How the Economy of Anarchist Spain Really Worked

Last week, I received a Polish translation of a long essay I wrote over a decade ago on Spanish anarchism.  During the Spanish Civil War (1936-9), an avowedly anarcho-socialist movement called the CNT won control over large parts of Spain.  This gave them their big chance to try their alternative to capitalism and statism.  To most economists, of course, there isn’t any realistic alternative.  Non-libertarian economists might not approve of my tone, but I think they’d accept the substance of my critique:

Suppose that there were a standard capitalist economy in which a class of wealthy capitalists owned the means of production and hired the rest of the population as wage laborers. Through extraordinary effort, the workers in each factory save enough money to buy out their employers. The capitalists’ shares of stock change hands, so that the workers of each firm now own and control their workplace. Question: Is this still a “capitalist society”? Of course; there is still private property in the means of production, it simply has different owners than before. The economy functions the same as it always did: the workers at each firm do their best to enrich themselves by selling desired products to consumers; there is inequality due to both ability and luck; firms compete for customers. Nothing changes but the recipient of the dividends.

This simple thought experiment reveals the dilemma of the anarcho-socialist. If the workers seize control of their plants and run them as they wish, capitalism remains. The only way to suppress what socialists most despise about capitalism – greed, inequality, and competition – is to force the worker-owners to do something they are unlikely to do voluntarily. To do so requires a state, an organization with sufficient firepower to impose unselfishness, equality, and coordination upon recalcitrant workers. One can call the state a council, a committee, a union, or by any other euphemism, but the simple truth remains: socialism requires a state.

A priori reasoning alone establishes this, but empiricists may be skeptical. Surely there is some “middle way” which is both anarchist and socialist? To the contrary; the experience of Spanish Anarchism could give no clearer proof that insofar as collectivization was anarchist, it was capitalist, and insofar as collectivization was socialist, it was statist. The only solution to this dilemma, if solution it may be called, is to retain the all-powerful state, but use a new word to designate it.

The interesting thing about the economy of anarchist Spain is that it brightly illustrated both horns of my dilemma.  The cities became capitalist and anarchist; the country became socialist and statist.

In the cities, unionized CNT workers took over their own places of employment – and acted like inexperienced capitalists:

An overwhelming body of evidence from a wide variety of sources confirms that when the workers really controlled their factories, capitalism merely changed it form; it did not cease to exist. Summarizing a CNT-UGT textile conference, Fraser explains that, “experience had already demonstrated that it was necessary to proceed rapidly towards a total socialization of the industry if ownership of the means of production was not once more to lead to man’s exploitation of man. The works councils did not in practice know what to do with the means of production and lacked a plan for the whole industry; as far as the market was concerned, the decree had changed none of the basic capitalist defects ‘except that whereas before it was the owners who competed amongst themselves it is now the workers.'”[130] Bolloten records that, “According to Daniel Guerin, an authority on the Spanish Anarchist movement, ‘it appeared… that workers’ self-management might lead to a kind of egotistical particularlism, each enterprise being concerned solely with its own interests… As a result, the excess revenues of the bus company were used to support the street cars, which were less profitable.’ But, in actuality, there were many cases of inequality that could not be so easily resolved.”[131]

…How, one might wonder, could avowed socialists act so contrary to their principles? The workers’ behavior was not particularly different from that of wealthy Marxist professors who live in luxury while denouncing the refusal of the West to share its wealth with the Third World. Talk is cheap. When the worker-owners had the option to enrich themselves, they seized it with few regrets.

The orthodox state-socialists, even the CNT’s would-be allies such as the POUM, bitterly attacked the capitalist nature of worker-control…

Andrade tells Fraser a striking story about the funeral of a POUM militant. “[T]he CNT undertakers’ union presented the POUM with its bill. The younger POUM militants took the bill to Andrade in amazement. He called in the undertakers’ representatives. ‘”What’s this? You want to collect a bill for your services while men are dying at the front, eh?” I looked at the bill. “Moreover, you’ve raised your prices, this is very expensive.” “Yes,” the man agreed, “we want to make improvements – ” I refused to pay and when, later, two members of the union’s committee turned up to press their case, we threw them out. But the example made me reflect on a particular working-class attitude to the revolution.'”[135]

[…]

Inequality existed within collectives as well as between them. Invariably, the participants attribute the tolerance of inequality to the fact that it was impossible for one collective to impose equal wages unless the other collectives did the same. As Fraser summarizes the testimony of CNT militant Luis Santacana, “But the ‘single’ wage could not be introduced in his plant because it was not made general throughout the industry. Women in the factory continued to receive wages between 15 per cent and 20 per cent lower than men, and manual workers less than technicians.”[137] In other words, it was impossible to impose equality so long as there was competition for workers. If one firm refused to pay extra to skilled workers, they would quit and find a job where egalitarian norms were not so strictly observed.

In the country, in contrast, CNT militants chaotically imposed Stalinist agricultural collectivization:

The Anarchist military was the backbone of a new monopoly on the means of coercion which was a government in everything but name. It then became possible to use the peasantry like cattle, to make them work, feed them their subsistence, and seize the “surplus.” Bolloten approvingly quotes Kaminsky’s account of Alcora.

“‘The community is represented by the committee… All the money of Alcora, about 100,000 pesetas, is in its hands. The committee exchanges the products of the community for others goods that are lacking, but what it cannot secure by exchange it purchases. Money, however, is retained only as a makeshift and will be valid as long as other communities have not followed Alcora’s example.

“‘The committee is paterfamilias. It owns everything; it directs everything; it attends to everything. Every special desire must be submitted to it for consideration; it alone has say…”[144]

[…]

Fraser’s interview with the farmer Navarro clearly indicates that the Anarchist “committees” were governments in the standard sense of the word. “Once the decision was taken, it was formally left to the peasants to volunteer to join. Mariano Franco came from the front to hold a meeting, saying that militiamen were threatening to take the livestock of all those who remained outside the collective. As in Mas de las Matas, all privately owned stocks of food had to be turned it.” Martinez, another farmer, adds further details. “He shared, however, the generalized dislike for having to hand over all the produce to ‘the pile’ and to get nothing except his rations in return. Another bad thing was the way the militia columns requisitioned livestock from the collective, issuing vouchers in return. Having been appointed livestock delegate, he went on a couple of occasions to Caspe to try to ‘cash in’ the vouchers unsuccessfully. As elsewhere, the abolition of money soon led to the ‘coining’ of local money – a task the blacksmith carried out by punching holes in tin disks until paper notes could be printed. The ‘money’ – 1.50 pesetas a day – was distributed, as the local schoolmaster recalled, to collectivists to spend on their ‘vices’ – ‘the latter being anything superfluous to the basic requirements of keeping alive.'”[145] (For comparison, one farmer states that pre-war he earned 250 pesetas per month.)

Anarcho-socialists often point to the Spanish Civil War as a wonderfully informative social experiment.  They’re right, but only because the facts proved their theories horribly wrong.

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