page_title: Mutualism (economic theory)
section_title: 19th-century United States
hierarchical_section_title: Mutualism (economic theory) / History / 19th-century United States
context_page_description: Mutualism is an anarchist school of thought and economic theory that advocates a socialist society based on free markets and usufructs, i.e. occupation and use property norms. One implementation of this system 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 which it uses as its basis for determining economic value. According to mutualist theory, when a worker sells the product of their labor, they ought to receive money, goods, or services in exchange that are equal in economic value, embodying "the amount of labor necessary to produce an article of exactly similar and equal utility".
  Mutualism was popularized by the writings of anarchist philosopher Pierre-Joseph Proudhon. Mutualists are opposed to individuals receiving income through loans, investments and rent under capitalist social relations. Although personally opposed to this type of income, Proudhon expressed that he had never intended "to forbid or suppress, by sovereign decree, ground rent and interest on capital.
context_section_description: Mutualism has been associated with two types of currency reform. Labor notes were first discussed in Owenite circles and received their first practical test in 1827 in the Time Store of former New Harmony member and 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 Batchelder Greene, but Greene drew from the work of Proudhon, Edward Kellogg and William Beck as well as from the land bank tradition. Within individualist anarchist circles, mutualism came to mean non-communist anarchism or non-communist socialism.
  Mutualism can in many ways be considered the original anarchy since Pierre-Joseph Proudhon was the first to identify himself as an anarchist. Although mutualism is generally associated with anarchism, it is not necessarily anarchist. Historian Wendy McElroy reports that American individualist anarchism received an important influence of three European thinkers. One of the most important of these influences was the French political philosopher Pierre-Joseph Proudhon, whose words "Liberty is not the Daughter But the Mother of Order" appeared as a motto on Liberty's masthead. Liberty was an influential American individualist anarchist publication of Benjamin Tucker. For American anarchist historian Eunice Minette Schuster, "[i]t is apparent [...] that Proudhonian Anarchism was to be found in the United States at least as early as 1848 and that it was not conscious of its affinity to the Individualist Anarchism of Josiah Warren and Stephen Pearl Andrews. [...] William B. Greene presented this Proudhonian Mutualism in its purest and most systematic form".
  After 1850, Greene became active in labor reform. He was elected vice-president of the New England Labor Reform League, the majority of the members holding to Proudhon's scheme of mutual banking; and in 1869 president of the Massachusetts Labor Union. He then publishes Socialistic, Mutualistic, and Financial Fragments (1875). He saw mutualism as the synthesis of "liberty and order". His "associationism [...] is checked by individualism. [...] 'Mind your own business,' 'Judge not that ye be not judged.' Over matters which are purely personal, as for example, moral conduct, the individual is sovereign as well as over that which he himself produces. For this reason, he demands 'mutuality' in marriage—the equal right of a woman to her own personal freedom and property".
  Tucker later connected his economic views with those of Proudhon, Warren and Karl Marx, taking sides with the first two while also arguing against American anti-socialists who declared socialism as imported, writing:
  The economic principles of Modern Socialism are a logical deduction from the principle laid down by Adam Smith in the early chapters of his "Wealth of Nations," – namely, that labor is the true measure of price. [...] Half a century or more after Smith enunciated the principle above stated, Socialism picked it up where he had dropped it, and in following it to its logical conclusions, made it the basis of a new economic philosophy. [...] This seems to have been done independently by three different men, of three different nationalities, in three different languages: Josiah Warren, an American; Pierre J. Proudhon, a Frenchman; Karl Marx, a German Jew. [...] That the work of this interesting trio should have been done so nearly simultaneously would seem to indicate that Socialism was in the air, and that the time was ripe and the conditions favorable for the appearance of this new school of thought. So far as priority of time is concerned, the credit seems to belong to Warren, the American, – a fact which should be noted by the stump orators who are so fond of declaiming against Socialism as an imported article.
caption: American individualist anarchist Benjamin Tucker, one of the individualist anarchists influenced by Proudhon's mutualism
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