Mutualism Essay ⋆ Political Science Essay Examples ⋆ EssayEmpire

Mutualism is a political ideology on the fringes of anarchism, utopian socialism, and liberalism. Its central values are autonomy and equality of the individual, just exchange, and mutual support. These principles would empower people to govern their affairs unconstrained by market forces and a state. Mutualism favors cooperation based on a sense of community.

Proudhon’s Early Theory

The main proponent of mutualism was Pierre-Joseph Proudhon (1809–1865). His system of liberty sought to remedy the evils of the two main political ideologies of the nineteenth century. In his 1840 book What is Property? An Enquiry into the Principle of Right and of Government, Proudhon stated, “Communism rejects independence and proportionality; property does not satisfy equality and law” (1966, 280). Instead, society under Proudhon’s view would be based on a network of contracts among free individuals without a central sovereign such as the state. Small producers who possess the means of production would exchange products on the basis of the amount of labor incorporated. A people’s bank would offer social credit without interests. Proudhon actually tried to establish such a bank but had to cancel the experiment when he was sentenced to prison for his radical views on government.

Karl Marx was originally attracted by Proudhon’s sharp attack on property but strictly disagreed with his simplistic labor theory of values, which saw injustice as emerging only in the sphere of distribution. Marx and Proudhon were also opponents on the issue of a violent seizure of state power. Mutualists believe that a natural sense of solidarity would guarantee social cooperation and observance of contracts. Mutualism rejects aggression and coercion; where more complex cooperation of individuals is required, it relies on voluntary association.

Mutualist Organizations

Mutual enterprises are part of the nonprofit economy. Unlike cooperatives, such mutuals consist of members instead of shareholders. Their capital stock is built by membership fees alone. Each member has equal voting rights, and profits are reinvested for their members’ benefit. Their origin dates back to self-help preceding the welfare state, with the establishment of friendly societies, unions, cooperatives, and clubs to secure the individual against misfortune. Mutual building and loan associations emerged in England in the late eighteenth century and in the United States in the 1830s, and they flourished a century later. Originally these societies dissolved when every member had acquired a house; later they continued to function as agencies for borrowing and lending money. Today, besides mutual savings and loan associations, mutual organizations mainly exist as health and insurance companies.

Since the 1980s, a process of demutualization has reduced the number of mutual enterprises. The main reasons for this are changes in taxation, ownership problems in mergers, and the remoteness of management. Nowadays mutual rarely constitute a face-to-face community. Modern forms of mutualism can also be found in nonmonetary exchange circles. Members of such networks organize voluntary engagement to support one another on the basis of cooperation and exchange. The European Commission tries to promote mutuals as part of the social economy of its member states.

Criticism

The main criticism of mutualism from the point of view of political philosophy is its harmonious approach. For Proudhon, private and collective interests are identical; he underestimates social heterogeneity and overestimates reason as a guide for behavior. A society based on mutual contract alone would need an agency to enforce compliance; eventually such contracts themselves also restrict absolute liberty of the individual.

Proudhon argued from the perspective of a preindustrial society of farmers, craftsmen, and artisans. These are settings of limited complexity, such as mutuals today. Although Proudhon’s understanding of the economic function of money was naïve, and the idea to abolish interests through free credit unrealistic, mutualism can claim a certain moral superiority, as it tries to abolish economic injustice.

Bibliography:

Copleston, Frederic. A History of Philosophy: Volume IX. London: Search Press, 1974.
Galbraith, John Kenneth. A History of Economics: The Past as the Present. New York: Hamish Hamilton, 1987.
Goodwin, Barbara. Using Political Ideas. 3rd ed. New York: Wiley, 1992.
Hansmann, Henry. The Ownership of Enterprise. Cambridge, Mass.: Harvard University Press, 2000.
Marshall, Peter. Demanding the Impossible: A History of Anarchism. London: HarperCollins, 1992.
Marx, Karl. The Poverty of Philosophy. 1847.Translated by H. Quelch. Chicago: Charles H. Kerr, 1920.
Proudhon, Pierre Josef. What Is Property? An Enquiry into the Principle of Right and of Government. 1840.Translated by B. R.Tucker. New York: Howard Fertig, 1966.
Swartz, Clarence Lee, in collaboration with The Mutualist Associates. What Is Mutualism? New York: Vanguard Press, 1927.

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