"property is theft", contained in his first major work published in 1840. The book's publication attracted the attention of the French authorities. It also attracted the scrutiny of Karl Marx, who started a correspondence with its author. The two influenced each other and they met in Paris while Marx was exiled there, but their friendship finally ended in a dispute that became one of the sources of the split between the anarchist and Marxist wings of the International Working Men's Association.

Proudhon favored workers' councils and associations or cooperatives as well as individual worker/peasant possession over private ownership or the nationalization of land and workplaces. He considered social revolution to be achievable in a peaceful manner. In The Confessions of a Revolutionary, Proudhon asserted that "Anarchy is Order Without Power", the phrase which much later inspired in the view of some the anarchist circled-A symbol, which became the most widely used anarchist symbol. Proudhon unsuccessfully tried to create a national bank, to be funded by what became an abortive attempt at an income tax on capitalists and shareholders. Similar in some respects to a credit union, it would have given interest-free loans. After the death of his follower Mikhail Bakunin, Proudhon's libertarian socialism diverged into individualist anarchism, collectivist anarchism, anarcho-communism, and anarcho-syndicalism, with notable proponents such as Carlo Cafiero, Joseph Déjacque, Peter Kropotkin, and Benjamin Tucker.