This is a common question, particularly from defenders of capitalism. They argue that syndicates will not co-operate together unless forced to do so, but will compete against each other for raw materials, skilled workers, and so on. The result of this process, it is claimed, will be rich and poor syndicates, inequality within society and within the workplace, and (possibly) a class of unemployed workers from unsuccessful syndicates who are hired by successful ones. In other words, they argue that libertarian socialism will need to become authoritarian to prevent competition, and that if it does not do so it will become capitalist very quickly.
For individualist anarchists and mutualists, competition is not viewed as a problem. They think that competition, based around co-operatives and mutual banks, would minimise economic inequality, as the new economic structure based around free credit and co-operation would eliminate non-labour (i.e. unearned) income such as profit, interest and rent and give workers enough bargaining power to eliminate exploitation. For these anarchists it is a case of capitalism perverting competition and so are not against competition itself (see Proudhon's General Idea of the Revolution, pages 50-1 for example). Other anarchists think that whatever gains might accrue from competition (assuming there are, in fact, any) would be more than offset by its negative effects, which are outlined in section I.1.3. It is to these anarchists that the question is usually asked.
Before continuing, we would like to point out that individuals trying to improve their lot in life is not against anarchist principles. How could it be? What is against anarchist principles is centralised power, oppression, and exploitation, all of which flow from large inequalities of income. This is the source of anarchist concern about equality — concern that is not based on some sort of "politics of envy." Anarchists oppose inequality because it soon leads to the few oppressing the many (a relationship which distorts the individuality and liberty of all involved as well as the health and very lives of the oppressed).
Anarchists desire to create a society in which such relationships are impossible, believing that the most effective way to do this is by empowering all, by creating an egoistic concern for liberty and equality among the oppressed, and by developing social organisations which encourage self-management. As for individuals' trying to improve their lot, anarchists maintain that co-operation is the best means to do so, not competition. And there is substantial evidence to support this claim (see, for example, Alfie Kohn's No Contest: The Case Against Competition).
Robert Axelrod, in his book, The Evolution of Co-operation agrees and presents abundant evidence that co-operation is in our long term interests (i.e. it provides better results than short term competition). This suggests that, as Kropotkin argued, mutual aid, not mutual struggle, will be in an individual's self-interest and so competition in a free, sane society would be minimised and reduced to sports and other individual pastimes. As Stirner argued, co-operation is just as egoistic as competition (a fact sometimes lost on many due to the obvious ethical superiority of co-operation):
"But should competition some day disappear, because concerted effort will have been acknowledged as more beneficial than isolation, then will not every single individual inside the associations be equally egoistic and out for his own interests?" [No Gods, No Masters, vol. 1, p. 22]
Now to the "competition" objection, which we'll begin to answer by noting that it ignores a few key points. Firstly, the assumption that libertarian socialism would "become capitalist" in the absence of a state is obviously false. If competition did occur between collectives and did lead to massive wealth inequalities, then the newly rich would have to create a state to protect their private property (means of production) against the dispossessed. So inequality, not equality, leads to the creation of states. It is no co-incidence that the anarchic communities that existed for millennia were also egalitarian.
Secondly, as noted in section A.2.5, anarchists do not consider "equal" to mean "identical." Therefore, to claim that wage differences mean inequality makes sense only if one thinks that "equality" means everyone getting exactly equal shares. As anarchists do not hold such an idea, wage differences in an otherwise anarchistically organised syndicate do not indicate a lack of equality. How the syndicate is run is of far more importance, because the most pernicious type of inequality from the anarchist standpoint is inequality of power, i.e. unequal influence on political and economic decision making.
Under capitalism, wealth inequality translates into such an inequality of power, and vice versa, because wealth can buy private property (and state protection of it), which gives owners authority over that property and those hired to produce with it; but under libertarian socialism, minor or even moderate differences in income among otherwise equal workers would not lead to this kind of power inequality, because direct democracy, social ownership of capital, and the absence of a state severs the link between wealth and power (see further below). Empirical evidence supports anarchist claims as co-operatives have a more egalitarian wage structure than corresponding capitalist firms.
Thirdly, anarchists do not pretend that an anarchist society will be "perfect." Hence there may be periods, particularly just after capitalism has been replaced by self-management, when differences in skill, etc., leads to a few people exploiting their fellow workers and getting more wages, better hours and conditions, and so forth. This problem existed in the industrial collectives in the Spanish Revolution. As Kropotkin pointed out, "[b]ut, when all is said and done, some inequalities, some inevitable injustice, undoubtedly will remain. There are individuals in our societies whom no great crisis can lift out of the deep mire of egoism in which they are sunk. The question, however, is not whether there will be injustices or no, but rather how to limit the number of them." [The Conquest of Bread, p. 94]
In other words, these problems will exist, but there are a number of things that anarchists can do to minimise their impact. Primarily there must be a "gestation period" before the birth of an anarchist society, in which social struggle, new forms of education and child-rearing, and other methods of consciousness-raising increase the number of anarchists and decrease the number of authoritarians.
The most important element in this gestation period is social struggle. Such self-activity will have a major impact on those involved in it (see section J.2). By direct action and solidarity, those involved develop bounds of friendship and support with others, develop new forms of ethics and new ideas and ideal. This radicalisation process will help to ensure that any differences in education and skill do not develop into differences in power in an anarchist society.
In addition, education within the anarchist movement should aim, among other things, to give its members familiarity with technological skills so that they are not dependent on "experts" and can thus increase the pool of skilled workers who will be happy working in conditions of liberty and equality. This will ensure that differentials between workers can be minimised.
In the long run, however, popularisation of non-authoritarian methods of child-rearing and education are particularly important because, as we have seen, secondary drives such as greed and the desire the exercise power over others are products of authoritarian upbringing based on punishments and fear (See sections B.1.5, "What is the mass-psychological basis for authoritarian civilisation?" and J.6, "What methods of child rearing do anarchists advocate?"). Only if the prevalence of such drives is reduced among the general population can we be sure that an anarchist revolution will not degenerate into some new form of domination and exploitation.
However, there are other reasons why economic inequality — say, in differences of income levels or working conditions, which may arise from competition for "better" workers — would be far less severe under any form of anarchist society than it is under capitalism. Firstly, the syndicates would be democratically managed. This would result in much smaller wage differentials, because there is no board of wealthy directors setting wage levels for their own gain and who think nothing of hierarchy and having elites. The decentralisation of power in an anarchist society will ensure that there would no longer be wealthy elites paying each other vast amounts of money. This can be seen from the experience of the Mondragon co-operatives, where the wage difference between the highest paid and lowest paid worker was 4 to 1. This was only increased recently when they had to compete with large capitalist companies, and even then the new ratio of 9 to 1 is far smaller than those in American or British companies (in America, for example, the ratio is even as high at 200 to 1 and beyond!). Thus, even under capitalism "[t]here is evidence that the methods of distribution chosen by worker-controlled or self-managed firms are more egalitarian than distribution according to market precepts." [Christopher Eaton Gunn, Workers' Self-Management in the United States, p. 45] Given that market precepts fail to take into account power differences, this is unsurprising. Thus we can predict that a fully self-managed economy would be just, if not, more egalitarian as differences in power would be eliminated, as would unemployment (James K. Galbraith, in his book Created Unequal, has presented extensive evidence that unemployment increases inequality, as would be expected).
It is a common myth that managers, executives and so on are "rugged individuals" and are paid so highly because of their unique abilities. Actually, they are so highly paid because they are bureaucrats in command of large hierarchical institutions. It is the hierarchical nature of the capitalist firm that ensures inequality, not exceptional skills. Even enthusiastic supporters of capitalism provide evidence to support this claim. Peter Drucker (in Concept of the Corporation) brushed away the claim that corporate organisation brings managers with exceptional ability to the top when he noted that "[n]o institution can possibly survive if it needs geniuses or supermen to manage it. It must be organised in such a way as to be able to get along under a leadership of average human beings." [p. 35] For Drucker, "the things that really count are not the individual members but the relations of command and responsibility among them." [p. 34]
Anarchists argue that high wage differences are the result of how capitalism is organised and that capitalist economics exists to justify these results by assuming company hierarchy and capitalist ownership evolved naturally (as opposed to being created by state action and protection). The end of capitalist hierarchy would also see the end of vast differences of income because decision making power would be decentralised back into the hands of those affected by those decisions.
Secondly, corporations would not exist. A network of workplaces co-ordinated by confederal committees would not have the resources available to pay exorbitant wages. Unlike a capitalist company, power is decentralised in a confederation of syndicates and wealth does not flow to the top. This means that there is no elite of executives who control the surplus made from the company's workers and can use that surplus to pay themselves high wages while ensuring that the major shareholders receive high enough dividends not to question their activities (or their pay).
Thirdly, management positions would be rotated, ensuring that everyone gets experience of the work, thus reducing the artificial scarcity created by the division of labour. Also, education would be extensive, ensuring that engineers, doctors, and other skilled workers would do the work because they enjoyed doing it and not for financial reward. And lastly, we should like to point out that people work for many reasons, not just for high wages. Feelings of solidarity, empathy, friendship with their fellow workers would also help reduce competition between syndicates for workers. Of course, having no means of unearned income (such as rent and interest), social anarchism will reduce income differentials even more.
Of course, the "competition" objection assumes that syndicates and members of syndicates will place financial considerations above all else. This is not the case, and few individuals are the economic robots assumed in capitalist dogma. Indeed, the evidence from co-operatives refutes such claims (ignoring, for the moment, the vast evidence of our own senses and experiences with real people rather than the insane "economic man" of capitalist economic ideology). Neo-classical economic theory, deducting from its basic assumptions, argues that members of co-operatives will aim to maximise profit per worker and so, perversely, fire their members during good times. Reality contradicts these claims, with the "empirical evidence" showing that there "has been no tendency for workers to lay-off co-workers when times are good, neither in Mondragon nor in [the former] Yugoslavia. Even in bad times, layoffs are rare." [David Schweickart, Against Capitalism, p. 92] The experience of self-managed collectives during the Spanish Revolution also confirms this, with collectives sharing work equitably in order to avoid laying people off during the harsh economic conditions caused by the Civil War. In other words, the underlying assumption that people are economic robots cannot be maintained — there is extensive evidence pointing to the fact that different forms of social organisation produce different considerations and people who are motivated by different considerations.
Also, we must remember that the syndicates are not competing for market share, and so it is likely that new techniques would be shared between workplaces and skilled workers might decide to rotate their work between syndicates in order to maximise the effectiveness of their working time until such time as the general skill level in society increases.
So, while recognising that competition for skilled workers could exist, anarchists think there are plenty of reasons not to worry about massive economic inequality being created, which in turn would re-create the state. The apologists for capitalism who put forward this argument forget that the pursuit of self-interest is universal, meaning that everyone would be interested in maximising his or her liberty, and so would be unlikely to allow inequalities to develop which threatened that liberty.
As for competition for scarce resources, it is clear that it would be in the interests of communes and syndicates which have them to share them with others instead of charging high prices for them. This is for two reasons. Firstly, they may find themselves boycotted by others, and so they would be denied the advantages of social co-operation. Secondly, they may be subject to such activities themselves at a future date and so it would wise for them to remember to "treat others as you would like them to treat you under similar circumstances." As anarchism will never come about unless people desire it and start to organise their own lives, it's clear that an anarchist society would be inhabited by individuals who followed that ethical principle.
So it is doubtful that people inspired by anarchist ideas would start to charge each other high prices, particularly since the syndicates and community assemblies are likely to vote for a wide basis of surplus distribution, precisely to avoid this problem and to ensure that production will be for use rather than profit (see section I.4.10, "What would be the advantage of a wide basis of surplus distribution?"). In addition, as other communities and syndicates would likely boycott any syndicate or commune that was acting in non-co-operative ways, it is likely that social pressure would soon result in those willing to exploit others rethinking their position. Co-operation does not imply a willingness to tolerate those who desire to take advantage of you.
Moreover, given the experience of the period between the 1960s and 1990s (with rising inequality marked by falling growth, lower wage growth, rising unemployment and increased economic instability) the impact of increased competition and inequality harms the vast majority. It is doubtful that people aware of these tendencies (and that, as we argued in section F.3, "free exchange" in an unequal society tends to increase, not decrease, inequality) would create such a regime.
Examples of anarchism in action show that there is frequently a spontaneous tendency towards charging cost prices for goods, as well as attempts to work together to reduce the dangers of isolation and competition. One thing to remember is that anarchy will not be created "overnight," and so potential problems will be worked out over time. Underlying all these kinds of objections is the assumption that co-operation will not be more beneficial to all involved than competition. However, in terms of quality of life, co-operation will soon be seen to be the better system, even by the most highly paid workers. There is far more to life than the size of one's pay packet, and anarchism exists in order to ensure that life is far more than the weekly grind of boring work and the few hours of hectic consumption in which people attempt to fill the "spiritual hole" created by a way of life which places profits above people.