MONEY IN ANARCHISM: between fraternity and individualism.Alba Delgado & Estrella TrincadoUniversidad Complutense de Madrid

Introduction

This research is oriented towards the understanding of the different schools of economic thought re-lated to anarchism and the impact of their concept of money in specific policies. The aim is toidentify current public policy challenges, including the future economic and financial development.

Money has a key role in facilitating the exchange of the surplus of production and to provide uswith what we cannot produce. Money, as the means of exchange, becomes the universal equivalentof all commodities that must circulate, and therefore has to be generally accepted. Its value, as anexchange value, determines the quantitative relationship of exchange.

The history of the currency as a means of exchange has created a lot of generated discussions aboutits shape and use. The debates (seigniorage, banks, etc.) that have shaped money consistency, reli-ability, rights and obligations have enabled its widespread acceptance. The objectives of thesepolicies are to ensure the circulation or even distribute and allocate the productive efforts of society,but it is also a way to accumulate and maintain certain power.

Nowadays money is not convertible, does not involve the physical presence of a coin or theexistence of a metallic standard of value. The shape of money as means of exchange is independentof the material it contains. It is a symbol of value that depends on its possibility of being used, noton its intrinsic value.

Although it is said, since the eighties, that the priorities of economic politics have been fullemployment, inflation and the continuous growth; the reality is that the main worry has been theprice stability, which implies fiscal austerity and monetary contraction. And whereas the financialmarkets were supposed to allocate capital and reduce risk, their development has provoked theexpansion of the financial sector towards speculation, which has generated periodic crisis andbubbles.

While we do an effort to understand the world as a whole we create concepts and establish relationsthat describe our reality. Ideas are powerful. We are usually slaves of an intellectual influence thataffects all our lives. But it would always be possible to elaborate new perspectives, perceptions andcompositions that provide us the reasons and the pillars to shape other thinking -and action- aroundthem. The building of the modern society begun with the celebrated Liberté, Égalité, Fraternité ofthe French Revolution but have developed nowadays towards Liberté, Egalité, Individualism1. Thisshift between fraternity and individualism implies a different approach on how the economic sys-tems are organized.

In order to understand different social organization modes we will first delve into the nature of themodes that pretend to regulate the human activity. Rightly, collectivism is the starting point of allhistoric life. What we examine in this paper is if the community implies a sacrifice of individualfreedom or if, on the contrary, the interdependence of the individual and the social whole release usby giving us a common purpose.

1 Although we are not going to deal with it, we wanted to point out how different the ideas thatinfluence our lives can be. As an example, we can mention the oriental ideals that rule theirworld: duty, work, pleasure.

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In the other hand, the modern State seems to be a unity that seeks a balance between freedom andorder. Anarchism advocates the elimination of all forms of imposed authority2, defending thepossibility of order without government.3 According to anarchists, the State is not synonymous withSociety. The first is a manipulating human artifice; the second is natural. Government is anexploiter by definition. Its power is based on war, territorial expansion and booty, not on aconception of natural social unit. Not being its origin established on a Social contract, itsdisappearance will not affect the society or the civilization. In a context of freedom, self-controlcould replace the control from above since good behaviour will become instinctive andspontaneous. The anarchist society is thus a natural organization based on free exchange and aconstantly changing order (Gómez Casas 1986).

However, there is considerable variation among anarchist political philosophies.4 Possibly, there is acommon basis in all of them, as anarchism has a strong Utopian base―some utopian socialists, likeGodwin, were anarchists – and, generally, anarchists disagree with Hobbesians assuming thatindividuals are sociable and naturally good or neutral. However, we can distinguish betweenAnarcho-communism, which is probably the most influential type of Anarchism, and otherimportant Anarchists today, such as Anarcho-Capitalism.

Despite the practical importance of Anarchism today and the existence of so many followers of it,however the theoretical approach made on it is limited, and in special the comparison betweenAnarcho-communism and Anarcho-capitalism is not clear due to the fact that both of themdisregard each other, sometimes based on alleged prejudices. So, in this article, we propose tounderstand the differences between Anarcho-socialism and Anarcho-capitalism, first explaining theorigin of these two tendencies and recalling their forerunners. Then, we will base our study on theturning point of these theories in the economic arena: their concept of money. In particular we shalladdress the question of freedom and responsibility in the monetary real; and we shall also stress theimportance given to the principle of utility versus the principle of authority.

Anarcho-communism

The first known usage of the word anarchy appears in the play Seven Against Thebes by Aeschylus,dated 467 BC, addressing a somewhat anarcho-communism. Within Greek philosophy, Zeno’svision of a free community without government was opposed to the state-Utopia of Plato’sRepublic. Like many modern anarchists, Zeno believed that if people follow their instincts, theywill have no need of law courts or police, public worship or use of money. The first modern authorto have published a treatise explicitly advocating the absence of government is William Godwin(1793). Though he did not use the word Anarchism, some regard him as the founder ofphilosophical Anarchism. It is not until the French Pierre-Joseph Proudhon published in 1840 Whatis Property? (Proudhon 1876) that the term was adopted as a self-description. For this reason, someclaim Proudhon to be the founder of modern Anarchist theory.

Most anarcho-communists want to modify or even replace the capitalist system with another one inwhich the exchanges and the productive activity could take place separately. The common aspira-tion of these anarchists is to establish a classless society and to avoid exploitation. Generally speak-ing, the initial wish is to achieve more social justice and to facilitate a more equal distribution of in-

2 The word comes from the Greek “an”, without, and “arch or archaism”, rule or ruler. 3 Although some have made the word synonymous of disorder or chaos, trying to invest it

with fearfulness, for anarchists, it is authority the one who creates disorder (Woodcock 1944)4 Bibliography and opinions differ in areas ranging from the role of violence in fostering

Anarchism, to the preferred type of economic system, or the interpretation of egalitarian ideals(see Nettlau 1934, 1935; and Bettini 1972)

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come and wealth, because they think that inequality of wealth is not a “law of nature” nor capitalistexploitation the most advantageous form of social organization.

To reach a non-authoritarian organization of the economy, the roles of the main elements that builda society are challenged. One of the main topics is salaries or the relation between how much eachperson contributes to the community and what they obtain. Even to consider the possibility of atotal collectivization of the production in order to create a community where each individual’sneeds would be meeting regardless their ability to work. Although there are other matters that haveto be taken into account such as: how we must put into practice the collective production anddistribution, how to organize the international division of labour or how to finance public goods(health, education, etc.); one of the main targets is money. The range of the proposals includesabolishing it or changing its nature by configuring new ways of distributing wealth.

The most widespread economic doctrines are mutualism, collectivism, and communism. In all ofthem they discuss the possibilities of a society without state, without private property and with acollective production, but there is no agreement about what role does the market and the state musthave, how the ownership has to be enforced or what role does society have or how is participationenhanced.

Proudhon (1809-1865) has been seen as the link between the individual and communist anarchism.For him, capitalism makes freedom an enemy of equality. So, he elaborates the mutualism doctrinein order to bring together freedom and equality.

Proudhon defends an “equality of opportunities”. He condemns the property rights if the proprietorcan live without working (from his interests, rents or unearned income). Proudhon (1888) defined in1847, before Marx, the surplus value of capitalists.5 Proudhon rejects violence. Only moral persua-sion, education and propaganda, together with passive resistance to illegitimate government, canlead to social transformation. His economic theory represents an argument for his program of socialreform. In fact, Proudhon himself was sent to jail for resisting government (Zoccoli 1908).

The reasoning behind Proudhon’s theory is that everything is produced by labour. Then, everyone,as a producer, shall obtain the whole product of his work and exchange work for work, withoutearning any kind of income, surplus value or profit raised from capital. Being economic and politic-al individualist, he defended that each person should possess his means of production and has to bepaid for the work done, but instead of receiving an income he should be given back goods or ser-vices that have the same utility or value as his own work.

He deplores private property; instead, he wrote that “property is theft!” meaning that property is thebad use of objects, the same as exploitation, because the private ownership of the instruments ofproduction includes the unearned (nonlabour) income -a reward to those who own the instrumentsof production- which usually accrues to other property. However, he distinguished between prop-erty and possession, the latter is the rightful use of any item, for example the right to occupy theland you are working.

Proudhon mutualism is based on the association of producers and consumers. Proudhon’s objectivewas to enable everyone to become a small owner-worker. The conditions he pictured were that allworkers should have equal wages. Whatever exchange should be based on the equivalence of freepartnership. The aim is to maintain equality in the means of production and, so, all government of

5 But, as opposed to Marx, Proudhon did not believe in the importance of the class struggle nor inthe inevitability or historical necessity of socialism. In addition, socialism would be imposedfrom above by the governing class.

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man by man must disappear. Therefore every association between individuals must be free and vol-untary.

In fact, he pursued the elimination of property income but the maintenance of the private ownershipof the instruments of production. The abolition of unearned income, of the so-called surplus-value,also called interest and economic rent, is his immediate economic aim. However, Proudhon’s sug-gestion for eliminating unearned income didn’t turn up from a complete socialization –or national-ization- of ownership of the instruments of production, neither the socialization of production.

Proudhon thought that the tendency to hoard money is the real root of the economic problem. Histheory could be called a theory of capital and interest since his theoretical system explains the rela-tion between the utilization of resources and the accumulation of capital. He asserts that interest is apayment for not hoarding money and his final statement is that interest payments are necessary inorder to induce the owner of money to “engage” it. Proudhon introduces what he called “constitutedvalue”, which is similar to Keynes’s concept of “liquidity-preference”. (Dillard 1942)

To explain what “constituted value” is we have to know first that Proudhon distinguishes betweencapital that is “free” and capital that is “engaged”. “Capital is “free” when it is in a form that “canbe regarded as realized or immediately realizable –that is, converted into such other product asmay be desired; in this case the form that capital most readily assumes is that of money.” On theother hand, “capital is said to be engaged… when the values that constitutes it is employed defin-itely in production; in this case it assumes all possible forms”. Interest is described as the paymentwhich is necessary to induce the owners of “free” or money capital to “engage” it in productiveuses” (Dillard 1942:60). The peculiarity of engaged capital is that is the resource that can be ex-ploited.

This helps him to link individual nonconsumption (saving) with social accumulation and formulatethe assumption that the payment of interest is not necessary to induce saving. Hence the difficulty inmaking transfers from buyers and savers to sellers and investors come from the use of money. Healso considers that capital will be increased because of a decrease in the rate of interest -and not theother way round-, so accumulation will be accelerated if the rate of interest disappears6.

The emphasis towards the theory of money and interest and the attack on financial capital is due tothe attribution of the capitalist frequent difficulties -lack of effective demand, crisis, depression, un-employment and poverty- to the peculiarities of money. The entrepreneur is the principal actor ofeconomic activity and the rentier will disappear as the rate of return on capital comes to an end.

To conclude, Proudhon’s proposals were built around an economic order where interest and rentwould be eliminated. He condemns all property income because it is not a consequence of labour –even more it is a reduction of the surplus produced by work-, but he allows private property andcompetition. The prevailing money and credit arrangements hinder full employment of the com-munity resources. Offering gratuitous credit would lead to an end of rent and interest. He proposedto create a bank of exchange to overcome the scarcity of money and credit and to abolish the prefer-ence for money over other forms of wealth. Proudhon’s program tried to bring a solution to the eco-nomic problem threatening the existence of the financial institutions that facilitated speculation andinstability. His analysis is focused on the exchange of commodities, the circulation of money, thereassignment of purchasing power and the full realization of the potential productive capacity of theeconomy.

6 Dillard (1942:71) explains that “he closely approximates Keynes’s central thesis that the rate ofinterest determines the rate of accumulation of capital, and thus the marginal efficiency ofcapital…”

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Mikhail Bakunin (1814-1876) instead defended collectivism and wanted to carry out a revolution tomake capitalist institutions collapse. According to him, property rights are based on conquest andinheritance, which make the existence of misery and ignorance of the masses possible. He rejectedMarxist political use of unions and parties and collectivism on large scale that would lead to anationalistic state capitalism. In order to eliminate centralization and nationalism, Bakunin defendedthe existence of small interdependent communities with different functions and linked through weakbonds. He defended education as a means of transformation of society, education understood asmaking the proletarians aware of class struggle and of their possibility to begin the revolution.

He speaks about the material emancipation as the first goal to achieve, otherwise it won’t be pos-sible any intellectual and moral emancipation. “The ideal, as Proudhon said, is nothing but a flowerwhose roots lie in the material conditions of existence. All intellectual and moral history, politicaland social of humanity is a reflection of its economic history” (Bakunin 1997:99). Only the collect-ive or social work may aim at the ideal, because it is society the one that creates the individual be-ing. He criticizes the modern metaphysicians of the seventeenth century, that ”took as a startingpoint, not the social man, alive and real, which is both the product of nature and society, but the ab-stract individual self, regardless of all natural and social ties” (Bakunin 1997:82). This man of thebourgeois society is an individual that “because the necessity or the logic of his position, appears tobe an exploiter of everybody else, because they need them all materially, but they don’t need any-body morally” (Bakunin 1997:56). However, for him, social solidarity exceeds individual selfish-ness.

In Bakunin’s collectivism capital must be expropriated by workers, the land and the instrument ofproduction must be shared, and the fruits of labour should be distributed through a collective de-cision. Bakunin is not so idealistic with regard to work. People work to survive, not for pleasure.The one who does not want to work must be divested of his political rights. People must receivegoods according to their effort. Thus, as opposed to Proudhonian “equality of opportunities”, Bak-unin defends an “equality of treatment”. Collectivism must maintain the principle “from each ac-cording to his ability, to each according to his merits”.

Bakunin attacks all power because it has no other purpose than domination. According to him wehave a society of exploitatiors -some are real ones, and the majority of them are potential-, so heencourages the ending of the submission of men to passively inherited formulas, such as the institu-tions created by the church, the state and capitalism. They all extend the system of exploitation. Freedom, as conceived by materialists, is eminently social. It only can be accomplished within theclosest equality and solidarity of each with everyone. Bakunin states that the isolated individualwould not even have awoken to the realization of his freedom. “To be free means that others, all hu-man, recognize one as free, and deal with one accordingly. Thus freedom is not a factor of isolation,but mutual reflections; not of exclusion, but of contact. The freedom of every individual is nothingbut the reflection of his humanity and his human rights in the consciousness of others. It is only inthe presence of others, and vis-á-vis others, that one can claim to be and actually be free” (Bakunin1997:27). So his pursuit is the free organization of the laborious masses. Its achievement needs: thefreedom of the whole society -I am truly free only when all human beings around me are equallyfree- and the rebellion against any kind of authority -collectively and individually-.

For him, collective and individual human beings emancipation is to say humanization. Assumingthat the human development grounds in an act of disobedience, Bakunin mentions two faculties thateach individual requires: to think and to rebel. He describes three essential principles that wouldlead to the only one remedy, the social revolution: human animality, thought and rebellion. Andtheir social correspondence: the social and private economy, science, and freedom (Bakunin1997:103).

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The collectivism was turned into communist anarchism –or also known as anarcho-comunism orlibertarian communism- when at the First International any salary was disapproved. Contrary to the“equality of treatment”, defended by Bakunin, Peter Kropotkin (1842-1921) defends “equality ofsatisfaction” or distribution according to needs. A follower of Bakunin, Kropotkin explores in1902, in Mutual Aid: A Factor of Evolution (Kropotkin 1914) the utility of cooperation. As opposedto social Darwinism, cooperation is considered more successful than individualism. Kropotkin es-tablishes parallels between human and animal societies and tries to prove that the natural human or-ganization consists of small communities with cooperation. Kropotkin condemns national bordersand the centralized State as opposed to nature. Here, Anarcho-communism emerges from scientifictheory based on evolution. In the other hand, Enrico Malatesta thinks of anarchy more as human so-cieties struggle against the “disharmony” of Nature. Can nature be waiting for the arrival of anarch-ists? He asks. More even is it possible that nature is still waiting, instead of ending the terrible anddeadly “disharmony” that men have always suffered?

Like Bakunin, Kropotkin defends that the State, the capital gain and the wage-earning work consti-tute repugnant bonds that must be destroyed. According to Kropotkin, the prominent characteristicof capitalist system is wage labour. He describes capitalism as: “A man, or a group of men, possess-ing the necessary capital, starts some industrial enterprise; he undertakes to supply the factory orworkshops with raw material, to organize production, to pay the employees a fixed wage, and lastly,to pocket the surplus value or profits, under pretext of recouping himself for managing the concern,for running the risks it may involve, and for the fluctuations of price in the market value of thewares.” (Kropotkin 2003:37)

Anarcho-communists usually aim to eliminate any form of wages. This means that not only the landand the means of production must be common, but also everybody’s product of work. InKropotkin’s words, communism sets as a starting point “from each according to his ability, to eachaccording to his needs”. His foundation is that there is no way to measure the value of each personinvolvement, because any progress, any wealth increases, any discovery is an outcome of eithermanual or intellectual past and present work. He didn’t agree either with applying equality ofwages, make a distinction between skilled and unskilled labour or counting in hours of work done,he just defended to... “Let each one take from the pile anything they need; we can be sure that thegranaries of our cities will be enough to feed everyone until the day free production undertake hisnew path.” (Kropotkin 2003:30)

In fact, his criterion on goods distribution –based on the real needs of every member of society-diverges from collectivist ideas. From his point of view, “Collectivists begin by proclaiming arevolutionary principle -the abolition of private property- then they deny it no sooner thanproclaimed by upholding an organization of production and consumption originated in privateproperty” (Kropotkin 2003:42) The important issue is that all revolutionary owners want to abolishprivate property and share the right to consume all social wealth. And this will be possible throughthe expropriation of everything that allows anyone to gain others work. “The goal of the revolutionis not the shift of wealth from one to another, but the transfer of private property to society, to thepeople as a whole.” (Kropotkin 2003:30)

He warns that the current holders of capital will want to save the system, so they will make someconcessions like distributing a portion of the profits with workers or rise salaries. But the revolution“can render no greater service to humanity than to make the wage system, in all its forms,impossibility, and to render Communism, which is the negation of wage-slavery, the only possiblesolution.” (Kropotkin 2003:38)

For him, all forms of anarchist tendencies in economy must be anti-authoritarian and voluntary. Theonly aspiration is to have the right to live for anyone, no matter their strength or weakness.

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Kropotkin insists that we must bear in mind that the economics image of the worker as a lazyperson that has to be permanently threatened of being fired is a minority in society. We should takeinto account that by working 4 or 5 hours per day until age 45 or 50 years, people could easilyproduce everything necessary to ensure the comfort of society; and that as human beings we feel theneed to exercise our will, our active force, one way or another. So, working –or doing somethinguseful- becomes a necessity for the vast majority of people. The distinction between egoism andaltruism is absurd to him. The main factors for progress are courage and individual’s free initiative.

With respect to an anarchist economic organization, the basis is to rebel against all economicslavery, because this is the cause of all bondage. The only identifiable common concept is that ofself-organization. Kropotkin advocated for the free and horizontal association without a state. Onlymutual aid can command individuals.

As significant as the anarcho-communism critique to capitalism is its fidelity to direct action.Kropotkin believes that labour organizations are the real force capable of carrying out the social re-volution. He considers unionism as an old tactic, that of direct action of workers in the economicsphere against the capital. This sort of thoughts led to the emergence of Anarcho-Syndicalism theor-ies and practices. Its aim is the conquer of all means of production by the workers, the abolition ofany kind of wage or social classes, and the organization of society through direct democracy7. Be-sides, their approach is related to self-management.

There have not been many real self-managed experiences in the lines of Anarcho-communism, buthistory records their intensity (see Gide 1928). Some examples are the Paris Commune of 1871, theRussian Soviets of 1917, the Italian and Hungarian Factory Councils of 1919-20, or the SpanishCivil War experiences in the Republican Party from 1936-9. Also Tito’s Yugoslavia, the IsraeliKibbutzim, and May 1968, can be cited. In particular, the Spanish experience is quite representative(see Preston (1984), Leval (1938 & 1975) and Orwell (1986)). There are also current successfulexperiments in worker control and cooperatives. The Mondragón cooperative movement in theBasque country in Spain is perhaps the most famous (see Whyte & Whyte (1991) and Cheney(1995)). However, MacLeod (1997) shows that the original motives of the Mondragón experimentare shared by other communities. In particular some North American groups share its objectives. Atpresent the recovered companies in Argentina under a self-managed cooperatives and the wholenetwork of markets that have formed between them are also taken as a reference.

In economic terms, it defends the abolition of the wage condition. It implies also the creation ofhorizontal social relations, groups and institutions and the reduction of vertical relations from thecupola to the base. This assumes avoidance of any delegation of power (Bertolo 1984). Rochdale(in 1884) and Boimondou (in 1941) defended cooperativism as a way of industrial self-management. Charles Gide (1847-1932) proposed a consumer cooperativism to avoid Capitalismconsumerism. Georges Fauquet (1883-1953) explained that not only in Capitalism, but also in

7 Anarcho-syndicalism or revolutionary syndicalism defends industrial violence, as opposed tothe passive and non-violent attitudes of Anarcho-Socialists. This movement bloomed innineteenth century France, 1890-1920 Russia, and 1930s Spain (especially in the Civil War,1936-39). George Sorel (1915), one of its principal defenders, responds to capitalists’ and Stateviolence using general strike as a myth to terrify politicians. The 1906 Confederal Congress ofAmiens defined the strategy of the movement. From 1890, French employment agenciesfollowed the anarcho-syndicalist criteria of the Confederation Générale du Travail. Other majoranarcho-syndicalist organizations include the Workers Solidarity Alliance, and the SolidarityFederation in the UK. In the United States, the North-American Industrial Workers of theWorld, created in 1905, was based on an anarchist philosophy. Also, in Latin America a politicalAnarchism grew in the twentieth century. It is the case with Mexico. Richard Flores-Magon ledvarious revolts and uprisings to overthrow the dictator Diaz, influencing the modern dayZapatista rebellion (see Schuster 1931 and Trincado 2010).

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Communist countries labour and consumption are used as means. We must erase the distinctionbetween consumers and producers.

There have also been non anarchist authors -economists or social thinkers- that have talked aboutself-management. They expound the need to democratize the economy and the politics. Someadvocate for self-managed economies through participatory-planning processes and others thinkthat we only need to rethink the market integrating some self-managed structures.

In the twentieth century, anarchist’s defenders of the notion of “self-management”, point out aradical change in the situation of workers who may break with subordination to an external power.Their status is transformed from simple salesmen of their workforce to becoming their ownemployers (Maire and Julliard 1975).

Anarcho-capitalism

Anarcho-capitalism naturally grows with capitalism and the defence of the market so it blooms inspecial in the nineteenth and twentieth century (for a recent compilation of articles, see Stringham(2007)). Many free market adherents believe in anarchist system where individuals freely operatewith others in a decentralised manner, without authority structures such as governments and largecorporations impinging on them. Individuals must contract with private companies for all socialservices and competition thus will tend to produce cheaper and higher-quality legal and policeservices including a high-quality good of impartial, efficient umpiring of conflicting rights claims.Anarcho-Capitalism demands the abolition of the state and the control of the economy by individualand entrepreneurial monetary assets. In principle, this anarchism is not egalitarian. It rejects Statecoercion, but it omits criticizing any economic coercion arisen from laissez-faire. Defence of anunrestricted kingdom of capitalist consumption is generally based on moral subjectivism.

Already in the eighteenth century, in the continental Europe Jakob Mauvillon (1780, 1783)proposed the privatizing of protection of individual liberty and property, the schools and the postalsystem and freedom of the press and expression. Gustave de Molinari (1849a, 1849b), associatedwith Frédéric Bastiat, is considered to be one of the first to discuss competition in security. Hedescribed how a market in justice and protection could advantageously replace the state (the samedid Julius Facher, see Ralph (2004)). Molinari (1899) proposed a federated system of collectivesecurity, and supported private competing defence agencies. Molinari’s argument for free-marketanarchism was based in economics and the benefits of competition.

The British Herbert Spencer (1851, 1884) also defended some time anarcho-capitalism. He arguedthat the state was not an "essential" institution and that it would "decay" in an evolutionary processas voluntary market organization would replace the coercive aspects of the state. Besides, theindividual had a right to ignore the state. His main objections were threefold: the use of the coercivepowers of the government, the discouragement given to voluntary self-improvement, and thedisregard of the "laws of life." He insisted on the limits to predictive knowledge, his model of aspontaneous social order, and his warnings about the "unintended consequences" of collectivism.

However, in the 19th century, Anarcho-capitalism flourished in special in America. For instance, theabolitionist Lysander Spooner advocated Natural Law or the “Science of Justice” wherein acts ofinitiatory coercion against individuals and their property were considered “illegal” but the so-calledcriminal acts that violated only man-made legislation were not. In Spooner (1852) he defended thedoctrine of Jury Nullification, which holds that in a free society juries can refuse to convict if theyregard the law they are asked to convict under as illegitimate. He said that it was a monstrousprinciple that the rich ought to be protected by law from the competition of the poor. Being an

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advocate of self-employment and opponent of government regulation of business, he challenged theUnited States Post Office’s monopoly, but legal premises by the government eventually exhaustedhis financial resources. Although he denounced the institution of slavery, Spooner recognized theright of the Confederate States of America to secede as the manifestation of government by consent,a constitutional and legal principle fundamental to Spooner’s philosophy.

Also, Benjamin Tucker (1893) in the United States theorized free-market anarchism, includingprisons and the military, addressing the importance of the law of supply and demand that furnishesthe best article at the lowest price instead of the State monopoly prices. His idea on land ownershipis associated with mutualism: when people customarily use given land (and in some versionsgoods), other people should respect that use or possession but stopping from using or occupyingland reverts it to the commons or to an unowned condition, and makes it available for anyone thatwishes to use it (see Swartz 1927). Therefore, there would be no market in land that is not in use.However, Tucker abandoned the natural rights conception of property rights for a egoism à la MaxStirner and said that land ownership is legitimately transferred through force unless specifiedotherwise by contracts, although he expected that individuals would come to the realization that the“occupancy and use” was a generally trustworthy guiding principle of action. Benjamin Tucker wasthe first to develop the free-market conception of anarchist law, defending common law juries.

As American political society developed along the liberal model, anarchist thoughts were expressedin America also in the twentieth century in the writings of Henry David Thoreau (1905) (see Martin1970). Thoreau’s anarchism is difficult to classify; however, it may be called individualist. In thissense, it fits in the right wing anarchism. Also in America, Albert Jay Nock (1935), educationaltheorist, defended an anti-collectivist anarcho-capitalism claiming that the state was the one who“claims and exercises the monopoly of crime”. As Oppenheimer, the said that the pursuit of humanends can be divided into two forms: the productive or economic means and the parasitic, politicalmeans. In Nock (1936), he argued that the inflationary monetary policy of the 1920s wasresponsible for the onset of the Great depression, and that the New Deal was responsible forperpetuating it. He believed that the New Deal was merely a pretext for the federal government toincrease its control over society. He opposed centralization, regulation, the income tax, andmandatory education, along with what he saw as the degradation of society. Freedom seems to bethe only condition under which any kind of substantial moral fiber can be developed. Finally, heexpressed his complete disillusionment with the idea of reforming the current system by convincingthe general population. Opposing any suggestion of a violent revolution, Nock defended nurturingwhat he called “the Remnant·, a small minority who understood the nature of the state and society.

After the Second World War, and with the growing importance of Keynesianism, it was quiteunusual to see Anarcho-capitalist defenders. However, Anarcho-capitalism recovered its importancein the late 60s of the twentieth century. For instance, Roy A. Childs, Jr. (1967) endorsed anarcho-capitalism as Ayn Rand's follower, arguing that her political philosophy implied free-marketanarchism, not the limited-state position she was defending. However, finally Child also endorsedminarchism. In the seventies, the Tannahills (1970) defended anarcho-capitalism opposing statutorylaw and advocating the usage of natural law as the basis for society. Laissez faire society is the onethat "does not institutionalize the initiation of force and in which there are means for dealing withaggression justly when it does occur". They outlined how different businesses and organisationalstructures would interact in a laissez-faire society, and how these interactions would create checkswhich would ultimately keep the tendency for crime low. They criticized the government for redtape which denies entrepreneurs opportunities to rise out of poverty. Most social problems could besolved through an increase in the amount and type of property owned. The problem is that peoplehave a fear of self-responsibility.

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Nozick (1976), although not anarchist himself, greatly influenced anarcho-capitalists defenders.Nozick defends a State with solely a tutelary function of enforcing property rights, the night-watchman state of classical liberalism. To support the idea of the minimal state, Nozick presents anargument that illustrates how the minimalist state arises naturally from anarchy and how anyexpansion of state power past this minimalist threshold is unjustified. A distribution of goods isonly just if it is brought about by free exchange among consenting adults and from a just startingposition, even if large inequalities subsequently emerge from the process. He rejected the notion ofinalienable rights advanced by most other libertarian academics; a “free system” would allow adultsto voluntarily enter into non-coercive slave contracts. According to Nozick, the agreement to aprocedure for private enforcement of rights fails because of the rationality of being a free rider,taking advantage of everyone else’s restraint and going ahead with one’s own risky activities.However, Nozick says that you may not charge and collect for benefits you bestow without prioragreement.

Immediately after Nozick’s book, Murray Rothbard (1977) criticised Anarchy, State, and Utopiafrom an anarcho-capitalist point of view, claiming that Nozick’s concept of the State has been“immaculately conceived” and could only be justified if it emerged after a free-market anarchistworld had been established; so, he should become an anarchist and then wait for the Nozickianinvisible hand to operate afterward. Besides, the fallacies of social contract theory would mean thatno present State, even a minimal one, would be justified. Rothbard considers property rights to benatural rights deriving from the primary right of self-ownership. In accordance with Lockeanphilosophy, property may only be originated by being the product of labour, and may thenlegitimately change hands by trade or gift. Only if something is unowned, there is no one againstwhom the original appropriator is initiating coercion. Building on the Austrian School’s concept ofspontaneous order, Rothbard considered the monopoly force of government the greatest danger toliberty and well-being, labeling the State as nothing but a “gang of thieves writ large” (Rothbard1982). All services provided by monopoly governments could be provided more efficiently by theprivate sector. Bureaucrats engage in dangerously unfettered self-aggrandizement and parasiticinefficiencies. He also condemned state corporatism and many instances where business elites co-opted government’s monopoly power so as to influence laws and regulatory policy in a mannerbenefiting them at the expense of their competitive rivals (Rothbard 1973, chapter 3). He arguedthat taxation represents coercive theft on a grand scale prohibiting the more efficient voluntaryprocurement of defence and judicial services from competing suppliers. Rothbard opposed military,political, and economic interventionism in the affairs of other nations.

David Friedman (1973) also defends an anarcho-capitalism where all goods and services includinglaw itself can be produced by the free market. Friedman advocates an incrementalist approach toachieve anarcho-capitalism by gradual privatization of areas that government is involved in,ultimately privatizing law and order itself. This differs from the version proposed by Rothbard,where a legal code would first be consented to the parties involved in setting up the anarcho-capitalist society; and besides his individualist anarchism is not based on the assumption ofinviolable natural rights but rather rests on a cost-benefit analysis of state versus no state.

Anthony de Jasay (1985) says that is seems self-contradictory for the state both to have a will and towant to minimize itself. The purpose of governing, then, is merely to keep out any non-minimalrivals (preventing revolution). While violence and preference may stand respectively at thehistorical and logical origins of the state, political obedience continues to be elicited by the statethrough recourse to the repression, legitimacy and consent. Besides, if people differ from each otheronly in how much money they have, and if they vote for the redistributive programme under whichthey gain most (or lose least), the rival programmes offered by the state and the opposition will beclosely similar (one being marginally less bad for the rich than the other). Under the spur ofcompetition for power, everything that can safely be taken from the prospective losers has to be

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offered to the prospective gainers, leaving no “discretionary income” for the state to dispose of. Asa consequence, its power over its subjects’ resources is all used up in its own reproduction, inmerely staying in power. Finally, Jasay (1989) counterarguments Hobbes’s classic dilemma of thepreference of being a free rider of public goods. When the “productivity” of public provision of agood is sufficiently superior to private-sector substitutes, incentive structures arise whose normalsolution is that some people contribute and others free-ride on the public good thus created. Withoutgovernment intervention, the social roles of “sucker” and of free rider are selected by theindividuals themselves. However, free riding is resented by the suckers, who regard it as “unfair.”If, in order to suppress this “unfairness”, society opts for the coercive solution, not only is theremore coercion but, more importantly, free riding is reintroduced, now in the form ofoverconsumption of certain public goods and redistribution of the incidence of taxation.

Kinsella talks about contract theory and the law giving non-utilitarian arguments for intellectualproperty being incompatible with libertarian property rights principles. Although some defineanarchy as communities without law and, so, anarchist legality can be said to be a contradiction interms, in an anarchist society, law continues to exist. The only difference ─it is said─ is that lawwould be effective without the need for any authority. In hierarchical societies, an authoritynormally uses violence, emotional manipulation or propaganda to enforce the law. But anarchistlaws would exist only to the extent that they are considered just by the members of the society, andhence obeyed voluntarily. A very recent anarcho-capitalist, Randy Barnett (1998), argues thatprivate adjudication and enforcement of law, with market forces eliminating inefficiencies andinequities, is the only legal system that can provide adequate solutions to the problems of interest,power, and knowledge. He suggests that an anarchist legal system will include private insuranceagencies with private arbitration as providers of “law enforcement” services. He uses the term“polycentric constitutional order” for anarcho-capitalism. Benson (1991) exemplifies a stateless lawsociety with the customary Kapauku of New Guinea. Personal protection was provided by kinshipgroups. Disputes were settled by prominent and wealthy men who followed well-established ritualsand memorized precedents. As the anarchist anthropologist Harold Barclay (1990) points out, ananarchist society could theoretically develop a type of hereditary system. Such arrangements couldbecome the foundation for a caste system and they could eventually evolve into a formal state.

Also Pierre Lemieux (1983, 1987, 1988) in Canada defends anarcho-capitalism within the theory ofpublic choice and public finances and criticizing the bureaucracy. However, he recently privilegedthe option of the minimum state. Also from Canada, Wendy McElroy is an individualist anarchistand feminist. For her, capitalism is the most productive, fair and sensible economic system on theface of the earth, but she says that what she wants for society is not necessarily a capitalisticarrangement but a free market system in which everyone can make the peaceful choices they wishwith their own bodies and labour. Therefore, she doesn’t call herself a capitalist but someone for afree market.

Finally, there is a leftist evolution of anarcho capitalism. For instance, Samuel Edward Konkin hasproposed “agorism” that rejects voting as inconsistent with libertarian ethics. So, he aimed atfighting “the system” from without encouraging people to withdraw their consent from the state bymoving their economic activities into the black and grey market where they would be untaxed andunregulated until the security functions of the state can be replaced by free market competitors.Williamson M. Evers, also a left-libertarian, stresses the importance of education and introduces theconcept of the “proper assumption of risk.” In a free society, possessing full individual rights, theproper assumption of risk is by each individual over his own person and his justly owned property.No one, then, can have the right to coerce anyone else into reducing his risks. John Denson (1997)deploys an antimilitarist anarchism stressing the importance of the costs of war in terms of inflation,debt, taxes, and the damage to morality and American personal liberties and to civilization at large.Also, Ralph Raico or Walter Block present an anarchism based on Austrian economics (Block

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(1976), as Nozick, defends voluntary slave contracts), the same as Huerta de Soto (2007), Hans-Hermann Hoppe (1989), Davidson & Rees-Mogg (1997) or Auberon Herbert (1978). Otherimportant names are Lew Rockwell, Robert Murphy, Jarrett Wollstein, George H. Smithor Frankvan Dun.

Freedom, liability and money

The anarcho-syndicalist thinker Rudolf Rocker described modern anarchism as “the confluence ofthe two great currents, which during and since the French revolution has found such characteristicexpression in the intellectual life of Europe: Socialism and Liberalism.” (Chomsky 2005:149). Theideals of the Enlightenment that we talked about in the beginning of this dissertation shape thenature of the modes that we use to regulate the activity of each individual.

The anarchist body of knowledge is devoted to the achievement of human freedom. The concept offreedom is actually one of the main differences between anarcho-communism and anarcho-capitalism. Although each theory allegedly wants freedom, anarcho-communism talks aboutfreedom in a specific context. Freedom emerges in free inter-subjectivity: I need others’ freedom tobe able to be free myself. Conversely, for anarcho-capitalists freedom is synonymous with choice,only limited in monetary terms.

To be able to choose to act is a manifestation of the freedom as power. But to be free from allregulation implies to eliminate any conflict between the purposes of the will and the demands ofduty, and even more, to recognize the same value –or absolute equality- to each and everyindividual wills. If we believe in the autonomy or voluntary self-determination of human beings, itshould include the recognition of a person’s liability for rights and duties.

So, one difficulty in achieving freedom is personal responsibility as the leading principle of anindividual’s acts. If freedom can only be exercised in society and is an expression of the concern forothers, the couple freedom-responsibility is indivisible. This feeling of freedom is a desire thatcombines many human efforts and that finds answers in economics. It means that it is possible todecide different settings where the development of a sense of freedom and responsibility can bepossible. The political organizations, the general beliefs, the attitudes of great powers and politicalleaders, and even the general passive spectators, are action makers that achieve freedom anddemonstrate responsibility by their own practice

However, the very same idea of human liberty is derived from a conception of the man. Anarchistsinquire into the nature of human freedom and its limits because man’s freedom and theconsciousness of his freedom are built on human nature. For Bakunin, freedom is the conditionwhere human dignity and happiness can develop and grow because it reveals the intellectual andmoral powers that are latent in each person. Kropotkin considers freedom as equality. People canuse this as a principle to solve any problem of social interest. David Thoreau contributes to theanarchist viewpoint when he writes: “When we say, people can become free only by will, only byacts of freedom, we are not juggling words. We mean that freedom is not merely the absence ofrestrictions –it is responsibility, choice, and the free assumption of social obligations” (Thoreau1953). Finally Noam Chomsky, who describes himself as a left libertarian, conceives freedom as akind of voluntary socialism where leaders have no place. Freedom will be lost as soon as leaders tryto direct people.

The anticapitalist anarchism talks about freedom in opposition to the exploitation of man by man. InRocker’s words, as quoted by Chomsky, “the problem that is set for our time is that of freeing manfrom the curse of economic exploitation and political and social enslavement” (Chomsky

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2005:119). With this understanding, increased citizen participation, self-management and directworker control are all supported. However, it is the abolition of capital and of wage labor as socialentities that will actually stop the cycle of economic servitude.

Proudhon was philosophically individualistic. He defined anarchy as the government of each Personof themselves and by themselves, fortified by the public and private conscience and the mutualmoral monitoring. For him, there is no freedom without self-control. Thus, freedom is not absolutefreedom. Rather it is a Kantian duty, understood in terms of what ought to be. On the subjects of itsopposition to any obstacle that limits individual freedom, Proudhon condemns all forms of theState, be they representative democracy, authoritarian socialism, etc. He proposes instead a “self-managed socialist federalism”. A federation of egalitarian self-managed communes would give riseto a decentralized familiar and local society, where men would learn to value moral virtues.Proudhon considered the farmer the example of self-sufficient individual existence. In the industrialactivity, dependency and domination can only be avoided through “contractualism” or “mutualism”(see Swartz 1927).

Kropotkin saw authority everywhere. This belief led him to contend that only the individual orsmall communities can escape from it, creating a safety corridor between them and the corruptedsociety and capitalist consumerism. People who eat whenever they are hungry are very difficult tobe subordinated, he said. So the revolution must and will ensure that all housing, clothing and foodare taken care of. “If we want social revolution, we are indeed primarily to ensure the bread to all”(Kropotkin 2003:35). A moral optimist with regard to educated men is needed in this theory, asmoral subjectivism makes freedom impossible and spontaneous action the liberating path.8

Philosophically, Anarcho-communism is supported by Marcuse’s theory, based on the concept ofalienation but the rejection of Marxism-Leninism. Marx explained work as an interchange betweennature and the man. This productive activity, if it is a creative and fulfilling work under one’scontrol, will be an act of freedom, not oppression. But for Marcuse freedom would only be possibleif work is abolished, which will only be possible by complete automation. Otherwise, work is aninherently unfree activity, an act of servitude either to other men or to nature.

We might also bear in mind Chomsky’s words: “The rule of law exists in varying degrees, but alltoo often, in operative reality, freedom in a capitalist society, like everything else, becomes a kindof commodity: one can have as much as one can purchase. In a wealthy society, much of thepopulation can purchase quite a substantial amount, but the formal guarantees mean little to thosewho lack resources to avail themselves of them”. (Chomsky 2005:149-150)

The other trend of anarchism is mainly based on individuality and involves a more formal conceptof liberty. The difference between the two trains of thought is that one focuses on exploringfreedom positively in order to discover its essence, while the other searches the necessary limits ofhuman freedom (using the two concepts of freedom posed by Berlin in 1958). This different startingpoint distinguishes freedom as an attribute of human will or as a right. Thus freedom may be apower or the natural faculty of self-determination, i.e. the ability to act alone or on the other hand, alegal concept, a faculty derived from rules. Anarcho-capitalists don’t believe in freedom as ahistorical product of society, but as an absolute concept inherent to the human being. Regardless ofthe society, everybody is free. The only restraint of individual freedom is the state.

The basic idea of freedom salient in this idea is that of the individual being absolutely free as longas he is out of a society. Consequently, society is considered just a legal and political organization

8 The libertarian left influenced the radical movements of the 60’s and beginnings of the 70’s (thestudent revolts, the hippie movement of 1968 in France and U.S.).

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that guarantees individualism under conditions of free markets. The measure of freedom will bereduced to quantity, a choice between more or less products.

It is from the pursuit of freedom that money has been well celebrated. It has overcome the doublecoincidence of wants in a bartering system, it has reduced the transaction costs, and it hasobjectified the decision making process by separating monetary variables (prices, inflation orinterest rates) from the real economic variables (production or employment). Furthermore, it hasmade possible the development of credit.

So far, it is important to bear in mind that Marx thought of work as the means whereby menobjectify their subjectivity. Work it is not meant to be a means to procure subsistence, but the onlyactivity where human beings can express their personality and be free. He distinguished betweennon-alienated and alienated labour. “Alienation, for Marx, arises from the separation of the workerfrom the means of production, from the ownership of the means of production by non-labourers. Insuch a condition, an individual must alienate his labour-power to a capitalist in order to obtain asubsistence wage” (Andrew, 1970). Then, the question of the ownership of the means of productionis important because it represents the measure of freedom for human beings.

The unity of work for Marx is opposed to the division of labour and leisure. This division is firmlymaintained by Marcuse, who thinks that work is inherently oppressive and represents a conflictbetween the realm of necessity and the realm of freedom. He wrote: “the more complete thealienation of labour, the greater the potential of freedom: total automation would be the optimum. Itis the sphere outside labour which defines freedom and fulfilment...” (Andrew, 1970). So, the onlyway to implement freedom is the total automation of work.

This is a materialist interpretation of social development that many anarcho-communists utilize asbasis. It affirms that social and political power is derived from the work environment. The workconditions of a capitalist society determine the relationship between social classes and depend onwho controls the means of production, how people relate to one another -the relation of production-,the institutions created or the forms of consciousness. As we mentioned within this idea there aretwo main views represented by Marx and Marcuse. For Marx, socialism involves productivefreedom or self-determination. This means the common ownership of the means of production butalso power to the working class, changes in what he considers the base of society. In Marcuse’sconception, freedom would only be possible through the complete ending of human labour, sinceproduction will become free and enjoyable. Work won’t subsist, only leisure, play and pleasure, inall human activity or relationship. The real issue will be rethinking the different human needs andthe different human relationships in working for the satisfaction of these needs.

The development of the economy towards money dependence is rejected by the anarcho-communists and assumed by the capitalist. The resistance is due to the opinion that –as someanarchist authors’ say9- this is leading us to a circle of image and emulation where there is no suchfreedom but slavery and sleepiness.

An additional problem that has been point out due to the recent increase in understandingindependence by increasing the financialization level of an economy is the dissolution ofresponsibility, the false perception of a diluted power. The increase of freedom will depend not onlyon work conditions but also in the conception of work and liability towards the future productionrelations and on how to quantify or measure value, or take into consideration the means of exchangethat each of us offer.

9 Ideas commented by the Situacionist. For a general approach see Perniola,Mario (1972).

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According to Bakunin, the only way to avoid the free-rider problem and making people work isthrough moral disapproval. This implies that freedom for him is freedom in a context, a socialliberty dependent on others. If people must receive goods according to their effort, then they arefully liable of their own actions. This is the idea of “equality of treatment”. However, Bakunin’sconcept of freedom is quite complex. To him freedom is a quality of the mind released from self-interest, without a source of mistakes and lack of social harmony. Firstly, he asserts, that to governothers destroys independence and self-realization, which requires the recognition of my peers, inwhom the individual is reflected. Secondly, freedom does not have the possibility of satisfyingdesires, but offers liberty of reason and opinion. In a social community, it can only be achieved if individual reason is previously forged by societyor if there is a “right natural reason”. So, there is a necessary connection between individualfreedom and the social unit.

Left-wing anarchists depart from the idea that human beings freedom may only be achieved throughthe work and the collective power of society. Bakuninists emphasized the importance of acommunal perspective to maintain individual liberty in a social context. They also stress the criticalrole of workers as self-managed organs of production and consumption. Left-wing anarchistsgenerally believe that governance resides with the community at a decentralized level. In thisstance, Karl Polanyi (1957) defends the replacing of many markets with community markets andnon-anonymous institutions that are embedded in reciprocity and redistribution. Consumer goodsmarkets are embedded in social norms, but labour, money and land markets result from heavyintervention by the state. In liberty, differing economic formations could peacefully coexist. Inparticular, as citizen education is an essential condition for a participatory democracy, democraticdecision-making should be introduced in families, community groups, and business organizations(see Stanfield 1986).

As we have said, there is a big difference between having a right and having all the conditionsneeded to exert that right, or what we have called power. By power we mean the possibility of usingour capacity to develop our talents and take advantage of them socially. For anarcho-communiststhis power is only possible in a cooperative society who lives without external authorities orimposed behaviors such as individuals being reduced to an economic agent. In brief, as Humboldtwrote: “If man acts in a purely mechanical way, reacting to external demands or instruction ratherthan in ways determined by his own interests and energies and power, “we might admire what hedoes, but we despise what he is” (Chomsky 2005:111). These actions will usually tend constantly tobecome broader and to affect wider circles. Interdependency in our economic system –the so-called“capitalist democracy”- should, at least, imply that people have real means to participate in thecommon decisions, to be able to have responsibility.

The main asset of social development is the mutual aid that creates equality. As Woodcock arguesabout anarchists: “It is too liberating the great network of human co-operation that even nowspreads through all the levels of our lives rather than to creating or even imagining brave newworlds that they have bent their efforts” (Woodcock 1986).

On the other hand, for anarcho-capitalism the key factor is to insure that incentives will encouragehuman beings to act. Freedom will have to be achieved through market discipline. Individualsshould interact and decide through the market while public policy should be limited to zero.

Generally speaking, anarcho-communists are critical of money and anarcho-capitalists consider thatmoney and pricing should be more extended in order to receive a correct valuation in the market.

Authority, utility and money

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The use of money for the exchange of goods and services fosters a system that allows theinterchange and the productive activity around certain standards of freedom, equality and alsojustice. But then again, money has to be created. The rate of money flow is the process by which themoney supply of a country is manipulated. The expansion or contraction of the currency valueaffects liquidity, the purchasing power, and the credit conditions. It has to be regulated or, at aminimum society has to arrange the terms of its functioning. Regarding anarchism, it is important to keep in mind that a clear distinction between democraticand authoritarian forms of the state are unreal because any government influence affects theachievement of human freedom. Men have historically have used power to get justice, and thisjustice has been implemented in exchange for a compensatory gift; The Powers are interested inmonopolizing justice, by using empathy for the injured, in order to prevent a resentful response tocrime. The Power sought to obtain the wealth necessary for their defense; imposing an order it fi-nally thought to be its own. But, Power confronts, in every crime, a duty delegated by individualswhich, in turn, confers greater dignity on this power: to recognize rights through laws, with rules assimple as grammar, and to apply punishments to crimes based on reasons an impartial man cannotapprove. In all cases, the measure of the punishment that must be inflicted is the coming together ofthe impartial spectators with the resentment of the injured party.

We can better understand Anarchist proposals by addressing the theory of a liberal author, AdamSmith. Adam Smith has a revealing theory of the law and the emergence of the state (see Trincado2004 and 2006). Non-anarchist philosophers that are against natural rights usually base this defenseon the concept of utility, assuming that without the State, society would not exist. Society enforcesa social contract and the state impresses on the human mind a fear of punishment for committingcrimes that naturally would not be felt to be unjust, but rather as a threat to survival. The state mustseek utility, and we emphasize must because theory is about what ought to be. There is no feeling ofjustice prior to law and we use the punishment of a man to obtain an imaginary end, which consistsin removing the community’s fear of possibly being the victims of criminals.

Therefore, power can also act according to the principle of utility by which the State, seeking orderand the prevention of natural resentment, establishes justice. Having laws and civil magistrates toassess and enforce punishment takes the responsibility out of the hands of the injured, and thus isinstrumentally helpful to social cohesion. Legitimacy then comes from the admiration of self-command in leading through justice instead of seeking their own interests (for the importance ofself-command, see Montes 2004 and Trincado 2006).10 Although the real problem is how is itpossible for the State to control its arbitrary power and act according to the principle of utility? Thisis something that, in the final analysis, seems impossible so we instead have to rely on the rule’sprudence.

According to Smith, if we do not believe in a superior moral right, we should not have any reason tobelieve that social life is far beyond a power play – something that we “do” believe (see Viner1975, 1978). Smith talks about a natural law, not based on utility, but from natural feelingsspringing up in human beings – felt in the present – that precede the laws. Sentiments of indignationare non-imposed and come prior to the written or common law. It appears even in a natural society.Generous and respectable resentment is generally admired when it proceeds in the absence of angerin order to bring justice to the greatest offences. An impartial spectator confronted with injusticefaces a moral dilemma. He does not want tot remain indifferent to criminal arrogance, but on theother hand he does not want to be caught up in improper resentment. This contradictory feeling

10 Actually, the invisible hand can only move individual interest to collective interest when self-control of competition and the freedom of entrance prevent the perverse effects in institutions.Public goods are characterized by lacking both of them (Trincado, 2007, 261).

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caused by indignation towards the arrogance of the criminal is natural, and consequently can besubdued, but not eliminated. The theory is about being, not about what ought to be.11

Bakunin’s understanding of anarchism speaks about authority as a task that would be a voluntaryand permanent change. Each person would be an authority that directs and conversely is beingdirected simultaneously. As it would be a voluntary act, the use of force and violence as a means ofmaintaining social order would be rejected. Justice and authority will be called upon to beimplemented, as punishment or reward, in order share the responsibility for crime. As we mention,Kropotkin understood that it is imposible to value an individual contribution collectively andProdhoun translated this idea to justice when he explains that the amends should be distributed inproportion to their guilt. “Since a crime is never isolated, since it has always been to some extentcaused, provoked, encouraged, tolerated, allowed by the system of relations that form society, thelatter must ask how much of it is to blame for the criminal’s acts, a sanction being incompleteunless it is reciprocal”. (Ritter, 1975).

Nonetheless, for an anarcho-communist there is no utility in any authority, because it is all aboutcreating systems of power and domination. The state is just another historical institution to beovercome. There is no need for it either to maintain order or to impose punishment. The comununderstanding rejects the standard kinds of punishment as coercive and external. The individual willhave to face two rebellions in order to defeat external authorities and to end with the mutualexploitation of individuals. Men will firstly have to challenge the authorities exercise of theirpower, and secondly the non-official authority, revealed in how people act towards one another.

Anarcho-communism usually seeks self-realization within the framework of society, not the liberalself-difference, supported in wealth. Therefore, it looks for satisfaction in “non-economic” terms. Ineconomic terms, mutual dependency is assumed. Still, creative work and co-operative pleasure gen-erate satisfaction. Mutual dependency makes anarchists reject free-riders. Work is the source of thesocial value, the individual satisfaction and the moral virtue, so anarchists usually establish a moralobligation to work. For anarchists, the problem is not the human being in himself, but government,law and private property; That is to say, the institutions of authority. Law is an instrument of thegovernment that tries to protect and preserve private property. It is a class weapon. It inhibits ration-al moral judgment and it limits freedom (see Carter 1971 for a study of Anarchist political philo-sophy).

Anarchists claim that the recognition of a society should exclude the principles of power andownership, which are considered to be destructive. This will only make sense if all the structures ofauthority, hierarchy and domination are dismantled. Any institution of coercion and control has tobe abolished. A freedom society has to be based on the principles of federalism and mutual aid. Forinstance, to create an order without dependency and domination, Proudhon defended theestablishment of communities of self-sufficient farmers (see Swartz 1927). According to him, underCapitalism, a just contract is not possible since an antecedent property exists. But Proudhonimagines a contract without property. He proposed a “self-managed socialist federalism”. This isfree association on the basis of multiple contracts that regulate social actions. This shifts the focusof the debate around the measure of punishment or the distribution of wealth through propertyrights.

“There are three standard ways of justifying punishment: as retribution for the offender, or toreform him by weakening his desire to misbehave, or through the fear evoked by his suffering, to

11 So, according to Adam Smith, there is a consciousness, an individual presence previous to law,and it is due to the fact that the individual understands life as a personal divine gift.Consciousness, in spite of its privacy, as public effects, essential to social life (Haakonssen 1996:135-148).

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deter him from repeating and others from committing, misdeeds. Godwin opposes all three of thesejustifications because they warrant too many bad effects.” (Ritter, 1975) Any violent orauthoritarian punishment could take the form of monetary compensation, or be guarantee by aproperty right but what most of these authors are keen on is to require virtuous acts or to give theoffender the opportunity for reparation.

The sentiment of indignation, or the necessity for men to respond to power, is conditioned by theiracceptance of authority as legitimate. Bakunin explains that “it is only by extirpating the habits ofobedience and servility to the last root that the working class can acquire the understanding of anew form of discipline, self-discipline arising from free consent” (Chomsky 2005:41). This neworganizational structure will affect the production system, but also the way in which the wealthcirculates. Proudhon defends that the currency is dominated by the “egoistic control of the financialcapital and the capricious control of the State”. To overcome this subordination people have toestablish explicit federal or communal mutual contracts instead of individual contracts based onmoney. Banks must act as great centers of cooperation between producers and give credit withoutinterest. This monetary organization would be based on a system of reassurance. Mutual credit andlabor checks of the People’s Bank would be given. Money would reflect the value in hours of laborincorporated in each product. We must say however that, although in this system the concession ofcredit would be almost limitless, Proudhon did not worry about the possibility of inflation or theway to maintain the credit.

On the opposite stance, Anarcho-capitalists are also against any form of state, but from a differentperspective, since they plead for the introduction of money and valuation in all stances of life.

Spooner (1886) underlined the idea that self-employment is the more free way of employment, asdependence on other is authoritarian. He believed that government restrictions on the issuance ofprivate money was the cause for labor dependence because as it was difficult for individuals to ob-tain the capital for credit to start their own businesses, so they had to sell their labor to others andthey will receive far below than what the laborers could produce.

Murray Rothbard (1974), however, refuted Spooner’s theory. He agreed that government should nothave any regulations on money, but he argued that an increase in the supply of money does notconfer any benefit whatsoever to society but simply dilutes the purchasing power. In an anarchistsociety, the quantity of money would not increase, but supply would be even more limited whengovernments and central banks manage the money supply. The monopoly force of government isthe greatest danger to liberty and the long-term well-being of the individuals. (Rothbard 1962, 1977,2008:111).

Following Carl Menger and Ludwig von Mises, Rothbard argued that money originates out of themarket process from those who manufacture this commodity. According to Rothbard, the moneyand banking system of the free society should be based on a system of 100 percent gold reserves.Banking would have two divisions: one would be pure warehousing, in which the depositor paid afee to store gold or silver and with a 100 percent deposited; the other would be for saving and lend-ing, in which sums would be deposited for a stipulated period of time and these saved sums wouldbe available for lending purposes for contracted periods of a loan. Only that amount of money in-come would be available for investment purposes by those desiring to borrow from the banks. Thus,savings and investment would be kept in balance, with limited potential for the type of savings-in-vestment imbalances that usually occur in the business cycle and that would eliminate the “businesscycle”.12

12 The similarity with the Glass-Steagall act passed in 1933 and repealed in 1999, now recovered byObama's administration in 2010, is clear.

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Friedman (1973) also talks the fractional reserve system and notes that the fundamental issue is nothow the money is produced but by whom. It is not the interest of the government to issue stablemoney. Inflation via the printing press is a way in which the government can spend money withoutcollecting taxes. Even if private fractional reserve banks can be stable, once a bank has built up areputation for reliability it might pay it to convert that reputation into cash by vastly expanding itsdeposits without any adequate backing, and then convert that cash from an asset of the corporationto a private asset of its owners and officers.

As posed by Smith, according to Friedman if there is a private monetary system produced by anumber of private firms, customers can shift away from a firm that starts producing underweightcoins. If all banks make their money standardized and redeemable in gold, for example, then allmonies should exchange at one for one (or five or ten to one in the case of different denominations)and money-changers would not be necessary. The only exception would be the money of a bankbelieved to be financially shaky. Such money would sell at a discount; the resulting inconveniencewould greatly reduce the demand for it, providing an incentive for banks to be careful of theirreputations.

For that reason, he defended free banking (Smith 1976, 41 and 782). The existence of differentcurrencies, convertible by law, competing to obtain public trust, is the only means to avoidexcessive issuing (Smith 1976, 383). Besides, government protection of system of regulated banksis a greater source of potential instability as banks take an excessive risk, assuming the central bankwill bail them out of the difficulty. The memory of a bankruptcy or the possibility of it is the onlyrisk deterrence.

According to De Jasay (1985), the “political hedonist” who regards the state as the source of afavorable balance in the calculus of help and hindrance, must logically aspire to a more thanminimal state and would invent it if it did not exist. Here, De Jasay is talking about the Smithian Principle of Authority; the idea of a utilitarian state seeking the greatest happiness for the greatestnumber. According to De Jasay, on the part of a hypothetical ruling class, political hedonism issupposed to call for a machine assuring dominance. In any non-unanimous society with a pluralityof interests, the state, no matter how accommodating, cannot possibly pursue ends other than itsown.

As maintained by Smith, the feebleness of government makes it difficult to meddle in anindividual’s affairs. Government strength and stability is essential for the justice’s impartiality. Agovernment in danger of insurrection needs to guarantee its future through punishment, which islikely to be unjust. A first conclusion is that it is not clear if people would get more punished fortheir offences or if they would be greater offences at first, as people could be more frightened ofprivate revenge. However, as Trincado (2009) points out, what State monopoly of violence avoidsis the revenge, or, actually, the revenge from the revenge, or a retaliatory offence. Retaliation orrevenge is accomplished through the courts of justice, but a third person cannot assume that thisretaliation inflicted has been unfair and, thanks to the monopoly of justice, there is no spiral ofviolence created.

However, in effect, when man delegates justice, the judge can act according to the principle ofauthority, by which Power is exerted to make itself not only useful but necessary. In so doing, ittries to make the injured party and the criminal happy at the same time, unavoidably imposinginjustice. The Sovereign began to think that the security he gave allowed him to demand somethingin return and he transformed punishment into an image of public admiration. In this case, theobligation to obey a power depends on the fact that men have a disposition to respect the authorityunder which they have grown up, which is one of Hume’s motives and what De Jasay calls consent.In this sense, it is not implicit wisdom that leads to the upholding of authority, as the conservative

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theorists said- those that defended institutional Darwinism (Smith 1983: 174). People delegatefreely on some type of power, and if power only establishes natural justice (the natural indignationof an impartial spectator watching the injustice), then he is avoiding the revenge from the revenge.

The utilitarian defends resolutions based on the expected consequences and for doing so theycompare utilities interpersonally so that the state can strike a balance of the greatest happiness. Thisgives a moral consent to the acts of government, who is supposed to make happy the people when,according to Smith, he is only avoiding the revenge agaisnt revenge. The doctrine that recommendssuch operations represents the perfect ideology for the activist state.

Having set these principles, we have to address what is really at issue here, which is Money. ForAdam Smith money is only an instrument of exchange that, being a measure of value, maintainsproperty rights in the long run (Trincado 2005: 57). In the case of property rights, the natural feelingconsists of indignation at the arrogance of the person who takes from us a good which we possesspeacefully, for instance, an apple – when he has many other apples to pick up from the trees. Theimpartial spectator feels an indignation not for the frustrated expectation of eating the apple – as hehimself could gather another one from another tree, but for his impotence against the exertion ofauthority of the thief. It is not the consequence (utility), but the cause of the act that is put forwardin the mechanism of approval.

The administration of justice is necessary only where property exists because the inducement tosteal is as strong as the desire for betterment. Actually, exclusive property is not an evident naturalright. At the same time, contracts could be established as a moral obligation assumed personally byindividuals who, if they do not keep the bargain, would no longer be considered reliable. Wenaturally depend more on what we possess than on what is in the hands of others. The onlyconsequence of not observing promises is that other persons will not make their action depended onour actions, since they do not trust our word. However, by maintaining the trustworthiness on whicheconomic affairs are based, wealth increases.

We can conclude that the dismantling of the state is a priority to the philosophers that we havebrought up here. This political attitude can be achieved towards differents endings. It can lead toindividualism if, as Herbert Read (1940) maintained, we establish a capitalist society as aprecondition for the development of a complex anarchist society with an elaborated division oflabor. On he other hand, one might argue rather differently if we challenge the state in order toabolish private property and special privileges (Chomsky 2005).

Conclusion

It must be stressed that economy is about answering what to produce, how to do it and for whom. Ina capitalist economy the improvement of the material well-being takes place as a result of theaugmentation of the productive capacity of society. The economic growth, measured in monetaryterms is the result of the capital accumulation process. Any worker participates in the productiveprocess as a survival option and any capitalist invest in a productive process because they obtainprofit. The justice of a capitalist system lies in the market’s efficiency and meritocracy distribution. The monetary value of the production process is called production and counts as the present andfuture income flows. Then, a monetary theory seeks measuring the physical and heterogeneousgoods and services, now exchanged and compared, converted into merchandises.

Adam Smith built his value theory regardless his monetary theory. Previous to any reference to anymonetary term he established a relation of exchange between physical units. Smith is critical ofmonetary authority: refuting what much later Coase (1994; 9) proposed, according to Smith we

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could not cut free transaction costs through monetary hierarchy because Smithian freedom givesrise to creativity, which is not based on reflection -in some sense, imposed from the outside. Forthat reason, according to Adam Smith, money is neutral13. Smith did not want to defend thatartificial incentives could spark a person to action and, so, he did not distinguish between the effectsof growth in the quantity of money in prices or in activity. Since then, the neoclassical approachtheory, which is the source of most of anarcho-capitalist monetary theories, have been developedintroducing money as a neutral object that doesn’t affect the structure and levels of relative prices,as well as the supply and demand functions.

There are other theories of value such as the “objectivist theory of value”, either the labor theory ofvalue or the energy theory of value. The “labor theory of value”, advanced by Ricardo and Marx,considers the exchange value of commodities as determined by the amount of labor put intoobtaining, manufacturing, processing, distributing, and transporting them. For this amount of laborto be completely objective, these theories have proposed to use time as a canon of value.14 In thesame vein, the Energy theory of Value is an attempt to make energy output of workers and energyexpenditure on goods/services the basis for value in Joules. These theories banish the market systemmyth of price of a commodity being determined by its marginal utility to the consumer andproducer. According to them, marginalism only concentrates on exchange and ignores thereproduction of the conditions of labor and society. It ignores the dynamics of a capitalist economyand the production relations that underlie the market. Orthodox economic theory leaves out classstruggle, alienation, hierarchy and bargaining power (see Lum 1890).

Once we have reminded these different monetary theory tenders we shall conclude that the schoolsof thought, whom we have expanded on in this paper, are opposed in regard to the followingindividual an social inclinations: participatory or market economies, cooperation or competitionexchanges, public or private structures.

Most free market anarchists hold the non-aggression principle against the person or property ofanother. This mere principle creates conflict between leftist and market anarchists, as many leftistanarchists consider private property ownership to be a form of violence, in special when “there arenot so many apples in the trees”. So, Leftist anarchists propose legal changes, such as taxexemptions, to encourage worker cooperatives and other egalitarian structures rather thanbureaucratic ones (Martin 1999). Anarcho-capitalists, however, stress Smithian principle of utility,pointing that is the State decision is less useful than the decision of the people.

Many anarcho-communists call for replacing money with new value systems, new exchangeparadigms, and new means of production and even for the abolition of money. This last radicalproposal is quite controversial: the prevailing argument against it is that the globalized nature of theworld makes an economy without currency inconvenient, if not impossible. Nevertheless, there arealternatives to money, such as a gift economy, based on the free distribution of goods and servicesand advanced by anarcho-communists. They strive for a society without any money and propose,instead, societies based on direct workers control. Anarcho-communists today are involved in

13 Not introducing money into his analysis allowed him to maintain the central argument of hiswork, that is to say, that labor (not money) is the cause of progress and growth (Smith 1978:507)

14 In particular, recently, some local currencies have been based on time, although participantsare not primarily anarchists. In the 1990’s, time dollar projects emerged all across the USA.They succeeded in revitalizing several neighbourhoods and in offering older residents activitiesin exchange for time credits. This is the case with East St Louis, New England, Washington DCor the Member to Member Time Dollar Programme in New York. Besides, the London TimeBank runs in community centres in the UK, the SEL in France or the Wir in Switzerland. Otherprojects have been developed in Japan and China (see Cahn 2004 & Boyle 1999).

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various broad labor and community issues; generally revolving around housing, laborstruggles/strikes, and building the anarchist movement.

The current social networks are calling for new approaches to the relationship between individuals.As Jeremy Rifkin points out “The partial shift from markets to networks establishes a differentbusiness orientation. The adversarial relationship between sellers and buyers is replaced by acollaborative relationship between suppliers and users. Self-interest is subsumed by shared interest.Proprietary information is eclipsed by a new emphasis on openness and collective trust. The newfocus on transparency over secrecy is based on the premise that adding value to the network doesn’tdepreciate ones own stock, but, rather, appreciates everyone’s holdings as equal nodes in a commonendeavor” (see Jeremy Rifkin article at: http://www.huffingtonpost.com).

As soon as we are reaching wider educational standards and more connected people, the interesttowards economics and politics will be shifted. People will be headed to be more everyday makers,rather than let the policy makers to be in charge of the decisions. And that will have to come alongwith learning how to manage more freedom.

We could say that responsibility links freedom either with solidarity or exclusion, this is to saycooperation or competition. Anarcho-communists are against social Darwinism competitiveness andlook for an artificial, deliberate and conscious cooperation that constitutes a defense against thepotentially authoritarian character of the State. Yet Bakunin thought that to be free implied to workfor equality, solidarity and fraternity within the human community. In this sense, cooperation alsomeans that each one would have to act as nourishing the collective interest any time. It means thatindividuals depend one to another and perform together. So what is autonomous in this logic is thesocial link that regards for the collective well being.

In the other hand, anarcho capitalism believes that if there was no competition the investors won’thave enough incentives to keep on producing and growing, and that will generate a crash of thesystem and a falling back of the living conditions. As long as the system will remain competitive itwill continue to grow autonomously, because capitalists will always try to reinvest their profits inorder to continue producing more and better than the other competitors.

But we are already witnessing new phenomena, as the exchange of property is being substituted bythe access to goods and services through open-source networks15, that creates new forms of globalcooperation. This means that intermediates might not be in charge anymore of circulating money ifsocial participation is the new way of creating movement. The asymmetry between who owns themoney and social power is shifting, although we don’t know yet if that will change something.

Even though, for the anarcho-capitalists what it is important is to create or to be able to act in asystem that allows each individual to participate in the same way. Therefore those that will do itbetter will benefit from it. They defend private money as against public money. They are usuallybased in the libertarian consideration of money posed by Adam Smith but, at the same time, theygive to property rights an out of proportion importance in terms of Natural Law. The profoundreason for this is that they have a Lockian individualist concept of the ego. The ego consists forthem in the property over oneself (and what surrounds oneself), so they commit a contradiction asthe self is an external object that can be appropriated, by whom? The ego itself.

15 To create a social networks can mean that each person have to exchange directly with eachmember of the network or that when the network accepts you as a member, that allows you toenjoy anything that network provides, independently -or dependently- of what you bring to it.

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For anarcho-communist the justification to undermine the state is to gain a public power foreveryone abolishing the class system by acquiring the control of one’s productive life through freeand voluntary associations of producers. To share social and economic life implies true control overproduction and investment and the elimination of structures of hierarchy in the private economy andmost of the social relationship. In this sense, we have to mention that anarcho feminism has madeimportant contributions to anarchist ideas, supporting the abolition of state as an element ofrethinking social relationship far away from a patriarchal perspective. Said this, it is necessary tounderline that in our time most collectivists and great many of the individualist’s anarcho-communist as well, have recognized the necessity of maintaining some state power if it means notgiving greater power to big private corporations.

Probably the main difference is enquiring if widespread poverty and concentrated wealth arereasonable even if we think we have invented the perfect market system. What is it poverty? It canbe to resign oneself to consume fantasy, the illusions of wealth that are generally sold to people.Adam Smith already talked about “The poor man's son, whom heaven in its anger has visited withambition, when he begins to look around him, admires the condition of the rich... enchanted withthe distant idea of this felicity... Through the whole of his life he pursues the idea of a certainartificial and elegant repose which he may never arrive at, for which he sacrifices a real tranquilitythat is at all times in his power”... (Smith 1790, iv, I, 8). Capitalism has to find a way of dealingwith human needs and collective interests that cannot be expressed in the market. There are alreadypeople working on alternative indexes that revise our ideas of productivity, growth and wealth,understanding new measures of the economic well-being of society.

In conclusion, what it is really at issue here is why we cannot imagine a world without work, stateor money?

Few talk about the reduction of working time or the increase of services. We want to remind thatanthropologist and other multidisciplinary economist have highlighted that not every society isinterested in devoting the surplus of their activity to be invest in order to grow limitlessly.

Maybe, most people think that we have to choose between cruel insecurity and security in asomnolent living. Fortunately, collective consciousness regarding these subjects is evolving. Thereare more models apart from the financial economy based on credit and debt. A more sustainable andeffective economy can appear from building social capital and not just shareholder value, bycreating wealth while respecting the environment, etc. Or else it is going to be very difficult even tomaintain the present monetary system or the purchasing power.

It is sobering to realize different aspects of the current global climate. The labor factor is not scarcewhen we have an overabundance of people and high unemployment rates in the world. The capitalfactor is not scarce when the saving rates are rising and many countries have to export their reservesas external surplus. There is also enormous technological innovation stockpiles waiting to beutilized in many productive processes. Moreover, emerging countries could advance theirtechnology processes for little or no cost. Finally, it is undeniable that the natural resources on thisplanet are overexploited. Without acknowledging this evidence at the present time, we are not goingto obtain the necessary solutions and responses.

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