How the Economy of Anarchist Spain Really Worked By Bryan Caplan

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.