Proudhon also claimed that "Property is impossible." Although he was against capitalism, he rejected communism and believed that individual possession — which he distinguished from private property — was necessary both for liberty and for an efficient economy.
He adopted the term Mutualism for his brand of anarchism, which involved control of the means of production by the workers. In his vision self-employed artisans, peasants and cooperatives would trade their products on the market. He advocated non-capitalist markets, markets without wage labor or private property. Factories and other large workplaces would be run by 'labor associations' operating on directly democratic principles. The state would be abolished, instead society would be organized by a federation of 'free communes' (community assemblies). In 1863 Proudhon said, "All my economic ideas as developed over twenty-five years can be summed up in the words: agricultural-industrial federation. All my political ideas boil down to a similar formula: political federation or decentralization." Proudhon rejected violent revolution, favoring a gradual evolution of society into anarchy.
He made few public criticisms of Marx or Marxism because in his lifetime Marx was a relatively minor thinker, it was only after Proudhon's death that Marxism became a large movement. He did, however, criticize other authoritarian socialists of his time period. This included the state socialist Louis Blanc, of which Proudhon said, "let me say to M. Blanc: you desire neither Catholicism nor monarchy nor nobility, but you must have a God, a religion, a dictatorship, a censorship, a hierarchy, distinctions, and ranks. For my part, I deny your God, your authority, your sovereignty, your judicial State, and all your representative mystifications." It was Proudhon's book What is Property? which convinced a young Karl Marx that private property should be abolished. In one of his first works, the Holy Family, Marx said, "Not only does Proudhon write in the interest of the proletarians [working class], he is himself a proletarian, an ouvrier. His work is a scientific manifesto of the French proletariat." Marx, however, disagreed with Proudhon's anarchism and later published vicious criticisms of Proudhon. Marx wrote The Poverty of Philosophy as a refutation of Proudhon's The Philosophy of Poverty. In his libertarian socialism, Proudhon was followed by Michael Bakunin, in contrast to the authoritarian socialism that followed from Marx.
His essay on what is government is also quite well known.
"You are a republican."
"Republican, yes; but that means nothing. Res publica is 'the State.' Kings, too, are republicans."
"Ah well! You are a democrat?"
"What! Perhaps you are a monarchist?"
"Then you are an aristocrat?"
"Not at all!"
"You want a mixed form of government?"
"Then what are you?"