        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]

   By building the new world in the shell of the old, we help create the
   environment within which individuals can manage their own affairs and
   develop their abilities to do so. In other words, we create "schools of
   anarchism" which lay the foundations for a better society as well as
   promoting and supporting social struggle against the current system.
   Make no mistake, the alternatives we discuss in this section are not an
   alternative to direct action and the need for social struggle - they
   are an expression of social struggle and a form of direct action. They
   are the framework by which social struggle can build and strengthen the
   anarchist tendencies within capitalist society which will ultimately
   replace it.

   Therefore it is wrong to think that anarchists are indifferent to
   making life more bearable, even more enjoyable, under capitalism. A
   free society will not just appear from nowhere, it will be created be
   individuals and communities with a long history of social struggle and
   organisation. For as Wilheim Reich so correctly pointed out:

     "Quite obviously, a society that is to consist of 'free
     individuals,' to constitute a 'free community' and to administer
     itself, i.e. to 'govern itself,' cannot be suddenly created by
     decrees. It has to evolve organically." [The Mass Psychology of
     Fascism, p. 241]

   And it is this organic evolution that anarchists promote when they
   create anarchist alternatives within capitalist society. The
   alternatives anarchists create (be they workplace or community unions,
   co-operatives, mutual banks, and so on) are marked by certain common
   features such as being self-managed, being based upon equality and
   decentralisation and working with other groups and associations within
   a confederal network based upon mutual aid and solidarity. In other
   words, they are anarchist in both spirit and structure and so create a
   practical bridge between what is and what is possible.

   Therefore, anarchists consider the building of alternatives as a key
   aspect of their activity under capitalism. This is because they, like
   all forms of direct action, are "schools of anarchy" and also because
   they make the transition to a free society easier. "Through the
   organisations set up for the defence of their interests," in
   Malatesta's words, "the workers develop an awareness of the oppression
   they suffer and the antagonism that divides them from the bosses and as
   a result begin to aspire to a better life, become accustomed to
   collective struggle and solidarity and win those improvements that are
   possible within the capitalist and state regime." [The Anarchist
   Revolution, p. 95] By creating viable examples of "anarchy in action"
   we can show that our ideas are practical and convince people of
   anarchist ideas by "good examples." Therefore this section of the FAQ
   will indicate the alternatives anarchists support and why we support
   them.

   The approach anarchists take to this activity could be termed "social
   unionism" -- the collective action of groups to change certain aspects
   (and, ultimately, all aspects) of their lives. This "social unionism"
   takes many different forms in many different areas (some of which, not
   all, are discussed here) -- but they share the same basic aspects of
   collective direct action, self-organisation, self-management,
   solidarity and mutual aid. These "social unions" would be a means (like
   the old labour movement) "of raising the morale of the workers,
   accustom them to free initiative and solidarity in a struggle for the
   good of everyone and render them capable of imagining, desiring and
   putting into practice an anarchist life." [Errico Malatesta, The
   Anarchist Revolution, p. 28]

   As will quickly become obvious in this discussion (as if it had not
   been so before!) anarchists are firm supporters of "self-help," an
   expression that has been sadly corrupted (like freedom) by the right in
   recent times. Like "freedom", "self-help" should be saved from the
   clutches of the right who have no real claim to that expression.
   Indeed, anarchism was created from and based itself upon working class
   self-help -- for what other interpretation can be gathered from the
   famous slogan of the First International that "the emancipation of the
   working class must be the task of the working class itself"? So,
   Anarchists have great faith in the abilities of working class people to
   work out for themselves what their problems are and act to solve them.

   Anarchist support, and promotion, of alternatives is a key aspect of
   this process of self-liberation, and so a key aspect of anarchism.
   While strikes, boycotts, and other forms of high profile direct action
   may be more sexy than the long and hard task of creating and building
   social alternatives, these are the nuts and bolts of creating a new
   world as well as the infrastructure which supports the "high profile"
   activities. Hence the importance of highlighting the alternatives
   anarchists support and build. The alternatives we discuss here is part
   of the process of building the new world in the shell of the old -- and
   involve both combative organisations (such as community and workplace
   unions) as well as more defensive/supportive ones (such as
   co-operatives and mutual banks). Both have their part to play in the
   class struggle, although the combative ones are the most important in
   creating the spirit of revolt and the possibility of creating an
   anarchist society (which will be reflected in the growth of supportive
   organisations to aid that struggle).

   We must also stress that anarchists look to "natural" tendencies within
   social struggle as the basis of any alternatives we try to create. As
   Kropotkin put it, anarchism is based "on an analysis of tendencies of
   an evolution that is already going on in society, and on induction
   thereform as to the future." It is "representative . . . of the
   creative, instructive power of the people themselves who aimed at
   developing institutions of common law in order to protect them from the
   power-seeking minority." In other words, anarchism bases itself on
   those tendencies that are created by the self-activity of working class
   people and while developing within capitalism are in opposition to it
   -- such tendencies are expressed in organisational form as trade unions
   and other forms of workplace struggle, cooperatives (both productive
   and credit), libertarian schools, and so on. For anarchists, anarchism
   is "born among the people - in the struggles of real life and not in
   the philosopher's studio" and owes its "origin to the constructive,
   creative activity of the people . . . and to a protest - a revolt
   against the external force which hd thrust itself upon [communal] . . .
   institutions." [Kropotkin's Revolutionary Pamphlets, p. 158, p. 147, p.
   150, p. 149] This "creative activity" is expressed in the organisations
   created in the class struggle by working people, some of which we
   discuss in this section of the FAQ. Therefore, the alternatives
   anarchists support should not be viewed in isolation of social struggle
   and working class resistance to hierarchy - the reverse in fact, as
   these alternatives are almost always expressions of that struggle.

   Lastly, we should note that this list of alternatives does not list all
   the forms of organisation anarchists create. For example, we have
   ignored solidarity groups and organisations which are created to
   campaign against or for certain issues or reforms. Anarchists are in
   favour of such organisations and work within them to spread anarchist
   ideas, tactics and organisational forms. However, these interest groups
   (while very useful) do not provide a framework for lasting change as do
   the ones we highlight below although we stress that anarchists do not
   ignore such organisations and struggles (see sections [1]J.1.4 and
   [2]J.1.5 for more details on anarchist opinions on such "single issue"
   campaigns).

   We have also ignored what have been called "intentional communities".
   This is when a group of individuals squat or buy land and other
   resources within capitalism and create their own anarchist commune in
   it. Most anarchists reject this idea as capitalism and the state must
   be fought, not ignored. In addition, due to their small size, they are
   rarely viable experiments in communal living and nearly always fail
   after a short time (for a good summary of Kropotkin's attitude to such
   communities, which can be taken as typical, to such schemes see Graham
   Purchase's book Evolution & Revolution, pp. 122-125). Dropping out will
   not stop capitalism and the state and while such communities may try to
   ignore the system, they will find that the system will not ignore them
   -- they will come under competitive and ecological pressures from
   capitalism whether they like it or not.

   Therefore the alternatives we discuss here are attempts to create
   anarchist alternatives within capitalism and which aim to change it
   (either by revolutionary or evolutionary means). They are based upon
   challenging capitalism and the state, not ignoring them by dropping
   out. Only by a process of direct action and building alternatives which
   are relevant to our daily lives can we revolutionise and change both
   ourselves and society.

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 state.

   Basically, a community union is the creation of interested members of a
   community who decide to form an organisation to fight against injustice
   in their local community and for improvements within it. It is a forum
   by which inhabitants can raise issues that affect themselves and others
   and provide a means of solving these problems. As such, it is a means
   of directly involving local people in the life of their own communities
   and collectively solving the problems facing them as both individuals
   and as part of a wider society. Politics, therefore, is not separated
   into a specialised activity that only certain people do (i.e.
   politicians). Instead, it becomes communalised and part of everyday
   life and in the hands of all.

   As would be imagined, like the participatory communities that would
   exist in an anarchist society, the community union would be based upon
   a mass assembly of its members. Here would be discussed the issues that
   effect the membership and how to solve them. Like the communes of a
   future anarchy, these community unions would be confederated with other
   unions in different areas in order to co-ordinate joint activity and
   solve common problems. These confederations, like the basic union
   assemblies themselves, would be based upon direct democracy, mandated
   delegates and the creation of administrative action committees to see
   that the memberships decisions are carried out.

   The community union could also raise funds for strikes and other social
   protests, organise pickets and boycotts and generally aid others in
   struggle. By organising their own forms of direct action (such as tax
   and rent strikes, environmental protests and so on) they can weaken the
   state while building an self-managed infrastructure of co-operatives to
   replace the useful functions the state or capitalist firms currently
   provide.

   So, in addition to organising resistance to the state and capitalist
   firms, these community unions could play an important role in creating
   an alternative economy within capitalism. For example, such unions
   could have a mutual bank or credit union associated with them which
   could allow funds to be gathered for the creation of self-managed
   co-operatives and social services and centres. In this way a
   communalised co-operative sector could develop, along with a communal
   confederation of community unions and their co-operative banks.

   Such community unions have been formed in many different countries in
   recent years to fight against particularly evil attacks on the working
   class. In Britain, groups were created in neighbourhoods across the
   country to organise non-payment of the conservative government's
   community charge (popularly known as the poll tax). Federations of
   these groups and unions were created to co-ordinate the struggle and
   pull resources and, in the end, ensured that the government withdrew
   the hated tax and helped push Thatcher out of government. In Ireland,
   similar groups were formed to defeat the privatisation of the water
   industry by a similar non-payment campaign.

   However, few of these groups have been taken as part of a wider
   strategy to empower the local community but the few that have indicate
   the potential of such a strategy. This potential can be seen from two
   examples of community organising in Europe, one in Italy and another in
   Spain.

   In Italy, anarchists have organised a very successful Municipal
   Federation of the Base (FMB) in Spezzano Albanese (in the South of that
   country). This organisation is "an alternative to the power of the town
   hall" and provides a "glimpse of what a future libertarian society
   could be" (in the words of one activist). The aim of the Federation is
   "the bringing together of all interests within the district. In
   intervening at a municipal level, we become involved not only in the
   world of work but also the life of the community. . . the FMB make
   counter proposals [to Town Hall decisions], which aren't presented to
   the Council but proposed for discussion in the area to raise people's
   level of consciousness. Whether they like it or not the Town Hall is
   obliged to take account of these proposals." ["Community Organising in
   Southern Italy", pp. 16-19, Black Flag no. 210, p. 17, p. 18]

   In this way, local people take part in deciding what effects them and
   their community and create a self-managed "dual power" to the local,
   and national, state. They also, by taking part in self-managed
   community assemblies, develop their ability to participate and manage
   their own affairs, so showing that the state is unnecessary and harmful
   to their interests. In addition, the FMB also supports co-operatives
   within it, so creating a communalised, self-managed economic sector
   within capitalism. Such a development helps to reduce the problems
   facing isolated co-operatives in a capitalist economy -- see section
   [3]J.5.11 -- and was actively done in order to "seek to bring together
   all the currents, all the problems and contradictions, to seek
   solutions" to such problems facing co-operatives [Ibid.].

   Elsewhere in Europe, the long, hard work of the C.N.T. in Spain has
   also resulted in mass village assemblies being created in the Puerto
   Real area, near Cadiz. These community assemblies came about to support
   an industrial struggle by shipyard workers. As one C.N.T. member
   explains, "[e]very Thursday of every week, in the towns and villages in
   the area, we had all-village assemblies where anyone connected with the
   particular issue [of the rationalisation of the shipyards], whether
   they were actually workers in the shipyard itself, or women or children
   or grandparents, could go along. . . and actually vote and take part in
   the decision making process of what was going to take place."
   [Anarcho-Syndicalism in Puerto Real: from shipyard resistance to direct
   democracy and community control, p. 6]

   With such popular input and support, the shipyard workers won their
   struggle. However, the assembly continued after the strike and "managed
   to link together twelve different organisations within the local area
   that are all interested in fighting. . . various aspects [of
   capitalism]" including health, taxation, economic, ecological and
   cultural issues. Moreover, the struggle "created a structure which was
   very different from the kind of structure of political parties, where
   the decisions are made at the top and they filter down. What we managed
   to do in Puerto Real was make decisions at the base and take them
   upwards." [Ibid.]

   In these ways, a grassroots movement from below has been created, with
   direct democracy and participation becoming an inherent part of a local
   political culture of resistance, with people deciding things for
   themselves directly and without hierarchy. Such developments are the
   embryonic structures of a world based around direct democracy and
   participation, with a strong and dynamic community life. For, as Martin
   Buber argued, "[t]he more a human group lets itself be represented in
   the management of its common affairs. . . the less communal life there
   is in it and the more impoverished it becomes as a community." [Paths
   in Utopia, p. 133]

   Anarchist support and encouragement of community unionism, by creating
   the means for communal self-management, helps to enrich the community
   as well as creating the organisational forms required to resist the
   state and capitalism. In this way we build the anti-state which will
   (hopefully) replace the state. Moreover, the combination of community
   unionism with workplace assemblies (as in Puerto Real), provides a
   mutual support network which can be very effective in helping winning
   struggles. For example, in Glasgow, Scotland in 1916, a massive rent
   strike was finally won when workers came out in strike in support of
   the rent strikers who been arrested for non-payment.

   Such developments indicate that Isaac Puente was correct to argue that:

     "Libertarian Communism is a society organised without the state and
     without private ownership. And there is no need to invent anything
     or conjure up some new organization for the purpose. The centres
     about which life in the future will be organised are already with us
     in the society of today: the free union and the free municipality
     [or Commune].

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

     "And the free municipality: an assembly with roots stretching back
     into the past where, again in spontaneity, inhabitants of village
     and hamlet combine together, and which points the way to the
     solution of problems in social life in the countryside.

     "Both kinds of organisation, run on federal and democratic
     principles, will be soveriegn in their decision making, without
     being beholden to any higher body, their only obligation being to
     federate one with another as dictated by the economic requirement
     for liaison and communications bodies organised in industrial
     federations.

     "The union and the free municipality will assume the collective or
     common ownership of everything which is under private ownership at
     present [but collectively used] and will regulate production and
     consumption (in a word, the economy) in each locality.

     "The very bringing together of the two terms (communism and
     libertarian) is indicative in itself of the fusion of two ideas: one
     of them is collectivist, tending to bring about harmony in the whole
     through the contributions and cooperation of individuals, without
     undermining their independence in any way; while the other is
     individualist, seeking to reassure the individual that his
     independence will be respected."
     [Libertarian Communism, pp. 6-7]

   The combination of community unionism, along with industrial unionism
   (see [4]next section), will be the key of creating an anarchist
   society, Community unionism, by creating the free commune within the
   state, allows us to become accustomed to managing our own affairs and
   seeing that an injury to one is an injury to all. In this way a social
   power is created in opposition to the state. The town council may still
   be in the hands of politicians, but neither they nor the central
   government can move without worrying about what the people's reaction
   might be, as expressed and organised in their community unions and
   assemblies.

J.5.2 Why do anarchists support industrial unionism?

   Simply because it is effective, expresses our ideas on how industry
   will be organised in an anarchist society and is a key means of ending
   capitalist oppression and exploitation. As Max Stirner pointed out the
   "labourers have the most enormous power in their hands, and, if they
   once become thoroughly conscious of it and used it, nothing could
   withstand them; they would only have to stop labour, regard the product
   of labour as theirs, and enjoy it. This is the sense of the labour
   disturbances which show themselves here and there." [The Ego and Its
   Own, p. 116]

   Libertarian workplace organisation is the best way of organising and
   exercising this power. However, before discussing why anarchists
   support industrial unionism, we must point out that the type of
   unionism anarchists support has very little in common with that
   associated with reformist or business unions like the TUC in Britain or
   the AFL-CIO in the USA (see [5]next section).

   In such unions, as Alexander Berkman points out, the "rank and file
   have little say. They have delegated their power to leaders, and these
   have become the boss. . . Once you do that, the power you have
   delegated will be used against you and your interests every time." [The
   ABC of Anarchism, p. 58] Reformist unions, even if they do organise by
   industry rather than by trade or craft, are top-heavy and bureaucratic.
   Thus they are organised in the same manner as capitalist firms or the
   state -- and like both of these, the officials at the top have
   different interests than those at the bottom. Little wonder anarchists
   oppose such forms of unionism as being counter to the interests of
   their members. The long history of union officials betraying their
   members is proof enough of this.

   Therefore anarchists propose a different kind of workplace
   organisation, one that is organised in a totally different manner than
   the current, mainstream, unions. We will call this new kind of
   organisation "industrial unionism" (although perhaps industrial
   syndicalism or workplace assemblies may be a better, less confusing,
   name for it).

   Industrial unionism is based upon the idea that workers should directly
   control their own organisations and struggles. As such, it is based
   upon workplace assemblies and their confederation between different
   workplaces in the same industry as well as between different workplaces
   in the same locality. An industrial union is a union which organises
   all workers in a given type of industry together into one body. This
   means that all workers regardless of their actual trade would ideally
   be in the one union. On a building site, for example, brick-layers,
   plumbers, carpenters and so on would all be a member of the Building
   Workers Union. Each trade may have its own sections within the union
   (so that plumbers can discuss issues relating to their trade for
   example) but the core decision making focus would be an assembly of all
   workers employed in a workplace. As they all have the same boss it is
   logical for them to have the same union.

   However, industrial unionism should not be confused with a closed shop
   situation where workers are forced to join a union when they become a
   wage slave in a workplace. While anarchists do desire to see all
   workers unite in one organisation, it is vitally important that workers
   can leave a union and join another. The closed shop only empowers union
   bureaucrats and gives them even more power to control (and/or ignore)
   their members. As anarchist unionism has no bureaucrats, there is no
   need for the closed shop and its voluntary nature is essential in order
   to ensure that a union be subject to "exit" as well as "voice" for it
   to be responsive to its members wishes.

   As Albert Meltzer argues, the closed shop means that "the [trade union]
   leadership becomes all-powerful since once it exerts its right to expel
   a member, that person is not only out of the union, but out of a job."
   Anarcho-syndicalism, therefore, "rejects the closed shop and relies on
   voluntary membership, and so avoids any leadership or bureaucracy."
   [Anarchism: Arguments for and against, p. 56 -- also see Tom Wetzel's
   excellent article "The Origins of the Union Shop", part 3 of the series
   "Why does the union bureaucracy exist?" in Ideas & Action no. 11, Fall
   1989 for a fuller discussion of these issues] Without voluntary
   membership even the most libertarian union may become bureaucratic and
   unresponsive to the needs of its members and the class struggle (even
   anarcho-syndicalist unions are subject to hierarchical influences by
   having to work within the hierarchical capitalist economy although
   voluntary membership, along with a libertarian structure and tactics,
   helps combat these tendencies -- see section [6]J.3.9).

   Obviously this means that anarchist opposition to the closed shop has
   nothing in common with boss, conservative and right-wing libertarian
   opposition to it. These groups, while denouncing coercing workers into
   trades unions, support the coercive power of bosses over workers
   without a second thought (indeed, given their justifications of sexual
   harassment and other forms of oppressive behaviour by bosses, we can
   imagine that they would happily support workers having to join company
   unions to keep their jobs -- only when bosses dislike mandatory union
   membership do these defenders of "freedom" raise their opposition).
   Anarchist opposition to the closed shop (like their opposition to union
   bureaucracy) flows from their opposition to hierarchy and authoritarian
   social relationships. The right-wing's opposition is purely a product
   of their pro-capitalist and pro-authority position and the desire to
   see the worker subject only to one boss during working hours, not two
   (particularly if this second one has to represent workers interests to
   some degree). Anarchists, on the other hand, want to get rid of all
   bosses during working hours.

   In industrial unionism, the membership, assembled in their place of
   work, are the ones to decide when to strike, when to pay strike pay,
   what tactics to use, what demands to make, what issues to fight over
   and whether an action is "official" or "unofficial". In this way the
   rank and file is in control of their unions and, by confederating with
   other assemblies, they co-ordinate their forces with their fellow
   workers. As syndicalist activist Tom Brown makes clear:

     "The basis of the Syndicate is the mass meeting of workers assembled
     at their place of work. . . The meeting elects its factory committee
     and delegates. The factory is Syndicate is federated to all other
     such committees in the locality. . . In the other direction, the
     factory, let us say engineering factory, is affiliated to the
     District Federation of Engineers. In turn the District Federation is
     affiliated to the National Federation of Engineers. . . Then, each
     industrial federation is affiliated to the National Federation of
     Labour . . . how the members of such committees are elected is most
     important. They are, first of all, not representatives like Members
     of Parliament who air their own views; they are delegates who carry
     the message of the workers who elect them. They do not tell the
     workers what the 'official' policy is; the workers tell them.

     "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]

   As can be seen, industrial unionism reflects anarchist ideas of
   organisation - it is organised from the bottom up, it is decentralised
   and based upon federation and it is directly managed by its members in
   mass assemblies. It is anarchism applied to industry and the needs of
   the class struggle. By supporting such forms of organisations,
   anarchists are not only seeing "anarchy in action", they are forming
   effective tools which can win the class war. By organising in this
   manner, workers are building the framework of a co-operative society
   within capitalism. Rudolf Rocker makes this clear:

     "the syndicate. . . has for its purpose the defence of the interests
     of the producers within existing society and the preparing for and
     the practical carrying out of the reconstruction of social life . .
     . It has, therefore, a double purpose: 1. As the fighting
     organisation of the workers against their employers to enforce the
     demand of the workers for the safeguarding of their standard of
     living; 2. As the school for the intellectual training of the
     workers to make them acquainted with the technical management of
     production and economic life in general." [Anarcho-Syndicalism, p.
     51]

   Given the fact that workers wages have been stagnating (or, at best,
   falling behind productivity increases) across the world as the trade
   unions have been weakened and marginalised (partly because of their own
   tactics, structure and politics) it is clear that there exists a great
   need for working people to organise to defend themselves. The
   centralised, top-down trade unions we are accustomed to have proved
   themselves incapable of effective struggle (and, indeed, the number of
   times they have sabotaged such struggle are countless - a result not of
   "bad" leaders but of the way these unions organise and their role
   within capitalism). Hence anarchists support industrial unionism
   (co-operation between workers assemblies) as an effective alternative
   to the malaise of official trade unionism. How anarchists aim to
   encourage such new forms of workplace organisation and struggle will be
   discussed in the [7]next section.

   We are sure that many radicals will consider that such decentralised,
   confederal organisations would produce confusion and disunity. However,
   anarchists maintain that the statist, centralised form of organisation
   of the trades unions would produce indifference instead of involvement,
   heartlessness instead of solidarity, uniformity instead of unity, and
   elites instead of equality, nevermind killing all personal initiative
   by lifeless discipline and bureaucratic ossification and permitting no
   independent action. The old form of organisation has been tried and
   tried again - it has always failed. The sooner workers recognise this
   the better.

   One last point. We must note that many anarchists, particularly
   communist-anarchists, consider unions, even anarchosyndicalist ones, as
   having a strong reformist tendency (as discussed in section [8]J.3.9).
   However, all anarchists recognise the importance of autonomous class
   struggle and the need for organisations to help fight that struggle.
   Thus anarchist-communists, instead of trying to organise industrial
   unions, apply the ideas of industrial unionism to workplace struggles.
   In other words, they would agree with the need to organise all workers
   into a mass assembly and to have elected, recallable administration
   committees to carry out the strikers wishes. This means that such
   anarchists they do not call their practical ideas "anarcho-syndicalism"
   nor the workplace assemblies they desire to create "unions," there are
   extremely similar in nature and so we can discuss both using the term
   "industrial unionism". The key difference is that many (if not most)
   anarcho-communists consider that permanent workplace organisations that
   aim to organise all workers would soon become reformist. Because of
   this they also see the need for anarchist to organise as anarchists in
   order to spread the anarchist message within them and keep their
   revolutionary aspects at the forefront (and so support industrial
   networks -- see [9]next section).

   Therefore while there are slight differences in terminology and
   practice, all anarchists would support the ideas of industrial unionism
   we have outlined above.

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

   As noted in the [10]last section, anarchists desire to create
   organisations in the workplace radically different from the existing
   trade unions. The question now arises, what attitude do anarchists
   generally take to these existing unions?

   Before answering that question, we must stress that anarchists, no
   matter how hostile to trade unions as bureaucratic, reformist
   institutions, are in favour of working class struggle. This means that
   when trade union members or other workers are on strike anarchists will
   support them (unless the strike is totally reactionary -- for example,
   no anarchist would support a strike which is racist in nature). This is
   because almost all anarchists consider it basic to their politics that
   you don't scab and you don't crawl (a handful of individualist
   anarchists are the exception). So, when reading anarchist criticisms of
   trade unions do not for an instant think we do not support industrial
   struggles -- we do, we are just very critical of the unions that are
   sometimes involved.

   So, what do anarchists think of the trade unions?

   For the most part, one could call the typical anarchist opinion toward
   them as one of "hostile support." It is hostile insofar as anarchists
   are well aware of how bureaucratic these unions are and how they
   continually betray their members. Given that they are usually little
   more than "business" organisations, trying to sell their members
   labour-power for the best deal possible, it is unsurprising that they
   are bureaucratic and that the interests of the bureaucracy are at odds
   with those of its membership. However, our attitude is "supportive" in
   that even the worse trade union represents an attempt at working class
   solidarity and self-help, even if the attempt is now far removed from
   the initial protests and ideas that set the union up. For a worker to
   join a trade union means having to recognise, to some degree, that he
   or she has different interests from their boss. There is no way to
   explain the survival of the unions other than the fact that there are
   different class interests, and workers have understood that to promote
   their own interests they have to organise on class lines.

   No amount of conservatism, bureaucracy or backwardness within the
   unions can obliterate the essential fact of different class interests.
   The very existence of trade unions testifies to the existence of some
   level of basic class consciousness -- even though most trade unions
   claim otherwise and that capital and labour have interests in common.
   As we have argued, anarchists reject this claim with good reason, and
   the very existence of trade unions show that this is not true. If
   workers and capitalists have the same interests, trade unions would not
   exist. Moreover, claiming that the interests of workers and bosses are
   the same theoretically disarms both the unions and its members and so
   weakens their struggles (after all, if bosses and workers have similar
   interests then any conflict is bad and the decisions of the boss must
   be in workers' interests!).

   Thus anarchist viewpoints reflect the contradictory nature of
   business/trade unions -- on the one hand they are products of workers'
   struggle, but on the other they are very bureaucratic, unresponsive and
   centralised and (therefore) their full-time officials have no real
   interest in fighting against wage labour as it would put them out of a
   job. Indeed, the very nature of trade unionism ensures that the
   interests of the union (i.e. the full-time officials) come into
   conflict with the people they claim to represent.

   This can best be seen from the disgraceful activities of the TGWU with
   respect to the Liverpool dockers in Britain. The union officials (and
   the TUC itself) refused to support their members after they had been
   sacked in 1995 for refusing to cross a picket line. The dockers
   organised their own struggle, contacting dockers' unions across the
   world and organising global solidarity actions. Moreover, a network of
   support groups sprung up across Britain to gather funds for their
   struggle (and, we are proud to note, anarchists have played their role
   in supporting the strikers). Many trade unionists could tell similar
   stories of betrayal by "their" union.

   This occurs because trade unions, in order to get recognition from a
   company, must be able to promise industrial pieces. They need to
   enforce the contracts they sign with the bosses, even if this goes
   against the will of its members. Thus trade unions become a third force
   in industry, somewhere between management and the workers and pursuing
   its own interests. This need to enforce contracts soon ensures that the
   union becomes top-down and centralised -- otherwise its members would
   violate the unions agreements. They have to be able to control their
   members - which usually means stopping them fighting the boss - if they
   are to have anything to bargain with at the negotiation table. This may
   sound odd, but the point is that the union official has to sell the
   employer labour discipline and freedom from unofficial strikes as part
   of its side of the bargain. Otherwise the employer will ignore them.
   The nature of trade unionism is to take power away from out of local
   members and centralise it into the hands of officials at the top of the
   organisation.

   Thus union officials sell out their members because of the role trade
   unions play within society, not because they are nasty individuals
   (although some are). They behave as they do because they have too much
   power and, being full-time and highly paid, are unaccountable, in any
   real way, to their members. Power -- and wealth -- corrupts, no matter
   who you are. (also see Chapter 11 of Alexander Berkman's What is
   Communist Anarchism? for an excellent introduction to anarchist
   viewpoints on trade unions).

   While, in normal times, most workers will not really question the
   nature of the trade union bureaucracy, this changes when workers face
   some threat. Then they are brought face to face with the fact that the
   trade union has interests separate from theirs. Hence we see trade
   unions agreeing to wage cuts, redundancies and so on -- after all, the
   full-time trade union official's job is not on the line! But, of
   course, while such a policy is in the short term interests of the
   officials, in the longer term it goes against their interests -- after
   all, who wants to join a union which rolls over and presents no
   effective resistance to employers? Little wonder Michael Moore has a
   chapter entitled "Why are Union Leaders So F#!@ing Stupid?" in his book
   Downsize This! -- essential reading to realise how moronic trade union
   bureaucrats can actually be. Sadly trade union bureaucracy seems to
   afflict all who enter it with short-sightedness, as seen by the
   countless times the trade unions have sold-out their members --
   although the chickens do, finally, come home to roost, as the
   bureaucrats of the AFL, TUC and other trade unions are finding out in
   this era of global capital and falling membership. So while the
   activities of trade union leaders may seem crazy and short-sighted,
   these activities are forced upon them by their position and role within
   society -- which explains why they are so commonplace and why even
   radical leaders end up doing exactly the same thing in time.

   Few anarchists would call upon members of a trade union to tear-up
   their membership cards. While some anarchists, particularly communist
   anarchists and some anarcho-syndicalists have nothing but contempt (and
   rightly so) for trade unions (and so do not work within them -- but
   will support trade union members in struggle), the majority of
   anarchists take a more pragmatic viewpoint. If no alternative
   syndicalist union exists, anarchists will work within the existing
   unions (perhaps becoming shop-stewards -- few anarchists would agree to
   be elected to positions above this in any trade union, particularly if
   the post was full-time), spreading the anarchist message and trying to
   create a libertarian undercurrent which would hopefully blossom into a
   more anarchistic labour movement.

   So most anarchists "support" the trade unions only until they have
   created a viable libertarian alternative. Thus we will become trade
   union members while trying to spread anarchist ideas within and outwith
   them. This means that anarchists are flexible in terms of their
   activity in the unions. For example, many IWW members were
   "two-carders." This meant that as well as being members of the IWW,
   they were also in the local AFL branch in their place of work and
   turned to the IWW when the AFL hierarchy refused to back strikes or
   other forms of direct action. Anarchists encourage rank and file
   self-activity, not endless calls for trade union bureaucrats to act for
   us (as is unfortunately far too common on the left).

   Anarchist activity within trade unions reflects our ideas on hierarchy
   and its corrupting effects. We reject totally the response of left-wing
   social democrats, Stalinists and mainstream Trotskyists to the problem
   of trade union betrayal, which is to try and elect and/or appoint
   'better' officials. They see the problem primarily in terms of the
   individuals who hold the posts. However this ignores the fact that
   individuals are shaped by the environment they live in and the role
   they play in society. Thus even the most left-wing and progressive
   individual will become a bureaucrat if they are placed within a
   bureaucracy -- and we must note that the problem of corruption does not
   spring from the high-wages officials are paid (although this is a
   factor), but from the power they have over their members (which partly
   expresses itself in high pay).

   Any claim that electing "radical" full-time officials who refuse to
   take the high wages associated with the position will be better is
   false. The hierarchical nature of the trade union structure has to be
   changed, not side-effects of it. As the left has no problem with
   hierarchy as such, this explains why they support this form of
   "reform." They do not actually want to undercut whatever dependency the
   members has on leadership, they want to replace the leaders with
   "better" ones (i.e. themselves or members of their party) and so
   endlessly call upon the trade union bureaucracy to act for its members.
   In this way, they hope, trade unionists will see the need to support a
   "better" leadership -- namely themselves. Anarchists, in stark
   contrast, think that the problem is not that the leadership of the
   trade unions is weak, right-wing or does not act but that the union's
   membership follows them. Thus anarchists aim at undercutting reliance
   on leaders (be they left or right) by encouraging self-activity by the
   rank and file and awareness that hierarchical leadership as such is
   bad, not individual leaders.

   Instead of "reform" from above (which is doomed to failure), anarchists
   work at the bottom and attempt to empower the rank and file of the
   trade unions. It is self-evident that the more power, initiative and
   control that lies with the rank & file membership on the shop floor,
   the less it will lie with the bureaucracy. Thus anarchists work within
   and outwith the trade unions in order to increase the power of workers
   where it actually lies: at the point of production. This is usually
   done by creating networks of activists who spread anarchist ideas to
   their fellow workers (see next section -- [11]"What are Industrial
   Networks?").

   These groups "within the unions should strive to ensure that they [the
   trade unions] remain open to all workers of whatever opinion or party
   on the sole condition that there is solidarity in the struggle against
   the bosses. They should oppose the corporatist spirit and any attempt
   to monopolise labour or organisation. They should prevent the Unions
   from becoming the tools of the politicians for electoral or other
   authoritarian ends; they should preach and practice direct action,
   decentralisation, autonomy and free initiative. They should strive to
   help members learn how to participate directly in the life of the
   organisation and to do without leaders and permanent officials.

   "They must, in short, remain anarchists, remain always in close touch
   with anarchists and remember that the workers' organisation is not the
   end but just one of the means, however important, of preparing the way
   for the achievement of anarchism."
   [Errico Malatesta, The Anarchist Revolution, pp. 26-27]

   As part of this activity anarchists promote the ideas of Industrial
   Unionism we highlighted in the [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." [Errico Malatesta, Life and
   Ideas, p, 115] Thus, as well as encouraging worker self-organisation
   and self-activity, anarchist groups also seek to politicise struggles
   and those involved in them. Only this process of self-activity and
   political discussion between equals within social struggles can ensure
   the process of working class self-liberation and the creation of new,
   more libertarian, forms of workplace organisation.

   The result of such activity may be a new form of workplace organisation
   (either workplace assemblies or an anarcho-syndicalist union) or a
   reformed, more democratic version of the existing trade union (although
   few anarchists believe that the current trade unions can be reformed).
   But either way, the aim is to get as many members of the current labour
   movement to become anarchists as possible or, at the very least, take a
   more libertarian and radical approach to their unions and workplace
   struggle.

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
   anarcho-syndicalist/anarchist ideas within the workplace, so creating
   the basis on which a workplace movement based upon the ideas of
   industrial unionism (see section [13]J.5.2) could grow and expand.

   The idea is very simple. An Industrial Network is a federation of
   militants in a given industry who support the ideas of anarchism and/or
   anarcho-syndicalism, namely direct action, solidarity and organisation
   from the bottom up (the difference between purely anarchist networks
   and anarcho-syndicalist ones will be highlighted later). In other
   words, it would "initially be a political grouping in the economic
   sphere, aiming to build a less reactive but positive organisation
   within the industry. The long term aim. . . is, obviously, the creation
   of an anarcho-syndicalist union." [Winning the Class War, p. 18]

   The Industrial Network would be an organisation of groups of anarchists
   and syndicalists within a workplace united into an industrial basis.
   They would pull their resources together to fund a regular bulletin and
   other forms of propaganda which they would distribute within their
   workplace and industry. These bulletins and leaflets would raise and
   discuss issues related to work and how to right back and win as well as
   placing workplace issues in a social and political context. This
   propaganda would present anarchist ideas of workplace organisation and
   resistance as well as general anarchist ideas and analysis. In this way
   anarchist ideas and tactics would be able to get a wider hearing and
   anarchists can have an input as anarchists into workplace struggles.

   Traditionally, many syndicalists and anarcho-syndicalists advocated the
   One Big Union strategy, the aim of which was to organise all workers
   into one organisation representing the whole working class. Today,
   however, most anarcho-syndicalists and all social anarchists advocate
   workers assemblies for decision making during struggles (the basic form
   of which we discussed in section [14]J.5.2). The role of the anarchist
   group or anarcho-syndicalist (or revolutionary) union would basically
   be to call such workplace assemblies, argue for direct workers control
   of struggle by these mass assemblies, promote direct action and
   solidarity, put across anarchist ideas and politics and keep things on
   the boil, so to speak.

   This support for industrial networks exists because most
   anarcho-syndicalists recognise that they face dual unionism (which
   means there are more than one union within a given workplace or
   country). This was the case, historically, in all countries with a
   large anarcho-syndicalist union movement - in Spain and Italy there
   were the socialist unions along with the syndicalist ones and so on).
   Therefore most anarcho-syndicalists do not expect to ever get a
   majority of the working class into a revolutionary union before a
   revolutionary situation develops. In addition, anarcho-syndicalists
   recognise that a revolutionary union "is not just an economic fighting
   force, but also an organisation with a political context. To build such
   a union requires a lot of work and experience" of which the Industrial
   Networks are but one aspect. [Ibid.]

   Thus industrial networks are intended to deal with the actual situation
   that confronts us, and provide a strategy for moving from our present
   reality toward out ultimate goals. Where one has only a handful of
   anarchists and syndicalists in a workplace or scattered across several
   workplaces there is a clear need for developing ways for these fellow
   workers to effectively act in union, rather than be isolated and
   relegated to more general agitation. A handful of anarchists cannot
   meaningfully call a general strike. But we can agitate around specific
   industrial issues and organise our fellow workers to do something about
   them. Through such campaigns we demonstrate the advantages of
   rank-and-file unionism and direct action, show our fellow workers that
   our ideas are not mere abstract theory but can be implemented here and
   now, attract new members and supporters, and further develop our
   capacity to develop revolutionary unions in our workplaces.

   Thus the creation of Industrial Networks and the calling for workplace
   assemblies is a recognition of where we are now -- with anarchist ideas
   very much in the minority. Calling for workers assemblies is not an
   anarchist tactic per se, we must add, but a working class one developed
   and used plenty of times by workers in struggles (indeed, it was how
   the current trade unions were created). It also puts the onus on the
   reformists and reactionary unions by appealing directly to their
   members as workers and showing their bureaucrat organisations and
   reformist politics by creating an effective alternative to them.

   A few anarchists reject the idea of Industrial Networks and instead
   support the idea of "rank and file" groups which aim to put pressure on
   the current trade unions to become more militant and democratic (a few
   anarcho-syndicalists think that such groups can be used to reform the
   trade-unions into libertarian, revolutionary organisations -- called
   "boring from within" -- but most reject this as utopia, viewing the
   trade union bureaucracy as unreformable as the state's). Moreover,
   opponents of "rank and file" groups argue that they direct time and
   energy away from practical and constructive activity and instead waste
   them "[b]y constantly arguing for changes to the union structure. . .
   the need for the leadership to be more accountable, etc., [and so] they
   not only [offer] false hope but [channel] energy and discontent away
   from the real problem - the social democratic nature of reformist trade
   unions." [Winning the Class War, p. 11]

   Supporters of the "rank and file" approach fear that the Industrial
   Networks will isolate anarchists from the mass of trade union members
   by creating tiny "pure" syndicalist unions or anarchist groups. But
   such a claim is rejected by supporters of Industrial Networks. They
   maintain that they will be working with trade union members where it
   counts, in the workplace and not in badly attended, unrepresentative
   branch meetings. So:

     "We have no intention of isolating ourselves from the many workers
     who make up the rest of the rank and file membership of the unions.
     We recognise that a large proportion of trade union members are only
     nominally so as the main activity of social democratic [i.e.
     reformist] unions is outside the workplace. . . We aim to unite and
     not divide workers.

     "It has been argued that social democratic unions will not tolerate
     this kind of activity, and that we would be all expelled and thus
     isolated. So be it. We, however, don't think that this will happen
     until. . . workplace militants had found a voice independent of the
     trade unions and so they become less useful to us anyway. Our aim is
     not to support social democracy, but to show it up as irrelevant to
     the working class."
     [Op. Cit., p. 19]

   Whatever the merits and disadvantages of both approaches are, it seems
   likely that the activity of both will overlap in practice with
   Industrial Networks operating within trade union branches and "rank and
   file" groups providing alternative structures for struggle.

   As noted above, there is a slight difference between
   anarcho-syndicalist supporters of Industrial Networks and
   communist-anarchist ones. This is to do with how they see the function
   and aim of these networks. While both agree that such networks should
   agitate in their industry and call and support mass assemblies to
   organise resistance to capitalist exploitation and oppression they
   disagree on who can join the network groups and what they aims should
   be. Anarcho-syndicalists aim for the Industrial Networks to be the
   focal point for the building of permanent syndicalist unions and so aim
   for the Industrial Networks to be open to all workers who accept the
   general aims of the organisation. Anarcho-communists, however, view
   Industrial Networks as a means of increasing anarchist ideas within the
   working class and are not primarily concerned about building
   syndicalist unions (while many anarcho-communists would support such a
   development, some do not).

   These anarchists, therefore, see the need for workplace-based branches
   of an anarchist group along with the need for networks of militant
   'rank and file' workers, but reject the idea of something that is one
   but pretends to be the other. They argue that, far from avoiding the
   problems of classical anarcho-syndicalism, such networks seem to
   emphasise one of the worst problems -- namely that of how the
   organisation remains anarchist but is open to non-anarchists.

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

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

   Anarchists tend to support must forms of co-operation, including those
   associated with credit and money. This co-operative credit/banking
   takes many forms, such as credit unions, LETS schemes and so on. In
   this section we discuss two main forms of co-operative credit,
   mutualism and LETS
   .

   Mutualism is the name for the ideas associated with Proudhon and his
   Bank of the People. Essentially, it is a confederation of credit unions
   in which working class people pool their funds and savings. This allows
   credit to be arranged at cost, so increasing the options available to
   working people as well as abolishing interest on loans by making
   increasing amount of cheap credit available to working people. LETS
   stands for Local Exchange Trading Schemes and is a similar idea in many
   ways (and apparently discovered independently) -- see Bringing the
   Economy Home from the Market by V.G. Dobson for a detailed discussion
   on LETS.

   Both schemes revolve around creating an alternative form of currency
   and credit within capitalism in order to allow working class people to
   work outwith the capitalist money system by creating "labour notes" as
   a new circulating medium. In this way, it is hoped, workers would be
   able to improve their living and working conditions by having a source
   of community-based (very low interest) credit and so be less dependent
   on capitalists and the capitalist banking system. Some supporters of
   mutualism considered it as the ideal way of reforming capitalism away.
   By making credit available to the ordinary worker at very cheap rates,
   the end of wage slavery would soon occur as workers would work for
   themselves by either purchasing the necessary tools required for their
   work or, by their increased bargaining power within the economy, gain
   industrial democracy from the capitalists by buying them out.

   Such ideas have had a long history within the socialist movement,
   originating in the British socialist movement in the early 19th
   century. Robert Owen and other Socialists active at the time considered
   the idea of labour notes and exchanges as a means of improving working
   class conditions within capitalism and as the means of reforming
   capitalism into a society of confederated, self-governing communities.
   Indeed, "Equitable Labour Exchanges" were "founded at London and
   Birmingham in 1832" with "Labour notes and the exchange of small
   products" [E.P. Thompson, The Making of the English Working Class, p.
   870] Apparently independently of these early attempts in England at
   what would later be called mutualism, P-J Proudhon arrived at the same
   ideas decades later in France. In his words, "The People's Bank quite
   simply embodies the financial and economic aspects of the principle of
   modern democracy, that is, the sovereignty of the People, and of the
   republican motto, 'Liberty, Equality, Fraternity.'" [Selected Writings
   of P-J Proudhon, p. 75] Similarly, in the USA (partly as a result of
   Joshua Warren's activities, who got the idea from Robert Owen) there
   was extensive discussion on labour notes, exchanges and free credit as
   a means of protecting workers from the evils of capitalism and ensuring
   their independence and freedom from wage slavery. When Proudhon's works
   appeared in North America, the basic arguments were well known.

   Therefore the idea that mutual banking using labour money as a means to
   improve working class living conditions, even, perhaps, to achieve
   industrial democracy, self-management and the end of capitalism has a
   long history in Socialist thought. Unfortunately this aspect of
   socialism became less important with the rise of Marxism (which called
   these early socialists "utopian") attempts at such credit unions and
   alternative exchange schemes were generally replaced with attempts to
   build working class political parties. With the rise of Marxian social
   democracy, constructive socialistic experiments and collective working
   class self-help was replaced by working within the capitalist state.
   Fortunately, history has had the last laugh on Marxism with working
   class people yet again creating anew the ideas of Mutualism (as can be
   seen by the growth of LETS and other schemes of community money).

J.5.6 What are the key features of mutual credit schemes?

   Mutualism, as noted in the [15]last section, is a form of credit
   co-operation, in which individuals pull their resources together in
   order to benefit themselves as individuals and as part of a community.
   LETS is another form of mutualism which developed recently, and
   apparently developed independently (from its start in Canada, LETS has
   spread across the world and there are now hundreds of schemes involved
   hundreds of thousands of people). Mutual banks and LETS have the
   following key aspects:

   1) Co-operation: No-one owns the network. It is controlled by its
       members directly.
       2) Non-exploitative: No interest is charged on account balances or
       credit. At most administrative costs are charged, a result of it
       being commonly owned and managed.
       3) Consent: Nothing happens without it, there is no compulsion to
       trade.
       4) Money: They use their own type of money (traditionally called
       "labour-notes") as a means of aiding "honest exchange".

   It is hoped, by organising credit, working class people will be able to
   work for themselves and slowly but surely replace capitalism with a
   co-operative system based upon self-management. While LETS schemes do
   not have such grand schemes, historically mutualism aimed at working
   within and transforming capitalism to socialism. At the very least,
   LETS schemes reduce the power and influence of banks and finance
   capital within society as mutualism ensures that working people have a
   viable alternative to such parasites.

   This point is important, as the banking system and money is often
   considered "neutral" (particularly in capitalist economics). However,
   as Malatesta correctly argues, it would be "a mistake to believe . . .
   that the banks are, or are in the main, a means to facilitate exchange;
   they are a means to speculate on exchange and currencies, to invest
   capital and to make it produce interest, and to fulfil other typically
   capitalist operations." [Life and Ideas, p. 100]

   Within capitalism, money is still to a large degree a commodity which
   is more than a convenient measure of work done in the production of
   goods and services. As a commodity it can and does go anywhere in the
   world where it can get the best return for its owners, and so it tends
   to drain out of those communities that need it most. It is the means by
   which capitalists can buy the liberty of working people and get them to
   produce a surplus for them (wealth is, after all, "a power invested in
   certain individuals by the institutions of society, to compel others to
   labour for their benefit." [William Godwin, The Anarchist Writings of
   William Godwin, p. 130]. From this consideration alone, working class
   control of credit and money is an important part of the class struggle
   as having access to alternative sources of credit can increase working
   class options and power.

   Moreover, credit is also an important form of social control -- people
   who have to pay their mortgage or visa bill are more pliable, less
   likely to strike or make other forms of political trouble. And, of
   course, credit expands the consumption of the masses in the face of
   stagnant or falling wages while allowing capitalists to profit from it.
   Indeed, there is a link between the rising debt burden on households in
   the 1980s and 1990s and the increasing concentration of wealth. This is
   "because of the decline in real hourly wages and the stagnation in
   household incomes, the middle and lower classes have borrowed to stay
   in place; they've borrowed from the very rich who have gotten richer.
   The rich need a place to earn interest on their surplus funds, and the
   rest of the population makes a juicy lending target." [Doug Henwood,
   Wall Street, pp. 64-65]

   Little wonder that the state (and the capitalists who run it) is so
   concerned to keep control of money in its own hands or the hands of its
   agents. With an increase in mutual credit, interest rates would drop,
   wealth would stay more in working class communities, and the social
   power of working people would increase (for people would be more likely
   to struggle for higher wages and better conditions -- as the fear of
   debt repayments would be less).

   Therefore, mutualism is an example of what could be termed
   "counter-economics". By counter-economics we mean the creation of
   community-based credit unions that do not put their money into "Capital
   Markets" or into capitalist Banks. We mean finding ways for workers to
   control their own retirement funds. We mean finding ways of using money
   as a means of undermining capitalist power and control and supporting
   social struggle and change.

   In this way working people are controlling more and more of the money
   supply and using it ways that will stop capital from using it to
   oppress and exploit the working class. An example of why this can be
   important can be seen from the results of the existing workers' pension
   fund system. Currently workers pension funds are being used to invest
   in capitalist firms (particularly transnationals and other forms of Big
   Business) and these companies use the invested money to fund their
   activities. The idea is that by so investing, workers will receive an
   adequate pension in their old age.

   However, the only people actually winning are bankers and big
   companies. Unsurprisingly, the managers of these pension fund companies
   are investing in those firms with the highest returns, which are
   usually those who are downsizing or extracting most surplus value from
   their workforce (which in turn forces other companies to follow the
   same strategies to get access to the available funds in order to
   survive).

   Basically, if you are lending your money to be used to put your fellow
   worker out of work or increase the power of capital, then you are not
   only helping to make things harder for others like you, you are also
   helping making things worse for yourself. No person is an island, and
   increasing the clout of capital over the working class is going to
   affect you directly or indirectly. And, of course, it seems crazy to
   suggest that workers desire to experience insecurity, fear of
   downsizing and stagnating wages during their working lives in order to
   have slightly more money when they retire.

   This highlights one of the tricks the capitalists are using against us,
   namely to get us to buy into the system through our fear of old age.
   Whether it is going into lifelong debt to buy a home or lending our
   money to capitalists, we are being encouraged to buy into something
   which we value more than what is right and wrong. This allows us to be
   more easily controlled by the government. We need to get away from
   living in fear and stop allowing ourselves to be deceived into behaving
   like "stakeholders" in Capitalistic and Plutocratic systems. As can be
   seen from the use of pension funds to buy out firms, increase the size
   of transnationals and downsize the workforce, such "stakeholding"
   amounts to trading in the present
   and the future while others benefit.

   The real enemies are not working people who take part in such pension
   schemes. It is the people in power, those who manage the pension
   schemes and companies, who are trying to squeeze every last cent out of
   working people to finance higher profits and stock prices -- which the
   unemployment and impoverishment of workers on a world-wide scale aids.
   They control the governments of the world. They are making the "rules"
   of the current system. Hence the importance of limiting the money they
   have available, of creating community-based credit unions and mutual
   risk insurance co-operatives to increase our control over our money and
   create our own, alternative, means of credit and exchange (as presented
   as mutualism) which can be used to empower ourselves, aid our struggles
   and create our own alternatives. Money, representing as it does the
   power of capital and the authority of the boss, is not "neutral" and
   control over it plays a role in the class struggle. We ignore such
   issues at our own peril.

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 Anarchists
   and Mutualists (followers of Proudhon) do think that mutual banking is
   the only sure way of abolishing capitalism, most anarchists do not see
   mutualism as an end in itself. Few think that capitalism can be
   reformed away in the manner assumed by Proudhon. Increased access to
   credit does not address the relations of production and market power
   which exist within the economy and so any move for financial
   transformation has to be part of a broader attack on all forms of
   capitalist social power in order to be both useful and effective (see
   section [16]B.3.2 for more anarchist views on mutual credit and its
   uses). So, for most anarchists, it is only in combination with other
   forms of working class self-activity and self-management that mutualist
   institutions could play an important role in the class struggle.

   By creating a network of mutual banks to aid in creating co-operatives,
   union organising drives, supporting strikes (either directly by
   gifts/loans or funding food and other co-operatives which could supply
   food and other essentials free or at a reduction), mutualism can be
   used as a means of helping build libertarian alternatives within the
   capitalist system. Such alternatives, while making life better under
   the current system, also can play a role in overcoming that system by
   being a means of aiding those in struggle make ends meet and providing
   alternative sources of income for black-listed or sacked workers. Thus
   Bakunin's comments:

     "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]

   Therefore, while few anarchists think that mutualism would be enough in
   itself, it can play a role in the class struggle. As a compliment to
   direct action and workplace and community struggle and organisation,
   mutualism has an important role in working class self-liberation. For
   example, community unions (see section [17]J.5.1) could create their
   own mutual banks and money which could be used to fund co-operatives
   and support strikes and other forms of social struggle. In this way a
   healthy communalised co-operative sector could develop within
   capitalism, overcoming the problems of isolation facing workplace
   co-operatives (see section [18]J.5.11) as well as providing a firm
   framework of support for those in struggle.

   Moreover, mutual banking can be a way of building upon and
   strengthening the anarchistic social relations within capitalism. For
   even under capitalism and statism, there exists extensive mutual aid
   and, indeed, anarchistic and communistic ways of living. For example,
   communistic arrangements exist within families, between friends and
   lovers and within anarchist organisations.

   Mutual banking could be a means of creating a bridge between this
   alternative (gift) "economy" and capitalism. The mutualist alternative
   economy would help strength communities and bonds of trust between
   individuals, and this would increase the scope for increasing the scope
   of the communistic sector as more and more people help each other out
   without the medium of exchange - in other words, mutualism will help
   the gift economy that exists within capitalism to grow and develop.

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

   The mutual banking ideas of Proudhon could be adapted to the conditions
   of modern society, as will be described in what follows. (Note:
   Proudhon is the definitive source on mutualism, but for those who don't
   read French, there are the works of his American disciples, e.g.
   William B. Greene's Mutual Banking, and Benjamin Tucker's Instead of a
   Book by a Man Too Busy to Write One).

   One scenario for an updated system of mutual banking would be for a
   community barter association to begin issuing an alternative currency
   accepted as money by all individuals within the system. This "currency"
   would not at first take the form of coins or bills, but would be
   circulated entirely through transactions involving the use of
   barter-cards, personal checks, and "e-money" transfers via
   modem/Internet. Let's call this currency-issuing type of barter
   association a "mutual barter clearinghouse," or just "clearinghouse"
   for short.

   The clearinghouse would have a twofold mandate: first, to extend credit
   at cost to members; second, to manage the circulation of credit-money
   within the system, charging only a small service fee (probably one
   percent or less) which is sufficient to cover its costs of operation,
   including labour costs involved in issuing credit and keeping track of
   transactions, insuring itself against losses from uncollectable debts,
   and so forth.

   The clearinghouse would be organised and function as follows. Members
   of the original barter association would be invited to become
   subscriber-members of the clearinghouse by pledging a certain amount of
   property as collateral. On the basis of this pledge, an account would
   be opened for the new member and credited with a sum of mutual dollars
   equivalent to some fraction of the assessed value of the property
   pledged. The new member would agree to repay this amount plus the
   service fee by a certain date. The mutual dollars in the new account
   could then be transferred through the clearinghouse by using a barter
   card, by writing a personal check, or by sending e-money via modem to
   the accounts of other members, who have agreed to receive mutual money
   in payment for all debts.

   The opening of this sort of account is, of course, the same as taking
   out a "loan" in the sense that a commercial bank "lends" by extending
   credit to a borrower in return for a signed note pledging a certain
   amount of property as security. The crucial difference is that the
   clearinghouse does not purport to be "lending" a sum of money that it
   already has, as is fraudulently claimed by commercial banks. Instead it
   honestly admits that it is creating new money in the form of credit.
   New accounts can also be opened simply by telling the clearinghouse
   that one wants an account and then arranging with other people who
   already have balances to transfer mutual money into one's account in
   exchange for goods or services.

   Another form is that associated with LETS systems. In this a number of
   people get together to form an association. They create a unit of
   exchange (which is equal in value to a unit of the national currency
   usually), choose a name for it and offer each other goods and services
   priced in these units. These offers and wants are listed in a directory
   which is circulated periodically to members. Members decide who they
   wish to trade with and how much trading they wish to do. When a
   transaction is completed, this is acknowledged with a "cheque" made out
   by the buyer and given to the seller. These are passed on to the system
   accounts administration which keeps a record of all transactions and
   periodically sends members a statement of their accounts. The accounts
   administration is elected by, and accountable to, the membership and
   information about balances is available to all members.

   Unlike the first system described, members do not have to present
   property as collateral. Members of a LETS scheme can go into "debt"
   without it, although "debt" is the wrong word as members are not so
   much going into debt as committing themselves to do some work within
   the system in the future and by so doing they are creating spending
   power. The willingness of members to incur such a commitment could be
   described as a service to the community as others are free to use the
   units so created to trade themselves. Indeed, the number of units in
   existence exactly matches the amount of real wealth being exchanged.
   The system only works if members are willing to spend and runs on trust
   and builds up trust as the system is used.

   It is likely that a fully functioning mutual banking system would
   incorporate aspects of both these systems. The need for collateral may
   be used when members require very large loans while the LETS system of
   negative credit as a commitment to future work would be the normal
   function of the system. If the mutual bank agrees a maximum limit for
   negative balances, it may agree to take collateral for transactions
   that exceed this limit. However, it is obvious that any mutual banking
   system will find the best means of working in the circumstances it
   finds itself.

J.5.9 How does mutual credit work?

   Let's consider an example of how business would be transacted in the
   new system. There are two possibilities, depending on whether the
   mutual credit is based upon whether the creditor can provide collateral
   or not. we will take the case with collateral first.

   Suppose that A, an organic farmer, pledges as collateral a certain plot
   of land that she owns and on which she wishes to build a house. The
   land is valued at, say, $40,000 in the capitalist market. By pledging
   the land, A is able to open a credit account at the clearinghouse for,
   say, $30,000 in mutual money (a ratio of 3/4). She does so knowing that
   there are many other members of the system who are carpenters,
   electricians, plumbers, hardware dealers, and so on who are willing to
   accept mutual dollars in payment for their products or services.

   It's easy to see why other subscriber-members, who have also obtained
   mutual credit and are therefore in debt to the clearinghouse for mutual
   dollars, would be willing to accept such dollars in return for their
   goods and services. For they need to collect mutual dollars to repay
   their debts. But why would someone who is not in debt for mutual
   dollars be willing to accept them as money?

   To see why, let's suppose that B, an underemployed carpenter, currently
   has no account at the clearinghouse but that he knows about the
   clearinghouse and the people who operate it. After examining its list
   of members and becoming familiar with the policies of the new
   organisation, he's convinced that it does not extend credit frivolously
   to untrustworthy recipients who are likely to default. He also knows
   that if he contracts to do the carpentry on A's new house and agrees to
   be paid for his work in mutual money, he'll then be able to use it to
   buy groceries, clothes, car repairs, and other goods and services from
   various people in the community who already belong to the system.

   Thus B will be willing, and perhaps even eager (especially if the
   economy is in recession and regular money is tight) to work for A and
   receive payment in mutual dollars. For he knows that if he is paid,
   say, $8,000 in mutual money for his labour on A's house, this payment
   constitutes, in effect, 20 percent of a mortgage on her land, the value
   of which is represented by her mutual credit. B also understands that A
   has promised to repay this mortgage by producing new value -- that is,
   by growing organic fruits and vegetables and selling them for mutual
   dollars to other members of the system -- and that it is this promise
   to produce new wealth which gives her mutual credit its value as a
   medium of exchange.

   To put this point slightly differently, A's mutual credit can be
   thought of as a lien against goods or services which she has guaranteed
   to create in the future. As security of this guarantee, she agrees that
   if she is unable for some reason to fulfil her obligation, the land she
   has pledged will be sold for mutual dollars to other members. In this
   way, a value sufficient to cancel her debt (and probably then some)
   will be returned to the system. This provision insures that the
   clearinghouse is able to balance its books and gives members confidence
   that mutual money is sound.

   It should be noticed that since new wealth is continually being
   created, the basis for new mutual credit is also being created at the
   same time. Thus, suppose that after A's new house has been built, her
   daughter, C, along with a group of friends D, E, F, . . . , decide that
   they want to start a collectively owned and operated organic restaurant
   (which will incidentally benefit A, as an outlet for her produce), but
   that C and her friends do not have enough collateral to obtain a
   start-up loan. A, however, is willing to co-sign a note for them,
   pledging her new house (valued at say, $80,000) as security. On this
   basis, C and her partners are able to obtain $60,000 worth of mutual
   credit, which they then use to buy equipment, supplies, furniture,
   advertising, etc. and lease the building necessary to start their
   restaurant.

   This example illustrates one way in which people without property are
   able to obtain credit in the new system. Another way -- for those who
   cannot find (or perhaps don't wish to ask) someone with property to
   co-sign for them -- is to make a down payment and then use the property
   which is to be purchased on credit as security, as in the current
   method of obtaining a home or auto loan. With mutual credit, however,
   this form of financing can be used to purchase anything, including
   capital goods.

   Which brings us to the case of an individual without means for
   providing collateral - say, for example A, the organic farmer, does not
   own the land she works. In such a case, A, who still desires work done,
   would contact other members of the mutual bank with the skills she
   requires. Those members with the appropriate skills and who agree to
   work with her commit themselves to do the required tasks. In return, A
   gives them a check in mutual dollars which is credited to their account
   and deducted from hers. She does not pay interest on this issue of
   credit and the sum only represents her willingness to do some work for
   other members of the bank at some future date.

   The mutual bank does not have to worry about the negative balance, as
   this does not create a loss within the group as the minuses which have
   been incurred have already created wealth (pluses) within the system
   and it stays there. It is likely, of course, that the mutual bank would
   agree an upper limit on negative balances and require some form of
   collateral for credit greater than this limit, but for most exchanges
   this would be unlikely to be relevant.

   It is important to remember that mutual dollars have no intrinsic
   value, since they can't be redeemed (at the mutual bank) in gold or
   anything else. All they are promises of future labour. Thus, as Greene
   points out in his work on mutual banking, mutual dollars are "a mere
   medium for the facilitation of barter." In this respect they are
   closely akin to the so-called "barter dollars" now being circulated by
   barter associations through the use of checks and barter cards. To be
   precise, then, we should refer to the units of mutual money as "mutual
   barter dollars." But whereas ordinary barter dollars are created at the
   same time that a barter transaction occurs and are used to record the
   values exchanged in that transaction, mutual barter dollars are created
   before any actual barter transaction occurs and are intended to
   facilitate future barter transactions. This fact is important because
   it can be used as the basis for a legal argument that clearinghouses
   are essentially barter associations rather than banks, thrifts, or
   credit unions, and therefore should not be subject to the laws
   governing the latter institutions.

J.5.10 Why do anarchists support co-operatives?

   Support for co-operatives is a common feature in anarchist writings.
   Indeed, anarchist support for co-operatives is as old as use of the
   term anarchist to describe our ideas is. So why do anarchists support
   co-operatives? Basically it is because a co-operative is seen as an
   example of the future social organisation anarchists want in the
   present. As Bakunin argued, "the co-operative system. . . carries
   within it the germ of the future economic order." [The Philosophy of
   Bakunin, p. 385]

   Anarchists support all kinds of co-operatives - housing, food, credit
   unions and productive ones. All forms of co-operation are useful as
   they accustom their members to work together for their common benefit
   as well as ensuring extensive experience in managing their own affairs.
   As such, all forms of co-operatives are useful examples of
   self-management and anarchy in action (to some degree). However, here
   we will concentrate on productive co-operatives, i.e. workplace
   co-operatives. This is because workplace co-operatives, potentially,
   could replace the capitalist mode of production with one based upon
   associated, not wage, labour. As long as capitalism exists within
   industry and agriculture, no amount of other kinds of co-operatives
   will end that system. Capital and wealth accumulates by oppression and
   exploitation in the workplace, therefore as long as wage slavery exists
   anarchy will not.

   Co-operatives are the "germ of the future" because of two facts.
   Firstly, co-operatives are based on one worker, one vote. In other
   words those who do the work manage the workplace within which they do
   it (i.e. they are based on workers' self-management in some form). Thus
   co-operatives are an example of the "horizontal" directly democratic
   organisation that anarchists support and so are an example of "anarchy
   in action" (even if in an imperfect way) within the economy. In
   addition, they are an example of working class self-help and
   self-activity. Instead of relying on others to provide work,
   co-operatives show that production can be carried on without the
   existence of a class of masters employing a class of order takers.

   Workplace co-operatives also present evidence of the viability of an
   anarchist "economy." It is well established that co-operatives are
   usually more productive and efficient than their capitalist
   equivalents. This indicates that hierarchical workplaces are not
   required in order to produce useful goods and indeed can be harmful.
   Indeed, it also indicates that the capitalist market does not actually
   allocate resources efficiently (as we will discuss in section
   [19]J.5.12). So why should co-operatives be more efficient?

   Firstly there are the positive effects of increased liberty associated
   with co-operatives.

   Co-operatives, by abolishing wage slavery, obviously increases the
   liberty of those who work in them. Members take an active part in the
   management of their working lives and so authoritarian social relations
   are replaced by libertarian ones. Unsurprisingly, this liberty also
   leads to an increase in productivity - just as wage labour is more
   productive than slavery, so associated labour is more productive than
   wage slavery. Little wonder Kropotkin argued that "the only guarantee
   not to be robbed of the fruits of your labour is to possess the
   instruments of labour. . . man really produces most when he works in
   freedom, when he has a certain choice in his occupations, when he has
   no overseer to impede him, and lastly, when he sees his work bringing
   profit to him and to others who work like him, but bringing in little
   to idlers." [The Conquest of Bread, p. 145]

   There are also the positive advantages associated with participation
   (i.e. self-management, liberty in other words). Within a self-managed,
   co-operative workplace, workers are directly involved in decision
   making and so these decisions are enriched by the skills, experiences
   and ideas of all members of the workplace. In the words of Colin Ward:

     "You can be in authority, or you can be an authority, or you can
     have authority. The first derives from your rank in some chain of
     command, the second derives special knowledge, and the third from
     special wisdom. But knowledge and wisdom are not distributed in
     order of rank, and they are no one person's monopoly in any
     undertaking. The fantastic inefficiency of any hierarchical
     organisation -- any factory, office, university, warehouse or
     hospital -- is the outcome of two almost invariable characteristics.
     One is that the knowledge and wisdom of the people at the bottom of
     the pyramid finds no place in the decision-making leadership
     hierarchy of the institution. Frequently it is devoted to making the
     institution work in spite of the formal leadership structure, or
     alternatively to sabotaging the ostensible function of the
     institution, because it is none of their choosing. The other is that
     they would rather not be there anyway: they are there through
     economic necessity rather than through identification with a common
     task which throws up its own shifting and functional leadership.

     "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 need for conflict between bosses
   and wage slaves over work loads, conditions or the division of value
   created between them. All these factors will increase the quality,
   quantity and efficiency of work and so increases efficient utilisation
   of available resources and facilities the introduction of new
   techniques and technologies.

   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 of Simon Frazer. . .conducted [studies] at utility
     companies, manufacturing plants, engineering firms, and many other
     kinds of organisations. Over and over again, Tjosvold has found that
     'co-operation makes a work force motivated' whereas 'serious
     competition undermines co-ordination.' . . . Meanwhile, the
     management guru. . . T. Edwards Demming, has declared that the
     practice of having employees compete against each other is 'unfair
     [and] destructive. We cannot afford this nonsense any longer. . .
     [We need to] work together on company problems [but] annual rating
     of performance, incentive pay, [or] bonuses cannot live with team
     work. . . What takes the joy out of learning. . .[or out of]
     anything? Trying to be number one.'" [No Contest, p. 240]

   (The question of co-operation and participation within capitalist firms
   will be discussed in section [20]J.5.12).

   Thirdly, there are the benefits associated with increased equality.
   Studies prove that business performance deteriorates when pay
   differentials become excessive. In a study of over 100 businesses
   (producing everything from kitchen appliances to truck axles),
   researchers found that the greater the wage gap between managers and
   workers, the lower their product's quality. [Douglas Cowherd and David
   Levine, "Product Quality and Pay Equity," Administrative Science
   Quarterly no. 37 (June 1992), pp. 302-30] Businesses with the greatest
   inequality were plagued with a high employee turnover rate. Study
   author David Levine said: "These organisations weren't able to sustain
   a workplace of people with shared goals." [quoted by John Byrne in "How
   high can CEO pay go?" Business Week, April 22, 1996]

   (In fact, the negative effects of income inequality can be seen on a
   national level as well. Economists Torsten Persson and Guido Tabellini
   conducted a thorough statistical analysis of historical inequality and
   growth, and found that nations with more equal incomes generally
   experience faster productive growth. ["Is Inequality Harmful for
   Growth?", American Economic Review no. 84, June 1994, pp. 600-21]
   Numerous other studies have also confirmed their findings. Real life
   yet again disproves the assumptions of capitalism - inequality harms us
   all, even the capitalist economy which produces it).

   This is to be expected. Workers, seeing an increasing amount of the
   value they create being monopolised by top managers and a wealthy elite
   and not re-invested into the company to secure their employment
   prospects, will hardly be inclined to put in that extra effort or care
   about the quality of their work. Managers who use the threat of
   unemployment to extract more effort from their workforce are creating a
   false economy. While they will postpone decreasing profits in the short
   term due to this adaptive strategy (and enrich themselves in the
   process) the pressures placed upon the system will bring a harsh long
   term effects - both in terms of economic crisis (as income becomes so
   skewed as to create realisation problems and the limits of adaptation
   are reached in the face of international competition) and social
   breakdown.

   As would be imagined, co-operative workplaces tend to be more
   egalitarian than capitalist ones. This is because in capitalist firms,
   the incomes of top management must be justified (in practice) to a
   small number of individuals (namely, those shareholders with sizeable
   stock in the firm), who are usually quite wealthy and so not only have
   little to lose in granting huge salaries but are also predisposed to
   see top managers as being very much like themselves and so are entitled
   to comparable incomes. In contrast, the incomes of top management in
   worker controlled firms have to be justified to a workforce whose
   members experience the relationship between management incomes and
   their own directly and who, no doubt, are predisposed to see their top
   managers as being workers like themselves and accountable to them. Such
   an egalitarian atmosphere will have a positive impact on production and
   efficiency as workers will see that the value they create is not being
   accumulated by others but distributed according to work actually done
   (and not control over power). In the Mondragon co-operatives, for
   example, the maximum pay differential is 14 to 1 (increased from 3 to 1
   in a response to outside pressures after much debate, with the actual
   maximum differential at 9 to 1) while (in the USA) the average CEO is
   paid over 140 times the average factory worker (up from 41 times in
   1960).

   Therefore, we see that co-operatives prove (to a greater or lesser
   extent) the advantages of (and interrelationship between) key anarchist
   principles such as liberty, equality, solidarity and self-management.
   Their application, whether all together or in part, has a positive
   impact on efficiency and work -- and, as we will discuss in section
   [21]J.5.12, the capitalist market actively blocks the spread of more
   efficient productive techniques instead of encouraging them. Even by
   its own standards, capitalism stands condemned - it does not encourage
   the efficient use of resources and actively places barriers in the
   development of human "resources."

   From all this its clear to see why co-operatives are supported by
   anarchists. We are "convinced that the co-operative could, potentially,
   replace capitalism and carries within it the seeds of economic
   emancipation. . . The workers learn from this precious experience how
   to organise and themselves conduct the economy without guardian angels,
   the state or their former employers." [Michael Bakunin, 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 and narrow their vision to just surviving within the current
   system.

   For most anarchists, the experience of co-operatives has proven without
   doubt that, however excellent in principle and useful in practice, if
   they are kept within the narrow circle of "bourgeois" existence they
   cannot become dominant and free the masses. This point is argued in
   Section [22]J.5.11 and so will be ignored here. In order to fully
   develop, co-operatives must be part of a wider social movement which
   includes community and industrial unionism and the creation of a
   anarchistic social framework which can encourage "truly Socialist
   co-operation" and discourage "bourgeois co-operation." As Murray
   Bookchin correctly argues, "[r]emoved from a libertarian municipalist
   [or other anarchist] context and movement focused on achieving
   revolutionary municipalist [or communalist] goals as a dual power
   against corporations and the state, food [and other forms of] co-ops
   are little more than benign enterprises that capitalism and the state
   can easily tolerate with no fear of challenge." [Democracy and Nature
   no. 9, p. 175]

   Therefore, while co-operatives are an important aspect of anarchist
   ideas and practice, they are not the be all or end all of our activity.
   Without a wider social movement which creates all (or at least most) of
   the future society in the shell of the old, co-operatives will never
   arrest the growth of capitalism or transcend the narrow horizons of the
   capitalist economy.

J.5.11 If workers really want self-management, why aren't there more producer
co-operatives?

   Supporters of capitalism suggest that producer co-operatives would
   spring up spontaneously if workers really wanted them. Their argument
   is that co-operatives could be financed at first by "wealthy radicals"
   or by affluent workers pooling their resources to buy out existing
   capitalist firms; then, if such co-operatives were really economically
   viable and desired by workers, they would spread until eventually they
   undermined capitalism. They conclude that since this is not happening,
   it must be because workers' self-management is either economically
   unfeasible or is not really attractive to workers or both (see, for
   example, Robert Nozick, Anarchy, State, and Utopia, pp. 250-52).

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

     "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]

   There are other structural problems as well. For one thing, since their
   pay levels are set by members' democratic vote, co-operatives tend to
   be more egalitarian in their income structure. But this means that in a
   capitalist environment, co-operatives are in constant danger of having
   their most skilled members hired away. Moreover, there is a difficulty
   in raising capital:

     "Quite apart from ideological hostility (which may be significant),
     external investors will be reluctant to put their money into
     concerns over which they will have little or no control -- which
     tends to be the case with a co-operative. Because co-operatives in a
     capitalist environment face special difficulties, and because they
     lack the inherent expansionary dynamic of a capitalist firm, it is
     hardy surprising that they are far from dominant." [Ibid., p 240]

   In addition, co-operatives face the negative externalities generated by
   a capitalist economy. The presence of wage labour and investment
   capital in the economy will tempt successful co-operatives to increase
   their flexibility to adjust to changes in market changes by hiring
   workers or issuing shares to attract new investment. In so doing,
   however, they may end up losing their identities as co-operatives by
   diluting ownership or by making the co-operative someone's boss:

     "To meet increased production, the producer co-operatives hired
     outside wage workers. This created a new class of workers who
     exploit and profit from the labour of their employees. And all this
     fosters a bourgeois mentality." [Michael Bakunin, Bakunin on
     Anarchism, p. 399]

   Hence the pressures of working in a capitalist market may result in
   co-operatives pursuing activities which may result in short term gain
   or survival, but are sure to result in harm in the long run. Far from
   co-operatives slowly expanding within and changing a capitalist
   environment it is more likely that capitalist logic will expand into
   and change the co-operatives that work in it (this can be seen from the
   Mondragon co-operatives, where there has been a slight rise in the size
   of wage labour being used and the fact that the credit union, since
   1992, has invested in non-co-operative firms). These externalities
   imposed upon isolated co-operatives within capitalism (which would not
   arise within a fully co-operative context) block local moves towards
   anarchism. The idea that co-operation will simply win out in
   competition within well developed capitalist economic systems is just
   wishful thinking. Just because a system is more liberatory and just
   does not mean it will survive in an authoritarian economic and social
   environment.

   There are also cultural problems as well. As Jon Elster points out, it
   is a "truism, but an important one, that workers' preferences are to a
   large extent shaped by their economic environment. Specifically, there
   is a tendency to adaptive preference formation, by which the actual
   mode of economic organisation comes to be perceived as superior to all
   others." ["From Here to There", in Socialism, p. 110] In other words,
   people view "what is" as given and feel no urge to change to "what
   could be." In the context of creating alternatives within capitalism,
   this can have serious effects on the spread of alternatives and
   indicates the importance of anarchists encouraging the spirit of revolt
   to break down this mental apathy.

   This acceptance of "what is" can be seen, to some degree, by some
   companies which meet the formal conditions for co-operatives, for
   example ESOP owned firms in the USA, but lack effective workers'
   control. ESOP (Employee Stack Ownership Plans) firms enable a firms
   workforce to gain the majority of a companies shares but the unequal
   distribution of shares amongst employees prevents the great majority of
   workers from having any effective control or influence on decisions.
   Unlike real co-operatives (based on "one worker, one vote") these firms
   are based on "one share, one vote" and so have more in common with
   capitalist firms than co-operatives.

   Moreover, we have ignored such problems as natural barriers to entry
   into, and movement within, a market (which is faced by all firms) and
   the difficulties co-operatives can face in finding access to long term
   credit facilities required by them from capitalist banks (which would
   effect co-operatives more as short term pressures can result in their
   co-operative nature being diluted). As Tom Cahill notes, the "old
   co-ops [of the nineteenth century] also had the specific problem of . .
   . giving credit . . . [as well as] problems . . . of competition with
   price cutting capitalist firms, highlighting the inadequate reservoirs
   of the under-financed co-ops." ["Co-operatives and Anarchism: A
   contemporary Perspective", in For Anarchism, edited by Paul Goodway, p.
   239]

   In addition, the "return on capital is limited" in co-operatives [Tom
   Cahill, Op. Cit., p. 247] which means that investors are less-likely to
   invest in co-operatives, and so co-operatives will tend to suffer from
   a lack of investment. Which also suggests that Nozick's argument that
   "don't say that its against the class interest of investors to support
   the growth of some enterprise that if successful would end or diminish
   the investment system. Investors are not so altruistic. They act in
   personal and not their class interests" is false [Op. Cit., pp. 252-3].
   Nozick is correct, to a degree -- but given a choice between high
   returns from investments in capitalist firms and lower ones from
   co-operatives, the investor will select the former. This does not
   reflect the productivity or efficiency of the investment -- quite the
   reverse! -- it reflects the social function of wage labour in
   maximising profits and returns on capital (see [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!).

   Tom Cahill outlines the investment problem when he writes that the
   "financial problem" is a major reason why co-operatives failed in the
   past, for "basically the unusual structure and aims of co-operatives
   have always caused problems for the dominant sources of capital. In
   general, the finance environment has been hostile to the emergence of
   the co-operative spirit. . ." And he also notes that they were "unable
   to devise structuring to maintain a boundary between those who work and
   those who own or control. . . It is understood that when outside
   investors were allowed to have power within the co-op structure, co-ops
   lost their distinctive qualities." [Op. Cit., pp. 238-239] Meaning that
   even if co-operative do attract investors, the cost of so doing may be
   to transform the co-operatives into capitalist firms.

   Thus, in spite of "empirical studies suggest[ing] that co-operatives
   are at least as productive as their capitalist counterparts," with many
   having "an excellent record, superior to conventionally organised firms
   over a long period" [Jon Elster, Op. Cit., p. 96], co-operatives are
   more likely to adapt to capitalism than replace it and adopt capitalist
   principles of rationality in order to survive. All things being equal,
   co-operatives are more efficient than their capitalist counterparts -
   but when co-operatives compete in a capitalist economy, all things are
   not equal.

   In spite of these structural and cultural problems, however, there has
   been a dramatic increase in the number of producer co-operatives in
   most Western countries in recent years. For example, Saul Estrin and
   Derek Jones report that co-operatives in the UK grew from 20 in 1975 to
   1,600 by 1986; in France they increased from 500 to 1,500; and in
   Italy, some 7,000 new co-operatives came into existence between 1970
   and 1982 ["Can Employee-owned Firms Survive?", Working Paper Series,
   Department of Economics, Hamilton College (April, May, 1989)]. Italian
   co-operatives now number well over 20,000, many of them large and
   having many support structures as well (which aids their development by
   reducing their isolation and providing long term financial support
   lacking within the capitalist market).

   We have already noted the success of the Mondragon co-operatives in
   Spain, which created a cluster of inter-locking co-operatives with its
   own credit union to provide long term financial support and commitment.
   Thus, in Europe at least, it appears that there is a rather "large and
   growing co-operative movement," which gives the lie to Nozick's and
   other supporters of capitalism arguments about co-operatives' lack of
   economic viability and/or attractiveness to workers.

   However, because co-operatives can survive in a capitalist economy it
   does not automatically mean that they shall replace that economy.
   Isolated co-operatives, as we argued above, will more likely adapt to
   capitalist realities than remain completely true to their co-operative
   promise. For most anarchists, therefore, co-operatives can reach their
   full potential only as part of a social movement aiming to change
   society. As part of a wider movement of community and workplace
   unionism, with mutualist banks to provide long terms financial support
   and commitment, co-operatives could be communalised into a network of
   solidarity and support that will reduce the problems of isolation and
   adaptation. Hence Bakunin:

     "We hardly oppose the creation of co-operative associations; we find
     them necessary in many respects. . . they accustom the workers to
     organise, pursue, and manage their interests themselves, without
     interference either by bourgeois capital or by bourgeois control. .
     . [they must] above all [be] founded on the principle of solidarity
     and collectivity rather than on bourgeois exclusivity, then society
     will pass from its present situation to one of equality and justice
     without too many great upheavals." [Op. Cit., p. 153]

   Co-operation "will prosper, developing itself fully and freely,
   embracing all human industry, only when it is based on equality, when
   all capital . . . [and] the soil, belong to the people by right of
   collective property." [Ibid.]

   Until then, co-operatives will exist within capitalism but not replace
   it by market forces - only a social movement and collective action can
   fully secure their full development. As David Schweickart argues:

     "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]

   This means that while anarchists support, create and encourage
   co-operatives within capitalism, they understand "the impossibility of
   putting into practice the co-operative system under the existing
   conditions of the predominance of bourgeois capital in the process of
   production and distribution of wealth." Because of this, most
   anarchists stress the need for more combative organisations such as
   industrial and community unions and other bodies "formed," to use
   Bakunin's words, "for the organisation of toilers against the
   privileged world" in order to help bring about a free society. [Michael
   Bakunin, Op. Cit., p. 185]

J.5.12 If self-management is more efficient, surely capitalist firms will be
forced to introduce it by the market?

   While it may be admitted that co-operatives cannot reform capitalism
   away (see [24]last section), many supporters of "free market"
   capitalism will claim that a laissez-faire system would see workers
   self-management spread within capitalism. This is because, as
   self-management is more efficient than wage slavery, those capitalist
   firms that introduce it will gain a competitive advantage, and so their
   competitors will be forced to introduce it or go bust. While not being
   true anarchistic production, it would (it is argued) be a very close
   approximation of it and so capitalism could reform itself naturally to
   get rid of (to a large degree) its authoritarian nature.

   While such a notion seems plausible in theory, in practice it does not
   work. Free market capitalism places innumerable barriers to the spread
   of worker empowering structures within production, in spite (perhaps,
   as we will see, because) of their more efficient nature. This can be
   seen from the fact that while the increased efficiency associated with
   workers' participation and self-management has attracted the attention
   of many capitalist firms, the few experiments conducted have failed to
   spread. This is due, essentially, to the nature of capitalist
   production and the social relationships it produces.

   As we noted in [25]section D.10, capitalist firms (particularly in the
   west) made a point of introducing technologies and management
   structures that aimed to deskill and disempower their workers. In this
   way, it was hoped to make the worker increasingly subject to "market
   discipline" (i.e. easier to train, so increasing the pool of workers
   available to replace any specific worker and so reducing workers power
   by increasing management's power to fire them). Of course, what
   actually happens is that after a short period of time while management
   gained the upper hand, the workforce found newer and more effective
   ways to fight back and assert their productive power again. While for a
   short time the technological change worked, over the longer period the
   balance of forces changed, so forcing management to continually try to
   empower themselves at the expense of the workforce.

   It is unsurprising that such attempts to reduce workers to order-takers
   fail. Workers' experiences and help are required to ensure production
   actually happens at all. When workers carry out their orders strictly
   and faithfully (i.e. when they "work to rule") production threatens to
   stop. So most capitalists are aware of the need to get workers to
   "co-operate" within the workplace to some degree. A few capitalist
   companies have gone further. Seeing the advantages of fully exploiting
   (and we do mean exploiting) the experience, skills, abilities and
   thoughts of their employers which the traditional authoritarian
   capitalist workplace denies them, some have introduced various schemes
   to "enrich" and "enlarge" work, increase "co-operation" between workers
   and their bosses. In other words, some capitalist firms have tried to
   encourage workers to "participate" in their own exploitation by
   introducing (in the words of Sam Dolgoff) "a modicum of influence, a
   strictly limited area of decision-making power, a voice - at best
   secondary - in the control of conditions of the workplace." [The
   Anarchist Collectives, p. 81] The management and owners still have the
   power and still reap the majority of benefits from the productive
   activity of the workforce.

   David Noble provides a good summary of the problems associated with
   experiments in workers' self-management within capitalist firms:

     "Participant in such programs can indeed be a liberating and
     exhilarating experience, awakening people to their own untapped
     potential and also to the real possibilities of collective worker
     control of production. As one manager described the former pilots
     [workers in a General Electric program]: 'These people will never be
     the same again. They have seen that things can be different.' But
     the excitement and enthusiasm engendered by such programs, as well
     as the heightened sense of commitment to a common purpose, can
     easily be used against the interests of the work force. First, that
     purpose is not really 'common' but is still determined by management
     alone, which continues to decide what will be produced, when, and
     where. Participation in production does not include participation in
     decisions on investment, which remains the prerogative of ownership.
     Thus participation is, in reality, just a variation of business as
     usual -- taking orders -- but one which encourages obedience in the
     name of co-operation.

     "Second, participation programs can contribute to the creation of an
     elite, and reduced, work force, with special privileges and more
     'co-operative' attitudes toward management -- thus at once
     undermining the adversary stance of unions and reducing membership .
     . .

     "Thirds, such programs enable management to learn from workers --
     who are now encouraged by their co-operative spirit to share what
     they know -- and, then, in Taylorist tradition, to use this
     knowledge against the workers. As one former pilot reflected, 'They
     learned from the guys on the floor, got their knowledge about how to
     optimise the technology and then, once they had it, they eliminated
     the Pilot Program, put that knowledge into the machines, and got
     people without any knowledge to run them -- on the Company's terms
     and without adequate compensation. They kept all the gains for
     themselves.'" . . .

     "Fourth, such programs could provide management with a way to
     circumvent union rules and grievance procedures or eliminate unions
     altogether. . ."
     [Forces of Production, pp. 318-9]

   Therefore, capitalist-introduced and supported "workers' control" is
   very like the situation when a worker receives stock in the company
   they work for. If it goes some way toward redressing the gap between
   the value of that person's labour, and the wage they receive for it,
   that in itself cannot be a totally bad thing (although, of course, this
   does not address the issue of workplace hierarchy and the social
   relations within the workplace itself). The real downside of this is
   the "carrot on a stick" enticement to work harder -- if you work extra
   hard for the company, your stock will be worth more. Obviously, though,
   the bosses get rich off you, so the more you work, the richer they get,
   the more you are getting ripped off. It is a choice that anarchists
   feel many workers cannot afford to make -- they need or at least want
   the money - but we believe that the stock does not work for many
   workers, who end up working harder, for less. After all, stocks do not
   represent all profits (large amounts of which end up in the hands of
   top management) nor are they divided just among those who labour.
   Moreover, workers may be less inclined to take direct action, for fear
   that they will damage the value of "their" company's stock, and so they
   may find themselves putting up with longer, more intense work in worse
   conditions.

   However, be that as it may, the results of such capitalist experiments
   in "workers' control" are interesting and show why self-management will
   not spread by market forces (and they also bear direct relevance to the
   question of why real co-operatives are not widespread within capitalism
   -- see [26]last section).

   According to one expert "[t]here is scarcely a study in the entire
   literature which fails to demonstrate that satisfaction in work is
   enhanced or. . .productivity increases occur from a genuine increase in
   worker's decision-making power. Findings of such consistency, I submit,
   are rare in social research." [Paul B. Lumberg, cited by Hebert Gintis,
   "The nature of Labour Exchange and the Theory of Capitalist
   Production", Radical Political Economy vol. 1, p. 252]

   In spite of these findings, a "shift toward participatory relationships
   is scarcely apparent in capitalist production. . . [this is] not
   compatible with the neo-classical assertion as to the efficiency of the
   internal organisation of capitalist production." [Herbert Gintz, Op.
   Cit., p. 252] Why is this the case?

   Economist William Lazonick indicates the reason when he writes that
   "[m]any attempts at job enrichment and job enlargement in the first
   half of the 1970s resulted in the supply of more and better effort by
   workers. Yet many 'successful' experiments were cut short when the
   workers whose work had been enriched and enlarged began questioning
   traditional management prerogatives inherent in the existing
   hierarchical structure of the enterprise." [Competitive Advantage on
   the Shop Floor, p. 282]

   This is an important result, as it indicates that the ruling sections
   within capitalist firms have a vested interest in not introducing such
   schemes, even though they are more efficient methods of production. As
   can easily be imagined, managers have a clear incentive to resist
   participatory schemes (and David Schweickart notes, such resistance,
   "often bordering on sabotage, is well known and widely documented"
   [Against Capitalism, p. 229]). As an example of this, David Noble
   discusses a scheme (called the Pilot Program) ran by General Electric
   at Lynn, Massachusetts, USA in the late 1960s:

     "After considerable conflict, GE introduced a quality of work life
     program . . . which gave workers much more control over the machines
     and the production process and eliminated foremen. Before long, by
     all indicators, the program was succeeding -- machine use, output
     and product quality went up; scrap rate, machine downtime, worker
     absenteeism and turnover when down, and conflict on the floor
     dropped off considerably. Yet, little more than a year into the
     program -- following a union demand that it be extended throughout
     the shop and into other GE locations -- top management abolished the
     program out of fear of losing control over the workforce. Clearly,
     the company was willing to sacrifice gains in technical and economic
     efficiency in order to regain and insure management control."
     [Progress Without People, p. 65f]

   However, it could be claimed that owners, being concerned by the
   bottom-line of profits, could force management to introduce
   participation. By this method, competitive market forces would
   ultimately prevail as individual owners, pursuing profits, reorganise
   production and participation spreads across the economy. Indeed, there
   are a few firms that have introduced such schemes, but there has been
   no tendency for them to spread. This contradicts "free market"
   capitalist economic theory which states that those firms which
   introduce more efficient techniques will prosper and competitive market
   forces will ensure that other firms will introduce the technique.

   This is for three reasons.

   Firstly, the fact is that within "free market" capitalism keeping
   (indeed strengthening) skills and power in the hands of the workers
   makes it harder for a capitalist firm to maximise profits (i.e. unpaid
   labour). It strengthens the power of workers, who can use that power to
   gain increased wages (i.e. reduce the amount of surplus value they
   produce for their bosses).

   Workers' control basically leads to a usurpation of capitalist
   prerogatives -- including their share of revenues and their ability to
   extract more unpaid labour during the working day. While in the short
   run workers' control may lead to higher productivity (and so may be
   toyed with), in the long run, it leads to difficulties for capitalists
   to maximise their profits. So, "given that profits depend on the
   integrity of the labour exchange, a strongly centralised structure of
   control not only serves the interests of the employer, but dictates a
   minute division of labour irrespective of considerations of
   productivity. For this reason, the evidence for the superior
   productivity of 'workers control' represents the most dramatic of
   anomalies to the neo-classical theory of the firm: worker control
   increases the effective amount of work elicited from each worker and
   improves the co-ordination of work activities, while increasing the
   solidarity and delegitimising the hierarchical structure of ultimate
   authority at its root; hence it threatens to increase the power of
   workers in the struggle over the share of total value." [Hebert Gintz,
   Op. Cit., p. 264]

   So, a workplace which had extensive workers participation would hardly
   see the workers agreeing to reduce their skill levels, take a pay cut
   or increase their pace of work simply to enhance the profits of
   capitalists. Simply put, profit maximisation is not equivalent to
   technological efficiency. By getting workers to work longer, more
   intensely or in more unpleasant conditions can increase profits but
   does not yield more output for the same inputs. Workers' control would
   curtail capitalist means of enhancing profits by changing the quality
   and quantity of work. It is this requirement which also aids in
   understanding why capitalists will not support workers' control -- even
   though it is more efficient, it reduces the ability of capitalists to
   maximise profits by minimising labour costs. 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 time and intensity of work 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). Profit maximisation
   under capitalism means the maximum profits available for capitalists --
   not the maximum difference between selling price and cost as such. This
   difference explains the strange paradox of workers' control experiments
   being successful but being cancelled by management. The paradox 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 profit maximisation by undermining the power (and so
   privileges) of management to allocate that surplus as they see fit.

   Increased workers' control reduces the capitalists potential to
   maximise their profits and so will be opposed by both management and
   owners. 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). This is why profit
   maximisation does not entail efficiency and can actively work against
   it.

   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. Hence [experiences such
     as] the Pilot Program [at GE] . . . 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, 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, of 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 (i.e. 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
   management authority, workers' control 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. In this they will be supported 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 maximum
   return would be endangered by workers' control, even though it is
   technically more efficient, 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 no owner 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 (a similar
   situation occurs when firms invest in "green" technology, see
   [27]section E.5).

   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 (for it ensures 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 (and banks, who in turn loan over the short
   term to 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. In other words, "[i]f 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." [Hebert 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).

   In addition, moves towards democratic workplaces within capitalism is
   an example of the system in conflict with itself -- pursuing its
   objectives by methods which constantly defeat those same objectives. As
   Paul Carden argues, 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 now superfluous the ruling class really is)." [Revolution
   and Modern Capitalism, pp. 45-46]

   The experience of the 1970s supports this thesis well. 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 short-term profits (i.e. capitalist share of value
   added) can be harmed. Attempts to make oppressed, exploited and
   alienated workers work 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 "automatic" actions of market forces.
   In spite of such schemes being more efficient, capitalism will not
   select them because they empower workers and make it hard for
   capitalists to maximise their short term 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).

   However 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, market
   forces will not select them (i.e. collective action would be required).

   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."
   [Sam 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.

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 modern "education" system. Such schools have a feature of the
   anarchist movement since the turn of the 20th century while interest in
   libertarian forms of education has been a feature of 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, to use Proudhon's words, ensure that the "industrial
   worker, the man [sic!] of action and the intellectual would all be
   rolled into one" [cited by Steward Edward in 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, middle 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
   good, all education is good, and education is always good. As Henry
   Barnard, the first US commissioner of education, appointed in 1867,
   exhorted, "education always leads to freedom".

   Those involved in libertarian education believe the contrary. They
   believe that national education systems exist only to produce citizens
   who'll 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 in An Enquiry Concerning
   Political Justice 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." [cited by Colin Ward, Anarchy in Action, p. 81]

   With the growth of industrialism in the 19th century 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 in 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. Franciso Ferrer (the most
   famous supporter of Modern Schooling due to his execution by the
   Spanish state in 1909) 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." [cited
     by Clifford Harper, Anarchy: A Graphic Guide, p. 100]

   Little wonder, then, that Emma Goldman argued that the "modern method
   of education" has "little regard for personal liberty and originality
   of thought. Uniformity and imitation is [its] motto" and that 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." [Red Emma Speaks, p. 118, p.
   116]

   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 [or herself], to know his [or her] relation to his fellow[s]. .
   . " [Emma Goldman, Op. Cit., p. 121] It would, in Stirner's words, be
   "an education for freedom, not for subservience."

   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 and
   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 [or her] 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 [or herself] ready to
     receive and assimilate". [Emma Goldman, Op. Cit., p. 126]

   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 Clifford 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, cited 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 the
   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, cited 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 later 1890s. The movement was started in France by Louise
   Michel and Sebastien Faure, where Franciso 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 in Britain, France,
   Belgium, Holland, Italy, Germany, Switzerland, Poland, Czechoslovakia,
   Yugoslavia, Argentina, Brazil, Mexico, China, Japan and, on the
   greatest scale, in the USA.

   However, for most anarchists, Modern Schools are not enough in
   themselves to produce a libertarian society. They agree with Bakunin's
   argument that "[f]or 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. Little wonder, then, that Bakunin supported the
   International Workers Association's resolution that urged "the various
   sections [of the International] to establish public courses . . .
   [based on] all-round instruction, in order to remedy as much as
   possible the insufficient education that workers currently receive."
   [quoted by Bakunin, Op. Cit., p. 175]

   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." [Michael 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, ignoring
   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 essay "Francisco Ferrer and the Modern School" in Anarchism
   and Other Essays and 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 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?

   In his article "Theses on Libertarian Municipalism" [in The Anarchist
   Papers, Black Rose Press, 1986], Murray Bookchin has proposed a
   non-parliamentary electoral strategy for anarchists. He has 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. The main points of his
   argument are summarised below, followed by a brief commentary.

   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 thinks 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 argues that it can be
   participatory rather than parliamentary. Or, as he puts it, "[t]he
   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. . .
   " He also points 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.

   But, 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, however, Bookchin thinks that a libertarian
   politics of local government is still possible, provided anarchists get
   their 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."

   What would anarchists do electorally at the local level? Bookchin
   proposes that they change city and town charters to make political
   institutions 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."

   In a latter essay, Bookchin argues that Libertarian Muncipalism
   "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. . ." [From Urbanisation to
   Cities, p. 266]

   Thus Bookchin sees Libertarian Muncipalism as a process by which the
   state can be undermined by using elections as the means of creating
   popular assemblies. Part of this process, he argues, 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." [Op. Cit. p. 235]

   Bookchin considers Libertarian Muncipalism as the key means of creating
   an anarchist society, and argues that those anarchists who disagree
   with it are failing to take their politics seriously. "It is curious,"
   he notes, "that many anarchists who celebrate the existence of a
   'collectivised' industrial enterprise, here and there, with
   considerable enthusiasm despite its emergence within a thoroughly
   bourgeois economic framework, can view a municipal politics that
   entails 'elections' of any kind with repugnance, even if such a
   politics is structured around neighbourhood assemblies, recallable
   deputies, radically democratic forms of accountability, and deeply
   rooted localist networks." ["Theses on Libertarian Municipalism"]

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

   Firstly, it is clear that Libertarian Muncipalism's arguments in favour
   of community assemblies is important and cannot be ignored. Bookchin is
   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 Muncipalism has a very valid point -- a free
   society will be created and maintained within the community as well as
   in the workplace.

   Secondly, Bookchin and other Libertarian Muncipalists are totally
   correct to argue that anarchists should work in their local
   communities. As noted in section [28]J.5.1, many anarchists are doing
   just that and are being very successful as well. However, most
   anarchists reject the idea that using elections are a viable means of
   "struggle toward creating new civic institutions out of old ones (or
   replacing the old ones altogether)." [From Urbanisation to Cities, p.
   267]

   The most serious problem 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.

   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? And would its educational
   value, if any, outweigh the disadvantages of electioneering mentioned
   in sections [29]J.2.2 and [30]J.2.4, such as the fact that voting
   ratifies the current system? 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 (as highlighted in section [31]J.2.6).
   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 Muncipalism will be
   any different -- after all, it is the circumstances the parties find
   themselves in which are decisive, not the theory they hold (the social
   relations they face will transform the theory, not vice versa, in other
   words).

   Lastly, most anarchists question the whole process on which Libertarian
   Muncipalism 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 using alienated, representative
   institutions to abolish these institutions is mad. As the 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 section J.5.1 - [32]"What is Community Unionism?" 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.
   Instead of a "confederal muncipalist movement run[ning] candidates for
   municipal councils with demands for the institution of public
   assemblies" [Murray Bookchin, Op. Cit., p. 229] 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." [Kropotkin's
   Revolutionary Pamphlets, 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 Muncipalism confuses
   with electioneering.

   So, while Libertarian Muncipalism 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?

   Currently we are seeing a concerted attempt to rollback the state
   within society. This has been begun by the right-wing in the name of
   "freedom," "individual dignity and 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 process 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 the
   current attacks on it? (see [33]next section for a short discussion of
   business based welfare)

   First we must note that this attack of "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 in 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 can be said for many of 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.

   Thirdly, we must note that while most anarchists are in favour of
   collective self-help and welfare, we are opposed to the welfare state.
   Part of the alternatives anarchists try and create are self-managed and
   communal community welfare projects (see [34]next section). Moreover,
   in the past, anarchists and syndicalists were at the forefront in
   opposing state welfare schemes (introduced, we may note, not by
   socialists but by liberals and other supporters of capitalism to
   undercut support for radical alternatives and 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 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." [Carole
   Pateman, "The Patriarchal Welfare State", in The Disorder of Women, p.
   195] She does 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." [Ibid., 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 state
   welfare 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, p. 81]

   The role of state education as a means of systematically indoctrinating
   the working class is reflected in William Lazonick's essay "The
   Subjection of Labour to Capital: The rise of the Capitalist System":

     "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."
     [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 recent attack on
   welfare in the UK -- 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.

   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 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
   "libertarian" 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). And
   anarchists agree with Colin Ward when he thinks that the demand for
   "tenant control" must come from below, by the "collective resistance"
   of the tenants themselves, perhaps as a growth from struggles against
   rent increases. [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, by the direct action of those who receive
   it by a "multiplicity of mutual aid organisations among claimants,
   patients, victims" for this "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." [Colin
   Ward, Op. Cit., p. 125]

   Ultimately, unlike the state socialist/liberal left, anarchists reject
   the idea that the case 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. And, as
   such, 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, of 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 capitalists and other sections 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 (and as we have explained in detail in sections [35]B,
   [36]C and [37]D, 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" and managers who do so. 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 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).

   Therefore, 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 step 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.

   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 create for ourselves do what we want and not what
   capital wants. In the end, what we create and run by our own activity
   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." [Colin Ward, Op. Cit.,
   p. 123] While sometimes anarchists are forced to defend the latter
   against the greater evil of "free market" corporate capitalism, we
   never forget the importance of creating and strengthening the former. A
   point we will discuss more in section [38]J.5.16 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 people joining together to
   practice mutual aid and solidarity. These take 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.

   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." [Colin Ward, Social Policy: an anarchist response, p.
   3]

   Ward terms this self-help (and self-managed) working class activity the
   "welfare road we failed to take."

   Indeed, 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 or 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 king 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." [Colin 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. 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. Here we will (using other sources than Mutual
   Aid) indicate a few examples of collective welfare in action.

   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." [Colin Ward, Social Policy: an
   anarchist response, p. 2]

   The historian E.P. Thompson confirms this picture of a wide network of
   working class self-help organisations:

   "Small tradesmen, artisans, labourers - 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, p. 462]

   Taking the United States, Sam Dolgoff presents 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, urges 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, 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 network could be initially build upon, and
   be an aspect of, the struggles of claimants, patients, tenants, and
   other users of the current welfare state (see [39]last section).

   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. And, of course, it will have its problems, but as Colin
   Ward notes, that "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, Op. Cit., p. 6]
   He notes that richer areas generally get a better service from the
   welfare state than poorer ones, thus violating the claims of equal
   service. And 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? Centralisation leads to
   disempowerment, which in turn leads to indifference, not solidarity.
   Rudolf Rocker reminds us of the evil effects of centralism when he
   writes:

     "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. 54]

   And, as an example, he notes that while the highly centralised German
   labour movement "did not raise a finger to avert the catastrophe" of
   Hitler's seizing power and "which in a few months beat their
   organisation completely to pieces" the exact opposite happened in Spain
   ("where Anarcho-Syndicalism had maintained its hold upon organised
   labour from the days of the First International"). There the
   anarcho-syndicalist C.N.T. "frustrated the criminal plans of Franco"
   and "by their heroic example spurred the Spanish workers and peasants
   to the battle." Without the heroic resistance of the
   Anarcho-Syndicalist labour unions the Fascist reaction would have
   dominated the whole country in a matter of weeks. [Op. Cit., p. 53]

   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." [E.P.
   Thompson, Op. Cit., p. 461f] The same complaints were voiced in Britain
   about the welfare state allowing strikers to claim benefit will 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. And 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 totally 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
   [40]last section, it is worthwhile to quickly discuss privatised
   welfare and why most anarchists reject this option even more than state
   welfare.

   Firstly, all forms of private healthcare/welfare has 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, the "[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." [Alfie Kohn, No
   Contest, p. 240] In the UK, attempts to introduce "market forces" into
   the National Health Service also lead to increased costs as well as
   inflating the services 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] Although market
   competition was supposed to lower commissions in Chile, the private
   pension fund market is dominated by a handful of companies. These,
   according to economists Peter Diamond and Salvador Valdes-Prieto, form
   a "monopolistic competitive market" rather than a truly competitive
   one. A similar process seems to be taking place in Argentina, where
   commissions have remained around 3.5 percent of taxable salary. As
   argued in section [41]C.4, such oligopolistic tendencies are inherent
   in capitalism and so this development is not unexpected.

   Even if commission costs were lowered (perhaps 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 (see Stephen J. Kay, "The Chile
   Con: Privatizing Social Security in South America," The American
   Prospect no. 33, July-August 1997, pp. 48-52 for details).

   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."
   [Op. Cit., pp. 304-5]

   So, anarchists reject private welfare as a con (and an even bigger one
   than state welfare). Instead we 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 ("the urge to destroy is a creative urge" - Bakunin) 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]

References

   1. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ1.html#secj14
   2. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ1.html#secj15
   3. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj511
   4. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj52
   5. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj53
   6. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ3.html#secj39
   7. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj53
   8. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ3.html#secj39
   9. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj53
  10. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj52
  11. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj54
  12. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj52
  13. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj52
  14. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj52
  15. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj55
  16. file://localhost/home/mauro/baku/debianize/maint/anarchy/secB3.html#secb32
  17. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj51
  18. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj511
  19. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj512
  20. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj512
  21. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj512
  22. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj511
  23. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj512
  24. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj511
  25. file://localhost/home/mauro/baku/debianize/maint/anarchy/secD10.html
  26. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj511
  27. file://localhost/home/mauro/baku/debianize/maint/anarchy/secE5.html
  28. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj51
  29. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ2.html#secj22
  30. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ2.html#secj24
  31. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ2.html#secj26
  32. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj51
  33. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj516
  34. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj516
  35. file://localhost/home/mauro/baku/debianize/maint/anarchy/secBcon.html
  36. file://localhost/home/mauro/baku/debianize/maint/anarchy/secCcon.html
  37. file://localhost/home/mauro/baku/debianize/maint/anarchy/secDcon.html
  38. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj516
  39. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj515
  40. file://localhost/home/mauro/baku/debianize/maint/anarchy/secJ5.html#secj515
  41. file://localhost/home/mauro/baku/debianize/maint/anarchy/secC4.html
