To read Proudhon, to many non-mutualist thinkers beyond anarchist academia, is laughable. Anarchist communists will insist that Bakunin, Kropotkin and Bookchin expand on Proudhon, rendering the original mutualist promise as empty (ironic considering the massive amount Bakunin took directly from Proudhon.) Anarchist capitalists insist that his theories were flawed, socialist, and/or didn’t rely on the non-aggression principle or Austrian economics (or generally some otherwise lackluster defense of the freedom of capitalists). Marxians, much to the dismay of left anarchists, will insist that Marx “debunked Bakunin and Proudhon” during his time (as if the schools haven’t had a dialogue for as long as Marxism has lived).
Marxists quite frequently point to Marx’s infamous response to Proudhon — the piece that, sadly, has seemed to outlive Proudhon’s writings. In our Proudhonian revival, it is key to tackle Marx’s mediocre criticisms and respond from our modern anarchist perspective. The compatibility of post-structuralist Marxist thought with Tucker-esque market anarchism, or De Cleyre-esque meta-anarchy, continues to provide reason to abandon the stale communist mythology that continues to blind the left.
The (post-structuralist?) neo-mutualist analysis is useful here. (What sort of Jargon is that? Simply put, markets & marxists.) It should be made clear that much of what Marx criticized in Proudhon has to do with what Marx sees as Proudhon failing at his conceptualization of Hegelian dialectics. Deleuze, through his reading of Nietzsche, would peel Dialectics away from anti-capitalism, and there have been varying anti-Hegelian arguments by those besides Deleuze which renders it relatively useless to discuss in great detail here. I, personally, am contra Hegel, but there are modern mutualists who would still consider themselves Hegelians, and that point truly isn’t central to the liberatory movement. What is important about Marx’s “Poverty of Philosophy” is that it makes economic criticisms of Proudhon’s anarchism. That, then, is what we must criticize and respond to.
Anarchy is dead, according to Marxists — but reality is displaying quite the opposite. Anarchists, arguably, carry on Marx’s creative spirit better than Marxists today, seeing as Marx’s arguments were premised on showing how bourgeois assumptions about capitalism had within them radical conclusions that pointed beyond capitalism — and yet Marxists often like to dismiss all modern economics as “bourgeois pseudoscience.” The modern left is riddled with intellectual stasis such as this.
Austrian economists and post-structuralists have previously unexplored overlap. The twentieth century communists revisiting the positivity of competition and the deterritorialization feared by conservatives displayed as a benefit of market exchange speak to the Deleuzian point that the new left must have “Nothing to do with Government.” Including fiscally. What is he arguing then? What is Deleuzian anti-capitalism at all? We say it must be free exchange, a movement that, despite a lack of self-awareness, mirrors the Boston Anarchist promise a century earlier. Market Anarchism has kept itself alive despite Marxist nonsense. It’s time to attack the stale communist critique that refuses to face the emancipatory aspects of markets head on.
The Division of Labor – Marx contra Proudhon
To begin with Marx’s criticisms beyond Hegelian bickering (which permeates the entire text), Marx throws into question the conceptualization of the division of labor made by Proudhon. Much of Marx’s critique of Proudhonian dialectics is that they are a sort of bastardized Hegelianism that paints things in black and white and attempts to wrestle the existing good from the existing bad that encompasses it. In the Proudhonian dialectic, the goal is to find a synthesis, or to find good through a mix of the status-quo and the counter-status-quo.
Marxists tend to make the same mistake as Proudhon is attacked for here, splitting things into black and white and then claiming that their historical process is science when rather it tends to be the same bland, dualistic concept of repeated negation. The division of labor, Marx says, Proudhon does not eliminate entirely. Proudhon’s solution largely tends to surround individual trade, partnerships of workers into workshops and the division of labor separate from state bureaucracy. Marx draws an inverted line, saying that the less control that a community has over the ability for capitalists to divide their workers, the more likely it is that the power within a form is driven directly to the capitalist.
This, from a mutualist perspective, is flawed. Marx does not see how the “boss” controlling the labor process (and thus the division of labor) is maintained entirely by authority — including community authority. Accumulation of capitalist power is, historically speaking, a byproduct of state intervention, (and it’s protection of absentee property, the principle of accumulation) not an existence contradictory to state intervention. Market anarchist works like Carson’s IFBTIH demonstrate this concisely. This is what Marx misses in Proudhon’s “anti-privilegism.” The tendency for privilege to correlate to any and all forms of exploitation, not despite them but due to them and through them, is at the heart of the mutualist response here. The relation of laborers and their employers revolves around economies of scale, which rely on rent, interest rates, statist education practices, fiat currencies, land monopolies, intellectual property and central banking. These forces which Greene would’ve deemed usury were the target of the mutualist project to begin with, despite Marx’s misreading. Dyer D. Lum, an anarchist of the Proudhonian tradition, would exemplify the mutualist response quite clearly.
“It is not in division, but in the subordination of division to privilege that the Economists make the error of ascribing disadvantages to a law evolved in social growth. The element of freedom lacking in exchange, division consequently falls under the control of prerogative, hence the limitations and disadvantages of which Economists learnedly prate.” (D. Lum, ‘The Economics of Anarchy’ section IX)
Marx’s point is that by allowing markets to prosper, we allow capitalists to suppress worker desire in the name of efficiency. Capitalist efficiency, however, is in many ways efficiency of control. The efficiency that we as anarchists strive for is the maximization of agency. Top-down control is thoroughly inefficient in this regard. For this process of capitalists to put workers in factory lines and divide their labor, not according to desire, but according to “efficiency,” relies on authority. Mass production must happen, which, as has been explored by Kevin Carson, is a direct byproduct of state authority. Proudhon’s rhizomatic “many workshops” model entirely skirts many problems of mass production.
Beyond this, capitalists must here have power to begin with. This is the same flawed Marxist accusation Engels makes in “On Authority;” being that firms must inherently function how capitalist firms function. As Proudhonians and other anarchists have argued for over a century, the hierarchy present in capitalist firms is precisely a byproduct of capitalist relations of domination, not a cause for it, and not antithetical to it. We have real world examples of success in alternative organization strategies — workers cooperatives being more productive and better capable at using technology and silicon valley firms leveraging worker autonomy to get ahead. Market anarchists see possibility and creativity as central to the anti-capitalist promise, and we follow through on that promise.
Marxist materialism doesn’t account for the ways in which capitalism was born entirely from hierarchy, which it somehow boasts around as a “one-up” on Proudhon. Without this hierarchy, labor is not divided into misery. It is divided in the sense that humans are divided. Organically by desire and free contract.
Competition & Monopoly – A Marketist Response
Marx similarly dismisses competition as liberal mythology, despite Proudhon’s intricate exploration of competition and both its upsides and downsides. To Proudhon, good aspects of competition go as follows; competition is free exchange, and thus equal exchange (as far as capability, positive liberty and agency go). It represents association, and the freeing of associations and competition is antithetical to “cronyist” monopoly, and thus capitalist monopoly is antithetical to competition and association, two forces dependent on one another.
Marx responds here by using the dialectical process to point out that Feudal authority came first, and competition endangered it, which resulted in the synthesis of modern, capitalist monopoly. First, take note of how closely this dialectic resembles the “butchered dialectic” Marx criticized in Proudhon, but also, zoom out for a more nuanced lens surrounding market history. Our anti-authoritarian recap of economic events would point out, on the contrary, that competition remains the opposite of monopoly, and that the Marxist suppression of competition fails insofar as it doesn’t eliminate competition (which is omnipresent), it simply further monopolizes it (monopoly being the source of capitalist property relations).
Competition endangered feudal monopoly for the same reason it endangers capitalist monopoly. Far from being the opposite of feudal monopoly, capitalist monopoly is the same force with the same underlying aim. Authority, Deleuze says, attempts to systematically “recapture” the freed flows competition naturally brings about. The modern monopoly existing within a supposedly “competitive” system is far from evidence competition doesn’t work. If anything, a further examination of capitalist authority reveals how all forces upholding monopoly are in many ways the same ones formulated by the aristocracy to suppress peasant competition, and the forces suppressing competition are the ones that spawn from the monopoly kept afloat only by the negation of competition that Marxists seek to continue.
Marxist history, a dialectical history, is what Deleuze would later critique as being single-minded, trapped by it’s premise in the same way Freudian psychoanalysis sees Oedipus in everything and anything. Marxist history zooms into class analysis to such an extent that other vectors for liberation through mechanisms like competition are ignored because historically, competition didn’t put an end to authority regarding class and class only (even though, in some senses, it did) The Austrians would discuss this later on in depth, but as market-positive anarchists committed to emancipation, we pose two questions in response to this conception of competition as faux-equality.
“Aren’t the failures of competition to suppress monopoly entirely the direct byproduct of monopolistic control of competition?”
“Doesn’t your plan extend the flaws present in capitalist monopolization, i.e. suppression of competition at the hands of authorities, rather than getting rid of it?”
It’s also worth mentioning the two “cons” that Marx says Proudhon displays surrounding markets. One of these flaws is that markets tend to blur lines surrounding identity, nationality, ingroups and outgroups, to which we’d now say “yeah, that’s the whole point!” The second flaw is that competition “destroys trust in social relations,” but it is precisely economic planning that destroys trust to begin with. Exchange beyond top-down intervention is mediated entirely by trust, not despite it. Every exchange is equal in a market free of authority, consisting of only voluntary parties. Trust is advocated for by, and only by, the most radical forms of competition. The reason competition appears to destroy trust is because capitalism refuses to escape monopoly. To finish here, we will once again look to Dyer Lum as to what he said about competition over one hundred years ago.
“COMPETITION is the exact opposite, not the parent of monopoly. Freedom is essential to true competition, and wherever restriction exists on one side, it implies privilege on the other, and insofar competition ceases: monopoly rather than competition now exists. In the abrogation of privilege competition becomes not only free, but acts, as the governor on an engine, self-regulative and bringing cost as the mean of price. ‘Our friends, the enemy,’ the Socialists, in flying into a passion at the mention of competition but thereby betray their own logical adherence to the militant camp, for liberty includes and implies freedom to compete.”
Value Theories and Anarchist Conclusions
The following chapter illuminates that rent as a concept relies on surplus extraction and competition. Once again, however, competition is antithetical to authority (which Marx admits) and authority exists currently largely to suppress competition, and because competition was frozen by existing feudal monopoly. Rent, as Greene would put it, is usury — it’s quite emblematic of the very concept of usury. A completely freed competition wouldn’t treat property as a lease, and so the entire concept of rent as a byproduct of competition is done away with by a simple analysis of mutualist property.
Marx’s disagreement with Proudhon also relies on the idea that rent is the byproduct of social relations in which “land is exploited,” but this exploitation (i.e. commodification) relies on mass production, a concept that, as pointed out, is entirely statist, and one that Marx’s theory itself doesn’t do away with in any capacity beyond the abolition of economic calculation and property titles. Proudhonian “exploitation” of land is just use, which is present in any system, and the “abolition of ownership” that coincides with use-possession according to communists tends to use authority to justify itself regardless.
The other critique Marx makes of Proudhon has to do with Ricardian ideas of value, but the modern mutualist recast of the Ricardian value theory, as well as the continuingly rising frequency of exceptions to the labor theory of value in our current market make this criticism pretty worthless. See Graeber, Carson or even modern Marxists for dismissals of certain dismissals of the labor theory, or perhaps we could even unmask older texts like those of Eugene Böhm-Bawerk.
The final chapter has to do with Proudhon’s idea that a raise in minimum wage would inevitably lead to a cost increase of goods and services. This debate is unresolved to this day, and it serves us little to nothing to continue engaging with debates of minimum wage for precisely the reason that the existence of a minimum wage necessitates a central planning agency to administer such a wage regulation.
In a freed market, the subjective interpretation of the value of labor by the laborer (seeing as “socially-necessary labor time” can be done away with as an oversimplified and ultimately useless concept from Marx) has to do with disutility; it can be seen that the reason that surplus extraction can exist in a marxist framework, then, is that there are unequal boss-employee relations. These are not freed contractors, but victims of capitalist hierarchy. With entirely freed negotiating power, and the release of desire from capitalist shackles, labor is a freed force in line with desire — one which is paid for in full by its negotiating power and the lack of disutility currently omnipresent in capitalist enterprise.
Our criticisms of economic planning are numerous. They go far beyond a stale, conservative “inflation” criticism like the one made by Proudhon attacked thereafter by Marx (which, to be fair, was relatively new for Proudhon’s time). We consult the problems surrounding calculation, knowledge, bandwidth, agency, authority, and centralization to which Marxists of the previous century have failed to adequately respond. Despite the Marxist rejection of Proudhon and Bakunin, Bakunin offers us wisdom on this centralized solution. As he once said,
“If you took the most ardent revolutionary, vested him in absolute power, within a year he’d be worse than the Tsar himself.”
Absolute power corrupts absolutely. Our anarchist analysis of this central agency is simply that the power it requires is violent and oppressive. Regardless of Marxist responses regarding the minimum wage as not having to do with inflation, it does have to do with central planning. It is suppressing and controlling, and there are easier ways to help the working class than by trying to control the network of interactions that make up the economy.
There is a very genuine liberatory potential in the market now, trapped in hierarchical cells. Marxists point to the lack of effectiveness of these market revolutions to be representative of market failure, and their solution is to build more fiscal prisons with statist guards. Beyond the repetitive communist dismissals surrounding anarchy, there is a revival undercurrent, and competition is quite central to it — quite central to any progressive movement.
Marx’s criticisms of Proudhon have rotted with time. An outdated conception of dialectics haunts the work Marxists publish to this day. Criticisms surrounding division of labor and competition similarly ignore the much more fundamental anti-power history; the history of multiplicity similar between the market anarchists and the post-structuralists. Critiques of rent or inflation in Proudhon are dismissive of the much wider anarchist picture, and ignorant of the power authority has in the current economic situation.
I’ll give Marx points for cleverness surrounding the title, as well as an overall humorous and angsty dismissal of Proudhon throughout “The Poverty of Philosophy,” but that’s it. Anarchist history is one of nuance and multiplicity, and anarchist conceptions of competition and monopoly go beyond a hyper-focused view of production-monopolization like the one made by Marx. Proudhon is outdated, sure. I have issues with his theories, specifically surrounding his federalism, electoralism and Hegelian influence (not to mention rampant and disgusting anti-semitism and anti-feminism). What he isn’t, though, is “lost to the test of time” despite what many Marxists claim today. His theories are diverse and inspirational, and creative reciprocity will be the formulation of any genuine non-capitalist economy.
Let competition prosper! Let rent dissolve! And, most importantly, let exchange be freed!