In Libertarian* areas of Spain, individual retail businesses and democratically operated businesses existed in Catalonia and especially in Barcelona.[i] There were some small businesses that existed outside Catalonia. For example, some small shops remained in Calanda and Graus.[ii]
What is the difference between Libertarian Mutualism and Capitalism?
Capitalism is a competitive market system where the majority of businesses operate in a situation** where an employer pays themselves more money than their employees for an equal amount of time working.[iii]
Libertarian Mutualism is a regulated form of a competitive market system where the majority of businesses operate in the following ways: self employment,[iv] a situation where both an employer and employee of smaller businesses are paid equally for an equal amount of time working,[v] or a situation where small and medium business are democratically operated,[vi] and large scale democratic industry and agricultural places are federated and controlled by the community in order to regulate the market as well as provide public services.[vii]
As economist Jim Stanford points out, contrary to popular belief, markets and competition exist in other economic systems besides Capitalism (e.g., Market Socialism).[viii]
In economics, Libertarian Mutualism is very similar to Libertarian Collectivism except Libertarian Collectivism is free from market competition.[ix] Libertarian Collectivism also includes free health care and free basic foods.[x] People preferring a living beyond basic needs will use money for exchange.[xi] In Libertarian Mutualism, the community controlled banks charge 1% interest or less to cover expenses. In Libertarian Collectivism, the community banks also handle distribution of all commodities along with charging interest at 1% or less to cover bank expenses. The Central Labor Bank in Barcelona, with branches everywhere, offered credit with a charge of 1% interest as well as purchasing products and balancing accounts between collectives.[xii] Since market competition is gone in Collectivism, product prices are based on how much physical and mental work went into them. As with Mutualism, how much average work it takes to create a product is decided either individually or by the community.[xiii]
In the Catalonia economy, there were usually combinations of mutualist and collectivist practices within and outside the same workplaces and areas. However the combinations were more Collectivist leaning.[xiv] Since the majority of the economy in Catalonia was run in an attempted Collectivist manner, Catalonia can be recognized as an industrial Libertarian Collectivist economy. However, there were individual areas and federated areas that were distinctly Mutualist.
The largest industry in Catalonia, the textile industry,[xv] was organized into a Mutualist federation of sorts (CNT textile union) with competition between collectives in the same industry.
How were the large Mutualist businesses organized within the textile industry?
In the textile industry, all functionaries carried out the instructions of the membership and reported back directly to the men on the job and union meetings. During the building of the collective, a management committee of 19 was chosen by the rank and file membership. After three months the management committee would report back to the membership on the condition of the collective and its progress.
Money that used to go to dividends and premiums was used to pay the increased costs for raw materials. Every factory elected its administrative committee composed of its most capable workers. Depending on the size of the factory, the function of these committees included inner plant organizations, finance, statistics, relations and correspondence with other factories and with the community. There was another organization of a top flight technical commission staffed by very capable technical and administrative experts in the entire industry.
This commission contained engineers, technicians, and commercial experts, made plans to increase production, specialization, installations, etc.[xvi]
The CNT textile union looked after the sales and importation of raw materials for the factory, while smaller collectives did their own deals with other collectives or directly with individuals.[xvii]
However in February 1937 the CNT and UGT agreed to socialization*** of the textile industry of Barcelona.[xviii]
In the following March (1938), the CNT began to promote consumer owned and operated businesses. The CNT revised many of its previous positions mainly due to the war effort.[xix]
What about medium and small democratic businesses?
The Barcelona department stores and other medium and smaller co-operative businesses, and individual retail businesses existed in various areas around Catalonia.[xx]
What about small businesses with employers?
Many in the Spanish Libertarian CNT preferred the Libertarian views of Errico Malatesta, James Guillaume, and most other Libertarians from all schools of thought regarding wage labor. In their forms (and most other forms) of libertarianism, markets and competition could exist (Individualist and Mutualist socialist libertarianism) however without any wage labor (wage labor is an employer and employee relationship).[xxi]
It seems for this reason, in quite a few areas, small businesses with employers were collectivized by the CNT.[xxii] The former employers where permitted to join the collectivized businesses or socialized workshops and own an equal share of the business along with all the other workers.[xxiii]
However, the CNT militant, Sebastiá Clara, (referring to the barber industry in particular) thought it would have been best to allow the small employers to keep their businesses.[xxiv]
Self employment remained in all the different forms of economics (mutualist, collectivist, communist, etc.). In many areas within the libertarian collectivist and libertarian communist economies, the workers would dispose of their produce through local supply committees set up by the CNT.[xxv] The official policy of the Libertarian CNT was respect for the small man’s property of the self-employed individuals.[xxvi]
During his visits to rural collectives and urban socialized enterprises in Libertarian Spain, the Libertarian Souchy concluded that a mixed libertarian economy of collective and privately owned democratic businesses is the true manifestation of a free society.[xxvii]
* I am using the term Libertarian as understood by the CNT and others. Libertarian is used to describe a society that is organized through types of direct democracy within the business, workplace, federation and the society in general. People who do not wish to take part in the Libertarian society do not have to. For more information pleased see works by Proudhon, Bakunin, Kropotkin, and books, etc, about the CNT.
** Contrary to popular thought, there is only one way to make profit. When money is made by an employer that is paying themselves more money then their employees, the extra money the employer keeps is actually profit. When self-employed individuals, small businesses, or small and medium democratic businesses make money from the sale of their products their income is referred to as ‘exchange,’ (please see Kropotkin’s entry on Anarchism in The Encyclopedia Britannica, 1910 edition) though sometimes their income is referred to as profit as well, though it is understood as ‘income’ rather than capitalist profit (ie, an employer making more money then their employees). For more information on profit please see endnote 3.
*** Socialization is a situation where an entire industry is free from competitiveness (market competition) within its own industry during trade.
Endnotes and Bibliography:
[i]Gabriel Jackson, The Spanish Republic and the Civil War, 1931-1939 (Princeton, New Jersey: Princeton University Press, 1965), pp 278-279: In Catalonia “Most individual retail businesses were untouched.” And Ronald Fraser, Blood of Spain: An Oral History of the Spanish Civil War (New York: Pantheon Books, 1979), 210-236, and Sam Dolgoff, The Anarchist Collectives (Brooklyn: Free Life Editions, 1974), 114: “In some Catalonian towns the old style bourgeois agricultural (Mutualist) syndicates supplied needed commodities to peasant landlords and small businesses… Usually the bourgeois-oriented associations organized their own cooperatives…in Barcelona the peasant’s associations opened their own stores in different sections of the city…”
[ii]Dolgoff, The Anarchist Collective, 131 and 136. Some small shops existed in Calanda where a wonderfully active Libertarian Youth existed. One shoe shop and two other shops existed in Graus.
[iii]Marx states: “The driving motive and determining purpose of capitalist production is the self-valorization of capital to the greatest possible extent, i.e., the greatest possible production of surplus value…” Karl Marx, Capital Volume 1 (England: Penguin Classics (reprint), 1990), 449; as does Kropotkin: “…the capitalists to appropriate for themselves a quite disproportionate share of the yearly accumulated surplus of production…” Peter Kropotkin, “Anarchism” (1910), Encyclopedia Britannica. Retrieved Feb. 10, 2009 from: http://dwardmac.pitzer.edu/Anarchist_Archives/kropotkin/britanniaanarchy.html.
In a Capitalist business, an employer pays themselves more money than their employees for an equal amount of time working. Surplus value is the money the employer receives which would have been the employees’ if the employer and employees were paid equally. Also please see: Iain McKay, “What is Surplus Value?” in The Anarchist FAQ, (Oakland: AK Press, 2008), 229. Also available online at: http://www.infoshop.org/faq/secC2.html#secc21.
[iv]Pierre-Joseph Proudhon, General Idea of the Revolution in the Nineteenth Century (New York: Cosmo Classics, 2007), pp 217: “Anybody who is capable of cutting out and sewing up a pair of shoes can get a license, open a shop, and hang out a sign, ‘So and So, Manufacturing Shoe Merchant’ although it may only be himself behind his counter.”
[v]Stewart Edwards, ed., Selected Writings of P.-J. Proudhon (Garden City, New York: Anchor Books, 1969), 64: “I will place a condition upon my service: the man who wishes to employ me as a servant must pay me fifty per cent of his income. Without this we are beyond the bounds of fraternity, equality, and mutuality.”
[vi]Proudhon, General Idea of the Revolution in the Nineteenth Century, 213: “By participating in the loss and gains, by the graded scale of pay, and successive promotion to all grades, the collective force, which is a product of the community, ceases to be a source of profit to a small number of managers and speculators: it becomes the property of all workers. At the same time, by a broad education, by the obligation of apprenticeship, and by the co-operation of all who take part in the collective work, the division of labor can no longer be a cause of degradation for the workman: it is on the contrary…”
[vii]Pierre-Joseph Proudhon, (Richard Vernon, ed.), The Principle of Federation (Toronto: University of Toronto Press, 1979), 70 and 72: “The agro-industrial federation, on the other hand, will tend to foster increasing equality, by organizing all public services in an economical fashion…industries are sisters; they are part of the same body… They should therefore federate… in order to guarantee mutually the conditions of common prosperity…” And Edwards, Selected Writings of P.-J. Proudhon, 70: “The advocates of mutualism are as familiar as anyone with the laws of supply and demand and they will be careful not to infringe them. Detailed and frequently reviewed statistics, precise information about needs and living standards, an honest breakdown of cost prices, the foreseeing of all eventualities, the fixing after amicable discussion of a maximum and minimum profit margin, taking into account the risks involved, the organization of regulating societies: these things, roughly speaking, constitute all the measures by means of which they hope to regulate the market.”
[viii]Jim Stanford, Economics for Everyone: A Short Guide to the Economics of Capitalism (Ann Arbor, MI: Pluto Press, 2008), 36: “But capitalism is not the only economic system which
relies on markets. Pre-capitalist economies also had markets—where producers could sell excess supplies of agricultural goods or handicrafts, and where exotic commodities (like spices or fabrics) from far-off lands could be purchased. Most forms of socialism also rely heavily on markets to distribute end products and even, in some cases, to organize investment and production. So markets are not unique to capitalism, and there is nothing inherently capitalist about a market.” Mutualism is and has always been part of the socialist movement. Mutualists were part of the International Working Men’s Association: “The First Congress of the International took place in Geneva from Sept. 3 to 8, 1866. It was attended by 60 delegates. Although some of these delegates were representatives of the schools of Proudhon, Blanqui, or Bakunin, the general tendency of the gathering was socialist in the Marxian tradition. “ ‘First Congress’—Geneva—Sept. 3-8, 1866,” Organizational History of the “International Working Men’s Association” at http://www.marxists.org/history/usa/eam/fi/firstinternational.html. Bakunin claimed that “Proudhon was the master of us all,” according to George Woodcock in Anarchism (Cleveland: The World Publishing Company, 1962), 152. Kropotkin was one of Proudhon’s “confessed disciples.” Benjamin Tucker, in Instead of a Book (New York: Arno Press, 1972), 391, called Proudhon “the father of the Anarchistic school of Socialism.” And, as we noted above, the socialist historian Carl Landauer considered Proudhon a socialist, as did the noted British socialist G.D.H. Cole in his History of Socialist Thought (and in fact called him one of the “major prophets of Socialism”). What about Marx and Engels?…According to Engels, Proudhon was “the Socialist of the small peasant and master-craftsman.” Marx and Engels, Selected Works, 260. (The citations from Woodcock, Landauer, Cole, and Engels can be found at http://www.infoshop.org/faq/append11.html#app3.) Marx considered Proudhon’s Socialism “petty-bourgeois Socialism.” Karl Marx, Capital Volume 1 (England: Penguin Classics (reprint) 1990), 181. Marx also mentions about Proudhon: “Not only does Proudhon write in the interest of the proletarians, he is himself a proletarian, an ouvrier. His work is a scientific manifesto of the French proletariat…” Karl Marx, The Holy Family (Frankfurt am Main , 1844), Chapter 4. Retrieved June 6, 2009 from: http://www.marxists.org/archive/marx/works/1845/holy-family/ch04.htm. In the Communist Manifesto, Karl Marx donates an entire section to market socialism. He notes its “great acuteness,” though he critiques it for maintaining markets, competition and money. Karl Marx, Manifesto of the Communist Party (1848), Chapter 3, Section B. “Petty Bourgeois Socialism.” Retrieved June 5, 2009 from: http://www.marxists.org/archive/marx/works/1848/communist-manifesto/.
[ix]Sam Dolgoff, ed., Bakunin On Anarchy, (New York: Vintage Books, 1972), 366. From On Building the New Social Order by James Guillaume: “…the value of the commodities having been established in advance by a contractual agreement between the regional cooperative federations and the various communes.”
[x]Ibid., 371 “First of course, are medical services, which will be free of charge…” to the members of the community. And 369 “…efforts must be made to institute the free distribution of certain essential foods, such as bread, meat, wine, dairy products etc…”
[xi]Ibid., please see section “B. Exchange,” 366.
[xii]Ibid., please see section “D. Statistics,” 370. For Mutualism please see: Proudhon & His “Bank of the People” by Charles Dana. For the Barcelona Central Labor Bank please see: Dolgoff, The Anarchist Collectives, 68-69.
[xiii]Ibid., please see section “B. Exchange,” 366. For Mutualism please see: Proudhon (Vernon), The Principle of Federation, 45: “The contract of federation, whose essence is always to reserve more powers for the citizen than for the state, and for municipal and provincial authorities than for the central power… Establishes weights and measures, prescribes the units, value, and divisions of currency.”
[xiv]Please see: Dolgoff, The Anarchist Collectives, and Fraser, Blood of Spain.
[xvi]Dolgoff, The Anarchist Collectives, 95.
[xvii]Fraser, Blood of Spain, 219.
[xix]Jose Peirats, The CNT in the Spanish Revolution Vol. 3, (East Sussex: ChristieBooks, 2001), 38.
[xx]Fraser, Blood of Spain, 221: “The Barcelona…department stores, where each collective was an autonomous unit…,” and Dolgoff, The Anarchist Collectives, 114.
[xxi]Errico Malatesta, Errico Malatesta: Life and Ideas (London: Freedom Press, 1977), 33: “Admitted the basic principle of anarchism—which is that no-one should wish or have the opportunity to reduce others to a state of subjection and oblige them to work for him—it is clear that all, and only, those ways of life which respect freedom, and recognise that each individual has an equal right to freedom to the means of production and the full enjoyment of the product of his own labor, have anything in common with anarchism.” Dolgoff, The Anarchist Collectives, 359: “Each peasant will continue to cultivate the land as he did in the past, with this single difference: his former highbred hands, if he had any, will become his partners and share with him the products which their common labor extracts from the land.” For the majority view also see: http://www.infoshop.org/faq/secG1.html#secg13. Regarding the policy of the CNT and the ultimate goal: “Although the majority of CNT-FAI members regarded libertarian communism as the final goal of their movement, there were a few “individualist” Anarchists who, while opposed to the employment of labor, held that an anarchist society should not be limited to one particular system of production.” Federico Urales, “La anarquia al alcance de todos,” 29. Burnett Bolloten, The Spanish Civil War: Revolution and Counterrevolution, (Chapel Hill: The University of North Carolina Press, 1991), 65.
[xxii]Bolloten, The Spanish Civil War, 57.
[xxiv]Fraser, Blood of Spain, 233.
[xxv]Bolloten, The Spanish Civil War, 57.
[xxvi]Ibid., pp. 64: “It is of course, true that the official policy of the CNT…was, within certain limits, one of respect for the property of the small Republican farmer…However, although neither the UGT nor the CNT permitted the small Republican farmer to hold more land than he could cultivate without the aid of hired labor…”
[xxvii]Dolgoff, The Anarchist Collectives, 26: “Economic variety, i.e., the co-existence of collective and privately conducted enterprises,* will not adversely affect the economy. But economic variety is, on the contrary, the true manifestation and indispensable precondition for a free society.” In summary of the Spanish Libertarian revolution, the CNT member and historian Peirats notes: “Employers prepared to lend a helping hand were awarded status equal to that of any other collectivist, or indeed—in the case of small property owners and artisans—were allowed to run their industry for themselves, or farm whatever land they could farm with the labour of their own unaided family, on condition that no waged labour was employed.” Peirats, The CNT in the Spanish Revolution Vol. 1, (East Sussex: The Meltzer Press, 2001), 223.
* Souchy is referring to enterprises that did not employ wage labor.