A Common Dispute with Left Anarchists

from The Daily Anarchist Wendy McElroy
June 5, 2012

One of the most common disputes I have with left anarchists is whether 19th century individualist anarchists were really socialists. On the surface, it is not absurd to argue that such proto-libertarians as Benjamin Tucker are best classified within the socialist tradition rather than the libertarian one. They generally accepted the labor theory of value and, so, rejected stock trappings of capitalism. For example, Tucker, William Greene, Ezra Heywood and Josiah Warren considered the charging of interest on money to be an act of usury or theft.

Moreover, the individualist anarchists sometimes referred to themselves as “socialists” and flirted with organizations such as the International Working People’s Association (IWPA). In 1881, when a moribund IWPA revived in London, Tucker enthused, “To this momentous event, which marks an epoch in the progress of the great labor movement…, in the present issue, devotes a large portion of her space.” (Published by Tucker, (1881-1908)was the most influential libertarian periodical of its day.)

I maintain that the identification of individualist anarchists as socialists rests on a confusion regarding the definition and use of the terms “socialist” and “libertarian.”

The umbrella term “socialism” covers several different approaches to the core belief in a social ownership of the means of production and a co-operative management of society. A strong dividing line between the various types of socialism is how they view the role of the state in achieving those goals. The socialism with which individualist anarchists identified held no role whatsoever for the state. What drew many of them was the idea of social co-operation. Josiah Warren – arguably the world’s first individualist anarchist – was deeply involved in voluntary and socialistic utopian communities such as New Harmony because he believed in the social principle of co-operation. Warren became disillusioned, however, by New Harmony’s demand for the relinquishment of individualism; for example, in the demand for communal meals and disdain for privacy. In response, Warren evolved a principle known as “The Sovereignty of the Individual” or self-ownership that he believed had to underlie all social co-operation.

As late 19th century socialism in America became increasingly statist, individual anarchists increasingly put distance between themselves and it. In a speech that subsequently became his most famous essay “State Socialism and Anarchism: How Far They Agree, and Wherein They Differ,” Tucker stated, “The two principles…are AUTHORITY and LIBERTY, and the names of the two schools of Socialistic thought…are, respectively, State Socialism and Anarchism.” (Capitalization in the original.)

Other individualist anarchists rejected the term “socialist” altogether with some occasionally applying the label “libertarian” to themselves. Why the outright rejection? In his book, William B. Greene commented, “In socialism, there is but one master, which is the state; but the state is not a living person, capable of suffering and happiness. Socialism benefits none but demagogues, and is, emphatically, the organization of universal misery…socialism gives us but one class, a class of slaves.”

Here, then, is the first basic schism between socialism and individualist anarchism. The former increasingly embraced the state while the latter continued to repudiate it. Individualists also began to reject the surrender of sovereignty that seemed to be demanded even by non-statist socialism.

Another key and irresolvable difference: the individuals advocated private property and believed social co-operation had to be based upon its recognition. The towering figure Moses Harman, for example, answered whether he was a Communist with the words, “We have never advocated the abolition of private property. We have always maintained that the development of the highest and truest individualism in human character requires the possession and therefore the existence of personal property.” Confusingly, in the same quote Harman speaks well of “Mutualism” and “Co-operative Communism” – terms that were used differently in the 19th century than now.

In short, the individualist anarchists rejected the state, demanded respect for individual rights and advocated private property. The thread of ideology that bound them to socialists was their belief in the labor theory of value. This economic theory conditions the value of a good or service upon the labor used to produce it. The rightful owner of that value or property is seen to be the laborer who produced it.

And, so, it is necessary to analyze the individualist-anarchist approach to issues involving the labor theory of value.

Most 19 century American individualist anarchists rejected profit from capital, particularly in three forms: interest on money, the charging of rent, and profit in exchange. All of these were called “usury.” If their main political goal can be stated as “the abolition of the state,” then it is no exaggeration to say that their main economic goal was “the abolition of the money monopoly.” And by this term — “money monopoly” — they referred to three different but interrelated forms of monopoly: banking, interest, and the issuance of currency.

Focusing on the one issue of currency provides a fair sense of how most individualist anarchists approached “usury” in general. They believed that the solution to currency usury was the free market; they believed that the right to issue private currency would destroy the money monopoly and this alone could bring about the destruction of the state. The money monopoly was considered to be the means by which the banks sustained themselves and robbed the average man of economic opportunities. Through the act of incorporating, bankers became immune from personal obligations: they acquired the legal advantage of being able to contract while avoiding the responsibility for doing so. This was not only a money-raking scam that bankers ran on the public, it also denied credit to the working people by setting up prohibitive interest rates or criteria for acquiring credit.

Again, the remedy for this form of state-capitalism was the free market and privatization of currency.

The key question at this point becomes, “what if the issuer of private currency decides to charge interest on its use?” What if a private issuer engaged in usury? Would that practice be forcibly prohibited?

The answer to this question is what separated advocates of the labor theory of value who were socialists from those who were libertarian. The socialists would have banned such a practice. By contrast, the individualist anarchists answered, “If a lender can find someone foolish enough to voluntarily enter into such a contract, then the contracting parties must be left to their folly.” The right of contract — “society by contract” — was the higher law. The only remedies individualist anarchists would have pursued against those who charged or paid interest were education, peaceful protest and the establishment of parallel currencies that offered what they thought was a better deal. Individualist anarchists gave primacy to the free market and the right of contract — this is what made them libertarians rather than socialists.

As long as the default position of individualist anarchism was the primacy of contracts — and it always was — then the free market would have inexorably established the practice of charging interest as it has through history, with or without the state.

Were individualist anarchists actually socialists? The answer is most definitely “no.”