Does Anarchism Skirt the Calculation Problem?
This is a lead essay in the C4SS Mutual Exchange Symposium: "Decentralization and Economic Coordination." The related readings and list of all other articles can be found in the introduction here. Illustration by a friend of C4SS.

Now it may surprise some, but unlike many fellow freed market anarchists at C4SS, I am not a market anarchist because of the economic calculation problem. While I do think the economic calculation problem rightly points out that top-down command economies cannot adequately produce and distribute goods to meet the needs of society, anarchist economic systems do not fall prey to this issue in the same fashion because they are not planned by outside actors in a top-down fashion but are rather decided by producers and consumers directly, thus eliminating the knowledge problem inherent to top-down economies.

To quote Mises himself:

When the “coal syndicate “provides the “iron syndicate “with coal, no price can be formed, except when both syndicates are the owners of the means of production employed in their business. This would not be socialization but…syndicalism.

Despite his semantical confusion over socialism (syndicalism is a form of socialism), his point still stands. This direct decision making by all of those involved is the key factor that sets it apart from other forms of planned economy and helps to avoid the pitfalls of outside planners. In fact, while markets have a tendency to overproduce and thus create waste, many more communal anarchist societal models allow such directly planned production and distribution to avoid unnecessary overproduction and waste.

The problem of economic calculation is that of a problem of hierarchical authority and the knowledge problem. Those removed from a situation cannot adequately make decisions for that particular situation and will in all likelihood make inadequate or misguided decisions. We need to include the voices affected in order to adequately meet their needs, whether through a freed market or directly democratic decision making. And while freed markets can be argued to cater to the more niche needs of individuals at times, there is nothing wrong with pursuing the goal of communization within the free market.

To quote Errico Malatesta:

Imposed communism would be the most detestable tyranny that the human mind could conceive. And free and voluntary communism is ironical if one has not the right and the possibility to live in a different regime, collectivist, mutualist, individualist — as one wishes, always on condition that there is no oppression or exploitation of others.

These various coexisting economic systems would indeed compete to some degree to meet the needs of those involved. Such competition would inherently be a market of sorts. Free markets keep communism truly free which is why they are so important. Full stateless communism needs the free market to maintain its voluntary nature, not so much because it is subjected to the calculation problem.

Markets are impossible to get rid of, especially in a free society. Even if most model their transactions in a completely communistic fashion, there would be enough experimentation at the fringes that would inevitably come with some sort of competition to fulfill a purpose and need, even if those purposes and needs are largely non-essential in nature and completely arbitrary. People will still trade, even if based on gifting and that free trade will make up the present market activity regardless of ideology or necessity. Markets are a description, and in no way have to function as a prescription for how we engage in economic activity. A truly free market allows economic exploration of the fullest extent.

So we as anarchists, have no need to base our market theories on the calculation problem. The calculation problem is irrelevant to anarchist economics. We can recognize and use the calculation problem as a means of disproving the effectiveness of state socialism to fellow anti-capitalists and win them over to anarchist ideals but using it to advocate for markets within anarchism is a stretch, and not to mention unnecessary when markets can’t be squashed without the force of the state.


Mutual Exchange is C4SS’s goal in two senses: We favor a society rooted in peaceful, voluntary cooperation, and we seek to foster understanding through ongoing dialogue. Mutual Exchange will provide opportunities for conversation about issues that matter to C4SS’s audience.

Online symposiums will include essays by a diverse range of writers presenting and debating their views on a variety of interrelated and overlapping topics, tied together by the overarching monthly theme. C4SS is extremely interested in feedback from our readers. Suggestions and comments are enthusiastically encouraged. If you’re interested in proposing topics and/or authors for our program to pursue, or if you’re interested in participating yourself, please email editor@c4ss.org or emmibevensee@email.arizona.edu.

The Anatomy of Escape
Fighting Fascism
Markets Not Capitalism
Free Markets & Capitalism?
Organization Theory
Conscience of an Anarchist