Information AboutMutualism (economic Theory) |
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Mutualism is a political and Economic theory or system, largely associated with Pierre-Joseph Proudhon , based on a Labor Theory Of Value which holds 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"Tandy, Francis D., 1896, ''Voluntary Socialism'', chapter 6, paragraph 15. (receiving anything less is considered exploitation, theft of labor, or "usury"). Mutualists believe that a natural economic consequence of a truly free labor market is income to individuals being received proportionally to the amount of labor they exert.Tandy, Francis D., 1896, ''Voluntary Socialism'', chapter 6, paragraphs 9, 10 & 22. Carson, Kevin, 2004, ''Studies in Mutualist Political Economy'', chapter 2 (after Meek & Oppenheimer). Mutualists oppose the idea of individuals receiving an income through loans, investments, and rent, as they believe these individuals are not laboring. They hold that if state intervention ceased, these types of incomes would disappear.Tandy, Francis D., 1896, ''Voluntary Socialism'', chapter 6, paragraph 19. Carson, Kevin, 2004, ''Studies in Mutualist Political Economy'', chapter 2 (after Ricardo, Dobb & Oppenheimer). Insofar as they ensure the workers right to the full product of their labor, mutualists support and associations.Hymans, E., ''Pierre-Joseph Proudhon'', pp. 190-1, Woodcock, George. ''Anarchism: A History of Libertarian Ideas and Movements'', Broadview Press, 2004, pp. 110 & 112 As for capital goods (man-made, non-land, "means of production"), mutualist opinions differ on whether they are private "possession" (i.e. individuals required to be using them in order to retain titles) or private property. Some commentators distinguish between the nineteenth century American and Collectivism .Avrich, Paul. ''Anarchist Voices: An Oral History of Anarchism in America'', Princeton University Press 1996 ISBN 0-691-04494-5, p.6 Proudhon himself described the "liberty" which he pursued as "the synthesis of communism and property."Pierre-Joseph Proudhon, ''What Is Property?'', p. 281. Mutualists, following Proudhon, originally considered themselves to be libertarian socialists. However, "some mutualists have abandoned the labor theory of value, and prefer to avoid the term "socialist." But they still retain some cultural attitudes, for the most part, that set them off from the libertarian right." A Mutualist FAQ: A.4. Are Mutualists Socialists? Mutualists have distinguished themselves from State Socialism , and don't advocate social control over the means of production. Benjamin Tucker said of Proudhon, that "though opposed to socializing the ownership of capital, 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."Tucker, Benjamin, ''State Socialism and Anarchism,'' [http://flag.blackened.net/daver/anarchism/tucker/tucker2.html State Socialism and Anarchism HISTORY Mutualism, as a term, has seen a variety of related uses. Charles Fourier first used the French term "mutualisme" in 1822,Fourier, Charles, ''Traité'' (1822), cited in Arthur E. Bestor, Jr., "The Evolution of the Socialist Vocabulary", ''Journal of the History of Ideas'', Vol. 9, No. 3 (Jun., 1948), 259-302. 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.''New-Harmony Gazette'', I, 301-02 (14 June 1826) cited in Arthur E. Bestor, Jr., "The Evolution of the Socialist Vocabulary", ''Journal of the History of Ideas'', Vol. 9, No. 3 (Jun., 1948), 259-302. In the early 1830s, a labor organization in Lyons, France, called themselves the "Mutuellists." In ''What Is Mutualism?'', Clarence Lee Swartz gives his own account of the origin of the term, claiming that " {Link without Title} he word "mutualism" seems to have been first used by John Gray , an English writer, in 1832." Swartz, Clarence Lee. What is Mutualism? 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, Pierre Joseph Proudhon was speaking of "mutualité" in his writings, and he used the term "mutuellisme," at least as early as 1848, in his "Programme Révolutionnaire." William B. Greene , in 1850, 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 IngallsJoshua King Ingalls, "A Practical Movement for Transition," Spirit of the Age, II, 13 (March 30, 1850), p. 202-4. and Albert Brisbane,Albert Brisbane, "The Mutualist Township," The Spirit of the Age, II, 12 (March 23, 1850), 179-183.; II, 13 (March 30, 1850), 200-202. together with works by Proudhon,Pierre-Joseph Proudhon, "The Coming Era of Mutualism," ''Spirit of the Age'', I, 7 (August 18, 1849), 107-8. Greene, Pierre Leroux , and others. Mutualism has been associated with two types of currency reform. Labor notes were first discussed in Owenite circles, but received their first practical test in 1827 in the Time Store of Individualist Anarchist Josiah Warren . Mutual banking aimed at the monetization of all forms of wealth and the extension of free credit. It is most closely associated with William B. Greene , but Greene drew from the work of Proudhon, Edward Kellogg, and William Beck, as well as from the land bank tradition. Mutualism can in many ways be considered "the original anarchy," since Proudhon was the first to identify himself as an Anarchist . Though mutualism is generally associated with anarchism, it is not ''necessarily'' anarchist. Nineteenth century mutualists considered themselves and socialism, with some characteristics of both. Modern-day Mutualist Anarchist Kevin Carson , considers anarchist mutualism to be "free market socialism." MUTUALIST THOUGHTS ON CAPITALISM The "cost principle" or "cost the limit of price" See Also: Cost the limit of price Mutualists argue that most of the economic problems associated with capitalism come back 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 , popularized, though not invented, by Adam Smith in 1776 — Proudhon mentions 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. Proudhon and Warren, working without association or apparent knowledge of each other, accepting this axiom, drew from this the conclusion that it is therefore ''unethical'' to charge higher labor cost for a thing than 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."Ryan, John Augustine. Distributive Justice: The Right and Wrong of Our Present Distribution of Wealth. Macmillan. 1916. p 342 As far as determining payment for goods, they should pay for those goods with an equivalent amount of labor lest they violate the cost principle. In terms of employment, an employer should not be paid unless he labors and, if he labors less than an employee, then he should be paid less than that employee. Therefore, if the cost principle is followed, profit to an employer through the labor of others is not possible — everyone receives the "full produce" of his own labor and receives no produce of the labor of another unless he pays with an equivalent amount of labor. Warren says that this is in contrast to "Value the limit of price" where the only limit to price is the highest amount someone is willing to pay for a thing based on his own subjective valuation (see '' Subjective Theory Of Value ''). Many later mutualists argued that free competition would naturally push prices towards cost. Instead of a normative principle for individual transactions, the cost principle was a long-run tendency. Property Pierre Joseph Proudhon was one of the most famous philosophers to have 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 impossible," and "property is liberty." 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 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 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. 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.'"'' Proudhon, Pierre-Joseph. ''What is Property?'' p. 118 Unlike capitalist private property-supporters Proudhon stressed equality, he wanted everyone to be a property-owning worker able to access capital for themselves. He stressed that in every cooperative ''"every worker employed in the association have an undivided share in the property of the company"'' quoted by James J. Martin. Men Against the State, p. 223. MUTUALIST ECONOMICS The major tenets 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". Contemporary mutualist author is due to state intervention to protect the Ruling Class , by using a money monopoly, granting Patent s and Subsidies to corporations, imposing discriminatory Taxation , and intervening militarily to gain access to international markets. Carson’s thesis is that an authentic Free Market Economy would not be capitalism as the separation of labor from ownership and the subordination of labor to capital would be impossible, bringing a class-less society where people could easily choose between working as a freelancer, working for a fair wage, taking part of a cooperative, or being an entrepreneur. He notes, as did Tucker before him, that a mutualist free market system would involve significantly different property rights than capitalism is based on, particularly in terms of land and intellectual property. Free association 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."'' Some background about the name: What is mutualism? 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."'' Guerin, Daniel (ed.) No Gods, No Masters, AK Press, vol. 1, p. 62 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."'' '''The General Idea of the Revolution''', Pluto Press, p. 277 and p. 281 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."'' "Introduction", General Idea of the Revolution, p. xxxii 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."'' '''Pierre-Joseph Proudhon and the Rise of French Republican Socialism,''' Oxford University Press, Oxford, 1984, p. 230 and p. 156 Mutual credit See Also: 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. Contract / Federation 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, Gradualism / Dual-power ''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...'' Proudhon, ''General Idea of the Revolution in the Nineteenth Century.'' Translated by John Beverly Robinson. New York: Haskell House Publishers, Ltd., 1923, 1969 {Link without Title} . p 243. Proudhon noted that the shock of the French Revolution failed the people, and was instead interested in a federation of worker cooperations that could use mutualist credit to gradually expand and take control of industry. This is similar to economic models based on worker cooperatives today, such as the Mondragón Cooperative Corporation in Spain and NoBAWC in San Francisco. MUTUALISM TODAY Kevin Carson is a contemporary mutualist and author of ''Studies in Mutualist Political Economy''. Contemporary mutualists are among those involved in the Alliance Of The Libertarian Left . Social Economy , some Fair Trade movements and some Free Software projects such as Debian and Linux Users Groups follow a similar spirit, focussing on Mutual Aid , decentralization and free association (see Small "a" Anarchism ). CRITICISMS One area of disagreement between mutualists and , Kropotkin believed that a wage system in any form, whether "administered by Banks of the People or by workers' associations through labor cheques is a form of compulsion."Woodcock, George. Anarchism: A History of Libertarian Ideas and Movements. Broadview Press 2004. p. 168 Collectivist Anarchist Michael Bakunin was an adamant critic of Proudhonian mutualism as well,Bookchin, Murray. The Spanish Anarchists. AK Press. 1996. p. 25 stating, "How ridiculous are the ideas of the individualists of... the Proudhonian mutualists who conceive society as the result of the free contract of individuals absolutely independent of one another and entering into mutual relations only because of the convention drawn up among men. As if these men had dropped from the skies, bringing with them speech, will, original thought, and as if they were alien to anything of the earth, that is, anything having social origin."Cited in Social Anarchism or Lifestyle Anarchism by Murray Bookchin, from Maximoff, Political Philosophy of Bakunin, p. 167 However, communist anarchist Murray Bookchin responds defending mutualism It is apparent, claims William Gary Kline, that 19th century mutualists "expected a society of largely self-employed workmen with no significant disparity of wealth between any of them." The Individualist Anarchists, p. 104 Proudhon and other mutualists expected their society to buttress social concern both economically and politically for the common good, leading to federations to allow social groups to interconnect with one another for decision-making for the common good ''"industries are sisters; they are parts of the same body; one cannot suffer without the others sharing in its suffering. They should therefore federate, not to be absorbed and confused together, but in order to guarantee mutually the conditions of common prosperity . . . Making such an agreement will not detract from their liberty; it will simply give their liberty more security and force." Proudhon, Pierre-Joseph. The Principle of Federation, p. 70, p. 67 and p. 72 Criticism from pro-market sectors has been common as well. argued ''"the fact that one class of men are dependent for their living upon the sale of their labour, while another class of men are relieved of the necessity of labour by being legally privileged to sell something that is not {Link without Title} labour. . . . And to such a state of things I am as much opposed as any one. But the minute you remove privilege. . . every man will be a labourer exchanging with fellow-labourers . . . What Anarchistic-Socialism aims to abolish is usury . . . it wants to deprive capital of its reward."'' Benjamin Tucker, Instead of a Book, p. 404. Mutualists would object to the anarcho-capitalist claim that the output capitalist proprieters sell their own labor, pointing to the fact that the goods and services which capitalists sell is produced by employees. Says mutualist William B. Greene NOTES AND REFERENCES Notes |
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