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An Anarchist FAQ
Index | What's New | Links | Introduction | Bibliography

LINKPDF version of Section J.

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 J.1.4 and J.1.5 for more details on anarchist opinions on such "single issue" campaigns).

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

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

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 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 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 next section).

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

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

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

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

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

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

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

"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 next section.

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

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

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

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

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

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

So, what do anarchists think of the trade unions?

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

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

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

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

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

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

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

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

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

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

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

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

These groups

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

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

As part of this activity anarchists promote the ideas of Industrial Unionism we highlighted in the last section -- namely direct workers control of struggle via workplace assemblies and recallable committees -- during times of struggle. However, anarchists are aware that economic struggle (and trade unionism as such) "cannot be an end in itself, since the struggle must also be waged at a political level to distinguish the role of the State." [Errico Malatesta, Life and Ideas, p, 115] Thus, as well as encouraging worker self-organisation and self-activity, anarchist groups also seek to politicise struggles and those involved in them. Only this process of self-activity and political discussion between equals within social struggles can ensure the process of working class self-liberation and the creation of new, more libertarian, forms of workplace organisation.

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

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 J.5.2) could grow and expand.

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

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

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

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

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

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

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

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

"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 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 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 J.5.1) could create their own mutual banks and money which could be used to fund co-operatives and support strikes and other forms of social struggle. In this way a healthy communalised co-operative sector could develop within capitalism, overcoming the problems of isolation facing workplace co-operatives (see section J.5.11) as well as providing a firm framework of support for those in struggle.

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

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

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 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 J.5.12).

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

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

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

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

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

From all this its clear to see why co-operatives are supported by anarchists. We are "convinced that the co-operative could, potentially, replace capitalism and carries within it the seeds of economic emancipation. . . The workers learn from this precious experience how to organise and themselves conduct the economy without guardian angels, the state or their former employers." [Michael Bakunin, Op. Cit., p. 399] Co-operatives give us a useful insight into the possibilities of a free, socialist, economy. Even within the hierarchical capitalist economy, co-operatives show us that a better future is possible and that production can be organised in a co-operative fashion and that by so doing we can reap the individual and social benefits of working together as equals.

However, this does not mean that all aspects of the co-operative movement find favour with anarchists. As Bakunin pointed out, "there are two kinds of co-operative: bourgeois co-operation, which tends to create a privileged class, a sort of new collective bourgeoisie organised into a stockholding society: and truly Socialist co-operation, the co-operation of the future which for this very reason is virtually impossible of realisation at present." [Op. Cit., p. 385] In other words, while co-operatives are the germ of the future, in the present they are often limited by the capitalist environment they find themselves and narrow their vision to just surviving within the current system.

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

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

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-op