What is Mutualism?

Mutualism is a political and economic system that is in favour of common ownership of the means of production in the forms of cooperatives and self-employed individuals operating within a market economy. It can be described as a form of market socialism.

In modern usage, mutualism can either refer to the economic theories espoused by Pierre-Joseph Proudhon, Benjamin Tucker and Kevin Carson; or it can be a belief in a mixed economy in which the economy is based upon cooperative businesses and social enterprises. This latter form can also be known as cooperativism.


Mutualism originally was an anarchist movement developed by Pierre-Joseph Proudhon. He seeked to synthesise market economics with left wing concerns about the exploitation of workers in the capitalist system.

His solution was to develop an economic system with no waged labour in which all who worked were either self-employed or for a cooperative.

Proudhon believed that the gradual elimination of the state would ensure that the market would lead to an equitable and equal society based on socialist and market principles.

Like many left-libertarians, Proudhon was concerned greatly with the vast amounts of hierarchy and inequalities within society during the 19th century. This played a huge influence in his belief that workers would need to own the means of production in an economy, in order to stop the exploitation found in a capitalist system.

Proudhon’s belief in markets was centred on his criticism of using a planned system, which would be hierarchical in nature, to distribute resources in an economy. So, instead, Proudhon advocated a more decentralised method based on exchange in a market.

Proudhon’s insight was the way the market was organised lead to injustices within the capitalist system. For capitalism was an economic system in which a powerful minority would own the mean of production  and be able to dictate to workers their duties in order that they would get paid for subsistence.

Anarcho-mutualism, or Mutualism, is individualist in nature. This means that mutualism is in fact concerned primarily with the individual, granting the individual the right to have their own identity. Their identity not needing to be shaped by external factors such as the state, society, groups and traditions.

Anarcho-mutualist accept the labour theory of value, which stipulates the value of any given commodity is determined by the amount of labour put into its manufacturing. This acceptance of the labour theory of value alongside the belief in social ownership of the means of production ensures that mutualism is a form of socialism.

A group called the neo-mutualist are an offset of the mutualist tradition but reject an economic analysis based on the labour theory of value.


Cooperativists, on the other hand, share similar views to Proudhon but with major differences as well. Cooperatives are not anarchists, they are more likely to be social democrats who would prefer a more decentralised form of social democracy rather than the more centralised version seen in the UK during the post-war consensus.

Cooperativists trace their roots through the foundation of the cooperative movement and to its founder Robert Owen. Robert Owen was an Utopian Socialist in the early to mid 19th century.

Cooperativists believe that state regulation of the economy is necessary as well as a belief that the state will need to interfere in the economy to correct market failures.

In the UK, the cooperative movement is represented in Westminster by the Cooperative Party. The Co-op Party is affiliated with the Labour party. Some Labour MPs also run as Co-op MPs as part of a Labour and Cooperative alliance.


A very similar view to mutualism is distributism. It is an economic philosophy based on common ownership of land in order that families and individuals can be self-sufficient.


Supportive of a more agrarian economy, distributivists support a heavily decentralised economy based upon the family unit. Property rights are seen as essential but for a just social order to arise private ownership must be wide spread rather than centralised to agents such as the state (socialism), the corporation (corporatocracy), or a few individuals (plutocracy).

Distributivism is a form of Christian democracy based on Catholic Social Teaching. It distinguishes itself from both socialism and capitalism. It is a form of a more egalitarian Toryism or conservatism.

Key supporters of the distributist movement include G.K. Chesterton, Hilaire Belloc, Pope Francis and Philip Blond, director of ResPublica think tank..

State Capitalism v Market Socialism

Market socialism, in the Mutualist sense, is the system that the economy will be a market based economy in which the means of production will be owned by either self-employed individuals or via employee owned cooperatives.

State capitalism on the other hand is an economic system in which a large amount of the economy is publicly owned and this publicly and privately owned sectors of the economy seek to gain through the profit motive.

The former is a decentralised form of socialism in which control over production and or consumption is spread on roughly equal terms to each member of society. It can feature many of the benefits that a market economy can have, in particular the advantages of the price mechanism.

The latter is a centralised economy in which the state plays a highly active role in the economy by providing jobs for workers but also to earn money for the state itself. State capitalism can also be referred to as a form of market socialism. This form of “market socialism” is the economic model used by the People Republic of China. It is socialist not in the sense that the workers own the mean of production, but in the sense owns a large portion of the economy. In other worlds, there is a very large nationalised public sector in a market economy. though state capitalism is the preferred label due to the fact waged labour is utilised rather than common ownership of the means of production.



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