Municipalization of the Economy

Worker at a cooperative mill in Tirbespiye

As the Rojava revolution continues, the nature of its economy has been much discussed. As I have written previously, Rojava aspires to a social economy based on cooperatives. In recent weeks, several people have asked me for Murray Bookchin’s ideas about the economy: what are the economic aspects of libertarian municipalism? I’ve put together a summary of his thinking here, based on the sources listed at the end of this article.

Janet Biehl

In a capitalist economy, the means of production—industry—as well as land, raw and finished materials, financial wealth are concentrated in private hands. The alternative is a social economy, in which ownership of such property—wholly or in part–is shifted to the society as a whole. The intention is to create an alternative society, to put economic life directly into the hands of the men and women who are vitally involved with it. An alternative system would be one that has both the desire and the ability to curtail or eliminate profit seeking in favor of humanistic values, practices, and institutions. As Murray Bookchin pointed out, a social economy can take several forms.


Cooperatives are small-scale enterprises that are collectively owned and operated. They may be producers’ cooperatives, or they may be the collectivized and self-managed enterprises such as are advocated by anarcho-syndicalists. Their internal structures of sharing foreshadow the emergence of sharing in the wider society.

In the 1970s, many American radicals formed cooperatives, which they hoped could constitute an alternative to large corporations and ultimately replace them. Bookchin welcomed this development, but as the decade wore on, he noticed that more and more those once-radical economic units were absorbed into the capitalist economy. While cooperatives’ internal structures remained admirable, he thought that in the marketplace they could become simply another kind of small enterprise with their own particularistic interests, competing with other enterprises, even with other cooperatives.

Indeed, for two centuries, cooperatives have too often been obliged to conform to marketplace dictates, regardless of the intentions of their advocates and founders. First, a cooperative becomes entangled in the web of exchanges and contracts typical. Then it finds that its strictly commercial rivals are offering the same goods it offers, but at lower prices. Like any enterprise, it finds that if it is to stay in business, it must compete by lowering its prices in order to win customers. One way to lower prices is to grow in size, in order to benefit from economies of scale. Thus growth becomes necessary for the cooperative—that is, it too must “grow or die.” Even the most idealistically motivated cooperative will have to absorb or undersell its competitors or close down. That is, it will have to seek profits at the expense of humane values. The imperatives of competition gradually refashion the cooperative into a capitalistic enterprise, albeit a collectively owned and managed one. Although cooperation is a necessary part of an alternative economy, cooperatives by themselves are insufficient to challenge the capitalist system.

Indeed, Bookchin argued, any privately owned economic unit, whether it is managed cooperatively or by executives, whether it is owned by workers or by shareholders, is susceptible to assimilation, whether its members like it or not. As long as capitalism exists, competition will always require the enterprises within it to look for lower costs (including the cost of labor), greater markets, and advantages over their rivals, in order to maximize their profits. They will tend ever more to value human beings by their levels of productivity and consumption rather than by any other criteria.

Public Ownership

A truly socialized, alternative economy would be one, then, in profit seeking must be restrained or, better, eliminated. Since economic units are incapable of restraining their own profit seeking from within, they must be subjected to restraint from without. Thus alternative economic units, to avoid assimilation, must exist in a social context that curtails their profit seeking externally. They must be embedded in a larger community that has the power not only to bridle a specific enterprise’s pursuit of profit but to control economic life generally. No social context in which capitalism is permitted to exist will ever successfully curtail profit seeking. The expansionist imperatives of capitalism will always try to overturn external controls, will always compete, will always press for expansion.

Such a society must be one that “owns” the economic units itself. That is, it must be one in which socially significant property—the means of production—is placed under public control or, insofar as ownership still exists, public ownership.

The notion of public ownership is not popular today, since its most familiar form is state socialism, as exemplified by the Soviet Union. The nation-state expropriates private property and becomes its owner. State ownership, however, led to tyranny, mismanagement, corruption—to anything but a sharing, cooperative economy.

The phrase “public ownership” implies ownership by the people, but state ownership is not public because the state is an elite structure set over the people. The nationalization of property does not give the people control over economic life; it merely reinforces state power with economic power. The Soviet state took over the means of production and used it to enhance its power, but it left the hierarchical structures of authority intact. The greater part of the public had little or nothing to do with making decisions about their economic life.


Real public ownership would have to be ownership by the people themselves.

That was precisely what Bookchin proposed as an alternative: a truly form of public ownership. The economy is neither privately owned, nor broken up into small collectives, nor nationalized. Rather, it is municipaized—placed under community ownership and control.

Municipalization of the economy means the ownership and management of the economy by the citizens. Property would be expropriated from the possessing classes by the citizens’ assemblies and confederations (acting as a dual power) and placed in the hands of the community, to be used for the benefit of all. The citizens would become the collective “owners” of their community’s economic resources.

Citizens would formulate and approve economic policy for the community. They would make decisions about economic life regardless of their occupation or their workplace. Those who worked in a factory would participate in formulating policies not only for that factory but for all other factories—and for farms as well. They would participate in this decision-making not as workers, farmers, technicians, engineers, or professionals, but as citizens. Their decision making would be guided not by the needs of a specific enterprise or occupation or trade but by the needs of the community as a whole.

The assemblies would rationally and morally determine levels of need. They would distribute the material means of life so as to fulfill the maxim of early communist movements, “From each according to ability and to each according to need.” That way everyone in the community would have access to the means of life, regardless of the work he or she was capable of performing.

Moreover, the citizens’ assemblies, Bookchin wrote, would consciously ensure that individual enterprises did not compete with one another; instead all economic entities would be required to adhere to ethical precepts of cooperation and sharing.

Over wider geographical areas, the assemblies would make economic policy decisions through their confederations. The wealth expropriated from the property-owning classes would be redistributed not only within a municipality but among all the municipalities in a region. If one municipality tried to engross itself at the expense of others, its confederates would have the right to prevent it from doing so. A thorough politicization of the economy would thereby extend the moral economy to a broad regional scale.

As Bookchin put it, in a municipalized economy, “The economy ceases to be merely an economy in the strict sense of the word—whether as ‘business,’ ‘market,’ capitalist, ‘worker-controlled’ enterprises. It becomes a truly political economy: the economy of the polis or the commune.” It would become a moral economy, guided by rational and ecological standards. An ethos of public responsibility would avoid a wasteful, exclusive, and irresponsible acquisition of goods, as well as ecological destruction and violations of human rights. Classical notions of limit and balance could replace the capitalist imperative to expand and compete in the pursuit of profit. Indeed, the community would value people, not for their levels of production and consumption, but for their positive contributions to community life.


For more on the municipalized economy, please refer to these sources:
Murray Bookchin, “Municipalization: Community Ownership of the Economy,” Green Perspectives 2 (1986)
Murray Bookchin, The Rise of Urbanization and Decline of Citizenship (San Francisco: Sierra Club Books, 1987), pages 260-65. (This book was later republished under the titles Urbanization Against Cities and Urbanization Without Cities.)
Janet Biehl, The Politics of Social Ecology: Libertarian Municipalism (Montreal: Black Rose Books, 1998), chapter 12.