Mutualism (economic theory)

Mutualism is a libertarian socialist economic theory and anarchist school of thought that advocates a society with free markets and occupation and use, i.e. usufruct property norms. One implementation of this scheme involves the establishment of a mutual-credit bank that would lend to producers at a minimal interest rate, just high enough to cover administration. Mutualism is based on a version of the labor theory of value holding that when labor or its product is sold, it ought to receive in exchange goods or services embodying 'the amount of labor necessary to produce an article of exactly similar and equal utility'. Mutualism originated from the writings of philosopher Pierre-Joseph Proudhon. Mutualists disagree with the idea of individuals receiving an income through loans, investments and rent as they believe these individuals are not laboring. Although 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'. Insofar as they ensure the worker's right to the full product of their labor, mutualists support markets and property in the product of labor, differentiating between capitalist private property (productive property) and personal property (private property). As a result, 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), a type of private property with strong abandonment criteria. This contrasts with capitalist non-proviso Lockean sticky property, where owners maintain title more or less until they consent to gift or sell it. As libertarian socialists, they have distinguished mutualism from state socialism and do not advocate state control over the means of production. Instead, each person possesses a means of production, either individually or collectively, with trade representing equivalent amounts of labor in the free market. Benjamin Tucker said of Proudhon that 'though opposed to socializing the ownership of capital, he 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'. Although mutualism is similar to the economic doctrines of the 19th-century American individualist anarchists, it is in favor of large industries. Mutualism has been retrospectively characterized sometimes as being a form of individualist anarchism and as ideologically situated between individualist and collectivist forms of anarchism as well. Proudhon himself described the liberty he pursued as 'the synthesis of communism and property'. As a result, some consider Proudhon to be an individualist anarchist while others regard him to be a social anarchist. As a term, mutualism has seen a variety of related uses. Charles Fourier first used the French term mutualisme in 1822, although the reference was not to an economic system. The first use of the noun mutualist was in the New-Harmony Gazette by an American Owenite in 1826. In the early 1830s, a French labor organization in Lyons called themselves the Mutuellists. Pierre-Joseph Proudhon was involved with the Lyons mutualists and later adopted the name to describe his own teachings. In What Is Mutualism?, Clarence Lee Swartz gives his own account of the origin of the term, claiming that 'he word 'mutualism' seems to have been first used by John Gray, an English writer, in 1832'. When Gray's 1825 Lecture on Human Happiness was first published in the United States in 1826, the publishers appended the Preamble and Constitution of the Friendly Association for Mutual Interests, Located at Valley Forge. 1826 also saw the publication of the Constitution of the Friendly Association for Mutual Interests at Kendal, Ohio. By 1846, Proudhon was speaking of mutualité in his writings and he used the term mutuellisme at least as early as 1848 in his 'Programme Révolutionnaire'. In 1850, William Batchelder Greene used the term mutualism to describe a mutual credit system similar to that of Proudhon. In 1850, the American newspaper The Spirit of the Age, edited by William Henry Channing, published proposals for a mutualist township by Joshua King Ingalls and Albert Brisbane, together with works by Proudhon, Greene, Pierre Leroux and others. Proudhon ran for the French Constituent Assembly in April 1848, but was not elected, although his name appeared on the ballots in Paris, Lyon, Besançon and Lille. He was successful in the complementary elections of June 4 and served as a deputy during the debates over the National Workshops, created by the 25 February 1848 decree passed by Republican Louis Blanc. The workshops were to give work to the unemployed. Proudhon was never enthusiastic about such workshops, perceiving them to be essentially charitable institutions that did not resolve the problems of the economic system. He was against their elimination unless an alternative could be found for the workers who relied on the workshops for subsistence.