Sunday, July 20, 2014

A proposal for the basics of a well defined Mutualist economic position, the philosophical basis for the strategy of the Mutual Economy Network


What is the Mutualist economic position and how is is similar and different from the “capitalist” and “socialist” positions? I will here attempt to offer a coherent answer to the challenge offered in the widely available “what is Mutualism?” article, wherein it states:



Ultimately, I guess I would like to highlight the ambiguity that sometimes lurks behind rather obscure political labels such as "mutualism". From a certain perspective, this could be portrayed as a good thing in the sense that it stops it from hardening into a dogma. At the same time, the desire for clarity is understandable and perhaps contemporary mutualists should do a better job of hashing out exactly what it is that makes mutualism unique. Mutualism certainly seems to be unique, and that's part of the value I see in it. I'd be interested to see what various self-proclaimed mutualists have to say about this.” -

http://web.archive.org/web/20101016220317/http://polycentricorder.blogspot.com/2010/05/what-is-mutualism.html



This challenge to find a 'mutually' agreeable economic method to the political end of Liberty for All, of Anarchism, is in and of itself part of what mutualism is, under what economic arrangements can liberty be preserved, and the issues at the heart of all the schools of thought on this subject be brought into harmony? This challenge is precisely what Proudhon himself, who coined the terms mutualism and anarchism, proposed. It is for this reason I feel, that Proudhon, on the question of economic organization felt that the most basic denominators of economic arrangement most agreeable to the preservation of the sovereignty of the individual are, in reverse order Contract, Credit which should really be Collateral, and these two being the economic extension of the idea of Property; clear and consensual contract between sovereigns of equal standing. This idea was wide spread and is still enshrined in the basis \of common Law; the inalienable right to Contract. Mutualism as an economic position, being based on the sovereignty of the individual, is based firstly on Contract. A clear agreement made between consenting sovereigns, akin to a treaty. This naturally arises in human interaction but it is rarely named and seen for a sound basis upon which a natural philosophy of economy could be based, I here intend to name it so. Thus the basis of the mutualist economic arrangement is equitable exchange based on clear consensual Contract. Economy is about exchange, but exchange, in order that Liberty not be infringed, must take the form of consensual contract between the parties exchanging, otherwise it is theft.

The second layer of the foundation of the Mutualist economic philosophy that I would like to highlight, and was named by Proudhon, but about with which I feel much has not been understood thoroughly, including by Proudhon himself, is what J. Proudhon called Credit. However, Credit is legally defined as; “1. Belief, faith, Trust. 2. One's ability to borrow money or property of value, based on the faith in one's ability to pay that debt.” (Black's Law, 9th Edition). What Proudhon had to say on this idea of Credit is so brief that one gets the impression that Proudhon, being human, he did not fully grasp the technical issues of Law concerning the equitable exchange so called by the American Anarchist philosopher Josiah Warren, or law in general for that matter, hence his argument with Fredric bastiat; his genius was more is intuiting the location and nature of Liberty and therefore that which would threaten it, for though great was his genius, he was not omnipotent. He was after all a practical man and a peasant as well. Being brief, I feel that no space is wasted quoting it here in full:



The organization of credit is three-quarters done by the winding up of the privileged and usurious banks, and their conversion into a National Bank of circulation and loan, at ½, ¼, or ⅛ per cent. It remains only to establish branches of the Bank, wherever necessary, and to gradually retire specie from circulation, depriving gold and silver of their privilege as money. (§ 1 ¶ 1)

As for personal credit, it is not for the National Bank to have to do with it; it is with the workingmen’s unions, and the farming and industrial societies, that personal credit should be exercised. “ - http://fair-use.org/p-j-proudhon/general-idea-of-the-revolution/organization-of-economic-forces#s2





I have a real problem with this position as any keen liberty minded individual might, for any such National Bank, would then be a supra-individual fictitious, and dare I say collectivist entity. He then goes on to imply a tiered system of fiat money lent through tiered networks of collective associations, from 'national banks' to 'farming and industrial societies'. All such centralized institutions of delegated powers, be they Armies, States or Banks, are burdensome, unnecessary, and potentially injurious to liberty. Even in his conception, the role of the Bank or the workingmen's association is to hold the right to lend on Credit. This right is suppose he felt to be the property of extra-individual collectivities, albeit consensual ones based on Contract. I feel he really knew that that this issue was not resolved and so in presenting mutualism also presented the challenge to his progenitors to solve it.

I endeavor to point out at this juncture, that any right or liberty held by a free association, cannot by definition be a right not held by the individuals comprising that free association. What liberty are we talking about? Not the right to Contract which I previously covered, but rather the right to Loan, which is a specific kind of Contract on a three fold spectrum of what are called real contracts in the civil law, thus this Credit creation through the right to loan is nothing but an extension of the right to contract, a point Proudhon seems to have missed. These three real contracts are the Pignoratio, the Deposit and/or Pledge, the Commodatum, the loan for use, and last but not least, the Mutuum, the equitable exchange. I call what Proudhon proposes a form of fiat currency because it is this the purpose of this Credit to be used as Collateral against which to lend and create money, the definition of a fiat currency. To his credit though, pun intended, in his time the first real global fiat currency, the Federal Reserve Note, had not yet been created and so he apparently did not foresee this arrangement as the real threat to liberty that it is. All that is required then to issue Credit is Collateral, Credit itself is not sufficient, something real and of substance with value must be had, some Property. Collateral here defined as “property that is pledged as security against a debt. It is only against collateral that credit can be established, and the right to do this, like all rights, is held by the individual first, and cannot be granted by association.

This collateral must therefor be some sort of Property, which leads us into the third and most basic pillar of the mutualist economic position; property. Whose domain is it? The Communists insist that the collectivity exercises domain over it. And the wealth of an economy and the equity thereof is a product of this ownership itself. This Capitalist position does not seem to differ so much from the Communist one, simply stating that rather than the collective ownership of the property being the source of economic health and function, it is My ownership of the property which, in and of itself, is the source of economic health and function. The Mutualist position is a third, which both sythesizes and transends these two; it is that it is the mutual exchange, in circulation, of the Property between sovereign individuals within a collectivity which creates the function and health of an economy. In order to answer the question of who may exercise their sovereignty over this Property, who owns it, one must first ask the questions, 'if this Property is a created thing, who made it? They own the property, unless the exchanged it for other property. If it is a service rendered, who performed the service? Then the performer owns his or her actions. If the Property is land, or the product of plants of that land, one must ask, who occupies that land, who cared for the apple trees, who planted and harvested the wheat, or whatever the case may be. The idea is that ownership of a property is derived from direct investment in that property. If I made it, then I own the product of my labor. If I did it, then I own the value of my services. If I live in an area of land, if I planted and tended that tree or wheat, then I own it. This is so simple and direct that it is often overlooked, and unessecary complexities are chosen instead. If I do not directly interact with a given piece of land for example, what stake should I rightfully have in the use of that land? None. This prevents the monopoly of ownership arising out of Feudalism, Communism, Capitalism or any other State creating arrangement which allows people with no direct occupancy in an area to claim ownership of it.

So to sum this up in clear though percise English, Property in Land is held by whoever directly inhabits it. Property in Goods is held by whoever produces them. Property in Services is held by whoever performs them. These Properties are held by their individual owners as collateral against which Credit can be issued as currency in the form of Contracts of Mutual Exchange by those individuals themselves and as such with no need for Banks of any kind. And these clear and consensual Contracts form the circulation of property which constitutes the functioning of economy. This is neither the communist nor capitalist economic philosophy, it is a mutualist one.

No comments:

Post a Comment