Commentary on Laurance Labadie’s “Anarchism Applied to Economics”

Mutualism Co-op Note: Read the original article in our archive of classical mutualist texts here.

Source: https://c4ss.org/content/55563

Laurence Labadie’s “Anarchism Applied to Economics” was first published in 1933 as a pamphlet via the International Anarchist Group of Detroit, then reproduced in Laurance Labadie: Selected Essays by Ralph Myers Publisher in 1978, and finally turned into digital text in 2019 by The Anarchist Library. Labadie uses this piece to explain from first principles the development of value from production and exchange to explain the logic of a free market system and the economic absurdity of the state and its interventions. In this way, it resembles the Robinson Crusoe style of many libertarian treatises, however, it goes further to contain, as almost all mutualist writing does, a condemnation of interest, rent, and profit; those deplorable weapons of wealth acquisition that earlier individualist anarchist Dyer Lum calls “the triple heads of the monster against which modern civilization is waging war.” Labadie adds as well the insight that these mechanisms are essentially forms of non-state (or, better put, indirectly statist) taxation. This lays the groundwork for continuing from the Tuckerites to the left-wing market anarchists the position that, yes, taxation (with tariff being one of the worst kinds) is theft by the unproductive/destructive state from the productive market—a position nearly universal to radical libertarians—but so are parasitic and usurious relationships within markets themselves when they are rendered systemically unfree by monopolistic control of banking/money, land, and other means of production—often via intellectual property law.

Labadie dreams then of a world in which wealth is exclusively the outcome of individual or cooperative production and voluntary exchange. And further, production and exchange are inseparably connected by Labadie’s own version of the labor theory of value which holds that the factors that determine value are utility and labor, with labor being the more fundamental as—in the absence of artificial hindrances against “free and equal access to the means of production, to the raw materials, and to an unrestricted market”—the price of commodities will tend toward cost of production; their labor value. It is only in the presence of artificial restrictions that marginal utility becomes the dominant definer of value. 

This take on the LTV not only follows from other anti-capitalist individualists such as Benjamin Tucker and Josiah Warren, but actually anticipates the more contemporary work on the LTV done by Kevin Carson that attempts to combine Austrian economic insights with traditional mutualist economics. As Center for a Stateless Society describes, Carson argues that “the insights of marginalism should be integrated as an additional component of classical political economy (LTV) and not as a standalone doctrine. He claims that the truth is akin to scissors: the top blade is marginal utility, which is the most influential short term factor, and that in the long run competition is always driving price toward cost with the bottom blade, never reaching it though due to the fluid nature of economic equilibrium.” And furthermore, like Labadie, Carson holds that “[i]n an economy of distributive property ownership, as would have existed had the free market been allowed to develop without large-scale robbery, time-preference would affect only laborers’ calculations of their own present consumption versus their own future consumption. All consumption, present or future, would be beyond question the result of labor.” The similarities between the two interpretations of the LTV are both uncanny and demonstrative of their organic development.

I would go as far as to claim that, alongside his “Economics of Liberty,” this is perhaps the most straightforward explanation of mutualist economics I have ever read. In only a few pages, Labadie outlines the virtues of liberty and the perils of monopoly to create an argument that is both vehemently anti-statist and anti-capitalist, but surprisingly non-partisan. It is therefore my pleasure to reproduce and comment on this first piece in the Laurance Labadie Archival Project.