Collectives in a Market

While nearly all anarchists agree that collectives are more efficient in real terms than corporations, many anarchists assume that collectives would not be efficient monetarily speaking. The basis of the argument against individualist anarchy is that it would probably collapse back into capitalism. I am not an individualist, but I do believe that collectives can compete with corporations in the market. We would be kidding ourselves to believe that we can achieve total anarchy without going through intermediary stages. And it is my opinion that one of these stages must be market anarchism.

By market anarchism I am being fairly general and am not really referring to individualist anarchism but rather anarchism taking place while the market still exists and is, hopefully, under replacement. As an evolutionary, I believe that this replacement will be a fairly slow process lasting perhaps a generation. The evolution, which has already begun to an extent, would begin with the appearance of collectives within the market. To hope of obtaining any sort of success, however, these collectives could not be communist. They would instead be forced to deal with money. I argue this because most people do not have a concept of how a society could function without money. In addition, collectives would require money to obtain resources without jeopardizing the means for life.

The mere existence of collectives would not lead to a replacement of the market. To compete with corporations, collectives must be able to compete with them in the market. To replace corporations, collectives must demonstrate superiority in the market. To do so, collectives would have to not only be more efficient than corporations, but demonstrate greater economic success. Many anarchists argue that this is impossible because corporations use exploitation to drive costs down. This is the justification for a great deal of propaganda and property damage. While not wrong in any universal sense, I believe that the former is slightly coercive and the latter alienating. (I make a distinction here between propaganda and art, where art is expressive and propaganda misleading and/or coercive).

So how can collectives be more economically successful? I will argue that to be successful in the market, collectives need do nothing special. All a collective really requires is size. Exploitation is, in fact, not the best route to economic success. There are several reasons for this.

Collectives of sufficient size would be more effective at attracting contributors than corporations are at obtaining workers. Let me explain. If the per capita income of a collective were equal to the per capita income of the average American household, and if income were spread nearly flat, the income of each contributor would be higher than sixty percent of the American population (based on stats from James M. Henslin’s book, Essentials of Sociology: a Down to Earth Approach). This is due simply to wealth distribution. Corporations take the minimum number of employees required to produce the most profit. This is economically efficient in only one sense: it results in unequal wealth distribution. Collectives have no reason to refuse new contributors, and higher income for at least sixty percent of the population would constantly attract new ones. The collectives would therefore grow rapidly in size once they earned the per capita income of the average household.

To reach this point, collectives would need to sell products at a lower price than corporations. Many anarchists think this is impossible, arguing that the exploitative means of the corporation will always lead to lower prices. This, however, may not be the case. There are several reasons to think that a collective could, in fact, sell products at lower prices than corporations.

First, as has already been noted in the anarchist FAQ on this website (, people actually tend to work harder when they know there will be no reward. People, it seems, don’t like being bribed. It is equally true that fear of punishment only reduces work efficiency. Stress is produced by both the reward and punishment incentives, which not only lowers the quality of a person’s work, but his or her quality of life as well. Since one cannot rise above others in a collective (though some may still make slightly more than others), there is no true reward or punishment incentive. This would result in greater production efficiency. For this reason, more and better products can be created at the same overall cost. In addition, contributors will not be forced to buy the products of their own labor.

Secondly, collectives have neither the need nor the motive for monetary growth. Company profit is unpaid labor and is therefore exploitation. As with any organization, a collective would need to save money. It wouldn’t, however, need to save more money than it needed to, because collectives grow by collecting contributors rather than excess capital. This additional money could be used in other ways such as obtaining more resources or raising income. In any case, the extra money would be reflected in the price of the product.

In a time when information can spread so fast between any two (or more) people, it is clear that the purpose of advertising is not to get the word out about a product, but rather to create an irrational demand. Collectives, if truly based on anarchist principles, would not participate in advertising (because advertisement is coercion). The price and quality of the products would speak for themselves and information about them would spread by word of mouth. Surely information about the product would be easily available, but not in advertising format. In fact, the information could be used by other collectives. Tremendous resources would thus be preserved for other uses by abstaining from advertising.

By abolishing profit, abstaining from advertising, and escalating production, collectives would produce better, less expensive products. This would make collectives a primary source of products. It would also assure that collectives prefer to buy from other collectives so that such a system would not collapse back into capitalism. Corporations would respond in several ways. To compete with prices, capitalists would lower wages and fire workers. This would ultimately be to our benefit, for these workers will ultimately join collectives as it is in there economic interests and, more importantly, assures them the necessary means for life. Companies would probably respond by outsourcing jobs which would, left to their own devices, probably lead to lower prices. If corporations have no borders, however, there is no reason collectives should. Nobody would take slave wages if offered the chance to work in a collective and I see no reason collectives couldn’t have contributors across oceans. Capitalists would at some point cut off resources to the collectives, refusing to sell them anything. It is therefore in our interest to start by building an infrastructure based on subsistence. At the same time, however, collectives need to sell products that compete in the market. As a last resort (hopefully last, at least) terrorist atrocities would probably be committed against the collectives through government ties. I hope that this issue could be minimized by never giving the capitalists an excuse to attack, by obtaining “monopolies” over several industries, and through diplomacy. In any case, I hope that all anarchist violence be kept to a minimum and defensive in nature. And no, the best defense is not a good offense.

The total abolishment of capitalism is probably as impossible as winning the “War On Terror.” There will always be people who wish to dominate others, but they can only do so when the people as a whole actually believe they are inferior. These people would be few and far between, however, by power of example.

Why haven’t collectives been this successful so far? It is difficult to say. It is clear that it’s possible; the Spanish revolution is testament to that. It is my opinion that what has kept collectives from making the changes we’d love to see is that today’s collectives lack the significant desire to replace corporations. Collectives, instead, have focused on doing what corporations don’t do, such as feeding the poor, providing healthcare, and protecting the environment and the innocent. This must continue, and we must never forget the humanitarian aspect of anarchist culture. It is clear, however, that to replace capitalism we must replace the corporation itself, to render it redundant in the way that direct action renders government redundant.

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Empowering the people with equality, direct democracy, and freedom

Empowering the people with equality, direct democracy, and freedom