It should be pointed out in this context that a synthesis of anarchism and capitalism was regarded as impossible by traditional proponents of both doctrines. While the defenders of capitalism such as the classical liberals of the nineteenth century believed that government should be kept strictly limited and as much as possible handled by the market, it should not be thought that they allied themselves with anarchism. On the contrary, it would not be too strong to describe classical liberalism's attitude toward anarchism as one of both contempt as well as fear. It was contemptuous because as one classical liberal philosopher wrote, anarchism "would be practicable only in a world of angels" and the "liberal understands quite clearly" that "one must be in a position to compel the per son who will not respect lives,health, personal feelings, or private property of others to acquiesce in the rules of life in society." And classical liberalism had feared anarchism because , while encompassing a broad spectrum of thought ranging from the rampant individualism of Max Stirner to the communism of Peter Kropotkin, the dominant strain of anarchism ostensibly place it squarely within the socialist camp. Daniel Guerin put the matter suc cinctly. Anarchism, he says, "is really a synonym for socialism." And, while acknowledging "Stirner's complete rejection of all political, moral, and traditional ties of the individual", " Max Adler goes so far as to argue that Stirner cannot even be considered an anarchist since anarchism is only "a definite political trend within the socialist labor movement," and Stirner was not a socialist.
Hence, not just the state but the capitalist economic system were the principle evils for the majority of the anarchist thinkers of the nineteenth century. It was not accidental that in Kropotkin's delineation of the three cardinal aims of anarchist communism the first was an injunction against capitalism: "Emancipation from the yoke of capital; production in common and free consumption of all the products of common labor."Only after his exhortation to abolish capitalism does one find a call for "emancipation from government" and "emancipation from religion." The views of the Italian anarchist, Errico Malatesta, and the Britisher, William Morris, were similar. Both equated anarchism with communism and called for the free distribution of all goods. Bakunin, while a collectivist rather than a communist, also advocated the liberation from capitalism. Even in the writings of the more individualist-oriented anarchists one finds condemnations of capitalism coupled with panegyrics to socialism. In a striking phrase, Proudhon not only declared that "Property is theft" , but also exclaimed "What is the capitalist? Everything! What should he be? Nothing!" Similarly, the English anarchist, William Godwin, asserted that "it follows upon the principles of equal and impartial justice, that the good things of the world are a common stock, upon which one man has as valid title as another to draw for what he wants." And the American anarchist, Benjamin Tucker, contended that there were "two schools of Socialistic thought," the State Socialism of Karl Marx and the Anarchism of Proudhon and the American Josiah Warren. Tucker placed himself in the anarcho-socialist camp. Thus, it is not surprising that anarchism was abhorrent to the classical liberals. "Liberalism," wrote Ludwig von Mises, "is not anarchism, nor has it anything to do with anarchism," and the twentieth century followers of classical liberalism, the minarachists, have followed their mentors in rejecting anarchism.
But while a quick glance at the major anarchist thinkers of Europe and England, and America would ostensibly indicate that all were firmly ant-capitalistic, a closer look will show that this is incorrect, for the term "capitalism" has been used in socialist literature in two contradictory manners. On the one hand, the term is used to denote production according to the dictates of the market, or in socialist terminology, "commodity production." On the other, capitalism is defined in terms of class relations, i.e., the ownership of the means of production by the "bourgeois," or ruling, class. The former may be termed the economic definition and the latter the sociological definition. If the economic definition is used, it follows that the more things are handled by the market, the more capitalistic the society. This means that price controls, tariffs, licensing restrictions, state unemployment compensation, state poor relief, etc., whether they are considered beneficial or not, must be classified as anti-capitalistic institutions since they constitute modifications or restrictions of the market. Since the state does not sell its services on the market, "state capitalism," according to the economic definition, is a contradiction in terms.
But if the sociological definition is used, the state becomes compatible with capitalism, for whatever serves to entrench the bourgeois class, the owners of the means of production, in power is, ipso-facto, "capitalistic." Since both proponents and critics of capitalism were in general agreement that market competition would force the "rate of profit" to fall, the two definitions lead to mutually exclusive consequences. Since the economic or market definition posits pure laissez faire, any government intervention to protect the interests of the bourgeois is anathema. But that is precisely what is entailed in the sociological definition: state intervention to protect profits and institutionalize the position of the property-owning class. When the sociological definition is used, capitalism becomes incomprehensible without control of the state by the bourgeois. For with the power of the sate behind them, the bourgeoisie are able to protect their privileged positions from the threat of competition by the establishment of tariff barriers, licensing restrictions, and other statist measures.
The proponents of capitalism, however, had only the economic definition in mind when they defended capitalism. Far from intending to defend state intervention to preserve artificially high profits, it was, in fact, such pro-capitalist writers as Adam Smith who vehemently condemned such "mercantilist" arrangements and urged their replacement by free trade capitalism. Since comparison can only be made when definitions tap the same domain, confusion occurred because of these definitional differences, and critics and opponents of capitalism talked past each other when many were in basic agreement. But if the economic spectrum is analyzed from the point of view of the economic definition only, then comparison can be made on the following basis: capitalism would be equated with the market, communism with the absence of the market, and mercantilism with a mixed or restricted market.