Part 0: Conceptual toolkit

Most disputes in this guide turn on four distinctions. Many apparent disagreements dissolve, and real ones sharpen, once it is clear which distinction is in play.

Conventions used throughout
Entry 1. Two labor theories
Entry 2. Variants within each theory
Entry 3. Renting things and renting persons
Entry 4. Possession and property
Entry 5. A map of economic systems

Conventions used throughout

• [N] marks a normative claim (what ought to be); [E] an empirical claim (testable against evidence); [C] a conceptual claim (about definitions or logical relations).
• Text marks what a thinker actually wrote, with a location. Reading marks a later interpretation, and the label "Reading:" always names its author. Where interpretations differ but their authors are not yet set out, the guide uses a "Note:" instead (below).
• To verify flags a date, title, attribution or quotation not yet confirmed to the guide's sourcing standard. The flag is removed once the claim is confirmed.
• Overview opens each entry: a short plain-language statement of what is at stake, with technical terms defined on first use.
• Where to read it closes each entry: the primary texts behind it, with exact titles, dates and locations.
• Spelling is American in the guide's own prose. Quotations, titles of books and articles, and proper names keep their original spelling (e.g. Labour Defended against the Claims of Capital, Catalogue of the Library of Thomas Jefferson).
• Note: at the end of a sentence marks a contested or unverified qualification and names where the full treatment will be; it stays flagged "to verify" until sourced.
• Readings are chosen by whether they change what a careful reader would conclude from the Text: they relocate an argument, dispute a premise, or rest on evidence the others ignore. Restatements are left out, the strongest published version is preferred, and rival Readings are marked as overlapping or exclusive.

Entry 1. Two labor theories

Overview. Two different questions are often answered with the same phrase, "labor theory." The labor theory of property (LTP) asks who ought to own what work produces; it is a claim about justice. Here justice means rightful entitlement in general, not any one theory of it: the claim may rest on what Locke called each person's property in his own person, later termed self-ownership, on responsibility for one's own actions (Ellerman), or on other grounds. The labor theory of value (LTV) asks what determines prices and where profit comes from; it is a claim about how markets work. This entry shows why holding one does not commit anyone to the other, and how the two were joined and then separated in the history of the debate. The separation is logical, not a claim that no one holds both: many writers have, and Marx himself held a labor theory of value while rejecting the demand that labor receive its whole product, under capitalism or after it.

The labor theory of property (LTP) and the labor theory of value (LTV) answer different questions, and neither entails the other [C].

The two are compatible, though. A writer can hold both, and many have; holding one simply does not settle the other.

	Labor theory of property	Labor theory of value
Question	Who ought to own what is produced?	What regulates relative prices, and where does profit come from?
Kind of claim	Normative [N]	Explanatory [E], with conceptual disputes [C]
How it is assessed	Moral and juridical argument	Price data, models, internal consistency
Classic statement	Locke, Second Treatise §27	Ricardo, Principles (1817), ch. 1
Held without the other by	Ellerman (LTP, sets the LTV aside)	Marx (LTV, rejects the "undiminished proceeds of labor")

Locke had already linked them, treating labor's share of value as what lets labor's claim "over-balance the community of land" (§40; Entry 2). They were joined most explicitly in the 1820s, when William Thompson and Thomas Hodgskin claimed for labor its whole product, though neither derived that claim simply from Ricardian value theory. Text: Thompson rests it on Bentham's principle of utility together with the thesis that labor is "the sole parent of wealth"; securing to producers the products of their labor is one of his "natural laws of distribution" [N] (Inquiry, 1824, ch. I, pp. 1, 6–7). Hodgskin argues that capital is unproductive, its supposed contributions being those of co-existing and skilled labor [C], and grounds labor's claim on the maxim that what labor produces belongs to it; he cites Ricardo's account of rent and subsistence wages only as confirmation (Labour Defended, 1825). Reading: the later label "Ricardian socialists" is disputed. Ellerman keeps it but reads the group as early theorists of a labor theory of property rather than of value; Carson calls it "somewhat misleading" for Hodgskin, whom he reads as a classical liberal in Smith's tradition. Marx pulled them apart again. He did so in two steps.

First, in Capital I (1867) he argues that the wage is an exchange of equivalents by the rules of commodity exchange ("Equivalent has been exchanged for equivalent," ch. 7, §2). The worker sells labor power, the capacity to work, and is paid its value. Surplus value arises because labor in use produces more than that value [C]. Exploitation therefore happens in production, not through cheating in exchange, so a demand for fairer exchange misses its source. Whether this makes the wage fair is a contested question (Entry 21, Part IV — Marx and Engels); in the Gotha critique Marx puts "fair" distribution in quotation marks and asks whether the bourgeois do not assert that present-day distribution is "fair" (Part I, §3).

Second, Text: the Critique of the Gotha Programme (1875) attacks the demand for the "undiminished proceeds of labor." Marx lists deductions any society must make from the total product: replacing used-up means of production, expansion, reserves against accidents, administration, common needs such as schools and health services, and support for those unable to work. He adds that right can never be higher than the economic structure of society. The remedy, on his view, lies in changing the relations of production rather than in a fairer rule of distribution [N]: any distribution of the means of consumption, he writes, is only a consequence of the distribution of the conditions of production themselves (Part I, §3).

Whether Marx nonetheless judged capitalism unjust is a separate and contested question (Entry 21, Part IV — Marx and Engels). Ellerman separates the theories from the other side. In Property and Contract in Economics (1992) he grounds a juridical LTP and treats the LTV as more than a distraction from it.

Text: Ellerman says the history of the LTP has been obscured by its confusion with the LTV, a confusion sponsored for different reasons by Marxian and neoclassical economists (Introduction, p. 6). Marx's insight into the distinctive role of human labor, he writes, was planted in "the blighted soil of the labor theory of value" (ch. 3, p. 44). And because Marx accepted that ownership of the means of production carries the right to run the firm, Ellerman calls Marxism "the ideal foil" for capitalist ideology, sharing what he calls its fundamental myth, the belief that being the firm, with the right to run production and to own its product, is part of owning the means of production, rather than exposing it (ch. 1, pp. 11, 16) [C]. Renting persons is part of the same quarrel. Ellerman faults the Marxist tradition for leaving the employment relation in place: the capitalism–socialism debate, he argues, was only over whether workers should be rented privately or by the state, like a debate over private or public ownership of slaves (Introduction, p. 2; ch. 1, p. 17) [N]. His target is socialism as practiced, "Marxist-Leninism" in government (ch. 1, pp. 16–17). Marx's own picture of communism is a different case: already in its first phase, producers draw on the social stock with certificates for the labor they have contributed rather than receiving wages from an employer (Gotha critique, Part I, §3; Entry 5). How far the charge reaches Marx himself, as opposed to the states built in his name, is a matter of interpretation, taken up with rival Readings in Entry 23 (Part IV — Marx and Engels). He adds that Marx's distinction between labor power and labor is not peculiar to labor, since renting a car raises the same distinction (ch. 3, pp. 37–38) [C]: renting a car for a day also buys a capacity whose actual use may be light or heavy, which is why rental firms charge by mileage as well. What sets labor apart, on his view, is not that distinction but that only persons can be responsible for what they do (ch. 3, p. 38).

The practical upshot: refuting the LTV, as the marginalists claimed to do, does not by itself touch a normative LTP. Equally, a successful LTV does not show that anyone is wronged. Writers in every camp have sometimes run the two together.

In context. Marx signed the preface to the first German edition of Capital I in London on 25 July 1867. In it he wrote that, as the American war of independence had "sounded the tocsin for the European middle class," so "the American Civil War sounded it for the European working class"; and that "on the other side of the Atlantic Ocean, Mr. Wade, vice-president of the United States, declared in public meetings that, after the abolition of slavery, a radical change of the relations of capital and of property in land is next upon the order of the day" (Preface to the first German edition, 1867, pp. X, XII) [E]. Benjamin F. Wade was not vice-president: the Senate elected him its president pro tempore in 1867, and he was next in line of presidential succession during Andrew Johnson's impeachment trial. A New York Times correspondent's account of Wade's speech at Lawrence, Kansas, sent from there under date of 13 June 1867 and reprinted in the Keowee Courier (Pickens Court House, S.C.) of 6 July 1867, p. 2, reported him as saying that "We had disposed of the question of slavery, and now that of labor and capital must pass through the ordeal," and that "Property was not equally divided, and a more equal distribution of capital must be wrought out" [N]. The account calls itself a "sketch" of a half-hour speech and regrets "that a stenographic report could not have been made of it." The sources cited here do not show which of Wade's speeches Marx had in mind.

Where to read it

• John Locke, Two Treatises of Government (London: Awnsham Churchill; title page dated 1690, issued late 1689), Second Treatise, ch. V, "Of Property," §27.
• David Ricardo, On the Principles of Political Economy and Taxation (London: John Murray, 1817), ch. 1, "On Value." The third edition (1821) revises this chapter.
• William Thompson, An Inquiry into the Principles of the Distribution of Wealth Most Conducive to Human Happiness (London: Longman, Hurst, Rees, Orme, Brown, and Green, 1824), ch. I: the principle of utility at p. 1; the "natural laws of distribution," including that the products of labor be secured to their producers, at p. 6; labor as "the sole parent of wealth," §1, p. 7.
• Thomas Hodgskin, Labour Defended against the Claims of Capital; or, The Unproductiveness of Capital Proved with Reference to the Present Combinations amongst Journeymen (London: Knight and Lacey, 1825), the later pages, where he turns from the claims of capital to labor's claim on its whole produce (page in the 1825 edition: to verify). Accessible reprint: ed. G. D. H. Cole (London: Labour Publishing Company, 1922).
• Karl Marx, Capital, vol. I (1867; English ed. 1887), Part II, ch. 6, "The Buying and Selling of Labour-Power," and Part III, ch. 7, "The Labour-Process and the Process of Producing Surplus-Value." Chapter numbers follow the English edition. In the fourth German edition (1890) these are ch. 4, §3, and ch. 5; in the first German edition (1867), ch. 2, §3, and ch. 3, §1.
• Karl Marx, Critique of the Gotha Programme (written April–May 1875; first published, abridged, by Engels in Die Neue Zeit 9, vol. 1, no. 18, 1890–91), Part I, §§1 and 3. Quotations follow the Progress Publishers translation in Marx/Engels Selected Works, vol. 3 (Moscow, 1970).
• David Ellerman, Property and Contract in Economics: The Case for Economic Democracy (Cambridge, Mass., and Oxford: Blackwell, 1992), Introduction, p. 6; ch. 3, p. 38; ch. 13, pp. 212 ff.
• Rival Readings of the "Ricardian socialist" label: David Ellerman, Property and Contract in Economics (1992), ch. 3, pp. 38 and 40; Kevin A. Carson, "On the Shoulders of Giants," Center for a Stateless Society, 15 November 2012.

Entry 2. Variants within each theory

Overview. Saying that someone holds "a labor theory" says little until one knows which version. Property theories ground ownership in different things: mixing labor with unowned objects, the value labor adds, responsibility for what one produces, or continued personal use. Value theories differ too: labor may serve as a measure of value, a regulator of relative prices, or a ceiling on the fair price. This entry sorts the main versions so that later entries can say exactly which one a thinker held.

Each theory comes in several forms, and thinkers who share a label often hold different variants.

Variants of the labor theory of property

• Mixing (Locke, §27): since every man has "a property in his own person" (later termed self-ownership), whatever he removes from the common state and mixes his labor with becomes his, "at least where there is enough, and as good, left in common for others"; §31 adds that no one may take more than he can use before it spoils. Nozick asks why mixing gains the thing rather than losing the labor, with his example of tomato juice poured into the sea (Anarchy, State, and Utopia, 1974, ch. 7).
• Value added (Locke, §§40–43): it is labor "that puts the difference of value on every thing," which is why "the property of labour should be able to over-balance the community of land" (§40). In §40 Locke's estimate rises from nine-tenths to ninety-nine hundredths; in §43 he adds that an uncultivated acre yields not a thousandth of the benefit of a cultivated one. Reading: whether this amounts to a labor theory of value is disputed. Vaughn argues that Locke's "value" here is usefulness and that he explains prices by quantity and vent (1978, pp. 312, 315–17); Marx read Locke as reducing rent and interest alike to the appropriation of another's labor (Theories of Surplus-Value, Part I, Addenda, §4).
• De facto responsibility (Ellerman): legal responsibility should follow factual responsibility. Those who jointly produce an output, using up inputs, are responsible for both. Only persons can be responsible, so land and capital cannot be.
• Occupancy and use (Proudhon's "possession"; Tucker): title to land rests on continued personal use, not on initial acquisition alone. Strictly this is a use-based theory rather than a labor theory, but it travels with labor theories in the mutualist tradition.

Variants of the labor theory of value

• Labor commanded (Smith, Wealth of Nations, 1776, I.v): a good's real value is measured by the labor it can purchase.
• Labor embodied (Smith's "early and rude state," I.vi; Ricardo, Principles, ch. 1): relative prices are regulated by the labor required to produce goods. Ricardo himself adds that where fixed capital differs in proportion or durability between trades, relative values also change with wages and profits, which introduces "a considerable modification to the rule" (1817 ed., ch. 1, pp. 22–48, at p. 48).
• Socially necessary abstract labor (Marx, Capital I, 1867, ch. 1): value is the labor time socially necessary under average conditions, realized only through exchange. Prices of production diverge systematically from values (Capital III, 1894).
• Cost the limit of price (Warren, Equitable Commerce, 1846): under fair exchange, price should not exceed the cost of production, chiefly labor and its burden. Carson restates it in subjective terms (Studies in Mutualist Political Economy, 2004).

Warren's version is a hybrid [C]. It is partly a prescriptive pricing rule and partly a prediction about competitive markets. Text: in the 1852 edition Warren calls cost "the only rational ground of price," and predicts that making cost the limit of price would end price fluctuations and turn competition into "a great adjusting and regulating power" (Equitable Commerce, Part I, §i).

In context. Warren and his family belonged to Robert Owen's community at New Harmony, Indiana, until its demise two years after they joined (Josiah Warren Papers, University of Michigan, biographical note). Nearly two decades before Equitable Commerce, on 18 May 1827, Warren opened a store in Cincinnati, known as the "Time Store," where, in William Bailie's account, goods were marked at "their cost price, plus a nominal percentage" and the storekeeper's own time was paid for in labor notes, promises to repay in labor (Josiah Warren: The First American Anarchist, Boston, 1906, pp. 9–10) [E]. Bailie, a sympathetic biographer, presents the store as Warren's first practical test of principles he took from "the lesson of New Harmony" (pp. 7–8). In 1847 Warren began a village called Utopia on the Ohio River, thirty miles from Cincinnati, and he later began another colony on Long Island, Modern Times, which became notorious and which its villagers renamed Brentwood (Michigan biographical note). Warren founded Modern Times with Stephen Pearl Andrews, who edited the 1852 Equitable Commerce, and its members traded goods and services "at cost, rather than market value" (Roger Wunderlich, Low Living and High Thinking at Modern Times, New York, Syracuse University Press, 1992, publisher's description).

Where to read it

• John Locke, Two Treatises of Government (title page 1690), Second Treatise, ch. V: mixing and the "enough, and as good" condition at §27; the spoilage limit at §31; the value added by labor at §§40–43. Quotations follow the sixth printing (London: A. Millar et al., 1764).
• Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books, 1974), ch. 7, "Distributive Justice," pp. 174–75 (the tomato juice).
• David Ellerman, Property and Contract in Economics (1992), Introduction, pp. 5–6, on imputing responsibility to persons rather than tools; ch. 3, pp. 40–41, "The juridical principle of imputation," the fullest statement of the de facto responsibility principle.
• Pierre-Joseph Proudhon, Qu'est-ce que la propriété? (Paris, 1840), ch. 2, on property as domain versus possession; English translation by Benjamin R. Tucker, What Is Property? (1876).
• Benjamin R. Tucker, Instead of a Book (1893; 2nd ed. 1897), part "Land and Rent."
• Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London, 1776), Book I, ch. v (labor commanded) and ch. vi (the "early and rude state").
• David Ricardo, Principles of Political Economy and Taxation (London: John Murray, 1817), ch. 1, "On Value," pp. 1–48, with the modification for fixed capital at pp. 22–48.
• Karl Marx, Capital, vol. I (1867), ch. 1, "Commodities"; vol. III (ed. Engels, Hamburg: Otto Meissner, 1894), Part II, ch. 9, "Formation of a General Rate of Profit (Average Rate of Profit) and Transformation of the Values of Commodities into Prices of Production."
• Josiah Warren, Equitable Commerce (1846; expanded ed., New York: Fowlers and Wells, 1852), and "A Brief Outline of Equitable Commerce" (1852).
• Kevin A. Carson, Studies in Mutualist Political Economy (Fayetteville, Ark.: self-published, 2004; free online at mutualist.org), Part One, ch. 2, "A Subjective Recasting of the Labor Theory of Value." A revised text dated March 2007 retitles the chapter "A Subjective Recasting of the Labor Theory." The online version was the subject of a symposium in the Journal of Libertarian Studies 20, no. 1 (Winter 2006).
• Rival Readings of Locke's §§40–43: Vaughn, "John Locke and the Labor Theory of Value," Journal of Libertarian Studies 2, no. 4 (1978): 311–26, at pp. 312, 315–17; Karl Marx, Theories of Surplus-Value, Part I, Addenda, §4, "Locke" (Progress Publishers text).

Entry 3. Renting things and renting persons

Overview. Standard economics treats wages, rent and interest alike: each is a price paid for the use of something, whether a worker's labor, a plot of land or a sum of capital. Profit is then the residual, what remains after those prices are paid. David Ellerman argues that hiring a person differs in kind from renting a thing, because people cannot hand over responsibility for what they do. This entry sets out that argument, what it leaves untouched, and why the justice of interest and rent remains a separate question.

Standard economics treats wages, rent and interest as parallel prices for the services of labor, land and capital. Ellerman argues that the parallel hides a categorical difference.

Income	What is hired	Classical account	Neoclassical account
Rent	Use of land	Differential surplus from better land (Ricardo)	Marginal product of land
Interest	Use of capital or money	Part of the return on stock (Smith)	Time preference and capital productivity (Böhm-Bawerk, Fisher)
Wages	Labor services	Regulated by subsistence or bargaining power (Smith, Ricardo)	Marginal product of labor (J. B. Clark, 1899)
Profit	Nothing; it is the residual	Return on stock, usually including interest	Zero in long-run competitive equilibrium; Knight (1921) explains profit as the return to bearing uncertainty

Text: Clark offers marginal productivity as more than an explanation of wages. His preface states the book's purpose: to show that distribution is governed by a natural law which, working without friction, "would give to every agent of production the amount of wealth which that agent creates," so that where titles to property originate "the social procedure is true to the principle on which the right of property rests" [N] (The Distribution of Wealth, Preface; quotations follow the 1908 reprint). This is the neoclassical counterpart to a labor theory of property. Ellerman answers it in ch. 13, "Marxian value theory, MP theory, and the labor theory of property" (1992, from p. 212).

When a thing is rented, its owner transfers the use of it, and the user is responsible for what is done with it. Ellerman's claim is that the employment contract treats a person the same way, as an instrument whose results belong to the employer [N].

He argues that responsibility cannot in fact be transferred. Employees remain jointly responsible for what they do together, as criminal law recognizes when employer and employee commit a crime together [C]. On this view the contract is invalid in its very structure, like a contract for voluntary slavery: the right it purports to sell is inalienable.

Objection: defenders of the employment contract reply that it transfers no responsibility, since employees remain answerable for what they do, and that unlike slavery it can be ended at will (Part IX; on ending at will, Murray N. Rothbard, The Ethics of Liberty [1982; New York: New York University Press, 1998], ch. 19, p. 137). The strongest published version of the first point, aimed at Ellerman directly, is Alan F. Zundel's: responsibility itself cannot be transferred, but "when responsibility produces a property right, that property right is alienable," so the employment contract "could be reconceived as a type of futures contract, selling a claim on the eventual whole product in return for something like a fixed wage"; he adds that suppliers of capital can share responsibility, as accomplices share culpability ("Ordinary Jurisprudence and the Democratic Firm: A Response to David Ellerman," Journal of Business Ethics 35, no. 1 [2002]: 51–56, at p. 51; accomplices, pp. 53–54; futures contract, p. 55) [C]. Zundel grants that "while the employment contract would be invalid, it could be reconceived as a type of futures contract" (p. 56): "The contract would not actually be for the sale of labor services, but for the sale of the laborer's property right in the eventual whole product" (p. 55) [C]. Ellerman's rejoinder is that the law treats the employee as a responsible person only once a crime is committed, and otherwise as an input whose product belongs to the employer (ch. 1, p. 20) [C]. A further rejoinder answers the at-will point directly: the right to quit neither dissolves the employer's authority nor justifies it, as Elizabeth Anderson argues in Private Government (2017), ch. 2, pp. 55 and 61 [N]. A related rejoinder, that at-will employment itself treats the employee as a thing to be used, which is Ellerman's charge that employment rents persons (Introduction, p. 2), is developed by Martin Elson in Part XII [N].

Note what this argument does not touch. A worker-owned firm can still borrow capital at interest and lease land. Mutualists and Georgists challenge those other incomes: mutualists treat interest and much rent as monopoly returns, Georgists treat land rent as socially created. Part XII returns to this difference.

Terminology warning: classical writers usually fold interest into "profit," while modern usage separates them. The comparison tables in Part XI specify which sense is meant.

In context. Ellerman also drafted American law. He was cofounder and staff economist of the Industrial Cooperative Association of Somerville, Massachusetts, an organization that "assists democratic worker-owned businesses," and with Peter Pitegoff, its staff attorney, a principal drafter of the Employee Cooperative Corporations Act, Massachusetts General Laws ch. 157A, enacted in 1982 (Ellerman and Pitegoff, "The Democratic Corporation: The New Worker Cooperative Statute in Massachusetts," N.Y.U. Review of Law and Social Change 11, 1982–83, from p. 441). They describe it as "the nation's first corporate governance statute designed exclusively for worker cooperatives," in which membership rights are "personal rights attached to the functional role of working in the firm," so that "instead of hiring labor, labor hires capital" [C].

Where to read it

• Adam Smith, Wealth of Nations (1776), Book I, ch. viii, "Of the Wages of Labour," and ch. ix, "Of the Profits of Stock."
• David Ricardo, Principles of Political Economy and Taxation (1817), ch. 2, "On Rent."
• Eugen von Böhm-Bawerk, Kapital und Kapitalzins, vol. II, Positive Theorie des Kapitales (Innsbruck: Wagner, 1889; the title page reads "Positive Theorie des Kapitals"); trans. William Smart, The Positive Theory of Capital (London: Macmillan, 1891).
• Irving Fisher, The Rate of Interest (New York: Macmillan, 1907), and The Theory of Interest (New York: Macmillan, 1930).
• John Bates Clark, The Distribution of Wealth: A Theory of Wages, Interest and Profits (New York: Macmillan, 1899).
• Frank H. Knight, Risk, Uncertainty and Profit (Boston and New York: Houghton Mifflin, 1921).
• David Ellerman, Property and Contract in Economics (1992), Introduction, p. 5; ch. 1, p. 20 (the criminous employee); Part II, "Contract," chs. 6–10, pp. 91–176, on the employment contract.
• Alan F. Zundel, "Ordinary Jurisprudence and the Democratic Firm: A Response to David Ellerman," Journal of Business Ethics 35, no. 1 (January 2002): 51–56, replying to Ellerman, "The Democratic Firm: An Argument Based on Ordinary Jurisprudence," Journal of Business Ethics 21, nos. 2–3 (1999): 111–24.
• Benjamin R. Tucker, "State Socialism and Anarchism," Liberty, 10 March 1888, on interest, rent and profit as returns to monopoly. Reprint in Instead of a Book: it opens the collection (2nd ed., New York: B. R. Tucker, 1897, pp. 1–18), where Tucker's note records its printing in Liberty of 10 March 1888. First edition 1893 (imprint to verify).
• Henry George, Progress and Poverty (1879), Book III, ch. 2, "Rent and the Law of Rent," and Book VII, "Justice of the Remedy," ch. 1, "The Injustice of Private Property in Land."

Entry 4. Possession and property

Overview. "Owning" something can mean two different things: using and controlling it oneself, or holding a title that entitles one to payment when others use it. Proudhon called the first possession and the second property. The distinction lets critics of rent and interest defend people's homes, tools and farms while rejecting absentee ownership. This entry explains the distinction, how Proudhon's own view changed, and the main reply from defenders of freely transferable title.

Proudhon distinguished possession, the secure use of a thing by its occupier, from property, a title that lets its holder draw income from others' use. Text: What is Property? (1840) answers "property is theft" while defending possession.

The distinction lets anti-capitalists defend personal use-rights while denying the titles behind absentee rent, interest and profit. Tucker's "occupancy and use" standard for land is a later form of it.

Proudhon's own view shifted. His posthumous Théorie de la propriété (1866) presents property as a counterweight to state power. Reading: whether this is a contradiction or a development of his earlier position is debated, and Part V sets out the rival Readings with their authors.

Right-libertarians reply on two grounds. One is rights-based [N]: on Nozick's entitlement theory, a holding is just if it arose by just acquisition or by voluntary transfer from someone entitled to it, so a title that earns income from others' use is not suspect as such (Anarchy, State, and Utopia, ch. 7, sec. I, "The Entitlement Theory," pp. 150–51). The other is consequentialist [E]: use-rights without freely transferable title would discourage investment and long-term exchange. The two should be assessed separately.

In context. Proudhon's first memoir appeared in 1840, a year after the Anti-Rent movement began in the rural villages of eastern New York. The publisher's description of Charles W. McCurdy's study calls it "the largest tenant rebellion in U.S. history," a rent strike rooted in an "archaic form of land tenure," which pressed the state's governors and legislators and the delegates to its constitutional convention of 1846 (The Anti-Rent Era in New York Law and Politics, 1839–1865, University of North Carolina Press, publisher's description). The constitution that convention framed declared "All feudal tenures of every description, with all their incidents" abolished, while saving rents and services lawfully created before it, and made invalid any new lease or grant of agricultural land for more than twelve years that reserved a rent or service (New York Constitution of 1846, Art. I, §§12, 14). No source cited here connects Proudhon's book with the movement or with the 1846 constitution. American readers had the book in English from 1876, in Benjamin R. Tucker's translation, which Tucker published himself and sent out for review that March with a card dated at Princeton, Massachusetts (Hamilton College, Library of the Oneida Community catalog).

Where to read it

• Pierre-Joseph Proudhon, Qu'est-ce que la propriété? (Paris, 1840), ch. 1, opening paragraph ("property is theft"; Tucker renders it "property is robbery") and ch. 2 (property as domain versus possession); trans. Benjamin R. Tucker, What Is Property? (1876).
• Pierre-Joseph Proudhon, Théorie de la propriété (Paris: Librairie internationale; Brussels: A. Lacroix, Verboeckhoven & Cie, 1866), in the Œuvres posthumes. Ch. VI, §1, on the need, once the State is organized, to create a counterweight to it in the liberty of each citizen, and on the federalist and republican character of property. The editors' notice says the manuscript was ready by 1862.
• Benjamin R. Tucker, Instead of a Book (1893; 2nd ed., New York: B. R. Tucker, 1897): "State Socialism and Anarchism," p. 12, on land titles resting on "personal occupancy and cultivation"; part "Land and Rent," pp. 297–358, including "Land Occupancy and Its Conditions," p. 324; and Individual Liberty, ed. C. L. S. (New York: Vanguard Press, 1926), Economics, part II, "Land and Rent," section "Occupancy and Use Versus the Single Tax."
• Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books, 1974), ch. 7, "Distributive Justice," section I, "The Entitlement Theory," pp. 150–51: the principles of justice in acquisition and in transfer, and the three-clause definition of entitlement (p. 151).
• The right-libertarian reply is given with its primary sources in Parts VI and VIII.

Entry 5. A map of economic systems

Overview. "Socialism" and "markets" are often treated as opposites, but they answer different questions. One question is how goods are allocated: by prices formed in markets, or by a plan. The other is who controls production and keeps the residual, what is left after costs: owners of capital, the workers, or the state. This entry maps the main systems on those two axes, so that positions such as market socialism or anti-capitalist markets can be located precisely.

Economic systems differ on two questions that are often conflated: how goods are allocated, and who controls production and keeps the residual. The terms "socialism" and "markets" are each used for positions on only one of these questions [C].

Who controls production	Markets	Non-market allocation
Capital owners, who hire labor	Capitalist markets Classical liberals, Austrian school, Nozick, Rothbard	No major position in this guide
Not capital owners (criteria differ by position: see below)	Anti-capitalist markets Mutualism: Proudhon, Tucker, Carson Ellerman’s economic democracy Self-managed market socialism	Non-market socialism Kropotkin’s communist anarchism Marx’s communism, both phases
The state	State market socialism Lange’s model (1936–37)	Central planning Soviet-type economies

Read across a row to compare allocation under the same control of production. Read down a column to compare who controls production within markets or within planning.

• Capitalist markets: market allocation, with firms controlled by capital owners who hire labor. Defended in different ways by classical liberals, the Austrian school, Nozick and Rothbard.
• Anti-capitalist markets: market allocation without the capital-hires-labor relation, without monopoly returns, or both. This includes mutualism (Proudhon, Tucker, Carson), Ellerman's economic democracy, and self-managed market socialism. Kevin Carson labels his own position "free market anti-capitalism"; the standard anthology of this current is Gary Chartier and Charles W. Johnson, eds., Markets Not Capitalism (2011). Text: Tucker himself wrote that the aim of "Anarchistic Socialism" was "not to abolish wages, but to make every man dependent upon wages and to secure to every man his whole wages," and that once privilege is removed the distinction between wage-payers and wage-receivers "will be wiped out" ("Should Labor Be Paid or Not?", Liberty 5, no. 19, 28 April 1888; reprinted in Instead of a Book, 2nd ed., 1897, p. 403). The table therefore places mutualism by its criterion, no monopoly returns, not by worker control. Note: how far this commits Tucker to wage labor in principle is disputed among his readers; Part V sets out the rival Readings with their authors (to verify).
• State market socialism: state ownership of the means of production, with prices adjusted by trial and error. The classic model is Oskar Lange, "On the Economic Theory of Socialism" (Review of Economic Studies, 1936–37).
• Non-market socialism: allocation by plan or common provision. Examples are Marx's communist society in both its first and higher phases, where "the producers do not exchange their products" (Gotha critique, Part I, §3), Kropotkin's communist anarchism (The Conquest of Bread, 1892), and Soviet-style central planning as a state variant.
• Mixed economies: not a seventh cell but a combination of cells: capitalist markets alongside state ownership, regulation and planning in some sectors [C]. Where the line falls between a regulated capitalist market and a mixed economy is a matter of degree.

These are ideal types. Real economies mix them, and several thinkers in this guide changed position over time.

In context. Fred M. Taylor of the University of Michigan gave "The Guidance of Production in a Socialist State" as his presidential address to the American Economic Association at Chicago on 27 December 1928; it was printed in the American Economic Review 19, no. 1 (March 1929). In 1938 the University of Minnesota Press published it with Lange's essay, "Reprinted with additions and some changes from the Review of Economic Studies," as On the Economic Theory of Socialism, edited by Benjamin E. Lippincott; the volume lists Lange as "Lecturer in Economics, University of California" (Minneapolis, 1938, pp. vii, 41, 57). Hayek's "The Use of Knowledge in Society" appeared in the American Economic Review in September 1945. Note: what bearing that article has on Taylor's and Lange's models is taken up with its sources in Part VI (to verify).

Where to read it

• Karl Marx, Critique of the Gotha Programme (written 1875; published 1891), Part I, §3, on the first and higher phases of communist society.
• Peter Kropotkin, La Conquête du pain (Paris: Tresse & Stock, 1892); English translation, The Conquest of Bread (1906).
• Ludwig von Mises, "Die Wirtschaftsrechnung im sozialistischen Gemeinwesen," Archiv für Sozialwissenschaft und Sozialpolitik 47 (1920/21): 86–121; English translation, "Economic Calculation in the Socialist Commonwealth," in F. A. Hayek, ed., Collectivist Economic Planning (London: Routledge, 1935), pp. 87–130. This is the argument Lange's model answers.
• F. A. Hayek, "Socialist Calculation: The Competitive 'Solution,'" Economica, n.s., 7, no. 26 (May 1940): 125–49 (volume to verify), the reply to Lange's model; and "The Use of Knowledge in Society," American Economic Review 35, no. 4 (September 1945): 519–30. Market socialists' rejoinders, and the dispute among Austrians over how far Hayek's knowledge argument departs from Mises's calculation argument, are taken up with their sources in Part VI.
• Oskar Lange, "On the Economic Theory of Socialism," Review of Economic Studies 4, no. 1 (1936): 53–71, and 4, no. 2 (1937): 123–42.
• Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books, 1974), Part II.
• David Ellerman, Property and Contract in Economics (1992), Introduction, pp. 1–7, and ch. 1, pp. 17–19, on economic democracy.
• Gary Chartier and Charles W. Johnson, eds., Markets Not Capitalism (Minor Compositions/Autonomedia, 2011).
• Kevin A. Carson, "On the Shoulders of Giants," Center for a Stateless Society, 15 November 2012, where he names his position "free market anti-capitalism."