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What is mutualism?

Mutualism is an economic theory and anarchist school of thought that advocates a society where each person might possess a means of production, either individually or collectively, with trade representing equivalent amounts of labour in the free market. Integral to the scheme was 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 labour theory of value that holds that when labour or its product is sold, in exchange, it ought to receive goods or services embodying “the amount of labour necessary to produce an article of exactly similar and equal utility”.1

Mutualists oppose the idea of individuals receiving an income through loans, investments, and rent, as they believe these individuals are not labouring. Though 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 universalisation of the principle of reciprocity which I propose.”2 Insofar as they ensure the worker’s right to the full product of their labour, mutualists support markets (or artificial markets) and property in the product of labour. However, 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”); thus advocating personal property, but not private property.


  1. Tandy, Francis D., 1896, Voluntary Socialism, chapter 6, paragraph 15.
  2. Proudhon’s Solution of the Social Problem, Edited by Henry Cohen. Vanguard Press, 1927.
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Frequently Asked Questions