Mutualism is an anarchist school of thought and economic theory that advocates for workers' control of the means of production, a free market made up of individual artisans, sole proprietorships and workers' cooperatives, and occupation and use property rights. As proponents of the labour theory of value and labour theory of property, mutualists oppose all forms of economic rent, profit and non-nominal interest, which they see as relying on the exploitation of labour. Mutualists seek to construct an economy without capital accumulation or concentration of land ownership. They also encourage the establishment of workers' self-management, which they propose could be supported through the issuance of mutual credit by mutual banks, with the aim of creating a federal society.
Mutualism has its roots in the utopian socialism of Robert Owen and Charles Fourier. It first developed a practical expression in Josiah Warren's community experiments in the United States, which he established according to the principles of equitable commerce based on a system of labor notes. Mutualism was first formulated into a comprehensive economic theory by the French anarchist Pierre-Joseph Proudhon, who proposed the abolition of unequal exchange and the establishment of a new economic system based on reciprocity. In order to establish such a system, he proposed the creation of a "People's Bank" that could issue mutual credit to workers and eventually replace the state; although his own attempts to establish such a system were foiled by the 1851 French coup d'état.
After Proudhon's death, mutualism lost its popularity within the European anarchist movement and was eventually redefined in counterposition to anarchist communism. Proudhon's thought was instead taken up by American individualists, who came to be closely identified with mutualist economics. Joshua K. Ingalls and William Batchelder Greene developed mutualist theories of value, property and mutual credit, while Benjamin Tucker elaborated a mutualist critique of capitalism. The American mutualist Dyer Lum attempted to bridge the divide between communist and individualist anarchists, but many of the latter camp eventually split from the anarchist movement and embraced right-wing politics.
Mutualist ideas were later implemented in local exchange trading systems and alternative currency models, but the tendency itself fell out of the popular consciousness during the 20th century. The advent of the internet generated a revived interest in mutualist economics, particularly after the publication of new works on the subject by American libertarian theorist Kevin Carson.
History Origins According to Peter Kropotkin, the origins of mutualism lay in the events of the French Revolution, particularly in the federalist and directly democratic structure of the Paris Commune. The foundations of mutualist economic theory lay in the radicalism of English socialist Thomas Spence. Drawing from the Bible, as well as the liberal works of John Locke and James Harrington, Spence called for the abolition of private property, and for the workers' control of production through workers' cooperatives. The term "mutualism" was first used during the 1820s; originally defined synonymously with terms such as "mutual aid, reciprocity and fair play". In 1822, French utopian philosopher Charles Fourier used the term "convergent compound mutualism" (), in order to describe a form of progressive education that adapted the Monitorial System of pupil-teachers.
Owenism and Josiah Warren
Thomas Spence's mutualist platform was taken up by Robert Owen, with Owenism becoming a pioneering force in the history of the cooperative movement. By 1826, the term "mutualism" was being used by members of Owen's utopian community of New Harmony, Indiana, in order to propose a more decentralised and libertarian project. The following year, Josiah Warren left New Harmony and established the Cincinnati Time Store, which was based on his ideas of "equitable commerce". This system set cost as the limit of price and established exchange based on labor notes. In keeping with his mutualist principles, Warren refused to substantially grow his business, maintaining the equal exchange between shopkeeper and customer. He hoped the shop would eventually be the nucleus for the establishment of a "mutualist village".
After running it for three years, in May 1830, Warren decided to liquidate the Time Store in an attempt to pursue his plan of building a mutualist village in Ohio. This caught the attention of Robert Owen, who proposed that they instead build a mutualist community in New York, but this project never met fruition. Warren made the decision to delay the establishment of his mutualist colony until 1833. He spent the preceding years sketching out the voluntarist structure of the planned community, together with other prospective members. They established their anarchist community in Tuscarawas County, Ohio, but it was short-lived, as an influenza epidemic forced them to abandon the village by 1835. Warren returned to New Harmony, where he established another Time Store, but he received little support from other community members and shut it down in March 1844. Nevertheless, his mutualist ideas were still taken up by other radicals of the period, with George Henry Evans and his Land Reform Association championing mutualist arguments against the concentration of land ownership.
Warren returned to Ohio, where he founded the mutualist community of Utopia in 1847, taking over from an earlier Fourierist community that had established the settlement. The community adopted labor notes as its currency and committed itself to an economy of equitable commerce, with cost as the limit of price. Utopia grew to about one hundred residents and established various enterprises, demonstrating to Warren the potential of his economic principles of decentralisation. By the 1850s, Warren himself had moved on from Ohio and established the Utopian Community of Modern Times on Long Island, New York, but his mutualist experiments would decline with the outbreak of the American Civil War. Warren's mutualist communities of Utopia and Modern Times ultimately lasted for twenty years, eventually evolving into traditional villages with only minor mutualist tendencies.
Formulation by Proudhon
The term "mutualist" was adopted in 1828 by the canuts of Lyon, who went on to lead a series of revolts throughout the 1830s. At this same time, the young French activist Pierre-Joseph Proudhon was first being drawn towards Fourier's utopian socialism; by 1843, Proudhon had joined the Mutualists in Lyon. The adoption of the term "mutualist" by Proudhon and his development of anarchism would result in a shift of its meaning and understanding.
Proudhon held "mutuality" (or "exchange in kind") to be a core part of his economic theory. In his System of Economic Contradictions (1846), Proudhon described mutuality as a synthesis of "private property and collective ownership". The mutualist principle of reciprocity provided the basis for all its proposed institutions, including mutual aid, mutual credit and mutual insurance. Proudhon considered the perfect expression of mutuality to be a synallagmatic contract of equal exchange between equal individuals. Proudhon considered the unequal exchange to be at the root of the exploitation of labour and believed that a truly free market ought to be built on reciprocity, without coercion. He concluded that under such conditions, commerce would progress towards equal exchange, where the value of a product or service reflects only the cost of its production. He envisioned the eventual "withering away of the state" and its replacement with a system of economic contracts between individuals and collectives.
Proudhon claimed that private property constituted a form of robbery, as proprietors used their title to extract labour-value from others, or as he characterised it: "the proprietor reaps where [they] did not sow". To Proudhon, wage labour represented the enclosure of the value of collective production, with the capitalist collecting economic rent from their workers in the form of profit. Proudhon's anti-capitalist economic theories stood in sharp contrast to liberal economists of the time, such as Frédéric Bastiat and Henry Charles Carey, who argued in defense of landlords and capitalists from the claims of workers. Proudhon claimed that landlords and capitalists contributed nothing to production, and that their only claim to the contrary was by not impeding access to the means of production.
In the wake of the French Revolution of 1848, Proudhon began elaborating his proposal for a "Bank of the People". He thought such a bank could guarantee mutual credit to all workers, enabling them bring the product of their labour under the collective ownership of all that participated in production. After he was elected to the Constituent Assembly, Proudhon lobbied for the transformation of the Bank of France into such a "Bank of the People"; he proposed that a 2-3% interest rate would be enough to cover all public expenses and would allow for the abolition of taxation. Proudhon's "Bank of the People" was officially incorporated but was never able to establish itself in practice, as Proudhon was arrested and imprisoned following the rise to power of Louis Napoleon Bonaparte. In his final attempt at writing a comprehensive mutualist programme, The Political Capacity of the Working Classes (1865), Proudhon proposed the establishment of a "mutualist system" of workers' self-management.
Anarchism and the IWA During the early 1860s, the French anarchist movement first began to develop an organised expression, establishing trade unions and mutual credit systems inspired by Proudhon's mutualist theories. Towards the end of his life, Proudhon himself had grown more cautious of using the term "anarchist" and instead referred to himself as a "federalist"; his followers also eschewed the "anarchist" label, instead calling themselves "mutualists" after his principle of mutual exchange. After Proudhon's death in 1865, his mutualist followers helped establish the International Workingmen's Association (IWA).
In the early years of the IWA, the organisation was largely mutualist, as exemplified by its contractual demands during its 1866 Geneva Congress and 1867 Lausanne Congress. But in the following years, French mutualists began to lose control over the organisation to Russian and German communists based in Belgium, and mutualism was gradually overshadowed by other anarchist schools of thought. By the end of the 1860s, the French section of the IWA was already shifting away from mutualism, with Eugène Varlin and Benoît Malon convincing it to adopt Mikhail Bakunin's platform of collectivism; Bakunin himself held his collectivist theories to be "Proudhonism, greatly developed and taken to its ultimate conclusion".
Although inspired by Proudhon's arguments for federalism, Bakunin broke from his mutualist economics and argued instead for the common ownership of land. By the 1870s, as divisions between the Marxists and the anti-authoritarians in the IWA grew sharper, Proudhonian mutualism gradually lost its remaining influence; although it continued to see minor developments by collectivists such as César De Paepe and Claude Pelletier, as well as in the programme of the Paris Commune of 1871. When the IWA finally split, members of the anti-authoritarian faction slowly adopted "anarchism" as the label for their philosophy.