In Libertarian* areas of Spain, individual retail businesses and democratically operated businesses existed in Catalonia and especially in Barcelona.[i] There were some small businesses that existed outside Catalonia. For example, some small shops remained in Calanda and Graus.[ii]

What is the difference between Libertarian Mutualism and Capitalism?

Capitalism is a competitive market system where the majority of businesses operate in a situation** where an employer pays themselves more money than their employees for an equal amount of time working.[iii]

Libertarian Mutualism is a regulated form of a competitive market system where the majority of businesses operate in the following ways: self employment,[iv] a situation where both an employer and employee of smaller businesses are paid equally for an equal amount of time working,[v] or a situation where small and medium business are democratically operated,[vi] and large scale democratic industry and agricultural places are federated and controlled by the community in order to regulate the market as well as provide public services.[vii]

As economist Jim Stanford points out, contrary to popular belief, markets and competition exist in other economic systems besides Capitalism (e.g., Market Socialism).[viii]

In economics, Libertarian Mutualism is very similar to Libertarian Collectivism except Libertarian Collectivism is free from market competition.[ix] Libertarian Collectivism also includes free health care and free basic foods.[x] People preferring a living beyond basic needs will use money for exchange.[xi] In Libertarian Mutualism, the community controlled banks charge 1% interest or less to cover expenses. In Libertarian Collectivism, the community banks also handle distribution of all commodities along with charging interest at 1% or less to cover bank expenses. The Central Labor Bank in Barcelona, with branches everywhere, offered credit with a charge of 1% interest as well as purchasing products and balancing accounts between collectives.[xii] Since market competition is gone in Collectivism, product prices are based on how much physical and mental work went into them. As with Mutualism, how much average work it takes to create a product is decided either individually or by the community.[xiii]

In the Catalonia economy, there were usually combinations of mutualist and collectivist practices within and outside the same workplaces and areas. However the combinations were more Collectivist leaning.[xiv] Since the majority of the economy in Catalonia was run in an attempted Collectivist manner, Catalonia can be recognized as an industrial Libertarian Collectivist economy. However, there were individual areas and federated areas that were distinctly Mutualist.

The largest industry in Catalonia, the textile industry,[xv] was organized into a Mutualist federation of sorts (CNT textile union) with competition between collectives in the same industry.

How were the large Mutualist businesses organized within the textile industry?

In the textile industry, all functionaries carried out the instructions of the membership and reported back directly to the men on the job and union meetings. During the building of the collective, a management committee of 19 was chosen by the rank and file membership. After three months the management committee would report back to the membership on the condition of the collective and its progress.

Money that used to go to dividends and premiums was used to pay the increased costs for raw materials. Every factory elected its administrative committee composed of its most capable workers. Depending on the size of the factory, the function of these committees included inner plant organizations, finance, statistics, relations and correspondence with other factories and with the community. There was another organization of a top flight technical commission staffed by very capable technical and administrative experts in the entire industry.

This commission contained engineers, technicians, and commercial experts, made plans to increase production, specialization, installations, etc.[xvi]

The CNT textile union looked after the sales and importation of raw materials for the factory, while smaller collectives did their own deals with other collectives or directly with individuals.[xvii]

However in February 1937 the CNT and UGT agreed to socialization*** of the textile industry of Barcelona.[xviii]

In the following March (1938), the CNT began to promote consumer owned and operated businesses. The CNT revised many of its previous positions mainly due to the war effort.[xix]

What about medium and small democratic businesses?

The Barcelona department stores and other medium and smaller co-operative businesses, and individual retail businesses existed in various areas around Catalonia.[xx]

What about small businesses with employers?

Many in the Spanish Libertarian CNT preferred the Libertarian views of Errico Malatesta, James Guillaume, and most other Libertarians from all schools of thought regarding wage labor. In their forms (and most other forms) of libertarianism, markets and competition could exist (Individualist and Mutualist socialist libertarianism) however without any wage labor (wage labor is an employer and employee relationship).[xxi]

It seems for this reason, in quite a few areas, small businesses with employers were collectivized by the CNT.[xxii] The former employers where permitted to join the collectivized businesses or socialized workshops and own an equal share of the business along with all the other workers.[xxiii]

However, the CNT militant, Sebastiá Clara, (referring to the barber industry in particular) thought it would have been best to allow the small employers to keep their businesses.[xxiv]

Self employment remained in all the different forms of economics (mutualist, collectivist, communist, etc.). In many areas within the libertarian collectivist and libertarian communist economies, the workers would dispose of their produce through local supply committees set up by the CNT.[xxv] The official policy of the Libertarian CNT was respect for the small man’s property of the self-employed individuals.[xxvi]

During his visits to rural collectives and urban socialized enterprises in Libertarian Spain, the Libertarian Souchy concluded that a mixed libertarian economy of collective and privately owned democratic businesses is the true manifestation of a free society.[xxvii]

* I am using the term Libertarian as understood by the CNT and others. Libertarian is used to describe a society that is organized through types of direct democracy within the business, workplace, federation and the society in general. People who do not wish to take part in the Libertarian society do not have to. For more information pleased see works by Proudhon, Bakunin, Kropotkin, and books, etc, about the CNT.

** Contrary to popular thought, there is only one way to make profit. When money is made by an employer that is paying themselves more money then their employees, the extra money the employer keeps is actually profit. When self-employed individuals, small businesses, or small and medium democratic businesses make money from the sale of their products their income is referred to as ‘exchange,’ (please see Kropotkin’s entry on Anarchism in The Encyclopedia Britannica, 1910 edition) though sometimes their income is referred to as profit as well, though it is understood as ‘income’ rather than capitalist profit (ie, an employer making more money then their employees). For more information on profit please see endnote 3.

*** Socialization is a situation where an entire industry is free from competitiveness (market competition) within its own industry during trade.