Thus, the CNT made a principled decision (and one which, as became clear later, had fatal consequences) to renounce “total revolution,” to set aside libertarian communism until victory was gained over the coalition of military, fascist Falangists and Monarchists opposing the Republic. The official position of the anarcho-syndicalists on the question of State power in this period was expressed in the article “The Uselessness of Government,” published in the “Information Bulletin of Propaganda of the CNT-FAI” and in the Catalan CNT’s newspaper Solidaridad Obrera.
This position boiled down to the notion of the necessity of continuing the Revolution in the social-economic sphere, not paying any attention to the State, and preserving the Popular Anti-fascist Front “from below.” In the article it was emphasized that the central and Catalan republican governments had not undertaken any measures to prevent or suppress the mutiny and that their existence was inessential for the antifascist struggle. The anarcho-syndicalists believed the “social struggle” was unfolding throughout the country.
“The coordination of the forces of the Popular Front and the organization of the food supply by means of the simultaneous collectivization of enterprises is vitally important for the achievement of our goals...,” they noted. “However up until now this has been carried out not under the control of the State, but rather in a decentralized, demilitarized fashion,” based on the CNT and UGT labour unions. The existing government is “basically only a weak preserver of the ‘status quo’ in tending to the property rights of international financial interests.” In such a situation a government of the Popular Front was unnecessary and even harmful, since it would either serve as a means of compromise and paralyze the decision-making process with its coalition politics and internal struggles, or prepare the way for a new dictatorship in the form of a “workers’ state.”
The leaders of the CNT and the FAI compromised with the antifascist parties and movement and made concessions to them, justifying this by reference to “developing circumstances,” namely the necessity of victory in the Civil War. They agreed (in order to avoid foreign intervention) not to expropriate enterprises belonging to foreign capital; such enterprises would only be subject to workers’ control.
New organs (revolutionary committees, committees of the antifascist militias, etc.) were now quite often put together not at general meetings, but – like the CCMA – on the basis of agreements between the CNT, UGT, and other organizations. Frequently revolutionary organs existed in parallel to the surviving pre-revolutionary structures at the local level, which sometimes gave rise to sharp conflicts between them.
The anarcho-syndicalist masses paid little attention during the first months to the compromises agreed to “above.” They carried out the social revolution on their own “from below,” impelled by their own libertarian “idée-force.” The scale of self-management by workers during this period of the Spanish Revolution has no equal in history. Thus, in Barcelona 70% of enterprises were taken from their owners and transferred to the control of the CNT and UGT; in Valencia – 50%. Collectivization was also widely embraced in the rural economy. A regional plenum of the peasant syndicates of Catalonia, belonging to the CNT, resolved on September 5-7 1936 to collectivize large estates and any land which was being worked with the help of a hired workforce. All expropriated land passed under the control and management of a syndicate and was cultivated directly in the interests of its members, namely “the workers as a whole.” Subsequently in Catalonia, Valencia, and other regions a wide-ranging process evolved of peasants coming together in self-managed collectives. This phenomenon was particularly widespread in the territory of Aragon which had been liberated by the anarcho-syndicalist militias, where such peasant collectives controlled up to 60% of all the land of the region and transformed themselves essentially into free, self-managed communes in the anarcho-syndicalist spirit.
However very soon the political compromises became an obstacle in the path of the grassroots initiatives. Thus, since libertarian communism had not been proclaimed, the notion of abolishing money and carrying out distribution according to needs had to be renounced. In the cities the circulation of money was fully retained; the most that was accomplished was the introduction in a number of cases of the so-called “family allowance” system, namely equal pay for each worker with a supplement for members of the worker’s family. More typically, there was a significant increase in the wage rates for the lowest paid workers, which reduced the gap between the earnings of different groups of workers. In the villages, at first there were attempts to experiment with unfettered consumption, rationing, introduction of local currency, the “family allowance,” etc. However all these measures were characterized by a lack of coordination. There was an absence of any sort of coordination of the activities of local revolutionary organs; in spite of the anarcho-syndicalist “program,” these organs were not united in a federation, but operated exclusively at the local level.
In their efforts above all to advance beyond “collectivization” (transition stage of management by workers’ collectives) to complete socialization of the economy, the anarcho-syndicalists initiated the creation on August 11 1936 of the Economic Council of Catalonia, which was to carry out the overall coordination and planning of the economy and establishing pricing policy. However this organ also bore the stamp of compromise both as to its make-up (it included members of CNT, UGT, and political parties) and as to the tasks it undertook to carry out. Its goals included such diverse measures as the regulation of production guided by the needs of consumption; the monopoly of external trade; the development of collectivization in industry, commerce, in the rural economy, and in transport; the fostering of cooperation between the peasantry and consumers; job placement for the unemployed; reform of the tax system, etc.
Abad de Santillan, who played a key role in the Economic Council, was convinced this organ would be able to bring about the creation of a new economic system. On the other hand, the radical wing of the anarcho-syndicalists (Durruti and others) feared such a “legalization” of the conquests of the Revolution would only tend to strengthen the power of the Generalitat and could lead to “State Capitalism” or “State Socialism.”
The unstable equilibrium of forces could not be preserved for long. State power – not liquidated by the anarchists – as well as the political parties and social strata which supported them, made use of the breathing space granted them to pass over to an offensive against the Revolution. In the hands of the unabolished State remained powerful levers, above all currency and other financial resources. Collectivized industry lacked raw materials. “The Marxists and Republicans formed a bloc and, possessing money and armaments, they pursued a politics of patronage in relation to their supporters, distributing to them food, weapons, administrative jobs, means of communication and transport...,” it was acknowledged in the report of the CNT to the congress of the anarcho-syndicalist International in 1937. “Catalonia had to organize its own foreign trade, competing abroad with other parts of the country, in order to feed its own citizens and satisfy the needs of the Aragon Front... The government, taking advantage of our efforts to avoid causing harm to antifascist unity and to not provoke a rupture of official relations with foreign nations, used its privileged diplomatic situation and ruthlessly sabotaged our actions in all fields. 
The governments in Madrid and Catalonia began to exert increasing pressure on the anarcho-syndicalists in three directions at once: impeding the supply of weapons and ammunition to the badly armed militias, trying to limit the scope and course of collectivizations in industry and in the rural economy, and attempting to impose the replacement of the militias by the regular army. In September 1936 a massive campaign was begun in the Catalan press directed against “out-of-control” anarchists, who were accused of concealing weapons instead of sending them to the Front (it was the committees of defense which were being targeted here), and also against “utopian experiments” in the economy.
Having embedded itself in the power system, the leadership of the CNT was forced to change itself. It had reconstructed itself in order to conform to the demands of the moment, justifying the mushrooming bureaucratic apparatus by the real requirements of coordinating economic and social life. Taking advantage of the fact that the activist members of the CNT and FAI were either fighting at the Front or completely weighed down with the work of workers’ self-management at the local level, many labour federation officers (members of the national, regional, or district committees; aides to the various union commissions, the Committee of Militias, the Economic Council, etc.) began to take into account the needs and desires of the anarcho-syndicalist masses less and less . The rank-and-file activists simply could not keep track of the endless chain of conferences, plenums, and meetings and look into the matters discussed in detail.
As noted by José Peirats , the historiographer of the CNT, there was essentially a breakdown of the federalist norms of the organization (transformation of the National Committee into a “machine for issuing orders” to individual unions, the convening of plenums by means of announcements from above, the adoption of important decisions by committees at all levels or at meetings of picked activists with subsequent approval at general assemblies). All these practices were in contradiction to the principles of anarcho-syndicalism, corresponding to which initiatives in the organizations ought to advance not “from the top down,” but “from the bottom up,” and committees and commissions were to be convened not to adopt independent decisions on fundamental questions, but to carry out the orders of the “ordinary members” at general assemblies.
Many anarcho-syndicalists spoke out against the nascent bureaucratization of the CNT and against the policy of more and more concessions into it after 490 to the State and political parties on the part of the CNT leaders. Durruti frequently expressed his concern and indignation on this score. The radical wing tried to turn the course of events at the regional plenum of the Catalan CNT at the beginning of August 1936. García Oliver and Durruti demanded an end to the collaboration with political forces, which was causing the Revolution to lose its bearings and depriving it of its strength. They called for further progress in the Revolution. But the majority feared above all civil war in the “antifascist camp.” The course pursued since July 20 remained without significant changes.
A decision was adopted about the necessity of a “revolutionary alliance” with the UGT and the creation of a National Committee of Defense for military-political leadership. The radical minority, noted the historian Paz, submitted this time around, obeying organizational discipline. “The only way out of this impasse would have been to break with ‘the activist’s sense of responsibility’ and, without the consent of their own organization, take the revolutionary problem into the streets. But none of the activists felt capable of doing this...” In the middle of August the CNT attempted to put into practice the idea of an alliance with the UGT by entering into negotiations with its leader, the socialist Largo Caballero. The possibility was discussed that both union federations could combine to topple the central republican government and replace it with a revolutionary junta of defense. At the last moment Largo Caballero renounced this plan, since he did not want to destroy the legitimacy of the republican government. On September 4 1936, he was appointed prime minister of the Spanish Republic.
Tensions between the anarcho-syndicalists and the antifascist parties and movements continued to grow. In response to the accusation that the anarchists were “hiding weapons,” the “committees of defense” of Barcelona declared that it intended to store weapons “as long as the Revolution has not resolved the problem of political power, and as long as there exist armed forces submitting to the orders of the government in Madrid,” since they considered weapons “the guarantee of our revolutionary conquests.” The newspaper Solidaridad obrera defended the collectives in industry and in the rural economy, and reminded its readers about “the revolutionary character” of the war. In a radio broadcast from the Front, Durruti emphasized that “fascism and capitalism – are one and the same,” and the company committees and the military committee of the “Durruti column” threatened to march on Barcelona if weapons allegedly concealed in the Barcelona barracks of the Communists were not immediately sent to the Front. Eight machine guns, discovered in the office of the Communists in Sabadella, were sent to the front-line soldiers.