jones report
that co-operatives in the UK grew from 20 in 1975 to 1,600 by 1986; in
France they increased from 500 to 1,500; and in Italy, some 7,000 new
co-operatives came into existence between 1970 and 1982 ["Can Employee-owned
Firms Survive?", Working Paper Series, Department of Economics, Hamilton
College (April, May, 1989)]. Italian co-operatives now number well over
20,000, many of them large and having many support structures as well
(which aids their development by reducing their isolation and providing
long term financial support lacking within the capitalist market).
We have already noted the success of the Mondragon co-operatives in Spain,
which created a cluster of inter-locking co-operatives with its own credit
union to provide long term financial support and commitment. Thus, in Europe
at least, it appears that there is a rather "large and growing co-operative
movement," which gives the lie to Nozick's and other supporters of
capitalism arguments about co-operatives' lack of economic viability
and/or attractiveness to workers.
However, because co-operatives can survive in a capitalist economy it does
not automatically mean that they shall replace that economy. Isolated
co-operatives, as we argued above, will more likely adapt to capitalist
realities than remain completely true to their co-operative promise. For
most anarchists, therefore, co-operatives can reach their full potential
only as part of a social movement aiming to change society. As part of
a wider movement of community and workplace unionism, with mutualist banks
to provide long terms financial support and commitment, co-operatives
could be communalised into a network of solidarity and support that
will reduce the problems of isolation and adaptation. Hence Bakunin:
Co-operation "will prosper, developing itself fully and freely, embracing
all human industry, only when it is based on equality, when all capital
. . . [and] the soil, belong to the people by right of collective
property." [Ibid.]
Until then, co-operatives will exist within capitalism but not replace it
by market forces - only a social movement and collective action can
fully secure their full development. As David Schweickart argues:
This means that while anarchists support, create and encourage co-operatives
within capitalism, they understand "the impossibility of putting into
practice the co-operative system under the existing conditions of the
predominance of bourgeois capital in the process of production and
distribution of wealth." Because of
this, most anarchists stress the need for more combative organisations
such as industrial and community unions and other bodies "formed,"
to use Bakunin's words, "for the organisation of toilers against the
privileged world" in order to help bring about a free society.
[Michael Bakunin, Op. Cit., p. 185]
While it may be admitted that co-operatives cannot reform capitalism away
(see last section), many supporters of "free market" capitalism will claim
that a laissez-faire system would see workers self-management spread within
capitalism. This is because, as self-management is more efficient than
wage slavery, those capitalist firms that introduce it will gain a
competitive advantage, and so their competitors will be forced to
introduce it or go bust. While not being true anarchistic production,
it would (it is argued) be a very close approximation of it and so
capitalism could reform itself naturally to get rid of (to a large degree)
its authoritarian nature.
While such a notion seems plausible in theory, in practice it does not
work. Free market capitalism places innumerable barriers to the spread of
worker empowering structures within production, in spite (perhaps, as we
will see, because) of their more efficient nature. This can be seen
from the fact that while the increased efficiency associated with workers'
participation and self-management has attracted the attention of many
capitalist firms, the few experiments conducted have failed to spread.
This is due, essentially, to the nature of capitalist production and
the social relationships it produces.
As we noted in section D.10,
capitalist firms (particularly in the west)
made a point of introducing technologies and management structures that
aimed to deskill and disempower their workers. In this way, it was hoped
to make the worker increasingly subject to "market discipline" (i.e. easier
to train, so increasing the pool of workers available to replace any specific
worker and so reducing workers power by increasing management's power to fire
them). Of course, what actually happens is that after a short period of
time while management gained the upper hand, the workforce found newer
and more effective ways to fight back and assert their productive power
again. While for a short time the technological change worked, over
the longer period the balance of forces changed, so forcing management to
continually try to empower themselves at the expense of the workforce.
It is unsurprising that such attempts to reduce workers to order-takers
fail. Workers' experiences and help are required to ensure production
actually happens at all. When workers carry out their orders strictly and
faithfully (i.e. when they "work to rule") production threatens to stop.
So most capitalists are aware of the need to get workers to "co-operate"
within the workplace to some degree. A few capitalist companies have
gone further. Seeing the advantages of fully exploiting (and we do mean
exploiting) the experience, skills, abilities and thoughts of their employers
which the traditional authoritarian capitalist workplace denies them, some
have introduced various schemes to "enrich" and "enlarge" work, increase
"co-operation" between workers and their bosses. In other words, some
capitalist firms have tried to encourage workers to "participate" in
their own exploitation by introducing (in the words of Sam Dolgoff) "a
modicum of influence, a strictly limited area of decision-making power, a
voice - at best secondary - in the control of conditions of the workplace."
[The Anarchist Collectives, p. 81] The management and owners still have
the power and still reap the majority of benefits from the productive
activity of the workforce.
David Noble provides a good summary of the problems associated with
experiments in workers' self-management within capitalist firms:
"Second, participation programs can contribute to the creation
of an elite, and reduced, work force, with special privileges
and more 'co-operative' attitudes toward management -- thus at
once undermining the adversary stance of unions and reducing
membership . . .
"Thirds, such programs enable management to learn from workers
-- who are now encouraged by their co-operative spirit to
share what they know -- and, then, in Taylorist tradition,
to use this knowledge against the workers. As one former pilot
reflected, 'They learned from the guys on the floor, got their
knowledge about how to optimise the technology and then, once
they had it, they eliminated the Pilot Program, put that
knowledge into the machines, and got people without any
knowledge to run them -- on the Company's terms and without
adequate compensation. They kept all the gains for themselves.'"
. . .
"Fourth, such programs could provide management with a way
to circumvent union rules and grievance procedures or
eliminate unions altogether. . ." [Forces of Production,
pp. 318-9]
However, be that as it may, the results of such capitalist experiments
in "workers' control" are interesting and show why self-management
will not spread by market forces (and they also bear direct relevance
to the question of why real co-operatives are not widespread within
capitalism -- see last section).
According to one expert "[t]here is scarcely a study in the entire
literature which fails to demonstrate that satisfaction in work is
enhanced or. . .productivity increases occur from a genuine increase
in worker's decision-making power. Findings of such consistency, I
submit, are rare in social research." [Paul B. Lumberg, cited by
Hebert Gintiz, "The nature of Labour Exchange and the Theory of
Capitalist Production", Radical Political Economy
vol. 1, p. 252]
In spite of these findings, a "shift toward participatory relationships
is scarcely apparent in capitalist production. . . [this is] not
compatible with the neo-classical assertion as to the efficiency of
the internal organisation of capitalist production." [Herbert Gintz,
Op. Cit., p. 252] Why is this the case?
Economist William Lazonick indicates the reason when he writes that
"[m]any
attempts at job enrichment and job enlargement in the first half of the
1970s resulted in the supply of more and better effort by workers. Yet
many 'successful' experiments were cut short when the workers whose work
had been enriched and enlarged began questioning traditional management
prerogatives inherent in the existing hierarchical structure of the
enterprise." [Competitive Advantage on the Shop Floor, p. 282]
This is an important result, as it indicates that the ruling sections within
capitalist firms have a vested interest in not introducing such schemes,
even though they are more efficient methods of production. As can easily be
imagined, managers have a clear incentive to resist participatory schemes
(and David Schweickart notes, such resistance, "often bordering on sabotage,
is well known and widely documented" [Against Capitalism,
p. 229]). As
an example of this, David Noble discusses a scheme (called the Pilot
Program) ran by General Electric at Lynn, Massachusetts, USA in the
late 1960s:
This is for three reasons.
Firstly, the fact is that within "free market" capitalism
keeping
(indeed strengthening) skills and power in the hands of the workers
makes it harder for a capitalist firm to maximise profits (i.e.
unpaid labour). It strengthens the power of workers, who can use
that power to gain increased wages (i.e. reduce the amount of
surplus value they produce for their bosses).
Workers' control basically leads to a usurpation of capitalist
prerogatives -- including their share of revenues and their
ability to extract more unpaid labour during the working day.
While in the short run workers' control may lead to higher
productivity (and so may be toyed with), in the long run, it
leads to difficulties for capitalists to maximise their profits.
So, "given that profits depend on the integrity of the labour exchange,
a strongly centralised structure of control not only serves the
interests of the employer, but dictates a minute division of labour
irrespective of considerations of productivity. For this reason,
the evidence for the superior productivity of 'workers control'
represents the most dramatic of anomalies to the neo-classical
theory of the firm: worker control increases the effective amount
of work elicited from each worker and improves the co-ordination of
work activities, while increasing the solidarity and delegitimising
the hierarchical structure of ultimate authority at its root; hence
it threatens to increase the power of workers in the struggle over
the share of total value." [Hebert Gintz, Op. Cit.,
p. 264]
So, a workplace which had extensive workers participation would
hardly see the workers agreeing to reduce their skill levels,
take a pay cut or increase their pace of work simply to enhance
the profits of capitalists. Simply put, profit maximisation is not
equivalent to technological efficiency. By getting workers to
work longer, more intensely or in more unpleasant conditions can
increase profits but does not yield more output for the same
inputs. Workers' control would curtail capitalist means of
enhancing profits by changing the quality and quantity of work.
It is this requirement which also aids in understanding why
capitalists will not support workers' control -- even though
it is more efficient, it reduces the ability of capitalists to
maximise profits by minimising labour costs. MoJ.5.1 What is community unionism?
"Libertarian Communism is a society organised without the state and
without private ownership. And there is no need to invent anything or
conjure up some new organization for the purpose. The centres about
which life in the future will be organised are already with us in
the society of today: the free union and the free municipality [or
Commune].
[Libertarian Communism,
pp. 6-7]
J.5.2 Why do anarchists support industrial unionism?
"The basis of the Syndicate is the mass meeting of workers assembled
at their place of work. . . The meeting elects its factory committee
and delegates. The factory is Syndicate is federated to all other
such committees in the locality. . . In the other direction, the
factory, let us say engineering factory, is affiliated to the District
Federation of Engineers. In turn the District Federation is affiliated
to the National Federation of Engineers. . . Then, each industrial
federation is affiliated to the National Federation of Labour . . .
how the members of such committees are elected is most important.
They are, first of all, not representatives like Members of Parliament
who air their own views; they are delegates who carry the message of
the workers who elect them. They do not tell the workers what the
'official' policy is; the workers tell them.
As can be seen, industrial unionism reflects anarchist ideas of
organisation - it is organised from the bottom up, it is decentralised
and based upon federation and it is directly managed by its members
in mass assemblies. It is anarchism applied to industry and the needs
of the class struggle. By supporting such forms of organisations,
anarchists are not only seeing "anarchy in action", they are forming
effective tools which can win the class war. By organising in this
manner, workers are building the framework of a co-operative society
within capitalism. Rudolf Rocker makes this clear:
"the syndicate. . . has for its purpose the defence of the interests of
the producers within existing society and the preparing for and the
practical carrying out of the reconstruction of social life . . .
It has, therefore, a double purpose: 1. As the fighting organisation
of the workers against their employers to enforce the demand of the
workers for the safeguarding of their standard of living; 2. As the
school for the intellectual training of the workers to make them
acquainted with the technical management of production and
economic life in general." [Anarcho-Syndicalism, p. 51]
J.5.3 What attitude do anarchists take to existing unions?
J.5.4 What are industrial networks?
"We have no intention of isolating ourselves from the many workers who
make up the rest of the rank and file membership of the unions. We
recognise that a large proportion of trade union members are only
nominally so as the main activity of social democratic [i.e. reformist]
unions is outside the workplace. . . We aim to unite and not divide
workers.
J.5.5 What forms of co-operative credit do anarchists support?
J.5.6 What are the key features of mutual credit schemes?
1) Co-operation: No-one owns the network. It is controlled by
its members directly.
2) Non-exploitative: No interest is charged on account balances
or credit. At most administrative costs are charged, a result
of it being commonly owned and managed.
3) Consent: Nothing happens without it, there is no compulsion
to trade.
4) Money: They use their own type of money (traditionally called
"labour-notes") as a means of aiding "honest exchange".
J.5.7 Do most anarchists think mutual credit is sufficient
to abolish capitalism?
"let us co-operate in our common enterprise to make our lives a little
bit more supportable and less difficult. Let us, wherever possible,
establish producer-consumer co-operatives and mutual credit societies which,
though under the present economic conditions they cannot in any real or
adequate way free us, are nevertheless important inasmuch they train the
workers in the practices of managing the economy and plant the precious
seeds for the organisation of the future." [Bakunin on Anarchism,
p. 173]
J.5.8 What would a modern system of mutual banking look like?
J.5.9 How does mutual credit work?
J.5.10 Why do anarchists support co-operatives?
"You can be in authority, or you can be an
authority, or you can have authority. The first
derives from your rank in some chain of
command, the second derives special knowledge, and the third from
special wisdom. But knowledge and wisdom are not distributed in
order of rank, and they are no one person's monopoly in any
undertaking. The fantastic inefficiency of any hierarchical
organisation -- any factory, office, university, warehouse or
hospital -- is the outcome of two almost invariable characteristics.
One is that the knowledge and wisdom of the people at the bottom
of the pyramid finds no place in the decision-making leadership
hierarchy of the institution. Frequently it is devoted to making
the institution work in spite of the formal leadership structure,
or alternatively to sabotaging the ostensible function of the
institution, because it is none of their choosing. The other is
that they would rather not be there anyway: they are there
through economic necessity rather than through identification
with a common task which throws up its own shifting and
functional leadership.
Also, as workers also own their place of work, they have an interest
in developing the skills and abilities of their members and, obviously,
this also means that there are few conflicts within the workplace.
Unlike capitalist firms, there is no need for conflict between bosses
and wage slaves over work loads, conditions or the division of value
created between them. All these factors will increase the quality,
quantity and efficiency of work and so increases efficient utilisation of
available resources and facilities the introduction of new techniques and
technologies.
"Dean Tjosvold of Simon Frazer. . .conducted [studies] at utility companies,
manufacturing plants, engineering firms, and many other kinds of organisations.
Over and over again, Tjosvold has found that 'co-operation makes a work force
motivated' whereas 'serious competition undermines co-ordination.' . . .
Meanwhile, the management guru. . . T. Edwards Demming, has declared that
the practice of having employees compete against each other is 'unfair [and]
destructive. We cannot afford this nonsense any longer. . . [We need to]
work together on company problems [but] annual rating of performance,
incentive pay, [or] bonuses cannot live with team work. . . What takes
the joy out of learning. . .[or out of] anything? Trying to be number one.'"
[No Contest, p. 240]
J.5.11 If workers really want self-management, why aren't there more producer co-operatives?
"A worker-managed firm lacks an expansionary dynamic. When a capitalist
enterprise is successful, the owner can increase her profits by
reproducing her organisation on a larger scale. She lacks neither the
means nor the motivation to expand. Not so with a worker-managed firm.
Even if the workers have the means, they lack the incentive, because
enterprise growth would bring in new workers with whom the increased
proceeds would have to be shared. Co-operatives, even when prosperous,
do not spontaneously grow. But if this is so, then each new co-operative
venture (in a capitalist society) requires a new wealthy radical or a new
group of affluent radical workers willing to experiment. Because such
people doubtless are in short supply, it follows that the absence of a
large and growing co-operative movement proves nothing about the viability
of worker self-management, nor about the preferences of workers."
[Against Capitalism, p. 239]
"Quite apart from ideological hostility (which may be
significant), external investors will be reluctant to put their money into
concerns over which they will have little or no control -- which tends to
be the case with a co-operative. Because co-operatives in a capitalist
environment face special difficulties, and because they lack the inherent
expansionary dynamic of a capitalist firm, it is hardy surprising that
they are far from dominant." [Ibid., p 240]
"To meet increased production, the producer co-operatives hired outside
wage workers. This created a new class of workers who exploit and profit
from the labour of their employees. And all this fosters a bourgeois
mentality." [Michael Bakunin, Bakunin on Anarchism, p. 399]
"We hardly oppose the creation of co-operative associations; we find
them necessary in many respects. . . they accustom the workers to
organise, pursue, and manage their interests themselves, without
interference either by bourgeois capital or by bourgeois control. . .
[they must] above all [be] founded on the principle of solidarity and
collectivity rather than on bourgeois exclusivity, then society will
pass from its present situation to one of equality and justice without
too many great upheavals." [Op. Cit., p. 153]
"Even if worker-managed firms are preferred by the vast majority, and
even if they are more productive, a market initially dominated by capitalist
firms may not select for them. The common-sense neo-classical dictum that only
those things that best accord with people's desires will survive the struggle
of free competition has never been the whole truth with respect to anything;
with respect to workplace organisation it is barely a half-truth."
[Op. Cit., p. 240]
J.5.12 If self-management is more efficient, surely capitalist firms will be forced to introduce it by the market?
"Participant in such programs can indeed be a liberating and
exhilarating experience, awakening people to their own untapped
potential and also to the real possibilities of collective worker
control of production. As one manager described the former pilots
[workers in a General Electric program]: 'These people will never
be the same again. They have seen that things can be different.'
But the excitement and enthusiasm engendered by such programs, as
well as the heightened sense of commitment to a common purpose, can
easily be used against the interests of the work force. First, that
purpose is not really 'common' but is still determined by management
alone, which continues to decide what will be produced, when, and
where. Participation in production does not include participation
in decisions on investment, which remains the prerogative of
ownership. Thus participation is, in reality, just a variation of
business as usual -- taking orders -- but one which encourages
obedience in the name of co-operation.
Therefore, capitalist-introduced and supported "workers' control" is
very like the situation when a worker receives stock in the company
they work for. If it goes some way toward redressing the gap between
the value of that person's labour, and the wage they receive for it,
that in itself cannot be a totally bad thing (although, of course,
this does not address the issue of workplace hierarchy and the
social relations within the workplace itself). The real downside of
this is the "carrot on a stick" enticement to work harder -- if you
work extra hard for the company, your stock will be worth more.
Obviously, though, the bosses get rich off you, so the more you
work, the richer they get, the more you are getting ripped off. It
is a choice that anarchists feel many workers cannot afford to make --
they need or at least want the money - but we believe that the stock
does not work for many workers, who end up working harder, for less.
After all, stocks do not represent all profits (large amounts of which
end up in the hands of top management) nor are they divided just among
those who labour. Moreover, workers may be less inclined to take direct
action, for fear that they will damage the value of "their" company's
stock, and so they may find themselves putting up with longer, more
intense work in worse conditions.
"After considerable conflict, GE introduced a quality of work life
program . . . which gave workers much more control over the machines
and the production process and eliminated foremen. Before long, by
all indicators, the program was succeeding -- machine use, output
and product quality went up; scrap rate, machine downtime, worker
absenteeism and turnover when down, and conflict on the floor
dropped off considerably. Yet, little more than a year into the
program -- following a union demand that it be extended throughout
the shop and into other GE locations -- top management abolished
the program out of fear of losing control over the workforce.
Clearly, the company was willing to sacrifice gains in technical
and economic efficiency in order to regain and insure management
control." [Progress Without People, p. 65f]
However, it could be claimed that owners, being concerned by the
bottom-line of profits, could force management to introduce
participation. By this method, competitive market forces would
ultimately prevail as individual owners, pursuing profits,
reorganise production and participation spreads across the
economy. Indeed, there are a few firms that have introduced
such schemes, but there has been no tendency for them to spread.
This contradicts "free market" capitalist economic theory which
states that those firms which introduce more efficient techniques
will prosper and competitive market forces will ensure that other
firms will introduce the technique.