''Mutualism is an
economic theory and
anarchist school of thought that advocates a society where each person might possess a
means of production, either individually or collectively, with trade representing equivalent amounts of labor in the
free market.[SUP]
[1][/SUP] Integral to the scheme was the establishment of a mutual-credit bank that would lend to producers at a minimal interest rate, just high enough to cover administration.[SUP]
[2][/SUP] Mutualism is based on a
labor theory of value that holds that when labor or its product is sold, in exchange, it ought to receive goods or services embodying "the amount of labor necessary to produce an article of exactly similar and equal utility".[SUP]
[3][/SUP] Mutualism originated from the writings of philosopher
Pierre-Joseph Proudhon.
Mutualists oppose the idea of individuals receiving an income through loans, investments, and rent, as they believe these individuals are not laboring. Though Proudhon opposed this type of income, he expressed that he had never intended
"...to forbid or suppress, by sovereign decree, ground rent and interest on capital. I think that all these manifestations of human activity should remain free and voluntary for all: I ask for them no modifications, restrictions or suppressions, other than those which result naturally and of necessity from the universalization of the principle of reciprocity which I propose."[SUP]
[4][/SUP] Insofar as they ensure the worker's right to the full product of their labor, mutualists support
markets (or
artificial markets) and
property in the product of labor. However, they argue for conditional titles to land, whose ownership is legitimate only so long as it remains in use or occupation (which Proudhon called "possession");[SUP]
[5][/SUP] thus advocating
personal property, but not
private property.
Though mutualism is similar to the economic doctrines of the nineteenth century American
individualist anarchists, unlike them, mutualism is in favor of large industries.[SUP]
[6][/SUP] Mutualism has therefore been retrospectively characterized sometimes as being a form of individualist anarchism,[SUP]
[7][/SUP] and as ideologically situated between individualist and collectivist forms of anarchism as well.[SUP]
[8][/SUP] Proudhon himself described the "liberty" he pursued as "the synthesis of communism and property."[SUP]
[9][/SUP]
Mutualists have distinguished mutualism from
state socialism, and do not advocate state control over the means of production.
Benjamin Tucker said of Proudhon, that "though opposed to socializing the ownership of capital, [Proudhon] aimed nevertheless to socialize its effects by making its use beneficial to all instead of a means of impoverishing the many to enrich the few...by subjecting capital to the natural law of competition, thus bringing the price of its own use down to cost.
[h=2]Theory[/h] See also:
Cost the limit of price
The primary aspects of mutualism are
free association, mutualist credit, contract (or federation/confederation), and gradualism (or dual-power). Mutualism is often described by its proponents as advocating an "anti-capitalist free market".
Mutualists argue that most of the economic problems associated with capitalism each amount to a violation of the
cost principle, or as
Josiah Warren interchangeably said, "Cost the limit of price." It was inspired by the
labor theory of value, which was popularized, though not invented, by
Adam Smith in 1776 (Proudhon mentioned Smith as an inspiration). The labor theory of value holds that the actual price of a thing (or the "true cost") is the amount of labor that was undertaken to produce it. In Warren's terms, cost should be the "limit of price," with "cost" referring to the amount of labor required to produce a good or service. Anyone who sells goods should charge no more than the cost to himself of acquiring these goods. Proudhon also held that the "real value of products was determined by labour time, and that all kinds of labour should be regarded as equally effective in the value-creating process, and he advocated therefore equality of wages and salaries."[SUP]
[11][/SUP]
[h=3]Free association[/h] Mutualists argue that association is only necessary where there is an organic combination of forces. For instance, an operation that requires specialization and many different workers performing their individual tasks to complete a unified product, i.e., a factory. In this situation, workers are inherently dependent on each other – and without association they are related as subordinate and superior, master and wage-slave.
An operation that can be performed by an individual without the help of specialized workers does
not require association. Proudhon argued that peasants do not require societal form, and only feigned association for the purposes of solidarity in abolishing rents, buying clubs, etc. He recognized that their work is inherently sovereign and free. In commenting on the degree of association that is preferable Proudhon said:
"In cases in which production requires great division of labour, it is necessary to form an ASSOCIATION among the workers... because without that they would remain isolated as subordinates and superiors, and there would ensue two industrial castes of masters and wage workers, which is repugnant in a free and democratic society. But where the product can be obtained by the action of an individual or a family... there is no opportunity for association."[SUP]
[12][/SUP]
For Proudhon, mutualism involved creating
"industrial democracy," a system where workplaces would be
"handed over to democratically organised workers' associations . . . We want these associations to be models for agriculture, industry and trade, the pioneering core of that vast federation of companies and societies woven into the common cloth of the democratic social Republic."[SUP]
[13][/SUP] He urged
"workers to form themselves into democratic societies, with equal conditions for all members, on pain of a relapse into feudalism." This would result in
"Capitalistic and proprietary exploitation, stopped everywhere, the wage system abolished, equal and just exchange guaranteed."[SUP]
[14][/SUP] Workers would no longer sell their labour to a capitalist but rather work for themselves in co-operatives.
As Robert Graham notes,
"Proudhon's market socialism is indissolubly linked to his notions of industry democracy and workers' self-management."[SUP]
[15][/SUP] K. Steven Vincent notes in his in-depth analysis of this aspect of Proudhon's ideas that
"Proudhon consistently advanced a program of industrial democracy which would return control and direction of the economy to the workers." For Proudhon,
"...strong workers' associations . . . would enable the workers to determine jointly by election how the enterprise was to be directed and operated on a day-to-day basis."[SUP]
[16][/SUP]
[h=3]Mutual credit[/h] Main article:
Mutual credit
Mutualists argue that
free banking should be taken back by the people to establish systems of free credit. They contend that banks have a monopoly on credit, just as capitalists have a monopoly on land. Banks are essentially creating money by lending out deposits that do not actually belong to them, then charging interest on the difference. Mutualists argue that by establishing a democratically run
mutual bank or
credit union, it would be possible to issue free credit so that money could be created for the benefit of the participants rather than for the benefit of the bankers. Individualist anarchists noted for their detailed views on mutualist banking include
Proudhon,
William B. Greene, and
Lysander Spooner.
Some modern forms of mutual credit are
LETS and the
Ripple monetary system project.
In a session of the French legislature, Proudhon proposed a government-imposed
income tax to fund his mutual banking scheme, with some tax brackets reaching as high as 33⅓ percent and 50 percent, which was turned down by the legislature.[SUP]
[17][/SUP] This income tax Proudhon proposed to fund his bank was to be levied on rents, interest, debts, and salaries.[SUP]
[18][/SUP][SUP]
[19][/SUP] Specifically, Proudhon's proposed law would have required all capitalists and stockholders to disburse one sixth of their income to their tenants and debtors, and another sixth to the national treasury to fund the bank.[SUP]
[20][/SUP] This scheme was vehemently objected to by others in the legislature, including
Frédéric Bastiat;[SUP]
[20][/SUP] the reason given for the income tax's rejection was that it would result in economic ruin and that it violated "the right of property."[SUP]
[21][/SUP] In his debates with Bastiat, Proudhon did once propose funding a national bank with a voluntary tax of 1%.[SUP]
[22][/SUP] Proudhon also argued for the abolition of all taxes.[SUP]
[23][/SUP]
[h=3]Contract and federation[/h] Mutualism holds that producers should exchange their goods at cost-value using systems of "contract." While Proudhon's early definitions of cost-value were based on fixed assumptions about the value of labor-hours, he later redefined cost-value to include other factors such as the intensity of labor, the nature of the work involved, etc. He also expanded his notions of "contract" into expanded notions of "federation." As Proudhon argued,
[TABLE="class: cquote"]
[TR]
[TD="align: left"]“[/TD]
[TD]"I have shown the contractor, at the birth of industry, negotiating on equal terms with his comrades, who have since become his workmen. It is plain, in fact, that this original equality was bound to disappear through the advantageous position of the master and the dependent position of the wage-workers. In vain does the law assure the right of each to enterprise . . . When an establishment has had leisure to develop itself, enlarge its foundations, ballast itself with capital, and assure itself a body of patrons, what can a workman do against a power so superior?"[SUP]
[24][/SUP][/TD]
[TD="align: right"]”[/TD]
[/TR]
[/TABLE]
[h=3]Gradualism and dual-power[/h]
Beneath the governmental machinery, in the shadow of political institutions, out of the sight of statemen and priests, society is producing its own organism, slowly and silently; and constructing a new order, the expression of its vitality and autonomy...[SUP]
[25][/SUP]
[h=2]Mutualism and capitalism[/h]
Pierre Joseph Proudhon was one of the most famous philosophers which articulated thoughts on the nature of property. He is known for claiming that "
property is theft," but is less known for the claims that "property is liberty" and "property is impossible". According to
Colin Ward, Proudhon did not see a contradiction between these slogans. This was because Proudhon distinguished between what he considered to be two distinct forms of property often bound up in the single label. To the mutualist, this is the distinction between property created by coercion and property created by labor. Property is theft "when it is related to a landowner or capitalist whose ownership is derived from conquest or exploitation and [is] only maintained through the state, property laws, police, and an army". Property is freedom for "the peasant or artisan family [who have] a natural right to a home, land [they may] cultivate, [...] to tools of a trade", and the fruits of that cultivation — but not to ownership or control of the lands and lives of others. The former is considered illegitimate property, the latter legitimate property.[SUP][
citation needed][/SUP]
Proudhon argued that property in the product of labor is essential to liberty, while property that strayed from "possession" ("occupancy and use") was the basis for tyranny and would lead a society to destroy itself. The conception of entitlement property as a destructive force and illegitimate institution can be seen in this quote by Proudhon,
"Then if we are associated for the sake of liberty, equality, and security, we are not associated for the sake of property; then if property is a natural right, this natural right is not social, but anti-social. Property and society are utterly irreconcilable institutions. It is as impossible to associate two proprietors as to join two magnets by their opposite poles. Either society must perish, or it must destroy property. If property is a natural, absolute, imprescriptible, and inalienable right, why, in all ages, has there been so much speculation as to its origin? – for this is one of its distinguishing characteristics. The origin of a natural right! Good God! who ever inquired into the origin of the rights of liberty, security, or equality?" (What is Property?)
Mutualist,
Clarence Lee Swartz, says in
What is Mutualism:
"It is, therefore, one of the purposes of Mutualists, not only to awaken in the people the appreciation of and desire for freedom, but also to arouse in them a determination to abolish the legal restrictions now placed upon non-invasive human activities and to institute, through purely voluntary associations, such measures as will liberate all of us from the exactions of privilege and the power of concentrated capital."
Swartz also states that mutualism differs from anarcho-communism and other collectivist philosophies by its support of private property: "One of the tests of any reform movement with regard to personal liberty is this: Will the movement prohibit or abolish private property? If it does, it is an enemy of liberty. For one of the most important criteria of freedom is the right to private property in the products of ones labor. State Socialists, Communists, Syndicalists and Communist-Anarchists deny private property."
However, Proudhon warned that a society with private property without equality would lead to statist-like relations between people.
"The purchaser draws boundaries, fences himself in, and says, 'This is mine; each one by himself, each one for himself.' Here, then, is a piece of land upon which, henceforth, no one has right to step, save the proprietor and his friends; which can benefit nobody, save the proprietor and his servants. Let these multiply, and soon the people . . . will have nowhere to rest, no place of shelter, no ground to till. They will die of hunger at the proprietor's door, on the edge of that property which was their birth-right; and the proprietor, watching them die, will exclaim, 'So perish idlers and vagrants.'"[SUP]
[26][/SUP]
Unlike capitalist private-property supporters, Proudhon stressed equality. He thought all workers should own property and have access to capital. He stressed that in every cooperative "every worker employed in the association [must have] an undivided share in the property of the company".[SUP]
[27][/SUP] This distinction Proudhon made between different kinds of property has been articulated by some later anarchist and socialist theorists as one of the first distinctions between
private property and
personal property; the latter having actual use-value to the individual possessing it.''
http://en.wikipedia.org/wiki/Mutualism_(economic_theory)
