As James J. Martin notes, "paralleling" European social anarchism "chronologically was a kindred but nearly unconnected phenomenon in America, seeking the same ends through individualistic rather than collectivistic dynamics." [Men Against the State, p. ix]
When the two movements meet in American in the 1880s, the similarities and differences of both came into sharp relief. While both social and individualist anarchists reject capitalism as well as the state and seek an end to the exploitation of labour by capital (i.e. to usury in all its forms), both schools of anarchism rejected each others solutions to the social problem. The vision of the social anarchists was more communally based, urging social ownership of the means of life. In contrast, reflecting the pre-dominantly pre-capitalist nature of post-revolution US society, the Individualist Anarchists urged small-scale possession of the means of life, co-operatives and mutual banking to remove interest and give every worker access to capital.
Thus their vision of a free society and the means to achieve it were somewhat different (although, we stress, not mutually exclusive as communist anarchists supported artisan possession of the means of possession for those who rejected communism and the Individualist Anarchists supported voluntary communism). Tucker argued that a communist could not be an anarchist and the communist-anarchists argued that Individualist Anarchism could not end the exploitation of capital by labour. Being social anarchists, here we indicate why social anarchists reject individualist anarchism (see section A.3.1 for a summary of why Individualist Anarchists reject social anarchism).
Malatesta summarises the essential points of difference:
"The individualists assume . . . that the (anarchist) communists wish to impose communism, which of course would put them right outside the ranks of anarchism.
"The communists assume . . . that the (anarchist) individualists reject every idea of association, want the struggle between men, the domination of the strongest -- and this would put them not only outside the anarchist movement but outside humanity.
"In reality those who are communists are such because they see in common freely accepted the realisation of brotherhood, and the best guarantee for individual freedom. And individualists, those who are really anarchists, are anti-communist because they fear that communism would subject individuals . . . to the tyranny of the collectivity . . . Therefore they want each individual, or each group, to be in a position to enjoy freely the product of their labour in conditions of equality with other individuals and groups, with whom they would maintain relations of justice and equity.
"In which case it is clear that there is no basic difference between us. But, according to the communists, justice and equity are, under natural conditions impossible of attainment in an individualistic society, and thus freedom too would not be attained.
"If climatic conditions throughout the world were the same, if the land were everywhere equally fertile, if raw materials were evenly distributed and within reach of all who needed them, if social development were the same everywhere in the world . . . then one could conceive of everyone . . . finding the land, tools and raw materials needed to work and produce independently, without exploiting or being exploited. But natural and historical conditions being what they are, how is it possible to establish equality and justice between he who by chance finds himself with a piece of arid land which demand much labour for small returns with him who has a piece of fertile and well sited land?" [Life and Ideas, pp. 31-2]
Thus, while Individualist Anarchists argue for the "cost principle" (i.e. cost being the limit of price) the cost of creating the same commodity in different areas or by different people is not equal. Thus the market price of a good cannot really equal the multitude of costs within it (and so price can only equal a workers' labour in the minority of cases where that labour was used in the least favourable circumstances). It was for this reason that Proudhon argued that a portion of income from agricultural produce be paid into a central fund which would be used to make equalisation payments to compensate farmers with less favourably situated or less fertile land. As he put it, economic rent "in agriculture has no other cause than the inequality in the quality of land . . . if anyone has a claim on account of this inequality . . . [it is] the other land workers who hold inferior land. That is why in our scheme for liquidation [of capitalism] we stipulated that every variety of cultivation should pay a proportional contribution, destined to accomplish a balancing of returns among farm workers and an assurance of products." [The General Idea of the Revolution, p. 209]
This problem was recognised by Tucker, who argued that "economic rent . . . is one of nature's inequalities. It will probably remain with us always. Complete liberty will every much lessen it; of that I have no doubt." ["Why I am an Anarchist", pp. 135-6, Man!, M. Graham (ed.), pp. 132-6] Unlike Proudhon, however, he proposed no scheme to equalise income. Perhaps Tucker was correct and the differences would be slight, but in a market situation exchanges tend to magnify differences, not reduce them. The actions of self-interested individuals in unequal positions will tend to exacerbate differences. Over time these slight differences would become larger and larger, subjecting the weaker party to relatively increasingly worse contracts. As Proudhon argued:
"I have shown the contractor, at the birth of industry, negotiating on equal terms with his comrades, who have since become his workmen. It is plain, in fact, that this original equality was bound to disappear through the advantageous position of the master and the dependent position of the wage-workers. In vain does the law assure the right of each to enterprise . . . When an establishment has had leisure to develop itself, enlarge its foundations, ballast itself with capital, and assure itself a body of patrons, what can a workman do against a power so superior?" [System of Economical Contradictions, p. 202]
Moreover, "there is a remarkable correlation between competitiveness in a society and the presence of clearly defined 'have' and 'have-not' groups." [Alfie Kohn, No Contest, p. 38] As the communist-anarchist paper Freedom argued:
"Are not the scandalous inequalities in the distribution of wealth today merely the culminative effect of the principle that every man is justified in securing to himself everything that his chances and capacities enable him to lay hands on?
"If the social revolution which we are living means anything, it means the destruction of this detestable economic principle, which delivers over the more social members of the community to the domination of the most unsocial and self-interested." [Freedom, vol. 2, no. 19]
While state action may have given the modern capitalist an initial advantage on the market, it does not follow that a truly free market will not create similar advantages naturally. And if it did, then surely a similar system would develop? That it developed without state aid would make it no less unfree and unjust. It is of little use to point out that such a situation is not what the Individualist Anarchists desired (after all, Stalin was hardly what most Marxists desired). It is a question of whether their ideas would actually result in what they wanted.
Which brings us to the corrosive effects of the market itself on human personalities. As noted in earlier sections, individualists mostly base their economic ideas on the free market. However, as we have argued elsewhere (see section B.1), competition for profits in a free market creates numerous problems -- for example, the creation of an "ethics of mathematics" and the strange inversion of values in which things (property) become more important than people. Competition, as Alfie Kohn points out, "itself is responsible for the development of a lower moral standard" which places winning at any cost above fairness and justice [Op. Cit., p. 163]. In addition, the "strife of competition reduces empathic sympathy, distorts communication, impairs the mutuality of support and sharing, and decreases the satisfaction of personal need." [Nathan Ackerman, quoted by Alfie Kohn, Op. Cit., pp. 142-3] Thus, by supporting the free market, Individualist Anarchists help to make us less human and more a robot. In contrast, social anarchists stress community and co-operation in order to develop us as fully rounded individuals. As Kropotkin put it, "the individualisation they so highly praise is not attainable by individual efforts." [Kropotkin's Revolutionary Pamphlets, p. 297]
Ultimately, Individualist Anarchists lose sight of the fact that success and competition are not the same thing. One can set and reach goals without competing. That we may loose more by competing than by co-operating is an insight which social anarchists base their ideas on. In the end, a person can become a success in terms of business but lose sight of their humanity and individuality in the process.
Returning to economic issues, the accumulation needs of a competitive market economy do not disappear just because capitalism has been replaced by co-operatives and mutual credit banks -- a fact that implies the inevitable development of big business (and so natural barriers to entry). In any market economy, firms will try to improve their market position by investing in new machinery, reducing prices by improving productivity and so on. This creates barriers to new competitors who have to expend more money in order to match the capital of existing firms. Such amounts of money may not be forthcoming for even a mutual bank and so certain firms would enjoy a privileged position on the market. Given that Tucker defined a monopolist as "any person, corporation, or institution whose right to engage in any given pursuit of life is secured, either wholly or partially, by any agency whatsoever -- whether the nature of things or the force of events or the decree of arbitrary power -- against the influence of competition" we may suggest that due to natural barriers, an individualist anarchist society would not be free of monopolists and so of usury. [quoted by James J. Martin, Men Against the State, p. 210]
For this reason, even in a mutualist market certain companies would receive a bigger slice of profits than (and at the expense of) others. This means that exploitation would still exist as larger companies could charge more than cost for their products. In addition, the free market in banking would also result in its market being dominated by a few big banks, with similar results.
This problem of natural barriers to competition also effects the possibility of mutual banking being able to abolish capitalism. While mutual banks would undoubtedly aid the position of workers under capitalism (which is why Bakunin and other social anarchists recommended them), they cannot undermine capitalism. This is because capitalism, due to its need to accumulate, creates natural barriers to entry into a market (see section C.4, "Why does the market become dominated by Big Business?"). Thus the physical size of the large corporation would make it immune to the influence of mutual banking and so usury could not be abolished.
This problem was recognised by Tucker himself in the postscript to a 1911 London edition of his famous essay "State Socialism and Anarchism." While arguing that when he wrote his essay 25 years earlier "the denial of competition had not effected the enormous concentration of wealth that now so gravely threatens social order" and so a policy of mutual banking might have stopped and reversed the process of accumulation, the way in 1911 was "not so clear." This was because the tremendous capitalisation of industry now made the money monopoly a convenience, but no longer a necessity. Admitted Tucker, "The trust is now a monster which . . . even the freest competition, could it be instituted, would be unable to destroy" as the "concentrated capital" could set aside a sacrifice fund to bankrupt smaller competitors and continue the process of expansion of reserves. Thus natural barriers to entry, resulting from the process of capitalist production and accumulation, had ensured that mutualism could no longer reform capitalism away and the problem of the trusts "must be grappled with for a time solely by forces political or revolutionary." [quoted by James J. Martin, Op. Cit., p. 273]
In other words, the economic power of "concentrated capital" and "enormous concentration of wealth" placed an insurmountable obstacle to the realisation of anarchy. Which means that the abolition of usury and relative equality were considered ends rather than side effects for Tucker and if free competition could not achieve these then such a society would not be anarchist.
(As an aside, Tucker's comments here indicate well how far he actually was from "anarcho"-capitalism. The "anarcho"-capitalism desires free markets no matter their result or the concentration of wealth existing at their introduction. As can be seen, Tucker sees the existence of concentrations of wealth as a problem and a hindrance towards anarchy. Thus Tucker was well aware of the dangers to individual liberty of usury, inequality and economic power).
Also, we may note, in the slow transition towards anarchism, we would see the rise of pro-capitalist "defence associations" which would collect rent from land, break strikes, attempt to crush unions and so on. Tucker seemed to have assumed that the anarchist vision of "occupancy-and-use" would become universal. Unfortunately, landlords would resist it and so, ultimately, an Individualist Anarchist society would have to either force the minority to accept the majority wishes on land use (hence his comments on there being "no legal power to collect rent") or the majority are dictated to by the minority who are in favour of collecting rent and hire "defence associations" to enforce those wishes. With the head start big business and the wealthy have in terms of resources, conflicts between pro- and anti-capitalist "defence associations" would usually work against the anti-capitalist ones (as trade unions often find out). In other words, reforming capitalism would not be as non-violent or as simple as Tucker maintained. The vested powers which the state defends will find other means to protect themselves when required (for example, when capitalists and landlords backed fascism and fascist squads in Italy after workers "occupied and used" their workplaces and land workers and peasants "occupied and used" the land in 1920). We are sure that economists will then rush to argue that the resulting law system that defended the collection of rent and capitalist property against "occupancy and use" was the most "economically efficient" result for "society."
In addition, even if individualist mutualism did result in an increase in wages by developing artisan and co-operative ventures that decreased the supply of labour in relation to its demand, this would not eliminate the subjective and objective pressures on profits that produce the business cycle within capitalism (see sections C.7 and C.8 for more on these pressures). This means that an increase in the bargaining power of labour would soon see capital moving to non-anarchist areas and using its financial power to buy up any resources in the anarchist areas. Because individualist anarchists assume an evolution towards anarchy, this is a distinct possibility. And co-operatives in a market economy will be as influenced by the business cycle as capitalist firms. This could mean that during an economic slump, when workers' savings and bargaining position were weak, the gains associated with mutualism could be lost as co-operative firms go bust and mutual banks find it hard to generate credit in a hostile environment.
Mutual banks would not, therefore, undermine modern capitalism, as recognised by social anarchists from Bakunin onward (they placed their hopes in a social revolution organised by workplace and community organisations). Moreover, social anarchists would argue that any individualist system could revert back to capitalism and wage labour, for two reasons.
Firstly, there is a possibility that possession would be replaced by property as individuals sell their means of production to others voluntarily or to repay loans in bad times and these new owners create "defence associations" to enforce their claims. In addition (and this may seem ironic), wage labour does have the advantage that people can move to new locations and work without having to sell their old means of living. Often moving somewhere can be a hassle if one has to sell a shop or home. Many people prefer not to be tied down to one place. This is a problem in a system based on self-employed artisan labour, but not in social anarchism as access to the means of life is guaranteed to all members of the free society.
Secondly, there is the problem associated with natural barriers to entry in an industry. This could help generate wage labour (and so a new class of exploiters) as workers face the unpleasant choice of working for a successful firm, being unemployed or working for low wages in an industry with lower barriers to entry. This process can be seen under capitalism when co-operatives hire wage workers and not include them as members of the association (i.e. they exercise their ownership rights to exclude others).
While state action may increase the degree of monopoly in an industry, the natural tendency for any market is to place barriers ("natural" barriers) to new entries in terms of set-up costs and so on. This means that if the relation between capital and labour was abolished within the workplace (by their transformation into co-operatives) but they remained the property of their workers, it would only be a matter of time before the separation of the producers from their means of production reproduced itself. This is because, within any market system, some firms fail and others succeed. Those which fail will create a pool of unemployed workers who will need a job. The successful co-operatives, safe behind their natural barriers to entry, would be in a stronger position than the unemployed workers and so may hire them as wage labourers -- in effect, the co-operative workers would become "collective capitalists" hiring other workers. This would end workers' self-management (as not all workers are involved in the decision making process) as well as workers' ownership, i.e. "occupancy and use," (as not all workers' would own the means of production they used).
The individual workers involved may "consent" to becoming wage slaves, but that is because it is the best option available rather than what they really want. Which, of course, is the same as under capitalism. Little wonder Proudhon argued that "every worker employed in the association" must have "an undivided share in the property of the company" in order to ensure workers' self-management. [Op. Cit., p. 223] Only this could ensure "occupancy and use" and so self-management in a free society (i.e. keep that society free).
Looking wider afield, unless there is some form of community control, a free market in banks may soon lead to the growth of purely capitalist firms. For in order to survive, banks -- like any company -- will have to make money, and so they will wish to lend to the most profitable firms. Capitalist firms are exploitative, thus allowing them to expand faster than co-operative firms. Hence even mutual banks will wind up preferring to lend to capitalist firms in order to survive on the market. This will enforce the division of labour (as opposed to work) as the most "efficient" way of exploiting workers, and this practice will spread across the economy like an oil slick as more and more co-operatives find themselves needing to introduce similar working practices in order to survive. Thus competition will soon result in like competing against like, not only in the market but also in production.
If we take the creation of employer-employee relationships within an anarchy, we see the danger of private statism arising (as in "anarcho"-capitalism) and so the end of anarchy. Such a development can be seen when Tucker argues that if, in an anarchy, "any labourers shall interfere with the rights of their employers, or shall use force upon inoffensive 'scabs,' or shall attack their employers' watchmen . . . I pledge myself that, as an Anarchist and in consequence of my Anarchistic faith, I will be among the first to volunteer as a member of a force to repress these disturbers of order, and, if necessary, sweep them from the earth." [Instead of a Book, p. 455]
In such a situation, these defence associations would be indeed "private states" and here Tucker's ideas unfortunately do parallel those of the "anarcho"-capitalists (although, as the employees would not be exploited by the employer, this does not suggest that Tucker can be considered a proto-"anarcho"-capitalist). As Kropotkin warned, "[f]or their self-defence, both the citizen and group have a right to any violence [within individualist anarchy] . . . Violence is also justified for enforcing the duty of keeping an agreement. Tucker . . . opens . . . the way for reconstructing under the heading of the 'defence' all the functions of the State." [Kropotkin's Revolutionary Pamphlets, p. 297]
However, as we have argued above (see section G.2), his opposition to usury in all forms implies co-operative labour, not wage labour, and if such a strike did occur in individualist anarchy it indicates that it was turning back into capitalism. And we may note this "love it or leave it" attitude of Tucker in regards firms in an anarchy ignores the fact that following orders is not a form of liberty and is degrading even when you get the full product of your labour. Ironically, by placing so much stress in opposing capitalist exploitation, instead of capitalist oppression, Tucker is actually closer to (the "authoritarian") Marx than (the "libertarian") Proudhon (Tucker's terms) and like Marx opens the door to various kinds of domination and restrictions on individual self-government within "scientific socialism" (one of Tucker's expressions for individualist anarchy!). Again we see a support for contract theory creating authoritarian, not libertarian, relationships between people.
So Tucker's comments on strikers brings to light an interesting contradiction in his ideas. After all, he favoured a system of "property" generally defined by use and occupancy, that is whoever uses and possesses is to be consider the owner. Based on this theory of "property" Tucker opposed landlords and rent, arguing that anarchy "means the freeing of all land not occupied by the owner" that is, "land ownership limited by occupancy and use." [The Individualist Anarchists, p. 155] He extends this principle to housing, arguing that "Anarchic associations" would "not collect your rent, and might not even evict your tenant" and "tenants would not be forced to pay you rent, nor would you be allowed to seize their property. The Anarchic Associations would look upon your tenants very much as they would look upon your guests." [Op. Cit., p. 162]
Now, in a strike those who use the given property are in dispute with those who own it. If individualist anarchy was based on "occupancy and use" then the argument for housing and land must extend to workplaces. Hence, if "the land should be free to all, and no one would control more than he [or she] used." [Op. Cit., p. 114] then it is clear that the boss controls more land than he can use (simply because he hires others to use it, and what is on it, for him). Thus "Anarchic associations" could not defend the property owner against those who use his/her property. If landlordism is unjust, then so is the ownership of capital by those who do not use it. In other words, "occupancy and use" implies co-operatives and not wage-labour. And Tucker's comments about strikers show an inconsistency in his basic ideas (see also section G.1). This conclusion is not surprising. As Malatesta argued:
"The individualists give the greatest importance to an abstract concept of freedom and fail to take into account, or dwell on the fact, that real, concrete freedom is the outcome of solidarity and voluntary co-operation. . . They certainly believe that to work in isolation is fruitless and that an individual, to ensure a living as a human being and to materially and morally enjoy all the benefits of civilisation, must either exploit -- directly or indirectly -- the labour of others . . . or associate with his [or her] fellows and share their pains and the joys of life. And since, being anarchists, they cannot allow the exploitation of one by another, they must necessarily agree that to be free and live as human beings they have to accept some degree and form of voluntary communism." [The Anarchist Revolution, p. 16]
Occupancy and use, therefore, implies the collective ownership of resources used by groups which, in turn, implies associative labour and self-management. In other words, "some degree and form of voluntary communism."
Moreover, if we look at Tucker's definition of the State, namely that it based on "aggression" and "the assumption of sole authority over a given area and all within it," then it is clear that the capitalist has sole authority over their workplace ("a given area") and all within it. And, as Tucker notes, no State "has ever tolerated a rival State within its borders" then the same can be said of the boss -- they rarely, through choice, allow unions to organise on their workplace (they sometimes agree if they have no choice or if the union in question will not question their authority -- as with the state). Given that the major rationale for the Homestead strike of 1892 was (to use the words of a company historian) that management decisions were "subject to the interference of some busybody from the Amalgamated Association" its clear that the boss does not like to tolerate a rival within his/her borders (i.e. workplace). Moreover, according to David Brody in his work The Steel Workers, after the union was broken "the steel workers output doubled in exchange for an income rise of one-fifth . . . The accomplishment was possible only with a labour force powerless to oppose the decisions of the steel men." [quoted by Katherine Stone, "The Origins of Job Structures in the Steel Industry", Root and Branch, p. 127 and p. 132] In other words, the boss is both the monopoly of authority in a given area and tolerates no other within it -- just like the state.
Thus Tucker's comments on strikers indicates a distinct contradiction in his ideas. It violates both his support for "occupancy and use" and his opposition to the state. It could, of course, be argued that the contradiction is resolved because the worker consents to the authority of the boss by taking the job. However, it can be replied that, by this logic, the citizen consents to the authority of the state as a democratic state allows people to leave its borders and join another one. That the citizen does not leave indicates they consent to the state. In other words, consent of and by itself does not justify hierarchy for if it did, the current state system would be anarchistic. This indicates the weakness of contract theory as a means of guaranteeing liberty and its potential to generate, and justify, authoritarian social relationships rather than libertarian and liberty enhancing ones. Hence Kropotkin's comment that "anarchism . . . refuses all hierarchical organisation and preaches free agreement." [Kropotkin's Revolutionary Pamphlets, p. 137] To do otherwise is to contradict the basic ideas of anarchism.
In addition, we must note another contradiction within Tucker's viewpoint highlighted by this diatribe against strikes in an anarchy. If, as Tucker maintained, in an individualist anarchy the demand for workers exceeded supply (unlike under capitalism) so ensuring that "labour will. . . be in a position to dictate its wages, and will thus secure its natural wage, its entire product" [The Anarchist Reader, p. 150], how will the employer attract enough scabs? There would be few if any workers willing to swap jobs and work for an employer whose management style provoked strikes by fellow workers. And in such a situation the power of labour would be so strong that workers' control would have occurred long before!
Peter Kropotkin recognised the statist implications of some aspects of anarchist individualism which Tucker's strike example highlights. Tucker's anarchism, due to its uncritical support for contract theory, could result in a few people dominating economic life, because "no force" would result in the perpetuation of authority structures, with freedom simply becoming the "right to full development" of "privileged minorities." But, Kropotkin argued, "as such monopolies cannot be maintained otherwise than under the protection of a monopolist legislation and an organised coercion by the State, the claims of these individualists necessarily end up in a return to the State idea and to that same coercion which they so fiercely attack themselves. Their position is thus the same as that of Spencer and of the so-called 'Manchester school' of economists, who also begin by a severe criticism of the State and end up in its full recognition in order to maintain the property monopolies, of which the State is the necessary stronghold." [Op. Cit., p. 162]
Such would be the possible (perhaps probable) result of the individualists' contract theory of freedom without a social background of communal self-management and ownership. As can be seen from capitalism, a society based on the abstract individualism associated with contract theory would, in practice, produce social relationships based on power and authority (and so force -- which would be needed to back up that authority), not liberty. As we argued in section A.2.14, voluntarism is not enough in itself to preserve freedom.
Therefore, social anarchists have to part company with individualists when the latter apply to bosses the maxim, "[t]o coerce the peaceful non-co-operator is to violate equality of liberty." [Tucker, Instead of a Book, p. 42] A boss not only "attempts to control another" but succeeds in doing so every day at work. To "coerce" bosses by those subject to it removing their authority to control (i.e. to govern) them is not itself coercion but a blow struck for liberty. It is not coercive to prevent others from coercing! Therefore, social anarchists favour direct actions by those subject to authority, such as strikes, boycotts, the occupation of workplaces, picketing, etc., irrespective of whether such measures are desired by the boss. However, as already indicated in section A.3.1, social anarchists reject attempts to coerce other workers into joining a co-operative. Freedom cannot be given, it must be taken and social anarchism, like all forms of anarchy, cannot be imposed. As Kropotkin argued:
"Communist organisations . . . must be the work of all, a natural growth, a product of the constructive genius of the great mass. Communism cannot be imposed from above; it could not live even for a few months if the constant and daily co-operation of all did not uphold it. It must be free." [Op. Cit., p. 140]
Which indicates that Tucker did not really understand communist-anarchism when he argued that communism is "the force which compels the labourer to pool his product with the products of all and forbids him to sell his labour or his products." [Instead of a Book, p. 400] Rather, communist-anarchists argued that communism must be free and voluntary. In other words, a communist-anarchist society would not "forbid" anything as those who make it up must be in favour of communism for it to work. The option of remaining outside the communist-anarchist society is there, as (to again quote Kropotkin) expropriation would "apply to everything that enables any man [or woman] . . . to appropriate the product of others' toil." [The Conquest of Bread, p. 61] Thus communist-anarchism would "forbid" exactly what Individualist Anarchism would "forbid" -- property, not possession (i.e. any form of "ownership" not based on "occupancy and use").
Free contracts are not sufficient to ensure freedom. Therefore, social anarchists reject the individualists' conception of anarchy, simply because it can, unfortunately, allow hierarchy (i.e. government) back into a free society in the name of "liberty" and "free contracts." Freedom is fundamentally a social product, created in and by community. It is a fragile flower and does not fare well when bought and sold on the market.
As we noted in the last section, Individualist "defence associations" would not be the private states of "anarcho"-capitalism only if the land and housing they protected were based on "occupancy and use" and the workplaces they protected were co-operatives (and we have indicated why Individualist Anarchism logically implies co-operative labour -- see section G.2). Tucker's example about strikers only drives home the contradictions in his views, contradictions resulting from his liberal slant on anarchism. If we agree with Kropotkin that Tucker's ideas are a combination of the anarchist Proudhon's and the liberal capitalist Herbert Spencer's, we see where the contradiction lies. If we reject Proudhon's support for association/co-operation as the basis of an anarchist economy, we are left with liberal capitalism and the need to protect the power of the employer over the employee, and so some form of statism ("anarcho"-capitalists, by ignoring Proudhon's argument from the start, miss the contradiction by jumping straight to capitalism and so private statism). Moreover, even assuming that such "defence associations" did protect a co-operative economy, they would still suffer from the problems of collusion which "anarcho"-capitalist "defence associations" face (as described in section F.6.3). If "self-defence" does become a commodity on the market, there is a distinct danger that the "defence associations" would (in time) become a new public state, due to the unique market forces within that specific market.
Also, Kropotkin saw that Tucker's argument against the forced expropriation of social capital by the working class would lead to a continuation of authoritarian relations in production, which would need to be maintained by coercion through some kind of state (aka "anarcho"-capitalist private states). In addition, Kropotkin seriously doubted that capitalism could be reformed away as Tucker maintained.
In addition, even assuming a fully individualist economy, co-operatives would still be controlled or influenced by market forces, which would drive them to increase working hours, create a division of labour, and implement a host of other dehumanising working practices in order to compete successfully against other co-operatives, and thus to "survive" economically. Hence survival, not living, would be the norm within such a society, just as it is, unfortunately, in capitalism.
So, taken as a whole, individualist anarchism would tend to revert back to capitalism. Moreover, it would not eliminate the tendency of a market economy to reduce people to commodities, as can be seen from Tucker's argument that children are "owned" by their parents until such time as they are able to make contracts -- an argument that led him, for the sake of logical consistency, to tolerate child labour. Therefore, because of the forces and tendencies at work within the any market system, social anarchists recognise the need to communalise, and so decentralise, production and finance in order to ensure that freely associated and co-operative labour is the basis of a free society.
Finally, as to its means of activism, individualist anarchism exaggerates the potential of mutual banks to fund co-operatives. While the creation of community-owned and -managed mutual credit banks would help in the struggle for a free society, such banks are not enough in themselves. Unless created as part of the social struggle against capitalism and the state, and unless combined with community and strike assemblies, mutual banks would quickly die, because the necessary social support required to nurture them would not exist. Mutual banks must be part of a network of other new socio-economic and political structures and cannot be sustained in isolation from them. This is simply to repeat our earlier point that capitalism cannot be reformed away.
However, while social anarchists disagree with the proposals of individualist anarchists, we do still consider them to be a form of anarchism -- one with many flaws and one perhaps more suited to an earlier age when capitalism was less developed and its impact upon society far less than it is now (see section G.1.1). John Quail, in his history of British Anarchism, puts his finger on the contextual implications and limitations of Tucker's ideas when he writes:
"Tucker was a Proudhonist and thus fundamentally committed to a society based on small proprietorship. In the American context, however, where the small landowner was often locked in battle with large capitalist interests, this did not represent the reactionary position it often did later. . . Tucker had a keen sense of the right of the oppressed to struggle against oppression." [The Slow Burning Fuse, p. 19]