J.5 What alternative social organisations do anarchists create?

   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]

   This idea (to quote the IWW) of "building a new world in the shell of
   the old" is a long standing one in anarchism. Proudhon during the 1848
   revolution "propose[d] that a provisional committee be set up" in Paris
   and "liaise with similar committees" elsewhere in France. This would be
   "a body representative of the proletariat . . ., imperium in imperio [a
   state within the state], in opposition to the bourgeois
   representatives." He proclaimed to working class people that "a new
   society be founded in the heart of the old society" for "the government
   can do nothing for you. But you can do everything for yourselves."
   [Property is Theft!, pp. 321-2] This was echoed by Bakunin (see
   [1]section H.2.8) while for revolutionary syndicalists the aim was "to
   constitute within the bourgeois State a veritable socialist (economic
   and anarchic) State." [Fernand Pelloutier, quoted by Jeremy Jennings,
   Syndicalism in France, p. 22] By so doing 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 libertarians 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 by
   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]

   It is this organic evolution that anarchists promote when they create
   libertarian alternatives within capitalist society. These alternatives
   (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, decentralised 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 now and
   the future free society.

   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 that they are not utopian.
   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 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 are a means "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." [Malatesta, Op. Cit., p. 28]
   Kropotkin summed up the anarchist perspective well when he argued that
   working class people had "to form their own organisations for a direct
   struggle against capitalism" and to "take possession of the necessaries
   for production, and to control production." [Memoirs of a
   Revolutionist, p. 359] As historian J. Romero Maura correctly
   summarised, the "anarchist revolution, when it came, would be
   essentially brought about by the working class. Revolutionaries needed
   to gather great strength and must beware of underestimating the
   strength of reaction" and so anarchists "logically decided that
   revolutionaries had better organise along the lines of labour
   organisations." ["The Spanish case", pp. 60-83, Anarchism Today, D.
   Apter and J. Joll (eds.), p. 66]

   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
   Proudhon's 1848 statement that "the proletariat must emancipate
   itself"? [Property is Theft!, p. 306] 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 other activities. These
   alternatives involve both combative organisations (such as community
   and workplace unions) as well as more defensive and 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.

   We must also stress that anarchists look to organic 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
   therefrom 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." 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 unions and other forms of
   workplace struggle, co-operatives (both productive and credit),
   libertarian schools, and so on. For anarchism was "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 had thrust itself upon" social institutions. [Anarchism, p.
   158, p. 147, p. 150 and 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 we do not list all the forms of organisation
   anarchists create. For example, we have ignored solidarity groups (for
   workers on strike or in defence of struggles in other countries) 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 (see [2]section J.1.4 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, see Graham Purchase's 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
   assuming they avoid direct political interference.

   So 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.

J.5.1 What is community unionism?

   Community unionism is our term for the process of creating
   participatory communities (called "communes" in classical anarchism)
   within the current society in order to transform it.

   Basically, a community union is the creation of interested members of a
   community who decide to form an organisation to fight against injustice
   and for improvements locally. 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. In this way, local people take part in deciding what
   affects 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. 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 (see [3]section I.5), the community union
   would be based upon a mass assembly of its members. Here would be
   discussed the issues that affect the membership and how to solve them.
   Thus issues like rent increases, school closures, rising cost of
   living, taxation, cuts and state-imposed "reforms" to the nature and
   quality of public services, utilities and resources, repressive laws
   and so on could be debated and action taken to combat 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 would be based upon self-management, mandated and
   recallable 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, 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 numerous attacks on the working class. In
   the late 1980s and early 1990s groups were created in neighbourhoods
   across Britain to organise non-payment of the Conservative government's
   Community Charge (popularly known as the poll tax, this tax was
   independent of income and was based on the electoral register).
   Federations of these groups were created to co-ordinate the struggle
   and pool resources and, in the end, ensured that the government
   withdrew the hated tax and helped push Thatcher out of government. In
   Ireland, groups were formed to defeat the privatisation of the water
   industry by a similar non-payment campaign in the mid-1990s.

   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 libertarian community organising in Europe, one in Italy
   and another in Spain, while the neighbourhood assemblies in Argentina
   show that such popular self-government can and does develop
   spontaneously in struggle.

   In Southern Italy, anarchists organised a very successful Municipal
   Federation of the Base (FMB) in Spezzano Albanese. This organisation,
   in the words of one activist, is "an alternative to the power of the
   town hall" and provides a "glimpse of what a future libertarian society
   could be." Its aim 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." 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 [4]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. ["Community Organising in Southern Italy", pp. 16-19,
   Black Flag, no. 210, p. 17 and p. 18]

   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. One C.N.T. member explains:
   "Every 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." 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." [Anarcho-Syndicalism in Puerto Real: from shipyard resistance
   to direct democracy and community control, p. 6]

   More recently, the December 2001 revolt against neo-liberalism in
   Argentina saw hundreds of neighbourhood assemblies created across the
   country. These quickly federated into inter-barrial assemblies to
   co-ordinate struggles. The assemblies occupied buildings, created
   communal projects like popular kitchens, community centres, day-care
   centres and built links with occupied workplaces. As one participant
   put it: "The initial vocabulary was simply: Let's do things for
   ourselves, and do them right. Let's decide for ourselves. Let's decide
   democratically, and if we do, then let's explicitly agree that we're
   all equals here, that there are no bosses . . . We lead ourselves. We
   lead together. We lead and decide amongst ourselves . . . no one
   invented it . . . It just happened. We met one another on the corner
   and decided, enough! . . . Let's invent new organisational forms and
   reinvent society." Another notes that this was people who "begin to
   solve problems themselves, without turning to the institutions that
   caused the problems in the first place." The neighbourhood assemblies
   ended a system in which "we elected people to make our decisions for us
   . . . now we will make our own decisions." While the "anarchist
   movement has been talking about these ideas for years" the movement
   took them up "from necessity." [Marina Sitrin (ed.), Horizontalism:
   Voices of Popular Power in Argentina, p. 41 and pp. 38-9]

   The idea of community organising has long existed within anarchism.
   Kropotkin pointed to the directly democratic assemblies of Paris during
   the French Revolution These were "constituted as so many mediums of
   popular administration, it remained of the people, and this is what
   made the revolutionary power of these organisations." This ensured that
   the local revolutionary councils "which sprang from the popular
   movement was not separated from the people." In this popular
   self-organisation "the masses, accustoming themselves to act without
   receiving orders from the national representatives, were practising
   what was described later on as Direct Self-Government." These
   assemblies federated to co-ordinate joint activity but it was based on
   their permanence: "that is, the possibility of calling the general
   assembly whenever it was wanted by the members of the section and of
   discussing everything in the general assembly." In short, "the Commune
   of Paris was not to be a governed State, but a people governing itself
   directly -- when possible -- without intermediaries, without masters"
   and so "the principles of anarchism . . . had their origin, not in
   theoretic speculations, but in the deeds of the Great French
   Revolution." This "laid the foundations of a new, free, social
   organisation" and Kropotkin predicted that "the libertarians would no
   doubt do the same to-day." [Great French Revolution, vol. 1, p. 201, p.
   203, pp. 210-1, p. 210, p. 204 and p. 206]

   In Chile during 1925 "a grass roots movement of great significance
   emerged," the tenant leagues (ligas do arrendatarios). The movement
   pledged to pay half their rent beginning the 1st of February, 1925, at
   huge public rallies (it should also be noted that "Anarchist labour
   unionists had formed previous ligas do arrendatarios in 1907 and
   1914."). The tenants leagues were organised by ward and federated into
   a city-wide council. It was a vast organisation, with 12,000 tenants in
   just one ward of Santiago alone. The movement also "press[ed] for a law
   which would legally recognise the lower rents they had begun paying . .
   . the leagues voted to declare a general strike . . . should a rent law
   not be passed." The government gave in, although the landlords tried to
   get around it and, in response, on April 8th "the anarchists in
   Santiago led a general strike in support of the universal rent
   reduction of 50 percent." Official figures showed that rents "fell
   sharply during 1915, due in part to the rent strikes" and for the
   anarchists "the tenant league movement had been the first step toward a
   new social order in Chile." [Peter DeShazo, Urban Workers and Labor
   Unions in Chile 1902-1927, p. 223, p. 327, p. 223, p. 225 and p. 226]
   As one Anarchist newspaper put it:

     "This movement since its first moments had been essentially
     revolutionary. The tactics of direct action were preached by
     libertarians with highly successful results, because they managed to
     instil in the working classes the idea that if landlords would not
     accept the 50 percent lowering of rents, they should pay nothing at
     all. In libertarian terms, this is the same as taking possession of
     common property. It completes the first stage of what will become a
     social revolution." [quoted by DeShazo, Op. Cit., p. 226]

   A similar concern for community organising and struggle was expressed
   in Spain. While the collectives during the revolution are well known,
   the CNT had long organised in the community and around non-workplace
   issues. As well as neighbourhood based defence committees to organise
   and co-ordinate struggles and insurrections, the CNT organised various
   community based struggles. The most famous example of this must be the
   rent strikes during the early 1930s in Barcelona. In 1931, the CNT's
   Construction Union organised a "Economic Defence Commission" to
   organise against high rents and lack of affordable housing. Its basic
   demand was for a 40% rent decrease but it also addressed unemployment
   and the cost of food. The campaign was launched by a mass meeting on
   May 1st, 1931. A series of meetings were held in the various working
   class neighbourhoods of Barcelona and in surrounding suburbs. This
   culminated in a mass meeting held at the Palace of Fine Arts on July
   5th which raised a series of demands for the movement. By July, 45,000
   people were taking part in the rent strike and this rose to over
   100,000 by August. As well as refusing to pay rent, families were
   placed back into their homes from which they had been evicted. The
   movement spread to a number of the outlying towns which set up their
   own Economic Defence Commissions. The local groups co-ordinated their
   actions out of CNT union halls or local libertarian community centres.
   The movement faced increased state repression but in many parts of
   Barcelona landlords had been forced to come to terms with their
   tenants, agreeing to reduced rents rather than facing the prospect of
   having no income for an extended period or the landlord simply agreed
   to forget the unpaid rents from the period of the rent strike. [Nick
   Rider, "The Practice of Direct Action: the Barcelona rent strike of
   1931", For Anarchism, David Goodway (ed.), pp. 79-105] As Abel Paz
   summarised:

     "Unemployed workers did not receive or ask for state aid . . . The
     workers' first response to the economic crisis was the rent, gas,
     and electricity strike in mid-1933, which the CNT and FAI's Economic
     Defence Committee had been laying the foundations for since 1931.
     Likewise, house, street, and neighbourhood groups began to turn out
     en masse to stop evictions and other coercive acts ordered by the
     landlords (always with police support). The people were constantly
     mobilised. Women and youngsters were particularly active; it was
     they who challenged the police and stopped the endless evictions."
     [Durruti in the Spanish Revolution, p. 308]

   In Gijon, the CNT "reinforced its populist image by . . . its direct
   consumer campaigns. Some of these were organised through the
   federation's Anti-Unemployment Committee, which sponsored numerous
   rallies and marches in favour of 'bread and work.' While they focused
   on the issue of jobs, they also addressed more general concerns about
   the cost of living for poor families. In a May 1933 rally, for example,
   demonstrators asked that families of unemployed workers not be evicted
   from their homes, even if they fell behind on the rent." The
   "organisers made the connections between home and work and tried to
   draw the entire family into the struggle." However, the CNT's "most
   concerted attempt to bring in the larger community was the formation of
   a new syndicate, in the spring of 1932, for the Defence of Public
   Interests (SDIP). In contrast to a conventional union, which comprised
   groups of workers, the SDIP was organised through neighbourhood
   committees. Its specific purpose was to enforce a generous renters'
   rights law of December 1931 that had not been vigorously implemented.
   Following anarchosyndicalist strategy, the SDIP utilised various forms
   of direct action, from rent strikes, to mass demonstrations, to the
   reversal of evictions." This last action involved the local SDIP group
   going to a home, breaking the judge's official eviction seal and
   carrying the furniture back in from the street. They left their own
   sign: "opened by order of the CNT." The CNT's direct action strategies
   "helped keep political discourse in the street, and encouraged people
   to pursue the same extra-legal channels of activism that they had
   developed under the monarchy." [Pamela Beth Radcliff, From mobilization
   to civil war, pp. 287-288 and p. 289]

   In these ways, grassroots movements from below were 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 participation and
   self-management, 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:

     "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 organisation 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].

     "The union: in it combine spontaneously the workers from factories
     and all places of collective exploitation.

     "And the free municipality: an assembly . . . where, again in
     spontaneity, inhabitants . . . combine together, and which points
     the way to the solution of problems in social life . . .

     "Both kinds of organisation, run on federal and democratic
     principles, will be sovereign 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 co-operation 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." [Libertarian Communism, pp. 6-7]

   The combination of community unionism, along with industrial unionism
   (see [5]next section), will be the key to 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 would be able to move without worrying about what the
   people's reaction might be, as expressed and organised in their
   community assemblies and federations.

J.5.2 Why do anarchists support industrial unionism?

   Simply because it is effective in resisting capitalist exploitation and
   winning reforms, ending capitalist oppression and expresses our ideas
   on how industry will be organised in an anarchist society. For workers
   "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." [Max Stirner, The Ego and Its
   Own, p. 116] Industrial unionism is simply libertarian workplace
   organisation and is the best way of organising and exercising this
   power.

   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 unions like the TUC in
   Britain or the AFL-CIO in the USA (see [6]next section). In such
   unions, as Alexander Berkman pointed 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." [What is
   Anarchism?, p. 205] 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.

   Anarchists propose a different kind of workplace organisation, one that
   is organised in a different manner than the mainstream unions. We will
   call this new kind of organisation "industrial unionism" (although
   perhaps industrial syndicalism, or just syndicalism, might be a better
   name for it). Some anarchists (particularly communist-anarchists)
   reject calling these workplace organisations "unions" and instead
   prefer such terms as workplace resistance groups, workplace assemblies
   and workers councils. No matter what they are called, all class
   struggle anarchists support the same organisational structure we are
   going to outline. It is purely for convenience that we term this
   industrial unionism.

   An industrial union is a union which organises all workers in a given
   workplace and so regardless of their actual trade everyone would 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 employer, the same
   exploiter, it is logical for them to have the same union.

   It is organised by the guiding principle that workers should directly
   control their own organisations and struggles. It is based upon
   workplace assemblies because workers have "tremendous power" as the
   "creator of all wealth" but "the strength of the worker is not in the
   union meeting-hall; it is in the shop and factory, in the mill and
   mine. It is there that he [or she] must organise; there, on the job."
   It is there that workers "decide the matters at issue and carry their
   decisions out through the shop committees" (whose members are "under
   the direction and supervision of the workers" and can be "recalled at
   will"). These committees are "associated locally, regionally and
   nationally" to produce "a power tremendous in its scope and
   potentialities." [Berkman, Op. Cit., pp. 205-6] This confederation is
   usually organised on two directions, between different workplaces in
   the same industry as well as between different workplaces in the same
   locality.

   So industrial unionism is different from ordinary trade unionism
   (usually called business unionism by anarchists and syndicalists as it
   treats the union's job purely as the seller of its members' labour
   power). It is based on unions managed directly by the rank and file
   membership rather than by elected officials and bureaucrats. The
   industrial union is not based on where the worker lives (as is the case
   with many trade unions). Instead, the union is based and run from the
   workplace. It is there that union meetings are held, where workers are
   exploited and oppressed and where their economic power lies. Industrial
   unionism is based on local branch autonomy, with each branch managing
   its own affairs. No union officials have the power to declare strikes
   "unofficial" as every strike is decided upon by the membership is
   automatically "official" simply because the branch decided it in a mass
   meeting.

   Power in such an organisation would be decentralised into the hands of
   the membership, as expressed in local workplace assemblies. To
   co-ordinate strikes and other forms of action, these autonomous
   branches are part of a federal structure. The mass meeting in the
   workplace mandates delegates to express the wishes of the membership at
   "labour councils" and "industrial federations." The labour council
   ("Brouse du Travail", in French) is the federation of all workplace
   branches of all industries in a geographical area (say, for example, in
   a city or region) and it has the tasks of, among other things,
   education, propaganda and the promotion of solidarity between the
   different workplaces in its area. Due to the fact it combines all
   workers into one organisation, regardless of industry or union, the
   labour council plays a key role in increasing class consciousness and
   solidarity. The industrial federation organises all workplaces in the
   same industry so ensuring that workers in one part of the country or
   world are not producing goods so that the bosses "can supply the market
   and lose nothing by the strike". So these federations are "organised
   not by craft or trade but by industries, so that the whole industry --
   and if necessary the whole working class -- could strike as one man."
   If that were done "would any strike be lost?" [Berkman, Op. Cit., p.
   82] In practice, of course, the activities of these dual federations
   would overlap: labour councils would support an industry wide strike or
   action while industrial unions would support action conducted by its
   member unions called by labour councils.

   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 argued, 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] Without voluntary
   membership even the most libertarian union may become bureaucratic and
   unresponsive to the needs of its members and the class struggle (also
   see Tom Wetzel's excellent article "The Origins of the Union Shop",
   [Ideas & Action no. 11]). Needless to say, if the union membership
   refuses to work with non-union members then that is a different
   situation. Then this is an issue of free association (as free
   association clearly implies the right not to associate). This issue
   rarely arises and most syndicalist unions operate in workplaces with
   other unions (the exceptions arise, as happened frequently in Spanish
   labour history with the Marxist UGT, when the other union scabs when
   workers are on strike).

   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 union and, by confederating with
   other assemblies, they co-ordinate their forces with their fellow
   workers. As syndicalist activist Tom Brown made clear:

     "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 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.

     "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]

   Such federalism exists to co-ordinate struggle, to ensure that
   solidarity becomes more than a word written on banners. We are sure
   that many radicals will argue 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. The centralised form of organisation has
   been tried and tried again -- it has always failed. This is why the
   industrial union rejects centralisation, for it "takes control too far
   away from the place of struggle to be effective on the workers' side."
   [Brown, Op. Cit., p. 34] Centralisation leads to disempowerment, which
   in turn leads to indifference, not solidarity. Rudolf Rocker reminds us
   of the evil effects of centralism when he wrote:

     "For the state centralisation is the appropriate form of
     organisation, since it aims at the greatest possible uniformity in
     social life for the maintenance of political and social equilibrium.
     But for a movement whose very existence depends on prompt action at
     any favourable moment and on the independent thought and action of
     its supporters, centralism could but be a curse by weakening its
     power of decision and systematically repressing all immediate
     action. If, for example, as was the case in Germany, every local
     strike had first to be approved by the Central, which was often
     hundreds of miles away and was not usually in a position to pass a
     correct judgement on the local conditions, one cannot wonder that
     the inertia of the apparatus of organisation renders a quick attack
     quite impossible, and there thus arises a state of affairs where the
     energetic and intellectually alert groups no longer serve as
     patterns for the less active, but are condemned by these to
     inactivity, inevitably bringing the whole movement to stagnation.
     Organisation is, after all, only a means to an end. When it becomes
     an end in itself, it kills the spirit and the vital initiative of
     its members and sets up that domination by mediocrity which is the
     characteristic of all bureaucracies." [Anarcho-Syndicalism, p. 61]

   Centralised unions ensure that it is the highest level of union
   officialdom which decides when workers are allowed to strike. Instead
   of those affected acting, "the dispute must be reported to the district
   office of the union (and in some cases to an area office) then to head
   office, then back again . . . The worker is not allowed any direct
   approach to, or control of the problem." [Brown, Op. Cit., p. 34] The
   end result is that "through the innate conservatism of officialdom"
   officials in centralised unions "ordinarily use their great powers to
   prevent strikes or to drive their unions' members back to work after
   they have struck in concert with other workers." The notion that a
   centralised organisation will be more radical "has not developed in
   practice" and the key problem "is due not to the autonomy of the
   unions, but to the lack of it." [Earl C. Ford and William Z. Foster,
   Syndicalism, p. 38] So the industrial union "is based on the principles
   of Federalism, on free combination from below upwards, putting the
   right of self-determination . . . above everything else" and so rejects
   centralism as an "artificial organisation from above downwards which
   turns over the affairs of everybody in a lump to a small minority" and
   is "always attended by barren official routine" as well as "lifeless
   discipline and bureaucratic ossification." [Rocker, Op. Cit., p. 60]

   This implies that as well as being decentralised and organised from the
   bottom up, the industrial union differs from the normal trade union by
   having no full-time officials. All union business is conducted by
   elected fellow workers who do their union activities after work or, if
   it has to be done during work hours, they get the wages they lost while
   on union business. In this way no bureaucracy of well paid officials is
   created and all union militants remain in direct contact with their
   fellow workers. Given that it is their wages, working conditions and so
   on that are affected by their union activity they have a real interest
   in making the union an effective organisation and ensuring that it
   reflects the interests of the rank and file. In addition, all part-time
   union "officials" are elected, mandated and recallable delegates. If
   the fellow worker who is elected to the local labour council or other
   union committee is not reflecting the opinions of those who mandated
   him or her then the union assembly can countermand their decision,
   recall them and replace them with someone who will reflect these
   decisions. In short, "the Syndicalist stands firmly by these things --
   mass meetings, delegates not bosses, the right of recall . . .
   Syndicalism is organised from the bottom upwards . . . all power comes
   from below and is controlled from below. This is a revolutionary
   principle." [Brown, Op. Cit., p. 85]

   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 organisation,
   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:

     "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
     demands 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, so that when a
     revolutionary situation arises they will be capable of taking the
     socio-economic organism into their own hands and remaking it
     according to Socialist principles." [Rocker, Op. Cit., pp. 56-7]

   So "[a]t the same time that syndicalism exerts this unrelenting
   pressure on capitalism, it tries to build the new social order within
   the old. The unions and the 'labour councils' are not merely means of
   struggle and instruments of social revolution; they are also the very
   structure around which to build a free society. The workers are to be
   educated in the job of destroying the old propertied order and in the
   task of reconstructing a stateless, libertarian society. The two go
   together." [Murray Bookchin, The Spanish Anarchists, p. 121] The
   industrial union is seen as prefiguring the future society, a society
   which (like the union) is decentralised and self-managed in all
   aspects.

   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 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 [7]section J.5.4.

   One last point. We noted that many anarchists, particularly
   communist-anarchists, consider unions, even anarchosyndicalist ones, as
   having a strong reformist tendency (as discussed in [8]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.
   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 while such anarchists do
   not call their practical ideas "anarcho-syndicalism" nor the workplace
   assemblies they desire to create "unions," they 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 become reformist. Because of this
   they also see the need for anarchists to organise as anarchists in
   order to spread the anarchist message within them and keep their
   revolutionary aspects at the forefront.

   Spontaneously created organisations of workers in struggle play an
   important role in both communist-anarchist and anarcho-syndicalist
   theory. Since both advocate that it is the workers, using their own
   organisations who will control their own struggles (and, eventually,
   their own revolution) in their own interests, not a vanguard party of
   elite political theorists, this is unsurprising. It matters little if
   the specific organisations are revolutionary industrial unions, factory
   committees, workers councils, or other labour formations. The important
   thing is that they are created and run by workers themselves.
   Meanwhile, anarchists are industrial guerrillas waging class war at the
   point of production in order to win improvements in the here and now
   and strengthen tendencies towards anarchism by showing that direct
   action and libertarian organisation is effective and can win partial
   expropriations of capitalist and state power. So while there are slight
   differences in terminology and practice, all anarchists would support
   the ideas of industrial organisation and struggle we have outlined
   above.

J.5.3 What attitude do anarchists take to existing unions?

   As noted in the [9]last section, anarchists desire to create
   organisations in the workplace radically different from the existing
   unions. The question now arises, what attitude do anarchists take to
   trade 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 reactionary -- for example, no
   anarchist would support a strike which is racist in nature). This is
   because anarchists consider it basic to their politics that you do not
   scab and you do not crawl. 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 organisation is now far removed
   from the initial protests and ideas that set the union up. For a worker
   to join a trade union means recognising, to some degree, that he or she
   has different interests from their boss ("If the interests of labour
   and capital are the same, why the union?" [Alexander Berkman, What is
   Anarchism?, p. 76]).

   There is no way to explain the survival of 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 collectively.
   No amount of conservatism, bureaucracy or backwardness within the
   unions can obliterate this. The very existence of trade unions
   testifies to the existence of some level of basic class consciousness
   and the recognition that workers and capitalists do not have the same
   interests. Claims by trade union officials that the interests of
   workers and bosses are the same theoretically disarms both the union
   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!). That kind of
   nonsense is best left to the apologists of capitalism (see [10]section
   F.3.2).

   It is no surprise, then, that "the existing political and economic
   power . . . not only suspected every labour organisation of aiming to
   improve the condition of its members within the limits of the wage
   system, but they also looked upon the trade union as the deadly enemy
   of wage-slavery -- and they were right. Every labour organisation of
   sincere character must needs wage war upon the existing economic
   conditions, since the continuation of the same is synonymous with the
   exploitation and enslavement of labour." [Max Baginski, "Aim and
   Tactics of the Trade-Union Movement", pp. 297-306, Anarchy! An
   Anthology of Emma Goldman's Mother Earth, Peter Glassgold (ed.), pp.
   302-3] Thus anarchist viewpoints on this issue reflect the
   contradictory nature of trade unions -- on the one hand they are
   products of workers' struggle, but on the other they are bureaucratic,
   unresponsive, centralised and 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 occurs because trade unions, in order to get recognition from a
   company, must be able to promise industrial peace. They need to enforce
   the contracts they sign with the bosses, even if this goes against the
   will of their 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 their members would
   violate the union's 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 their side of the bargain otherwise the employer will ignore
   them.

   The nature of trade unionism, then, is to take power away from the
   membership 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 (see Chapter XI of Alexander
   Berkman's What is 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 -- who
   wants to join a union which rolls over and presents no effective
   resistance to employers? Sadly trade union bureaucracy seems to afflict
   all who enter it with short-sightedness -- 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.

   However, few anarchists would call upon members of a trade union to
   tear-up their membership cards. While some anarchists 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 were 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 we 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 our activity in the unions. For
   example, many IWW members were "two-carders" which meant 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.

   Anarchist activity within trade unions reflects our ideas on hierarchy
   and its corrupting effects. We reject the response of left-wing social
   democrats, Stalinists and mainstream Trotskyists to the problem of
   trade union betrayal, which is to try and elect 'better' officials.
   They see the problem primarily in terms of the individuals who hold the
   posts so ignoring 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.

   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 have 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. 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).

   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 on the shop floor, the less the bureaucracy has. 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 [11]next section).
   Hence Malatesta:

     "The anarchists within the unions should strive to ensure that they
     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." [The Anarchist
     Revolution, pp. 26-7]

   As part of this activity anarchists promote the ideas of Industrial
   Unionism we highlighted in the [12]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." [Malatesta, Errico Malatesta:
   His 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).
   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.

J.5.4 What are industrial networks?

   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 libertarian
   ideas within the workplace, so creating the basis on which a workplace
   movement based upon the ideas of industrial unionism (see [13]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). 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
   libertarians within a workplace united on 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
   workplaces. These bulletins and leaflets would raise and discuss issues
   related to work, how to fight 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, like other revolutionary
   anarchists, advocate workers assemblies for decision making during
   struggles which are open to all workers (union members or not) as they
   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 syndicalist union movement
   there were also socialist unions. 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, revolutionary unions do not simply appear, they develop from
   previous struggles and require a lot of work and experience of which
   the Industrial Networks are but one aspect. The most significant
   revolutionary unions (such as the IWW, USI and CNT) were originally
   formed by unions and union militants with substantial experience of
   struggle behind them, some of whom were part of existing trade union
   bodies.

   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 our ultimate goals. The role of the anarchist group or
   syndicalist union would be to call workplace assemblies and their
   federation into councils, 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. When 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
   struggle (indeed, it was how the current trade unions were created). It
   also puts the onus on the reformist unions by appealing directly to
   their members as workers and exposing 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. Some
   even 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 utopian, viewing the trade union bureaucracy
   as unreformable as the state's (and it is likely that rather than
   change the trade union, "boring from within" would change the
   syndicalists by watering down their ideas). 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." [Op. Cit., 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 groups. Such a claim is rejected by
   supporters of Industrial Networks who argue that rather than being
   isolated from the majority of trade unionists they would be in contact
   with them where it counts, in the workplace and in struggle rather than
   in trade union meetings which many workers do not even attend:

     "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 unions is
     outside the workplace . . . We aim to unite and not divide workers.

     "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. In the short run, both agree that such
   networks should agitate in their industry and call mass assemblies to
   organise resistance to capitalist exploitation and oppression. They
   disagree on who can join the network groups and what their medium term
   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). In the long term, they both aim for social
   revolution and workers' self-management of production.

   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. However,
   the similarities between the two positions are greater than the
   differences and so can be summarised together, as we have done here.

J.5.5 What forms of co-operative credit do anarchists support?

   Anarchists tend to support most forms of co-operation, including those
   associated with credit and money. This co-operative 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 so allowing
   credit to be supplied at cost (no interest), so increasing the options
   available to them. LETS stands for Local Exchange Trading Schemes and
   is a similar idea in many ways (see Bringing the Economy Home from the
   Market by Ross V.G. Dobson on LETS). From its start in Canada, LETS has
   spread across the world and there are now hundreds of schemes involving
   hundreds of thousands of people.

   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 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. Supporters of mutualism
   considered it as the ideal way of reforming capitalism away for by
   making credit available to the ordinary worker at very cheap rates, the
   end of wage slavery could occur as workers would work for themselves by
   either purchasing the necessary tools required for their work or by
   buying the capitalists out.

   Mutual credit, in short, 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. It has the
   following key aspects:

     -- Co-operation: No-one owns the network. It is controlled by its
     members democratically.

     -- 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.

     -- Consent: Nothing happens without it, there is no compulsion to
     trade.

     -- Labour-Notes: They use their own type of money as a means of
     aiding "honest exchange."

   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.

   These ideas have a long history within the socialist movement,
   originating in Britain in the early 19th century when Robert Owen and
   other Socialists raised the idea of labour notes and labour-exchanges
   as both a means of improving working class conditions within capitalism
   and of reforming capitalism into a society of confederated,
   self-governing communities. Such "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 attempts in
   Britain at what would later be called mutualism, Proudhon arrived at
   the same ideas decades later in France: "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 and they
   were quickly adopted by radicals there.

   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 and so 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).

J.5.6 Why are mutual credit schemes important?

   Mutual credit schemes are important because they are a way to improve
   working class life under capitalism and ensure that what money we do
   have is used to benefit ourselves rather than the elite. By organising
   credit, we retain control over it and so rather than being used to
   invest in capitalist schemes it can be used for socialist alternatives.

   For example, rather than allow the poorest to be at the mercy of loan
   sharks a community, by organising credit, can ensure its members
   receive cheap credit. Rather than give capitalist banks bundles of cash
   to invest in capitalist firms seeking to extract profits from a
   locality, it can be used to fund a co-operative instead. Rather than
   invest pension schemes into the stock market and so help undermine
   workers pay and living standards by increasing rentier power, it can be
   used to invest in schemes to improve the community and its economy. In
   short, rather than bolster capitalist power and so control, mutual
   credit aims to undermine the power of capitalist banks and finance by
   placing as much money as much possible in working class hands.

   This point is important, as the banking system is often considered
   "neutral" (particularly in capitalist economics). However, as Malatesta
   correctly argued, 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." [Errico Malatesta: His 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. 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 (why else would a large company invest in
   a community unless the money it takes out of the area handsomely
   exceeds that put it?). 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.

   As we discussed in [14]section B.3.2, 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. Credit also expands the consumption of the masses in
   the face of stagnant or falling wages so blunting the impact of
   increasing exploitation. Moreover, as an added bonus, there is a profit
   to be made as 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, p. 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). By the creation of community-based
   credit unions that do not put their money into "Capital Markets" or
   into capitalist Banks working class people can control their own
   credit, their own retirement funds, and find ways of using money as a
   means of undermining capitalist power and supporting social struggle
   and change. In this way working people are controlling more and more of
   the money supply and using it in ways that will stop capital from using
   it to oppress and exploit them.

   An example of why this can be important can be seen from the existing
   workers' pension fund system which is invested in the stock market in
   the hope that 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 your money is used to downsize your fellow
   workers 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. As such, the whole scheme is counter-productive as it
   effectively means workers have to experience insecurity, fear of
   downsizing and stagnating wages during their working lives in order to
   have slightly more money when they retire (assuming that they are
   fortunate enough to retire when the stock market is doing well rather
   than during one of its regular periods of financial instability, of
   course).

   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 putting our
   money in the stock market, we are being encouraged to buy into the
   system which exploits us and so put its interests above our own. This
   makes us more easily controlled. We need to get away from living in
   fear and stop allowing ourselves to be deceived into behaving like
   "stakeholders" in a Plutocratic system where most shares really are
   held by an elite. 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 sacrificing both 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 penny 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 which can be used to empower ourselves, aid our struggles and
   create our own alternatives (see [15]section B.3.2 for more anarchist
   views on mutual credit and its uses). 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.

J.5.7 Do most anarchists think mutual credit is sufficient to abolish
capitalism?

   The short answer is no, they do not. While the Individualist and
   Mutualist Anarchists do think that mutual banking is the only sure way
   of abolishing capitalism, most anarchists do not see it as an end in
   itself. Few think that capitalism can be reformed away in the manner
   assumed by Proudhon or Tucker.

   In terms of the latter, 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. In short, assuming that Individualist
   Anarchists do manage to organise a mutual banking scheme it cannot be
   assumed that as long as firms use wage-labour that any spurt in
   economic activity will have a long term effect of eliminating
   exploitation. What is more likely is that an economic crisis would
   develop as lowering unemployment results in a profits squeeze (as
   occurred in, say, the 1970s). Without a transformation in the relations
   of production, the net effect would be the usual capitalist business
   cycle.

   For the former, for mutualists like Proudhon, mutual credit was seen as
   a means of transforming the relations of production (as discussed in
   [16]section G.4.1, unlike Proudhon, Tucker did not oppose wage-labour
   and just sought to make it non-exploitative). For Proudhon, mutual
   credit was seen as the means by which co-operatives could be created to
   end wage-labour. The organisation of labour would combine with the
   organisation of credit to end capitalism as workers would fund
   co-operative firms and their higher efficiency would soon drive
   capitalist firms out of business. Thus "the Exchange Bank is the
   organisation of labour's greatest asset as it allowed "the new form of
   society to be defined and created among the workers." "To organise
   credit and circulation is to increase production," Proudhon stressed,
   "to determine the new shapes of industrial society." So, overtime,
   co-operative credit would produce co-operative production while
   associated labour would increase the funds available to associated
   credit. For Proudhon the "organisation of credit and organisation of
   labour amount to one and the same" and by recognising this the workers
   "would soon have wrested alienated capital back again, through their
   organisation and competition." [Property is Theft!, pp. 17-8]

   Bakunin, while he was "convinced that the co-operative will be the
   preponderant form of social organisation in the future" and could
   "hardly oppose the creation of co-operatives associations" now as we
   find them necessary in many respects," argued that Proudhons hope for
   gradual change by means of mutual banking and the higher efficiency of
   workers co-operatives were unlikely to be realised. This was because
   such claims "do not take into account the vast advantage that the
   bourgeoisie enjoys against the proletariat through its monopoly on
   wealth, science, and secular custom, as well as through the approval --
   overt or covert but always active -- of States and through the whole
   organisation of modern society. The fight is too unequal for success
   reasonably to be expected." [The Basic Bakunin, p. 153 and p. 152] Thus
   capitalism "does not fear the competition of workers' associations --
   neither consumers', producers', nor mutual credit associations -- for
   the simple reason that workers' organisations, left to their own
   resources, will never be able to accumulate sufficiently strong
   aggregations of capital capable of waging an effective struggle against
   bourgeois capital." [The Political Philosophy of Bakunin, p. 293]

   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. In
   other words, few anarchists think that mutualist credit or
   co-operatives are enough in themselves to end capitalism. Revolutionary
   action is also required -- such as the expropriation of capital by
   workers associations.

   This does not mean anarchists reject co-operation under capitalism. 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 consumer co-operatives which could supply food
   and other essentials free or at a reduced cost), 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 play a role in overcoming that system by
   aiding those in struggle. Thus Bakunin:

     "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]

   So 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 [17]section J.5.1) could create their own mutual
   banks and money which could be used to fund co-operatives and support
   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 [18]section J.5.11) as well as
   providing solidarity for those in struggle.

   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 credit 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 of the communistic sector as more and more people
   help each other without the medium of exchange. In other words,
   mutualism will help the gift economy that exists within capitalism to
   grow and develop.

J.5.8 What would a modern system of mutual banking look like?

   One scenario for an updated system of mutual banking would be for a
   community to begin issuing an alternative currency accepted as money by
   all individuals within it. Let us call this currency-issuing
   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 (one percent or
   less) 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.
   Some current experiments in community money use labour time worked as
   their basis (thus notes would be marked one-hour) while others have
   notes tied to the value of the state currency (thus, say, a Scottish
   town would issue pounds assumed to be the same as a British pound
   note).

   The clearinghouse would be organised and function as follows. People
   could join the clearinghouse by pledging a certain amount of property
   (including savings) as collateral. On the basis of this pledge, an
   account would be opened for the new member and credited with a sum of
   mutual pounds 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 into their account by a certain date. The mutual pounds
   could then be transferred through the clearinghouse to the accounts of
   other members, who have agreed to receive mutual money in payment for
   all debts or work done.

   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 of mutual credit are 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. It 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.

J.5.9 How does mutual credit work?

   Let us consider an example of how business would be transacted using
   mutual credit within capitalism. 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 and by
   pledging the land, A is able to open a credit account at the
   clearinghouse for, say, £30,000 in mutual money. She does so knowing
   that there are many other members of the system who are carpenters,
   electricians, plumbers, hardware suppliers, and so on who are willing
   to accept mutual pounds in payment for their products or services.

   It is easy to see why other subscriber-members, who have also obtained
   mutual credit and are therefore in debt to the clearinghouse, would be
   willing to accept such notes in return for their goods and services.
   They need to collect mutual currency to repay their debts. Why would
   someone who is not in debt for mutual currency be willing to accept it
   as money?

   To see why, let us suppose that B, an underemployed carpenter,
   currently has no account at the clearinghouse but that he knows about
   it and the people who operate and use it. After examining its list of
   members and becoming familiar with the policies of the new
   organisation, he is 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 will then be
   able to use it to buy groceries, clothes, 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 credit. 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 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 will 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 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 co-operative restaurant 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. 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 do not 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 other loan. With mutual credit, however,
   this form of financing can be used to purchase anything, including the
   means of production and other equipment required for workers to work
   for themselves instead of a boss.

   Which brings us to the case of an individual without means for
   providing collateral -- say, for example Z, a plumber, who currently
   does not own the land she uses. In such a case, Z, 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, Z 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 money has no intrinsic value,
   since they cannot be redeemed (at the mutual bank) in gold or anything
   else. All they are promises of future labour. They are a mere medium
   for the facilitation of exchange used to facilitate the increased
   production of goods and services (as discussed in [19]section G.3.6, it
   is this increase which ensures that mutual credit is not inflationary).
   This also ensures enough work for all and, ultimately, the end of
   exploitation as working people can buy their own means of production
   and so end wage-labour by self-employment and co-operation.

   For more information on how mutual banking is seen to work see the
   collection of Proudhon's works collected in Proudhon's Solution to the
   Social Problem. William B. Greene's Mutual Banking and Benjamin
   Tucker's Instead of a Book should also be consulted.

J.5.10 Why do anarchists support co-operatives?

   Support for co-operatives is a common feature in anarchist writings. In
   fact, support for democratic workplaces is as old as use of the term
   anarchist to describe our ideas. So why do anarchists support
   co-operatives? It is because they are the only way to guarantee freedom
   in production and so "the co-operative system . . . carries within it
   the germ of the future economic order." [Bakunin, The Philosophy of
   Bakunin, p. 385]

   Anarchists support all kinds of co-operatives: housing, food, consumer,
   credit and workplace 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 (to some degree) useful examples
   of self-management and anarchy in action. Here we will concentrate on
   producer co-operatives as only these can replace the capitalist mode of
   production. They are examples of a new mode of production, one based
   upon associated, not wage, labour. As long as wage-labour exists within
   industry and agriculture then capitalism remains and no amount of other
   kinds of co-operatives will end it. If wage slavery exists, then so
   will exploitation and oppression and anarchy will remain but a hope.

   Co-operatives are the "germ of the future" for two reasons. 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). 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 capitalism. Secondly, 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. It
   also indicates that the capitalist market does not actually allocate
   resources efficiently nor has any tendency to do so.

   So why should co-operatives be more efficient? Firstly, there are the
   positive effects of increased liberty. Co-operatives, by abolishing
   wage slavery, obviously increase 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. As Kropotkin argued: "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:

     "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 from 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.

     "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]

   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 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, increase efficient utilisation of available
   resources and aid the introduction of new techniques and technologies.

   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):

     "Dean Tjosvold . . . 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]

   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, 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, "How high can CEO
   pay go?" Business Week, April 22, 1996] The negative effects of income
   inequality can also 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,
   pp. 600-21] Numerous other studies have also confirmed their findings
   (the negative impacts of inequality on all aspects of life are
   summarised by Richard Wilkinson and Kate Pickett in The Spirit Level:
   Why More Equal Societies Almost Always Do Better). 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. Bosses 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 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 (and let us not forget that "corporate boards,
   largely selected by the CEO, hire compensation experts, almost always
   chosen by the CEO, to determine how much the CEO is worth." [Paul
   Krugman, The Conscience of a Liberal, p. 144]). In contrast, the
   incomes of 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 elected 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 9 to 1 (increased from 3 to 1 after much debate in a
   response to outside pressures from capitalist firms hiring away
   workers) while (in the USA) the average CEO is paid well over 100 times
   the average worker (up from 41 times in 1960).

   Therefore, we see that co-operatives prove the advantages of (and the
   inter-relationship 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 [20]section J.5.12, the capitalist market
   actively blocks the spread of these more egalitarian and 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 their
   development.

   From all this it is 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." [Bakunin, Bakunin on Anarchism,
   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 in, narrow their vision to just surviving within the current
   system and so adapt to it.

   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 capitalism they cannot become the dominant mode of
   production and free the masses (see [21]section J.5.11). 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 argued: "Removed from a libertarian municipalist [or
   other anarchist] context and movement focused on achieving
   revolutionary municipalist 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]

   So 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.

J.5.11 If workers really want self-management then why are there so few
co-operatives?

   Supporters of capitalism suggest that producer co-operatives would
   spring up spontaneously if workers really wanted them. To quote leading
   propertarian Robert Nozick, under capitalism "it is open to any wealthy
   radical or group of workers to buy an existing factory or establish a
   new one, and to . . . institute worker-controlled, democratically-run
   firms." If "they are superior, by market standards, to their more
   orthodox competitors" then "there should be little difficulty in
   establishing successful factories of this sort." Thus there is "a means
   of realising the worker-control scheme that can be brought about by the
   voluntary actions of people in a free [sic!] society." [Anarchy, State,
   and Utopia, pp. 250-2] So if such co-operatives were really
   economically viable and desired by workers, they would spread until
   eventually they undermined capitalism. Propertarians conclude that
   since this is not happening, it must be because workers'
   self-management is either economically inefficient or is not really
   attractive to workers, or both.

   David Schweickart has decisively answered this argument by showing that
   the reason there are not more producer co-operatives is structural:

     "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]

   This means that in, say, a mutualist economy there would be more firms
   of a smaller size supplying a given market compared to capitalism. So a
   free economy, with the appropriate institutional framework, need not
   worry about unemployment for while individual co-operatives may not
   expand as fast as capitalist firms, more co-operatives would be set up
   (see [22]section I.3.1 for why the neo-classical analysis of
   co-operatives which Nozick implicitly invokes is false). In short, the
   environment within which a specific workplace operates is just as
   important as its efficiency.

   This is important, as the empirical evidence is strong that
   self-management is more efficient than wage-slavery. As economist
   Geoffrey M. Hodgson summarises, support for "the proposition that
   participatory and co-operative firms enjoy greater productivity and
   longevity comes from a large amount of . . . case study and econometric
   evidence" and "the weight of testimony" is "in favour or [indicates] a
   positive correlation between participation and productivity."
   ["Organizational Form and Economic Evolution: A critique of the
   Williamsonian hypothesis", pp. 98-115, Democracy and Efficiency in
   Economic Enterprises, U. Pagano and R. E. Rowthorn (eds.), p. 100] This
   is ignored by the likes of Nozick in favour of thought-experiments
   rooted in the dubious assumptions of bourgeois economics. He implicitly
   assumed that because most firms are hierarchical today then they must
   be more efficient. In short, Nozick abused economic selection arguments
   by simply assuming, without evidence, that the dominant form of
   organisation is, ipso facto, more efficient. In reality, this is not
   the case.

   The question now becomes one of explaining why, if co-operation is more
   efficient than wage-slavery, does economic liberty not displace
   capitalism? The awkward fact is that individual efficiency is not the
   key to survival as such an argument "ignores the important point that
   the selection of the 'fitter' in evolution is not simply relative to
   the less successful but is dependent upon the general circumstances and
   environment in which selection takes place." Moreover, an organism
   survives because its birth rate exceeds its death rate. If more
   capitalist firms secure funding from capitalist banks then, obviously,
   it is more likely for them to secure dominance in the economy simply
   because there are more of them rather than because they are more
   efficient. As such, large numbers do not imply greater efficiency as
   the "rapid flow of new entrants of hierarchical form" may "swamp the
   less hierarchical firms even if other selection processes are working
   in favour of the latter." [Hodgson, Op. Cit., p. 100 and p. 103] Thus:

     "The degree of fitness of any organism can only be meaningfully
     considered in relation to its environment . . . the market may help
     to select firms that are fit for the market, but these surviving
     firms needn't be the most 'efficient' in some absolute sense. In
     fact, the specification of 'the market' as a selection process is
     incomplete because the market is only one institution of many needed
     to specify an environment." [Michael J. Everett and Alanson P.
     Minkler, "Evolution and organisational choice in nineteenth-century
     Britain", pp. 51-62, Cambridge Journal of Economics vol. 17, No. 1,
     p. 53]

   As an obvious example there are the difficulties co-operatives can face
   in finding access to credit facilities required by them from capitalist
   banks and investors. As Tom Cahill notes, co-operatives in the
   nineteenth century "had the specific problem of . . . giving credit"
   while "competition with price cutting capitalist firms . . .
   highlighting the inadequate reservoirs of the under-financed co-ops."
   ["Co-operatives and Anarchism: A contemporary Perspective", pp 235-58,
   For Anarchism, Paul Goodway (ed.), p. 239] This points to a general
   issue, namely that there are often difficulties for co-operatives in
   raising money:

     "Co-operatives in a capitalist environment are likely to have more
     difficulty in raising capital. 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." [Schweickart, Op. Cit., p 240]

   In addition, the "return on capital is limited" in co-operatives. [Tom
   Cahill, Op. Cit., p. 247] This means that investors are less-likely to
   invest in co-operatives, and so co-operatives will tend to suffer from
   a lack of investment. So despite "the potential efficiency of such
   [self-managed] workplaces", capitalism "may be systematically biased
   against participatory workplaces" and as "a result the economy can be
   trapped in a socially suboptimal position." Capital market issues,
   amongst others, help explain this as such firms "face higher
   transaction costs for raising equity and loans." [David I. Levine and
   Laura D'Andrea Tyson, "Participation, Productivity, and the Firm's
   Environment", pp. 183-237, Paying for Productivity, Alan S. Blinder
   (ed.), pp. 235-6 and p. 221]

   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." 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] So even if
   co-operatives do attract investors, the cost of so doing may be to
   transform the co-operatives into capitalist firms. So while all
   investors experience risk, this "is even more acute" in co-operatives
   "because investors must simultaneously cede control and risk their
   entire wealth. Under an unlimited liability rule, investors will
   rationally demand some control over the firm's operations to protect
   their wealth. Since [co-operatives] cannot cede control without
   violating one of the organisation's defining tenets, investors will
   demand an investment premium, a premium not required from equity
   investments." [Everett and Minkler, Op. Cit., p. 52] Needless to say,
   such a premium is a strain on a co-operative and makes it harder to
   survive simply because it has higher costs for debt repayment. If such
   external investment is not forthcoming, then the co-operative is
   dependent on retained earnings and its members' savings which,
   unsurprisingly, are often insufficient.

   All of which suggests that Nozick's assertion 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 he forgets that class interest is a fusion of
   individual interests. Given a choice between returns from investments
   in capitalist firms because a management elite has similar interests in
   maximising unpaid labour and workers in a co-operative which controls
   any surplus, the investor will select the former. Moreover, lack of
   control by investors plays its role as they cannot simply replace the
   management in a co-operative -- that power lies in the hands of the
   workforce. The higher premiums required by investors to forsake such
   privileges place a burden on the co-operative, so reducing their
   likelihood of getting funds in the first place or surviving and,
   needless to say, increasing the risk that investors face. Thus the
   personal and class interest of investors merge, with the personal
   desire to make money ensuring that the class position of the individual
   is secured. 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 [23]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!).

   There are other structural problems as well. Co-operatives face the
   negative externalities generated by the capitalist economy they operate
   within. For one thing, since their pay levels are set by members'
   democratic vote, co-operatives tend to be more egalitarian in their
   income structure. This means that in a capitalist environment,
   co-operatives are in constant danger of having their most skilled
   members hired away by capitalist firms who can, due to their resources,
   out-bid the co-operative. While this may result in exploitation of the
   worker, the capitalist firm has the resources to pay higher wages and
   so it makes sense for them to leave ("As to the employer who pays an
   engineer twenty times more than a labourer, it is simply due to
   personal interest; if the engineer can economise $4000 a year on the
   cost of production; the employer pays him $800 . . . He parts with an
   extra $40 when he expects to gain $400 by it; and this is the essence
   of the Capitalist system." [Kropotkin, The Conquest of Bread, p. 165]).
   However, in a co-operative system there would not be the inequalities
   of economic wealth (created by capitalist firms and finance structures)
   which allows such poaching to happen.

   There are cultural issues 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", pp. 93-111, Socialism, Paul, Miller Jr., Paul,
   and Greenberg (eds.), 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 Stock Ownership Plans) enable a firm's
   workforce to gain the majority of a company's 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.

   Finally, there is the question of history, of path dependency. Path
   dependency is the term used to describe when the set of decisions one
   faces for any given circumstance is limited by the decisions made in
   the past, even though past circumstances may no longer be relevant.
   This is often associated with the economics of technological change in
   a society which depends quantitatively and/or qualitatively on its own
   past (the most noted example this is the QWERTY keyboard, which would
   not be in use today except that it happened to be chosen in the
   nineteenth century). Evolutionary systems are path dependent, with
   historical events pushing development in specific directions. Thus, if
   there were barriers against or encouragement for certain forms of
   organisational structure in the past then the legacy of this will
   continue to dominate due to the weight of history rather than
   automatically being replaced by new, more efficient, forms.

   This can be seen from co-operatives, as "labour managed firms were
   originally at a substantial disadvantage compared to their capitalist
   counterparts" as the law "imposed additional risks and costs" on them
   while "early financial instruments were ill-suited to the establishment
   and continuation of worker co-operatives. The subsequent coevolution of
   firms and supporting institutions involved a path-dependent process
   where labour-managed firms were at a continual disadvantage, even after
   many of the earlier impediments were removed." [Hodgson, Op. Cit., p.
   103] "Historically," argue Everett and Minkler "both company and
   co-operative law were incompatible with democratic decision-making by
   workers." The law ensured that the "burden was more costly" to
   labour-managed firms and these "obstacles led to an environment
   dominated by investor-controlled firms (capitalist firms) in which
   informal constraints (behaviours and routines) emerged to reinforce the
   existing institutions. A path-dependent process incorporating these
   informal constraints continued to exclude [their] widespread
   formation." When the formal constraints which prevented the formation
   of co-operatives were finally removed, the "informal constraints"
   produced as a result of these "continued to prevent the widespread
   formation" of co-operatives. So the lack of co-operatives "can thus be
   explained quite independently of any of the usual efficiency criteria."
   [Op. Cit., p. 58 and p. 60] Nor should we forget that the early
   industrial system was influenced by the state, particularly by
   rewarding war related contracts to hierarchical firms modelled on the
   military and that the state rewarded contracts to run various state
   services and industries to capitalist firms rather than, as Proudhon
   urged, to workers associations.

   However, "there are several good reasons why more efficient firms need
   not always be selected in a competitive and 'evolutionary' process."
   [Hodgson, Op. Cit., p. 99] So it is not efficiency as such which
   explains the domination of capitalist firms for "empirical studies
   suggest 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] So 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. As David Schweickart argues:

     "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]

   It is illuminating, though, to consider why Nozick ignored the
   substantial empirical evidence that participation is more efficient
   than hierarchy and, as a result, why "market criteria" does not result
   in the more productive and efficient co-operative production displacing
   the authoritarian workplace. Far better, it must be supposed, to just
   assume that the dominant form of workplace is more "efficient" and
   implicitly invoke a quasi-Darwinian individualistic selection mechanism
   in an ahistorical and institution-less framework. So people like Nozick
   who suggest that because worker co-operatives are few in number that
   this means they are forced out by competition because they are
   inefficient miss the point. A key reason for this lack of co-operative
   firms, argues Hodgson, "is that competitive selection depends on the
   economic context, and while the institutional context of a capitalist
   system may be more conducive for the capitalist firm, a different
   context may favour the co-operative firm." [Economics and Utopia, p.
   288]

   As discussed in [24]section I.3.5, Proudhon was well aware that for
   mutualism to prosper and survive an appropriate institutional framework
   was required (the "agro-industrial federation" and mutual banking). So
   an organisation's survival also depends on the co-evolution of
   supporting informal constraints. If a co-operative is isolated within a
   capitalist economy, without co-operative institutions around it, it
   comes as no great surprise to discover that they find it difficult to
   survive never mind displace its (usually larger and well-established)
   capitalist competitors.

   Yet in spite of these structural problems and the impact of previous
   state interventions, co-operatives do exist under capitalism but just
   because they can survive in such a harsh environment it does not
   automatically mean that they shall replace that economy. Co-operatives
   face pressures to adjust to the dominant mode of production. The
   presence of wage labour and investment capital in the wider economy
   will tempt successful co-operatives to hire workers or issue shares to
   attract new investment. In so doing, however, they may end up losing
   their identities as co-operatives by diluting ownership (and so
   re-introducing exploitation by having to pay non-workers interest) or
   by making the co-operative someone's boss (which creates "a new class
   of workers who exploit and profit from the labour of their employees.
   And all this fosters a bourgeois mentality." [Bakunin, Bakunin on
   Anarchism, p. 399]).

   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 has, since
   1992, 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, just and
   efficient does not mean it will survive or prosper in an authoritarian
   economic and social environment.

   So both theory and history suggests that isolated co-operatives 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. Only as part of a wider movement of
   community and workplace unionism, with mutualist banks to provide long
   term financial support and commitment, can co-operatives be
   communalised into a network of solidarity and support that will reduce
   the problems of isolation and adaptation. Hence Bakunin:

     "We want co-operation too . . . But at the same time, we know that
     it prospers, developing itself fully and freely, embracing all human
     industry, only when it is based on equality, when all capital and
     every instrument of labour, including the soil, belong to the people
     by right of collective property . . . Once this is acknowledged 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 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." [The Basic Bakunin, p. 153]

   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. This means that while anarchists
   support, create and encourage co-operatives within capitalism, we
   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. [The Political Philosophy of Bakunin, p. 385]

   Finally, we must note an irony with Nozick's argument, namely the
   notion that capitalism (his "free society") allows a "voluntary" path
   to economic liberty. The irony is two-fold. First, the creation of
   capitalism was the result of state action (see [25]section F.8). While
   working class people are expected to play by the rules decreed by
   capitalism, capitalists have never felt the urge to do so. It is this
   state coercion which helped create the path-dependency which stops "the
   market" selecting more efficient and productive ways of production.
   Secondly, Nozick's own theory of (property) rights denies that stolen
   wealth can be legitimately transferred. In other words, expecting
   workers to meekly accept previous coercion by seeking investors to fund
   their attempts at economic liberty, as Nozick did, is implicitly
   accepting that theft is property. While such intellectual incoherence
   is to be expected from defenders of capitalism, it does mean that
   propertarians really have no ground to oppose working class people
   following the advice of libertarians and expropriating their
   workplaces. In other words, transforming the environment and breaking
   the path-dependency which stops economic liberty from flowering to its
   full potential.

J.5.12 If self-management were more efficient then surely capitalists would
introduce it?

   Some supporters of capitalism argue that if self-management really were
   more efficient than hierarchy, then capitalists would be forced to
   introduce it by the market. As propertarian Robert Nozick argued, if
   workers' control meant that "the productivity of the workers in a
   factory rises . . . then the individual owners pursuing profits will
   reorganise the productive process. If the productivity of workers
   remains the same . . . then in the process of competing for labourers
   firms will alter their internal work organisation." This meant that
   "individual owners pursuing profits . . . will reorganise the
   productive process." [Anarchy, State, and Utopia, p. 248] As this has
   not happened then self-management cannot be more efficient.

   While such a notion seems plausible in theory, in practice it is flawed
   as "there is a vast quantity of empirical evidence demonstrating that
   participatory workplaces tend to be places of higher morale and greater
   productivity than authoritarian workplaces." [David Schweickart ,
   Against Capitalism, p. 228] So Nozick's thought experiment is
   contradicted by reality. Capitalism places innumerable barriers to the
   spread of worker empowering structures within production, in spite
   (perhaps, as we will see, because) of their (well-documented) higher
   efficiency and productivity. 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 even though they
   were extremely successful. This is due to the nature of capitalist
   production and the social relationships it produces.

   As we noted in [26]section D.10, capitalist firms (particularly in the
   west) made a point of introducing technologies and management
   structures that aimed to deskill and disempower 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 stops. 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, to encourage workers to "participate" in their own exploitation
   by introducing "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." [Sam Dolgoff, The Anarchist
   Collectives, p. 81] The management and owners still have the power and
   still reap unpaid labour 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:

     "Participation 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.

     "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 .
     . .

     "Third, 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]

   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 a little way toward redressing the gap between the value
   produced by that person's labour and the wage they receive for it, that
   in itself cannot be a totally bad thing (although this does not address
   the issue of workplace hierarchy and its social relations). 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 it does not work
   as workers simply 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.

   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. According to one expert: "There 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 . . . are rare in social research." [Paul
   B. Lumberg, quoted by Herbert Gintis, "The nature of Labour Exchange
   and the Theory of Capitalist Production", Radical Political Economy,
   vol. 1, Samuel Bowles and Richard Edwards (eds.), p. 252] In spite of
   these findings, a "shift toward participatory relationships is scarcely
   apparent in capitalist production" and this is "not compatible with the
   neo-classical assertion as to the efficiency of the internal
   organisation of capitalist production." [Gintz, Op. Cit., p. 252]
   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 (as David Schweickart notes, such resistance,
   "often bordering on sabotage, is well known and widely documented" [Op.
   Cit., p. 229]). As an example of this David Noble discusses a scheme
   ran by General Electric in the late 1960s:

     "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 went 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]

   Simply put, managers and capitalists can see that workers' control
   experiments expose the awkward fact that they are not needed, that
   their role is not related to organising production but exploiting
   workers. They have no urge to introduce reforms which will ultimately
   make themselves redundant. Moreover, most enjoy the power that comes
   with their position and have no desire to see it ended. This also
   places a large barrier in the way of workers' control. Interestingly,
   this same mentality explains why capitalists often support fascist
   regimes: "The anarchist Luigi Fabbri termed fascism a preventative
   counter-revolution; but in his essay he makes the important point that
   the employers, particularly in agriculture, were not so much moved by
   fear of a general revolution as by the erosion of their own authority
   and property rights which had already taken place locally: The bosses
   felt they were no longer bosses.'" [Adrian Lyttelton, Italian
   Fascism, pp. 81-114, Fascism: a Reader's Guide, p. 91]

   However, it could be claimed that owners of stock, 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.

   This has not happened 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 also 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:

     "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." [Gintz, Op. Cit., p. 264]

   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
   efficiency. Getting workers to work longer, more intensely or in more
   unpleasant conditions can increase profits but it 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 capitalist power in production. Moreover, demands
   to change the nature of workers' inputs into the production process in
   order to maximise profits for capitalists would provoke a struggle over
   the intensity of work, working hours, and over the share of value added
   going to workers, management and owners and so destroy the benefits of
   participation.

   Thus power within the workplace plays a key role in explaining why
   workers' control does not spread -- it reduces the ability of bosses to
   extract more unpaid labour from workers.

   The second reason is related to the first. It too is based on the power
   structure within the company but the power is related to control over
   the surplus produced by the workers rather than the ability to control
   how much surplus is produced in the first place (i.e. power over
   workers). Hierarchical management is the way to ensure that profits are
   channelled into the hands of a few. By centralising power, the surplus
   value produced by workers can be distributed in a way which benefits
   those at the top (i.e. management and capitalists). This explains the
   strange paradox of workers' control experiments being successful but
   being cancelled by management. This is easily explained once the
   hierarchical nature of capitalist production (i.e. of wage labour) is
   acknowledged. Workers' control, by placing (some) power in the hands of
   workers, undermines the authority of management and, ultimately, their
   power to control the surplus produced by workers and allocate it as
   they see fit. Thus, while workers' control does reduce costs, increase
   efficiency and productivity (i.e. maximise the difference between
   prices and costs) it (potentially) reduces the power of management and
   owners to allocate that surplus as they see fit. Indeed, it can be
   argued that hierarchical control of production exists solely to provide
   for the accumulation of capital in a few hands, not for efficiency or
   productivity (see Stephan A. Margin, "What do Bosses do? The Origins
   and Functions of Hierarchy in Capitalist Production", Op. Cit., pp.
   178-248).

   As David Noble argues, power is the key to understanding capitalism,
   not the drive for profits as such:

     "In opting for control [over the increased efficiency of workers'
     control] . . . management . . . knowingly and, it must be assumed,
     willingly, sacrificed profitable production. . . . [This]
     illustrates not only the ultimate management priority of power over
     both production and profit within the firm, but also the larger
     contradiction between the preservation of private power and
     prerogatives, on the one hand, and the social goals of efficient,
     quality, and useful production, on the other . . .

     "It is a common confusion, especially on the part of those trained
     in or unduly influenced by formal economics (liberal and Marxist
     alike), that capitalism is a system of profit-motivated, efficient
     production. This is not true, nor has it ever been. If the drive to
     maximise profits, through private ownership and control over the
     process of production, has served historically as the primary means
     of capitalist development, it has never been the end of that
     development. The goal has always been domination (and the power and
     privileges that go with it) and the preservation of domination.
     There is little historical evidence to support the view that, in the
     final analysis, capitalists play by the rules of the economic game
     imagined by theorists. There is ample evidence to suggest, on the
     other hand, that when the goals of profit-making and efficient
     production fail to coincide with the requirements of continued
     dominance, capital will resort to more ancient means: legal,
     political, and, if need be, military. Always, behind all the careful
     accounting, lies the threat of force. This system of domination has
     been legitimated in the past by the ideological invention that
     private ownership of the means of production and the pursuit of
     profit via production are always ultimately beneficial to society.
     Capitalism delivers the goods, it is argued, better, more cheaply,
     and in larger quantity, and in so doing, fosters economic growth . .
     . The story of the Pilot Program -- and it is but one among
     thousands like it in U.S. industry -- raises troublesome questions
     about the adequacy of this mythology as a description of reality."
     [Forces of Production, pp. 321-2]

   Hierarchical organisation (domination) is essential to ensure that
   profits are controlled by a few and can, therefore, be allocated by
   them in such a way to ensure their power and privileges. By undermining
   such authority, workers' control also undermines that power to maximise
   profits in a certain direction even though it increases "profits" (the
   difference between prices and costs) in the abstract. As workers'
   control starts to extend (or management sees its potential to spread)
   into wider areas such as investment decisions, how to allocate the
   surplus (i.e. profits) between wages, investment, dividends, management
   pay and so on, then they will seek to end the project in order to
   ensure their power over both the workers and the surplus they, the
   workers, produce (this is, of course, related to the issue of lack of
   control by investors in co-operatives raised in the [27]last section).

   As such, the opposition by managers to workers' control will be
   reflected by those who actually own the company who obviously would not
   support a regime which will not ensure the maximum return on their
   investment. This would be endangered by workers' control, even though
   it is more efficient and productive, as control over the surplus rests
   with the workers and not a management elite with similar interests and
   aims as the owners -- an egalitarian workplace would produce an
   egalitarian distribution of surplus, in other words (as proven by the
   experience of workers' co-operatives). In the words of one participant
   of the GE workers' control project: "If we're all one, for
   manufacturing reasons, we must share in the fruits equitably, just like
   a co-op business." [quoted by Noble, Op. Cit., p. 295] Such a
   possibility is one few owners would agree to.

   Thirdly, to survive within the "free" market means to concentrate on
   the short term. Long terms benefits, although greater, are irrelevant.
   A free market requires profits now and so a firm is under considerable
   pressure to maximise short-term profits by market forces. Participation
   requires trust, investment in people and technology and a willingness
   to share the increased value added that result from workers'
   participation with the workers who made it possible. All these factors
   would eat into short term profits in order to return richer rewards in
   the future. Encouraging participation thus tends to increase long term
   gains at the expense of short-term ones (to ensure that workers do not
   consider participation as a con, they must experience real benefits in
   terms of power, conditions and wage rises). For firms within a free
   market environment, they are under pressure from share-holders and
   their financiers for high returns as soon as possible. If a company
   does not produce high dividends then it will see its stock fall as
   shareholders move to those companies that do. Thus the market forces
   companies to act in such ways as to maximise short term profits.

   If faced with a competitor which is not making such investments (and
   which is investing directly into deskilling technology or intensifying
   work loads which lowers their costs) and so wins them market share, or
   a downturn in the business cycle which shrinks their profit margins and
   makes it difficult for the firm to meet its commitments to its
   financiers and workers, a company that intends to invest in people and
   trust will usually be rendered unable to do so. Faced with the option
   of empowering people in work or deskilling them and/or using the fear
   of unemployment to get workers to work harder and follow orders,
   capitalist firms have consistently chosen (and probably preferred) the
   latter option (as occurred in the 1970s).

   Thus, workers' control is unlikely to spread through capitalism because
   it entails a level of working class consciousness and power that is
   incompatible with capitalist control: "If the hierarchical division of
   labour is necessary for the extraction of surplus value, then worker
   preferences for jobs threatening capitalist control will not be
   implemented." [Gintis, Op. Cit., p. 253] The reason why it is more
   efficient, ironically, ensures that a capitalist economy will not
   select it. The "free market" will discourage empowerment and democratic
   workplaces, at best reducing "co-operation" and "participation" to
   marginal issues (and management will still have the power of veto).

   The failure of moves towards democratic workplaces within capitalism
   are an example of that system in conflict with itself -- pursuing its
   objectives by methods which constantly defeat those same objectives. As
   Paul Carden argued, the "capitalist system can only maintain itself by
   trying to reduce workers into mere order-takers . . . At the same time
   the system can only function as long as this reduction is never
   achieved . . . [for] the system would soon grind to a halt . . .
   [However] capitalism constantly has to limit this participation (if it
   didn't the workers would soon start deciding themselves and would show
   in practice how superfluous the ruling class really is)." [Modern
   Capitalism and Revolution, pp. 45-46] Thus "workers' control" within a
   capitalist firm is a contradictory thing -- too little power and it is
   meaningless, too much and workplace authority structures and capitalist
   share of, and control over, value added can be harmed. Attempts to make
   oppressed, exploited and alienated workers work as if they were neither
   oppressed, exploited nor alienated will always fail.

   For a firm to establish committed and participatory relations
   internally, it must have external supports -- particularly with
   providers of finance (which is why co-operatives benefit from credit
   unions and co-operating together). The price mechanism proves
   self-defeating to create such supports and that is why we see
   "participation" more fully developed within Japanese and German firms
   (although it is still along way from fully democratic workplaces), who
   have strong, long term relationships with local banks and the state
   which provides them with the support required for such activities. As
   William Lazonick notes, Japanese industry had benefited from the state
   ensuring "access to inexpensive long-term finance, the sine qua non of
   innovating investment strategies" along with a host of other supports,
   such as protecting Japanese industry within their home markets so they
   could "develop and utilise their productive resources to the point
   where they could attain competitive advantage in international
   competition." [Op. Cit., p. 305] The German state provides its industry
   with much of the same support.

   Therefore, "participation" within capitalist firms will have little or
   no tendency to spread due to the actions of market forces. In spite of
   such schemes almost always being more efficient, capitalism will not
   select them because they empower workers and make it hard for
   capitalists to generate and control their profits. Hence capitalism, by
   itself, will have no tendency to produce more libertarian
   organisational forms within industry. Those firms that do introduce
   such schemes will be the exception rather than the rule (and the
   schemes themselves will be marginal in most respects and subject to
   veto from above). For such schemes to spread, collective action is
   required (such as state intervention to create the right environment
   and support network or -- from an anarchist point of view -- union and
   community direct action).

   Such schemes, as noted above, are just forms of self-exploitation,
   getting workers to help their robbers and so not a development
   anarchists seek to encourage. We have discussed this here just to be
   clear that, firstly, such forms of structural reforms are not
   self-management, as managers and owners still have the real power, and,
   secondly, even if such forms are somewhat liberatory and more
   efficient, market forces will not select them precisely because the
   latter is dependent on the former. Thirdly, they would still be
   organised for exploitation as workers would not be controlling all the
   goods they produced. As with an existing capitalist firm, part of their
   product would be used to pay interest, rent and profit. For anarchists
   "self-management is not a new form of mediation between workers and
   their bosses . . . [it] refers to the very process by which the workers
   themselves overthrow their managers and take on their own management
   and the management of production in their own workplace." [Dolgoff, Op.
   Cit., p. 81] Hence our support for co-operatives, unions and other
   self-managed structures created and organised from below by and for
   working class people by their own collective action.

J.5.13 What are Modern Schools?

   Modern schools are alternative schools, self-managed by students,
   teachers and parents which reject the authoritarian schooling methods
   of the contemporary "education" system. Such schools have been a
   feature of the anarchist movement since the turn of the 20th century
   while interest in libertarian forms of education has existed in
   anarchist theory from the beginning. All the major anarchist thinkers,
   from Godwin through Proudhon, Bakunin and Kropotkin to modern activists
   like Colin Ward, have stressed the importance of libertarian (or
   rational) education, education that develops all aspects of the student
   (mental and physical -- and so termed integral education) as well as
   encouraging critical thought and mental freedom. The aim of such
   education is ensure that the "industrial worker, the man [sic!] of
   action and the intellectual would all be rolled into one." [Proudhon,
   quoted by Steward Edward, The Paris Commune, p. 274]

   Anyone involved in radical politics, constantly and consistently
   challenges the role of the state's institutions and their
   representatives within our lives. The role of bosses, the police,
   social workers, the secret service, managers, doctors and priests are
   all seen as part of a hierarchy which exists to keep us, the working
   class, subdued. It is relatively rare, though, for the left-wing to
   call into question the role of teachers. Most left wing activists and a
   large number of libertarians believe that education is always good.

   Those involved in libertarian education believe the contrary. They
   believe that national education systems exist only to produce citizens
   who will be blindly obedient to the dictates of the state, citizens who
   will uphold the authority of government even when it runs counter to
   personal interest and reason, wage slaves who will obey the orders of
   their boss most of the time and consider being able to change bosses as
   freedom. They agree with William Godwin (one of the earliest critics of
   national education systems) when he wrote that "the project of a
   national education ought to be discouraged on account of its obvious
   alliance with national government . . . Government will not fail to
   employ it to strengthen its hand and perpetuate its institutions . . .
   Their views as instigator of a system will not fail to be analogous to
   their views in their political capacity." [quoted by Colin Ward,
   Anarchy in Action, p. 81]

   With the growth of industrialism in the 19th century state schools
   triumphed, not through a desire to reform but as an economic necessity.
   Industry did not want free thinking individuals, it wanted workers,
   instruments of labour, and it wanted them punctual, obedient, passive
   and willing to accept their disadvantaged position. According to Nigel
   Thrift, many employers and social reformers became convinced that the
   earliest generations of workers were almost impossible to discipline
   (i.e. to get accustomed to wage labour and workplace authority). They
   looked to children, hoping that "the elementary school could be used to
   break the labouring classes into those habits of work discipline now
   necessary for factory production . . . Putting little children to work
   at school for very long hours at very dull subjects was seen as a
   positive virtue, for it made them habituated, not to say naturalised,
   to labour and fatigue." [quoted by Juliet B. Schor, The Overworked
   American, p. 61]

   Thus supporters of Modern Schools recognise that the role of education
   is an important one in maintaining hierarchical society -- for
   government and other forms of hierarchy (such as wage labour) must
   always depend on the opinion of the governed. Francisco Ferrer (the
   most famous libertarian educator) argued that:

     "Rulers have always taken care to control the education of the
     people. They know their power is based almost entirely on the school
     and they insist on retaining their monopoly. The school is an
     instrument of domination in the hands of the ruling class." [quoted
     by Clifford Harper, Anarchy: A Graphic Guide, p. 100]

   Little wonder, then, that Emma Goldman argued that "modern methods of
   education" have "little regard for personal liberty and originality of
   thought. Uniformity and imitation is [its] motto." The school "is for
   the child what the prison is for the convict and the barracks for the
   solder -- a place where everything is being used to break the will of
   the child, and then to pound, knead, and shape it into a being utterly
   foreign to itself." Hence the importance of Modern Schools. It is a
   means of spreading libertarian education within a hierarchical society
   and undercut one of the key supports for that society -- the education
   system. Instead of hierarchical education, Modern schools exist to
   "develop the individual through knowledge and the free play of
   characteristic traits, so that [the child] may become a social being,
   because he had learned to know himself, to know his relation to his
   fellow[s]." [Red Emma Speaks, pp. 141-2, p. 140 and p. 145] It would be
   an education for freedom, not for subservience:

     "Should the notion of freedom but awaken in man, free men dream only
     of freeing themselves now and for all time: but instead, all we do
     is churn out learned men who adapt in the most refined manner to
     every circumstance and fall to the level of slavish, submissive
     souls. For the most part, what are our fine gentlemen brimful of
     intellect and culture? Sneering slavers and slaves themselves." [Max
     Stirner, No Gods, No Masters, vol. 1, p. 12]

   The Modern School Movement (also known as the Free School Movement)
   over the past century has been an attempt to represent part of this
   concern about the dangers of state and church schools and the need for
   libertarian education. The idea of libertarian education is that
   knowledge and learning should be linked to real life processes as well
   as personal usefulness and should not be the preserve of a special
   institution. Thus Modern Schools are an attempt to establish an
   environment for self development in an overly structured and
   rationalised world. An oasis from authoritarian control and as a means
   of passing on the knowledge to be free:

     "The underlying principle of the Modern School is this: education is
     a process of drawing out, not driving in; it aims at the possibility
     that the child should be left free to develop spontaneously,
     directing his own efforts and choosing the branches of knowledge
     which he desires to study . . . the teacher . . . should be a
     sensitive instrument responding to the needs of the child . . . a
     channel through which the child may attain so much of the ordered
     knowledge of the world as he shows himself ready to receive and
     assimilate." [Goldman, Op. Cit., p. 146]

   The Modern School bases itself on libertarian education techniques.
   Libertarian education, very broadly, seeks to produce children who will
   demand greater personal control and choice, who think for themselves
   and question all forms of authority:

     "We don't hesitate to say we want people who will continue to
     develop. People constantly capable of destroying and renewing their
     surroundings and themselves: whose intellectual independence is
     their supreme power, which they will yield to none; always disposed
     for better things, eager for the triumph of new ideas, anxious to
     crowd many lives into the life they have. It must be the aim of the
     school to show the children that there will be tyranny as long as
     one person depends on another." [Ferrer, quoted by Harper, Op. Cit.,
     p. 100]

   Thus the Modern School insists that the child is the centre of gravity
   in the education process -- and that education is just that, not
   indoctrination:

     "I want to form a school of emancipation, concerned with banning
     from the mind whatever divides people, the false concepts of
     property, country and family so as to attain the liberty and
     well-being which all desire. I will teach only simple truth. I will
     not ram dogma into their heads. I will not conceal one iota of fact.
     I will teach not what to think but how to think." [Ferrer, quoted by
     Harper, Op. Cit., pp. 99-100]

   The Modern School has no rewards or punishments, exams or mark -- the
   everyday tortures of conventional schooling. And because practical
   knowledge is more useful than theory, lessons were often held in
   factories, museums or the countryside. The school was also used by
   parents, and Ferrer planned a Popular University.

     "Higher education, for the privileged few, should be for the general
     public, as every human has a right to know; and science, which is
     produced by observers and workers of all countries and ages, ought
     not be restricted to class." [Ferrer, quoted by Harper, Op. Cit., p.
     100]

   Thus Modern Schools are based on encouraging self-education in a
   co-operative, egalitarian and libertarian atmosphere in which the pupil
   (regardless of age) can develop themselves and their interests to the
   fullest of their abilities. In this way Modern Schools seek to create
   anarchists by a process of education which respects the individual and
   gets them to develop their own abilities in a conducive setting.

   Modern Schools have been a constant aspect of the anarchist movement
   since the late 1890s. The movement was started in France by Louise
   Michel and Sebastien Faure, where Francisco Ferrer became acquainted
   with them. He founded his Modern School in Barcelona in 1901, and by
   1905 there were 50 similar schools in Spain (many of them funded by
   anarchist groups and trade unions and, from 1919 onward, by the C.N.T.
   -- in all cases the autonomy of the schools was respected). In 1909,
   Ferrer was falsely accused by the Spanish government of leading an
   insurrection and executed in spite of world-wide protest and
   overwhelming proof of his innocence. His execution, however, gained him
   and his educational ideas international recognition and inspired a
   Modern School progressive education movement across the globe.

   However, for most anarchists, Modern Schools are not enough in
   themselves to produce a libertarian society. They agree with Bakunin:

     "For individuals to be moralised and become fully human . . . three
     things are necessary: a hygienic birth, all-round education,
     accompanied by an upbringing based on respect for labour, reason,
     equality, and freedom and a social environment wherein each human
     individual will enjoy full freedom and really by, de jure and de
     facto, the equal of every other.

     "Does this environment exist? No. Then it must be established. . .
     [otherwise] in the existing social environment . . . on leaving
     [libertarian] schools they [the student] would enter a society
     governed by totally opposite principles, and, because society is
     always stronger than individuals, it would prevail over them . . .
     [and] demoralise them." [The Basic Bakunin, p, 174]

   Because of this, Modern Schools must be part of a mass working class
   revolutionary movement which aims to build as many aspects of the new
   world as possible in the old one before, ultimately, replacing it.
   Otherwise they are just useful as social experiments and their impact
   on society marginal. Thus, for anarchists, this process of education is
   part of the class struggle, not in place of it and so "the workers
   [must] do everything possible to obtain all the education they can in
   the material circumstances in which they currently find themselves . .
   . [while] concentrat[ing] their efforts on the great question of their
   economic emancipation, the mother of all other emancipations."
   [Bakunin, Op. Cit., p. 175]

   Before finishing, we must stress that hierarchical education (like the
   media), cannot remove the effects of actual life and activity in
   shaping/changing people and their ideas, opinions and attitudes. While
   education is an essential part of maintaining the status quo and
   accustoming people to accept hierarchy, the state and wage slavery, it
   cannot stop individuals from learning from their experiences, trusting
   their sense of right and wrong, recognising the injustices of the
   current system and the ideas that it is based upon. This means that
   even the best state (or private) education system will still produce
   rebels -- for the experience of wage slavery and state oppression (and,
   most importantly, struggle) is shattering to the ideology spoon-fed
   children during their "education" and reinforced by the media.

   For more information on Modern Schools see Paul Avrich's The Modern
   School Movement: Anarchism and education in the United States, Emma
   Goldman's essays "Francisco Ferrer and the Modern School" (in Anarchism
   and Other Essays) and "The Social Importance of the Modern School" (in
   Red Emma Speaks) as well as A.S Neil's Summerhill. For a good
   introduction to anarchist viewpoints on education see "Kropotkin and
   technical education: an anarchist voice" by Michael Smith (in For
   Anarchism, David Goodway (ed.),) and Michael Bakunin's "All-Round
   Education" (in The Basic Bakunin). For an excellent summary of the
   advantages and benefits of co-operative learning, see Alfie Kohn's No
   Contest.

J.5.14 What is Libertarian Municipalism?

   As we noted in [28]section J.2, most anarchists reject participating in
   electoral politics. A notable exception was Murray Bookchin who not
   only proposed voting but also a non-parliamentary electoral strategy
   for anarchists. He repeated this proposal in many of his later works,
   such as From Urbanisation to Cities, and has made it -- at least in the
   USA -- one of the many alternatives anarchists are involved in.

   According to Bookchin, "the proletariat, as do all oppressed sectors of
   society, comes to life when it sheds its industrial habits in the free
   and spontaneous activity of communising, or taking part in the
   political life of the community." In other words, Bookchin thought that
   democratisation of local communities may be as strategically important,
   or perhaps more important, to anarchists than workplace struggles.
   Since local politics is humanly scaled, Bookchin argued that it can be
   participatory rather than parliamentary. Or, as he put it, the
   "anarchic ideal of decentralised, stateless, collectively managed, and
   directly democratic communities -- of confederated municipalities or
   'communes' -- speaks almost intuitively, and in the best works of
   Proudhon and Kropotkin, consciously, to the transforming role of
   libertarian municipalism as the framework of a liberatory society."
   "Theses on Libertarian Municipalism", pp. 9-22, The Anarchist Papers,
   Dimitrios I. Roussopoulos (ed.),p. 10] He also pointed out that,
   historically, the city has been the principle countervailing force to
   imperial and national states, haunting them as a potential challenge to
   centralised power and continuing to do so today, as can be seen in the
   conflicts between national government and municipalities in many
   countries.

   Despite the libertarian potential of urban politics, "urbanisation" --
   the growth of the modern megalopolis as a vast wasteland of suburbs,
   shopping malls, industrial parks, and slums that foster political
   apathy and isolation in realms of alienated production and private
   consumption -- is antithetical to the continued existence of those
   aspects of the city that might serve as the framework for a libertarian
   municipalism: "When urbanisation will have effaced city life so
   completely that the city no longer has its own identity, culture, and
   spaces for consociation, the bases for democracy -- in whatever way the
   word in defined -- will have disappeared and the question of
   revolutionary forms will be a shadow game of abstractions." Despite
   this danger Bookchin argued that a libertarian politics of local
   government is still possible, provided anarchists get our act together:
   "The Commune still lies buried in the city council; the sections still
   lie buried in the neighbourhood; the town meeting still lies buried in
   the township; confederal forms of municipal association still lie
   buried in regional networks of towns and cities." [Op. Cit., p. 16 and
   p. 21]

   What would anarchists do electorally at the local level? Bookchin
   proposed that libertarians stand in local elections in order to change
   city and town charters to make them participatory: "An organic politics
   based on such radical participatory forms of civic association does not
   exclude the right of anarchists to alter city and town charters such
   that they validate the existence of directly democratic institutions.
   And if this kind of activity brings anarchists into city councils,
   there is no reason why such a politics should be construed as
   parliamentary, particularly if it is confined to the civic level and is
   consciously posed against the state." [Op. Cit., p. 21]

   In short, Libertarian Municipalism "depends upon libertarian leftists
   running candidates at the local level, calling for the division of
   municipalities into wards, where popular assemblies can be created that
   bring people into full and direct participation in political life . . .
   municipalities would [then] confederate into a dual power to oppose the
   nation-state and ultimately dispense with it and with the economic
   forces that underpin statism as such." [Democracy and Nature no. 9, p.
   158] This would be part of a social wide transformation, whose
   "[m]inimal steps . . . include initiating Left Green municipalist
   movements that propose neighbourhood and town assemblies -- even if
   they have only moral functions at first -- and electing town and city
   councillors that advance the cause of these assemblies and other
   popular institutions. These minimal steps can lead step-by-step to the
   formation of confederal bodies . . . Civic banks to fund municipal
   enterprises and land purchases; the fostering of new
   ecologically-orientated enterprises that are owned by the community."
   Thus Bookchin saw Libertarian Municipalism as a process by which the
   state can be undermined by using elections as the means of creating
   popular assemblies. Part of this would be the "municipalisation of
   property" which would "bring the economy as a whole into the orbit of
   the public sphere, where economic policy could be formulated by the
   entire community." [From Urbanisation to Cities, p. 266 and p. 235]

   In evaluating Bookchin's proposal, several points come to mind.

   Firstly, it is clear that Libertarian Municipalism's arguments in
   favour of community assemblies is important and cannot be ignored.
   Bookchin was right to note that, in the past, many anarchists placed
   far too much stress on workplace struggles and workers' councils as the
   framework of a free society. Many of the really important issues that
   affect us cannot be reduced to workplace organisations, which by their
   very nature disenfranchise those who do not work in industry (such as
   housewives, the old, and so on). And, of course, there is far more to
   life than work and so any future society organised purely around
   workplace organisations is reproducing capitalism's insane
   glorification of economic activity, at least to some degree. So, in
   this sense, Libertarian Municipalism has a very valid point -- a free
   society will be created and maintained within the community as well as
   in the workplace. However, this perspective was hardly alien to such
   anarchist thinkers as Proudhon, Bakunin and Kropotkin who all placed
   communes at the centre of their vision of a free society.

   Secondly, Bookchin and other Libertarian Municipalists are correct to
   argue that anarchists should work in their local communities. Many
   anarchists are doing just that and are being very successful as well.
   However, most anarchists reject the idea of a "confederal municipalist
   movement run[ning] candidates for municipal councils with demands for
   the institution of public assemblies" as viable means of "struggle
   toward creating new civic institutions out of old ones (or replacing
   the old ones altogether)." [Bookchin, Op. Cit., p. 229 and p. 267]

   The most serious objection to this has to do with whether politics in
   most cities has already become too centralised, bureaucratic, inhumanly
   scaled, and dominated by capitalist interests to have any possibility
   of being taken over by anarchists running on platforms of participatory
   democratisation. Merely to pose the question seems enough to answer it.
   There is no such possibility in the vast majority of cities, and hence
   it would be a waste of time and energy for anarchists to support
   libertarian municipalist candidates in local elections -- time and
   energy that could be more profitably spent in direct action. If the
   central governments are too bureaucratic and unresponsive to be used by
   Libertarian Municipalists, the same can be said of local ones too --
   particularly as the local state has become increasingly controlled by
   the central authorities (in the UK, for example, the Conservative
   government of the 1980s successfully centralised power away from local
   councils to undercut their ability to resist the imposition of its
   neo-liberal policies).

   The counter-argument to this is that even if there is no chance of such
   candidates being elected, their standing for elections would serve a
   valuable educational function. The answer to this is: perhaps, but
   would it be more valuable than direct action? Would its educational
   value, if any, outweigh the disadvantages of electioneering discussed
   in [29]section J.2? Given the ability of major media to marginalise
   alternative candidates, we doubt that such campaigns would have enough
   educational value to outweigh these disadvantages. Moreover, being an
   anarchist does not make one immune to the corrupting effects of
   electioneering. History is littered with radical, politically aware
   movements using elections and ending up becoming part of the system
   they aimed to transform. Most anarchists doubt that Libertarian
   Municipalism will be any different -- after all, it is the
   circumstances the parties find themselves in which are decisive, not
   the theory they hold. Why would libertarians be immune to this but not
   Marxists or Greens?

   Lastly, most anarchists question the whole process on which Libertarian
   Municipalism bases itself on. The idea of communes is a key one of
   anarchism and so strategies to create them in the here and now are
   important. However, to think that we can use alienated, representative
   institutions to abolish these institutions is wrong. As Italian
   activists who organised a neighbourhood assembly by non-electoral means
   argue "[t]o accept power and to say that the others were acting in bad
   faith and that we would be better, would force non-anarchists towards
   direct democracy. We reject this logic and believe that organisations
   must come from the grassroots." ["Community Organising in Southern
   Italy", pp. 16-19, Black Flag no. 210, p. 18]

   Thus Libertarian Municipalism reverses the process by which community
   assemblies will be created. Instead of anarchists using elections to
   build such bodies, they must work in their communities directly to
   create them (see [30]section J.5.1 for more details). Using the
   catalyst of specific issues of local interest, anarchists could propose
   the creation of a community assembly to discuss the issues in question
   and organise action to solve them. Rather than stand in local
   elections, anarchists should encourage people to create these
   institutions themselves and empower themselves by collective
   self-activity. As Kropotkin argued, "Laws can only follow the
   accomplished facts; and even if they do honestly follow them -- which
   is usually not the case -- a law remains a dead letter so long as there
   are not on the spot the living forces required for making the
   tendencies expressed in the law an accomplished fact." [Anarchism, p.
   171] Most anarchists, therefore, think it is far more important to
   create the "living forces" within our communities directly than waste
   energy in electioneering and the passing of laws creating or
   "legalising" community assemblies. In other words, community assemblies
   can only be created from the bottom up, by non-electoral means, a
   process which Libertarian Municipalism confuses with electioneering.

   So, while Libertarian Municipalism does raise many important issues and
   correctly stresses the importance of community activity and
   self-management, its emphasis on electoral activity undercuts its
   liberatory promise. For most anarchists, community assemblies can only
   be created from below, by direct action, and (because of its electoral
   strategy) a Libertarian Municipalist movement will end up being
   transformed into a copy of the system it aims to abolish.

J.5.15 What attitude do anarchists take to the welfare state?

   The period of neo-liberalism since the 1980s has seen a rollback of the
   state within society by the right-wing in the name of "freedom,"
   "individual responsibility" and "efficiency." The position of
   anarchists to this process is mixed. On the one hand, we are all in
   favour of reducing the size of the state and increasing individual
   responsibility and freedom but, on the other, we are well aware that
   this rollback is part of an attack on the working class and tends to
   increase the power of the capitalists over us as the state's (direct)
   influence is reduced. Thus anarchists appear to be on the horns of a
   dilemma -- or, at least, apparently.

   So what attitude do anarchists take to the welfare state and attacks on
   it?

   First we must note that this attack on "welfare" is somewhat selective.
   While using the rhetoric of "self-reliance" and "individualism," the
   practitioners of these "tough love" programmes have made sure that the
   major corporations continue to get state hand-outs and aid while
   attacking social welfare. In other words, the current attack on the
   welfare state is an attempt to impose market discipline on the working
   class while increasing state protection for the ruling class.
   Therefore, most anarchists have no problem defending social welfare
   programmes as these can be considered as only fair considering the aid
   the capitalist class has always received from the state (both direct
   subsidies and protection and indirect support via laws that protect
   property and so on). And, for all their talk of increasing individual
   choice, the right-wing remain silent about the lack of choice and
   individual freedom during working hours within capitalism.

   Secondly, most of the right-wing inspired attacks on the welfare state
   are inaccurate. For example, Noam Chomsky notes that the "correlation
   between welfare payments and family life is real, though it is the
   reverse of what is claimed [by the right]. As support for the poor has
   declined, unwed birth-rates, which had risen steadily from the 1940s
   through the mid-1970s, markedly increased. 'Over the last three
   decades, the rate of poverty among children almost perfectly correlates
   with the birth-rates among teenage mothers a decade later,' Mike Males
   points out: 'That is, child poverty seems to lead to teenage
   childbearing, not the other way around.'" ["Rollback III", Z Magazine,
   April, 1995] The same charge of inaccurate scare-mongering can be laid
   at the claims about the evil effects of welfare which the rich and
   large corporations wish to save others (but not themselves) from. Such
   altruism is truly heart warming. For those in the United States or
   familiar with it, the same can be said of the hysterical attacks on
   "socialised medicine" and health-care reform funded by insurance
   companies and parroted by right-wing ideologues and politicians.

   Thirdly, anarchists are just as opposed to capitalism as they are the
   state. This means that privatising state functions is no more
   libertarian than nationalising them. In fact, less so as such a process
   reduces the limited public say state control implies in favour of more
   private tyranny and wage-labour. As such, attempts to erode the welfare
   state without other, pro-working class, social reforms violates the
   anti-capitalist part of anarchism. Similarly, the introduction of a
   state supported welfare system rather than a for-profit capitalist run
   system (as in America) would hardly be considered any more a violation
   of libertarian principles as the reverse happening. In terms of
   reducing human suffering, though, most anarchists would oppose the
   latter and be in favour of the former while aiming to create a third
   (self-managed) alternative.

   Fourthly, we must note that while most anarchists are in favour of
   collective self-help and welfare, we are opposed to the state. Part of
   the alternatives anarchists try and create are self-managed and
   community welfare projects (see [31]next section). Moreover, in the
   past, anarchists and syndicalists were at the forefront in opposing
   state welfare schemes. This was because they were introduced not by
   socialists but by liberals and other supporters of capitalism to
   undercut support for radical alternatives and to aid long term economic
   development by creating the educated and healthy population required to
   use advanced technology and fight wars. Thus we find that:

     "Liberal social welfare legislation . . . were seen by many [British
     syndicalists] not as genuine welfare reforms, but as mechanisms of
     social control. Syndicalists took a leading part in resisting such
     legislation on the grounds that it would increase capitalist
     discipline over labour, thereby undermining working class
     independence and self-reliance." [Bob Holton, British Syndicalism:
     1900-1914, p. 137]

   Anarchists view the welfare state much as some feminists do. While they
   note, to quote Carole Pateman, the "patriarchal structure of the
   welfare state" they are also aware that it has "also brought challenges
   to patriarchal power and helped provide a basis for women's autonomous
   citizenship." She goes on to note that "for women to look at the
   welfare state is merely to exchange dependence on individual men for
   dependence on the state. The power and capriciousness of husbands is
   replaced by the arbitrariness, bureaucracy and power of the state, the
   very state that has upheld patriarchal power." This "will not in itself
   do anything to challenge patriarchal power relations." [The Disorder of
   Women, p. 195 and p. 200]

   Thus while the welfare state does give working people more options than
   having to take any job or put up with any conditions, this relative
   independence from the market and individual capitalists has came at the
   price of dependence on the state -- the very institution that protects
   and supports capitalism in the first place. And has we have became
   painfully aware in recent years, it is the ruling class who has most
   influence in the state -- and so, when it comes to deciding what state
   budgets to cut, social welfare ones are first in line. Given that such
   programmes are controlled by the state, not working class people, such
   an outcome is hardly surprising. Not only this, we also find that state
   control reproduces the same hierarchical structures that the capitalist
   firm creates.

   Unsurprisingly, anarchists have no great love of such state welfare
   schemes and desire their replacement by self-managed alternatives. For
   example, taking municipal housing, Colin Ward writes:

     "The municipal tenant is trapped in a syndrome of dependence and
     resentment, which is an accurate reflection of his housing
     situation. People care about what is theirs, what they can modify,
     alter, adapt to changing needs and improve themselves. They must
     have a direct responsibility for it . . . The tenant take-over of
     the municipal estate is one of those obviously sensible ideas which
     is dormant because our approach to municipal affairs is still stuck
     in the groves of nineteenth-century paternalism." [Anarchy in
     Action, p. 73]

   Looking at state supported education, Ward argues that the "universal
   education system turns out to be yet another way in which the poor
   subsidise the rich." Which is the least of its problems, for "it is in
   the nature of public authorities to run coercive and hierarchical
   institutions whose ultimate function is to perpetuate social inequality
   and to brainwash the young into the acceptance of their particular slot
   in the organised system." [Op. Cit., p. 83 and p. 81] The role of state
   education as a means of systematically indoctrinating the working class
   is reflected in William Lazonick's words:

     "The Education Act of 1870 . . . [gave the] state . . . the
     facilities . . . to make education compulsory for all children from
     the age of five to the age of ten. It had also erected a powerful
     system of ideological control over the next generation of workers .
     . . [It] was to function as a prime ideological mechanism in the
     attempt by the capitalist class through the medium of the state, to
     continually reproduce a labour force which would passively accept
     [the] subjection [of labour to the domination of capital]. At the
     same time it had set up a public institution which could potentially
     be used by the working class for just the contrary purpose." ["The
     Subjection of Labour to Capital: The rise of the Capitalist System",
     Radical Political Economy Vol. 2, p. 363]

   Lazonick, as did Pateman, indicates the contradictory nature of welfare
   provisions within capitalism. On the one hand, they are introduced to
   help control the working class (and to improve long term economic
   development). On the other hand, these provisions can be used by
   working class people as weapons against capitalism and give themselves
   more options than "work or starve" (the fact that the attacks on
   welfare in the UK during the 1990s -- called, ironically enough,
   welfare to work -- involves losing benefits if you refuse a job is not
   a surprising development). Thus we find that welfare acts as a kind of
   floor under wages. In the US, the two have followed a common trajectory
   (rising together and falling together). And it is this, the potential
   benefits welfare can have for working people, that is the real cause
   for the current capitalist attacks upon it. As Noam Chomsky summarises:

     "State authority is now under severe attack in the more democratic
     societies, but not because it conflicts with the libertarian vision.
     Rather the opposite: because it offers (weak) protection to some
     aspects of that vision. Governments have a fatal flaw: unlike the
     private tyrannies, the institutions of state power and authority
     offer to the public an opportunity to play some role, however
     limited, in managing their own affairs." [Chomsky on Anarchism, p.
     193]

   Because of this contradictory nature of welfare, we find anarchists
   like Noam Chomsky arguing that (using an expression popularised by
   South American rural workers unions) "we should 'expand the floor of
   the cage.' We know we're in a cage. We know we're trapped. We're going
   to expand the floor, meaning we will extend to the limits what the cage
   will allow. And we intend to destroy the cage. But not by attacking the
   cage when we're vulnerable, so they'll murder us . . . You have to
   protect the cage when it's under attack from even worse predators from
   outside, like private power. And you have to expand the floor of the
   cage, recognising that it's a cage. These are all preliminaries to
   dismantling it. Unless people are willing to tolerate that level of
   complexity, they're going to be of no use to people who are suffering
   and who need help, or, for that matter, to themselves." [Expanding the
   Floor of the Cage]

   Thus, even though we know the welfare state is a cage and part of an
   instrument of class power, we have to defend it from a worse
   possibility -- namely, the state as "pure" defender of capitalism with
   working people with few or no rights. At least the welfare state does
   have a contradictory nature, the tensions of which can be used to
   increase our options. And one of these options is its abolition from
   below!

   For example, with regards to municipal housing, anarchists will be the
   first to agree that it is paternalistic, bureaucratic and hardly a
   wonderful living experience. However, in stark contrast with the right
   who desire to privatise such estates, anarchists think that "tenants
   control" is the best solution as it gives us the benefits of individual
   ownership along with community (and so without the negative points of
   property, such as social atomisation). The demand for "tenant control"
   must come from below, by the "collective resistance" of the tenants
   themselves, perhaps as a result of struggles against "continuous rent
   increases" leading to "the demand . . . for a change in the status of
   the tenant." Such a "tenant take-over of the municipal estate is one of
   those sensible ideas which is dormant because our approach to municipal
   affairs is still stuck in the grooves of nineteenth century
   paternalism." [Ward, Op. Cit., p. 73]

   And it is here that we find the ultimate irony of the right-wing, "free
   market" attempts to abolish the welfare state -- neo-liberalism wants
   to end welfare from above, by means of the state (which is the
   instigator of this individualistic "reform"). It does not seek the end
   of dependency by self-liberation, but the shifting of dependency from
   state to charity and the market. In contrast, anarchists desire to
   abolish welfare from below. This the libertarian attitude to those
   government policies which actually do help people. While anarchists
   would "hesitate to condemn those measures taken by governments which
   obviously benefited the people, unless we saw the immediate possibility
   of people carrying them out for themselves. This would not inhibit us
   from declaring at the same time that what initiatives governments take
   would be more successfully taken by the people themselves if they put
   their minds to the same problems . . . to build up a hospital service
   or a transport system, for instance, from local needs into a national
   organisation, by agreement and consent at all levels is surely more
   economical as well as efficient than one which is conceived at top
   level [by the state] . . . where Treasury, political and other
   pressures, not necessarily connected with what we would describe as
   needs, influence the shaping of policies." So "as long as we have
   capitalism and government the job of anarchists is to fight both, and
   at the same time encourage people to take what steps they can to run
   their own lives." ["Anarchists and Voting", pp. 176-87, The Raven, No.
   14, p. 179]

   Ultimately, unlike the state socialist/liberal left, anarchists reject
   the idea that the cause of socialism, of a free society, can be helped
   by using the state. Like the right, the left see political action in
   terms of the state. All its favourite policies have been statist --
   state intervention in the economy, nationalisation, state welfare,
   state education and so on. Whatever the problem, the left see the
   solution as lying in the extension of the power of the state. They
   continually push people in relying on others to solve their problems
   for them. Moreover, such state-based "aid" does not get to the core of
   the problem. All it does is fight the symptoms of capitalism and
   statism without attacking their root causes -- the system itself.

   Invariably, this support for the state is a move away from working
   class people, from trusting and empowering them to sort out their own
   problems. Indeed, the left seem to forget that the state exists to
   defend the collective interests of the ruling class and so could hardly
   be considered a neutral body. And, worst of all, they have presented
   the right with the opportunity of stating that freedom from the state
   means the same thing as the freedom of the market (so ignoring the
   awkward fact that capitalism is based upon domination -- wage labour --
   and needs many repressive measures in order to exist and survive).
   Anarchists are of the opinion that changing the boss for the state (or
   vice versa) is only a step sideways, not forward! After all, it is not
   working people who control how the welfare state is run, it is
   politicians, "experts", bureaucrats and managers who do so ("Welfare is
   administered by a top-heavy governmental machine which ensures that
   when economies in public expenditure are imposed by its political
   masters, they are made in reducing the service to the public, not by
   reducing the cost of administration." [Ward, Op. Cit. p. 10]). Little
   wonder we have seen elements of the welfare state used as a weapon in
   the class war against those in struggle (for example, in Britain during
   the miners strike in 1980s the Conservative Government made it illegal
   to claim benefits while on strike, so reducing the funds available to
   workers in struggle and helping bosses force strikers back to work
   faster).

   Anarchists consider it far better to encourage those who suffer
   injustice to organise themselves and in that way they can change what
   they think is actually wrong, as opposed to what politicians and
   "experts" claim is wrong. If sometimes part of this struggle involves
   protecting aspects of the welfare state ("expanding the floor of the
   cage") so be it -- but we will never stop there and will use such
   struggles as a stepping stone in abolishing the welfare state from
   below by creating self-managed, working class, alternatives. As part of
   this process anarchists also seek to transform those aspects of the
   welfare state they may be trying to "protect". They do not defend an
   institution which is paternalistic, bureaucratic and unresponsive. For
   example, if we are involved in trying to stop a local state-run
   hospital or school from closing, anarchists would try to raise the
   issue of self-management and local community control into the struggle
   in the hope of going beyond the status quo.

   In this, we follow the suggestion made by Proudhon that rather than
   "fatten certain contractors," libertarians should be aiming to create
   "a new kind of property" by "granting the privilege of running" public
   utilities, industries and services, "under fixed conditions, to
   responsible companies, not of capitalists, but of workmen."
   Municipalities would take the initiative in setting up public works but
   actual control would rest with workers' co-operatives for "it becomes
   necessary for the workers to form themselves into democratic societies,
   with equal conditions for all members, on pain of a relapse into
   feudalism." Thus, for example, rather than nationalise or privatise
   railways, they should be handed over workers' co-operatives to run. The
   same with welfare services and such like: "the abolition of the State
   is the last term of a series, which consists of an incessant
   diminution, by political and administrative simplification the number
   of public functionaries and to put into the care of responsible workers
   societies the works and services confided to the state." [Property is
   Theft!, p. 25]

   Not only does this mean that we can get accustomed to managing our own
   affairs collectively, it also means that we can ensure that whatever
   "safety-nets" we have do what we want and not what capital wants. In
   the end, what we create and run by ourselves will be more responsive to
   our needs, and the needs of the class struggle, than reformist aspects
   of the capitalist state. This much, we think, is obvious. And it is
   ironic to see elements of the "radical" and "revolutionary" left argue
   against this working class self-help (and so ignore the long tradition
   of such activity in working class movements) and instead select for the
   agent of their protection a state run by and for capitalists!

   There are two traditions of welfare within society, one of "fraternal
   and autonomous associations springing from below, the other that of
   authoritarian institutions directed from above." [Ward, Op. Cit., p.
   123] While sometimes anarchists are forced to defend the latter against
   the greater evil of "free market" capitalism, we never forget the
   importance of creating and strengthening the former. As Chomsky
   suggests, libertarians have to "defend some state institutions from the
   attack against them [by private power], while trying at the same time
   to pry them open to meaningful public participation -- and ultimately,
   to dismantle them in a much more free society, if the appropriate
   circumstances can be achieved." [Chomsky on Anarchism, p. 194] A point
   we will discuss more in [32]the next section when we highlight the
   historical examples of self-managed communal welfare and self-help
   organisations.

J.5.16 Are there any historical examples of collective self-help?

   Yes, in all societies we see working class people joining together to
   practice mutual aid and solidarity. This takes many forms, such as
   trade and industrial unions, credit unions and friendly societies,
   co-operatives and so on, but the natural response of working class
   people to the injustices of capitalism was to practice collective
   "self-help" in order to improve their lives and protect their friends,
   communities and fellow workers.

   There are, as Colin Ward stresses, "in fact several quite separate
   traditions of social welfare: the product of totally different
   attitudes to social needs . . . One of these traditions is that of a
   service given grudgingly and punitively by authority, another is the
   expression of social responsibility, or of mutual aid and self-help.
   One is embodied in institutions, the other in associations." [Anarchy
   in Action, p. 112] Anarchists, needless to say, favour the latter.
   Unfortunately, this "great tradition of working class self-help and
   mutual aid was written off, not just as irrelevant, but as an actual
   impediment, by the political and professional architects of the welfare
   state . . . The contribution that the recipients had to make to all
   this theoretical bounty was ignored as a mere embarrassment -- apart,
   of course, for paying for it . . . The socialist ideal was rewritten as
   a world in which everyone was entitled to everything, but where nobody
   except the providers had any actual say about anything. We have been
   learning for years, in the anti-welfare backlash, what a vulnerable
   utopia that was." This self-managed working class self-help was the
   "welfare road we failed to take." [Ward, Social Policy: an anarchist
   response, p. 11-2 and p. 9]

   Anarchists would argue that self-help is the natural side effect of
   freedom. There is no possibility of radical social change unless people
   are free to decide for themselves what their problems are, where their
   interests lie and are free to organise for themselves what they want to
   do about them. Self-help is a natural expression of people taking
   control of their own lives and acting for themselves. Anyone who urges
   state action on behalf of people is no socialist and any one arguing
   against self-help as "bourgeois" is no anti-capitalist. It is somewhat
   ironic that it is the right who have monopolised the rhetoric of
   "self-help" and turned it into yet another ideological weapon against
   working class direct action and self-liberation (although, saying that,
   the right generally likes individualised self-help -- given a strike,
   squatting or any other form of collective self-help movement they will
   be the first to denounce it):

     "The political Left has, over the years, committed an enormous
     psychological error in allowing this kind of language ["self-help",
     "mutual aid", "standing on your own two feet" and so on] to be
     appropriated by the political Right. If you look at the exhibitions
     of trade union banners from the last century, you will see slogans
     like Self Help embroidered all over them. It was those clever
     Fabians and academic Marxists who ridiculed out of existence the
     values by which ordinary citizens govern their own lives in favour
     of bureaucratic paternalising, leaving those values around to be
     picked up by their political opponents." [Ward, Talking Houses, p.
     58]

   We cannot be expected to provide an extensive list of working class
   collective self-help and social welfare activity here, all we can do is
   present an overview of collective welfare in action (for a discussion
   of working class self-help and co-operation through the centuries we
   can suggest no better source than Kropotkin's Mutual Aid). In the case
   of Britain, we find that the "newly created working class built up from
   nothing a vast network of social and economic initiatives based on
   self-help and mutual aid. The list is endless: friendly societies,
   building societies, sick clubs, coffin clubs, clothing clubs, up to
   enormous federated enterprises like the trade union movement and the
   Co-operative movement." [Ward, Social Policy, pp. 10-1] The historian
   E.P. Thompson confirmed this picture of a wide network of working class
   self-help organisations. "Small tradesmen, artisans, labourers" he
   summarised, "all sought to insure themselves against sickness,
   unemployment, or funeral expenses through membership of . . . friendly
   societies." These were "authentic evidence of independent working-class
   culture and institutions . . . out of which . . . trade unions grew,
   and in which trade union officers were trained." Friendly societies
   "did not 'proceed from' an idea: both the ideas and institutions arose
   from a certain common experience . . . In the simple cellular structure
   of the friendly society, with its workaday ethos of mutual aid, we see
   many features which were reproduced in more sophisticated and complex
   form in trade unions, co-operatives, Hampden clubs, Political Unions,
   and Chartist lodges . . . Every kind of witness in the first half of
   the nineteenth century -- clergymen, factory inspectors, Radical
   publicists -- remarked upon the extent of mutual aid in the poorest
   districts. In times of emergency, unemployment, strikes, sickness,
   childbirth, then it was the poor who 'helped every one his neighbour.'"
   [The Making of the English Working Class, p. 458, pp. 460-1 and p. 462]
   Sam Dolgoff gave an excellent summary of similar self-help activities
   by the American working class:

     "Long before the labour movement got corrupted and the state stepped
     in, the workers organised a network of co-operative institutions of
     all kinds: schools, summer camps for children and adults, homes for
     the aged, health and cultural centres, credit associations, fire,
     life, and health insurance, technical education, housing, etc." [The
     American Labour Movement: A New Beginning, p. 74]

   Dolgoff, like all anarchists, urged workers to "finance the
   establishment of independent co-operative societies of all types, which
   will respond adequately to their needs" and that such a movement "could
   constitute a realistic alternative to the horrendous abuses of the
   'establishment' at a fraction of the cost." [Op. Cit., p. 74 and pp.
   74-75] In this way a network of self-managed, communal, welfare
   associations and co-operatives could be built -- paid for, run by and
   run for working class people. Such a system "would not . . . become a
   plaything of central government financial policy." [Ward, Op. Cit., p.
   16] Such a network could be initially build upon, and be an aspect of,
   the struggles of both workers in and claimants, patients, tenants, and
   other users of the current welfare state. So a "multiplicity of mutual
   aid organisations among claimants, patients, victims, represents the
   most potent lever for change in transforming the welfare state into a
   genuine welfare society, in turning community care into a caring
   community." [Ward, Anarchy in Action, p. 125]

   The creation of such a co-operative, community-based, welfare system
   will not occur over night, nor will it be easy. But it is possible, as
   history shows. It will, of course, have its problems, but as Colin Ward
   notes, "the standard argument against a localist and decentralised
   point of view, is that of universalism: an equal service to all
   citizens, which it is thought that central control achieves. The short
   answer to this is that it doesn't!" [Colin Ward, Social Policy, p. 16]
   He notes that richer areas generally get a better service from the
   welfare state than poorer ones, thus violating the claims of equal
   service. A centralised system (be it state or private) will most likely
   allocate resources which reflect the interests and (lack of) knowledge
   of bureaucrats and experts, not on where they are best used or the
   needs of the users.

   Anarchists are sure that a confederal network of mutual aid
   organisations and co-operatives, based upon local input and control,
   can overcome problems of localism far better than a centralised one --
   which, due to its lack of local input and participation will more
   likely encourage parochialism and indifference than a wider vision and
   solidarity. If you have no real say in what affects you, why should you
   be concerned with what affects others? This is unsurprising, for what
   else is global action other than the product of thousands of local
   actions? Solidarity within our class is the flower that grows from the
   soil of our local self-activity, direct action and self-organisation.
   Unless we act and organise locally, any wider organisation and action
   will be hollow. Thus local organisation and empowerment is essential to
   create and maintain wider organisations and mutual aid.

   To take another example of the benefits of a self-managed welfare
   system, we find that it "was a continual complaint of the authorities"
   in the late eighteenth and early nineteenth century "that friendly
   societies allowed members to withdraw funds when on strike." [Thompson,
   Op. Cit., p. 461f] The same complaints were voiced in Britain about the
   welfare state allowing strikers to claim benefit while on strike. The
   Conservative Government of the 1980s changed that by passing a law
   barring those in industrial dispute to claim benefits -- and so
   removing a potential support for those in struggle. Such a restriction
   would have been far harder (if not impossible) to impose on a network
   of self-managed mutual aid co-operatives. Such institutions would have
   not become the plaything of central government financial policy as the
   welfare state and the taxes working class people have to pay have
   become.

   All this means that anarchists reject the phoney choice between private
   and state capitalism we are usually offered. We reject both
   privatisation and nationalisation, both right and left wings (of
   capitalism). Neither state nor private health care are user-controlled
   -- one is subject to the requirements of politics and the other places
   profits before people. As we have discussed the welfare state in the
   [33]last section, it is worthwhile to quickly discuss privatised
   welfare and why anarchists reject this option even more than state
   welfare.

   Firstly, all forms of private healthcare/welfare have to pay dividends
   to capitalists, fund advertising, reduce costs to maximise profits by
   standardising the "caring" process - i.e. McDonaldisation - and so on,
   all of which inflates prices and produces substandard service across
   the industry as a whole. According to Alfie Kohn, "[m]ore hospitals and
   clinics are being run by for-profit corporations; many institutions,
   forced to battle for 'customers,' seem to value a skilled director of
   marketing more highly than a skilled caregiver. As in any other
   economic sector, the race for profits translates into pressure to
   reduce costs, and the easiest way to do it here is to cut back on
   services to unprofitable patients, that is, those who are more sick
   than rich . . . The result: hospital costs are actually higher in areas
   where there is more competition for patients." [No Contest, p. 240] In
   the UK, attempts to introduce "market forces" into the National Health
   Service has also lead to increased costs as well as inflating the size
   and cost of its bureaucracy.

   Looking at Chile, hyped by those who desire to privatise Social
   Security, we find similar disappointing results (well, disappointing
   for the working class at least, as we will see). Seemingly, Chile's
   private system has achieved impressive average returns on investment.
   However, once commissions are factored in, the real return for
   individual workers is considerably lower. For example, although the
   average rate of return on funds from 1982 through 1986 was 15.9
   percent, the real return after commissions was a mere 0.3 percent!
   Between 1991 and 1995, the pre-commission return was 12.9 percent, but
   with commissions it fell to 2.1 percent. According to Doug Henwood, the
   "competing mutual funds have vast sales forces, and the portfolio
   managers all have their vast fees. All in all, administrative costs . .
   . are almost 30% of revenues, compared to well under 1% for the U.S.
   Social Security system." [Wall Street, p. 305] In addition, the private
   pension fund market is dominated by a handful of companies.

   Even if commission costs were lowered (by regulation), the impressive
   returns on capital seen between 1982 and 1995 (when the real annual
   return on investment averaged 12.7 percent) are likely not to be
   sustained. These average returns coincided with boom years in Chile,
   complemented by government's high borrowing costs. Because of the debt
   crisis of the 1980s, Latin governments were paying double-digit real
   interest rates on their bonds -- the main investment vehicle of social
   security funds. In effect, government was subsidising the "private"
   system by paying astronomical rates on government bonds. Another
   failing of the system is that only a little over half of Chilean
   workers make regular social security contributions. While many believe
   that a private system would reduce evasion because workers have a
   greater incentive to contribute to their own personal retirement
   accounts, 43.4 percent of those affiliated with the new system in June
   of 1995 did not contribute regularly. [Stephen J. Kay, "The Chile Con:
   Privatizing Social Security in South America," The American Prospect
   no. 33, pp. 48-52] All in all, privatisation seems to be beneficial
   only to middle-men and capitalists, if Chile is anything to go by. As
   Henwood argues, while the "infusion of money" resulting from
   privatising social security "has done wonders for the Chilean stock
   market" "projections are that as many as half of future retirees will
   draw a poverty-level pension." [Henwood, Op. Cit., pp. 304-5]

   Suffice to say, all you really need to know about privatisation of
   pensions and healthcare in Chile is that the military dictatorship
   which imposed it excluded the military from its dubious benefits. Such
   altruism is truly touching.

   So, anarchists reject private welfare as a con (and an even bigger one
   than state welfare). As Colin Ward suggests, it "is the question of how
   we get back on the mutual aid road instead of commercial health
   insurance and private pension schemes." [Social Policy, p. 17] As
   anarchists are both anti-state and anti-capitalist, swapping private
   power for the state power is, at best, a step sideways. Usually, it is
   worse for capitalist companies are accountable only to their owners and
   the profit criteria. This means, as Chomsky suggests, "protecting the
   state sector today is a step towards abolishing the state because it
   maintains a public arena in which people can participate and organise,
   and affect policy, and so on, though in limited ways. If that's
   removed, we'd go back to a . . . private dictatorship, but that's
   hardly a step towards liberation." [ Chomsky on Anarchism, p. 213]
   Instead anarchists try to create real alternatives to hierarchy, be it
   state or capitalist, in the here and now which reflect our ideas of a
   free and just society. For, when it boils down to it, freedom cannot be
   given, only taken and this process of self-liberation is reflected in
   the alternatives we build to help win the class war.

   The struggle against capitalism and statism requires that we build for
   the future and, moreover, we should remember that "he who has no
   confidence in the creative capacity of the masses and in their
   capability to revolt doesn't belong in the revolutionary movement. He
   should go to a monastery and get on his knees and start praying.
   Because he is no revolutionist. He is a son of a bitch." [Sam Dolgoff,
   quoted by Ulrike Heider, Anarchism: left, right, and green, p. 12]
   [34] J.4 What trends in society aid anarchist activity? [35]up
   [36]J.6 What methods of child rearing do anarchists advocate? 

References

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   2. //usr/share/doc/anarchism/txt/secJ1.txt#secj14
   3. //usr/share/doc/anarchism/txt/secI5.txt
   4. //usr/share/doc/anarchism/txt/secJ5.txt#secj511
   5. //usr/share/doc/anarchism/txt/secJ5.txt#secj52
   6. //usr/share/doc/anarchism/txt/secJ5.txt#secj53
   7. //usr/share/doc/anarchism/txt/secJ5.txt#secj54
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  18. //usr/share/doc/anarchism/txt/secJ5.txt#secj511
  19. //usr/share/doc/anarchism/txt/secG3.txt#sech36
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  21. //usr/share/doc/anarchism/txt/secJ5.txt#secj511
  22. //usr/share/doc/anarchism/txt/secI3.txt#seci31
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  24. //usr/share/doc/anarchism/txt/secI3.txt#seci35
  25. //usr/share/doc/anarchism/txt/secF8.txt
  26. //usr/share/doc/anarchism/txt/secD10.txt
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  35. //afaq/secJcon.html
  36. //afaq/secJ6.html
