I was recently asked by a twitter friend what I thought of “mutualists”. My first thought was to say that it all depends on what you mean by “mutualists”. Then I thought about just directing him to one of my past posts on “Syndicalists” but that would not have been fair since a syndicalist is not a mutualist; at least so far as I understand the terms. So, I decided it was time here, once again, to take a look at the left-libertarians: this time “mutualists”.

Mutualism is a theory of societal organization based on the labor theory of value which teaches that when labor or its product is sold or exchanged then one ought to receive back goods or services that were produced with the same amount of labor necessary to produce the article or service that the person offered for trade. Or, in other words, the labor theory of value teaches that the value of final production rests on the labor amount of the inputs. In the 1800s Carl Menger showed that this is the exact opposite of reality. The price of a factor input is based on competitive bidding by producers who use their subjective evaluations based on what they think the factor is worth to them; and so entrepreneurs bid up prices because of their expectation of greater revenues in the future. And so, Mutualists base their theories entirely on an economic fallacy.

As they say themselves:

Our ultimate vision is of a society in which the economy is organized around free market exchange between producers, and production is carried out mainly by self-employed artisans and farmers, small producers’ cooperatives, worker-controlled large enterprises, and consumers’ cooperatives. To the extent that wage labor still exists (which is likely, if we do not coercively suppress it), the removal of statist privileges will result in the worker’s natural wage, as Benjamin Tucker put it, being his full product.

Mutualists claim to believe in private property, but only so long as it is based on personal occupancy and use. They believe that if a property owner rents out or leases any property then the renter may just steal the land as “absentee landlords” have no rights at all. Thus they deny that we should honor contracts! This is a philosophy of theft. And as I have noted elsewhere, how does a “worker controlled factory” operate if one guy gets to sit behind the big desk while another guy has clean the men’s room? Who the hell decides on that? Does the hard working janitor get more “money” since he inputs more labor? (what the hell is “money” to these people anyway?)

It is brutally obvious that the mutualists, if they were in control, would be unable to get the population to act as they would have them act without the sort of force and brutality that the old USSR had to resort to. There is no way that people will value an item based on the labor that was input into its manufacture. People base their evaluations on their subjective notions of its marginal utility to them; and add to that the law of supply and demand. One can labor greatly making an item that no one wants and it will have no value to others. That is just the facts of life folks. And the idea of factories run by a “democracy” made up of its workers has never worked in the real world even though such a system could be tried right now in most countries of the world. It just does not work.

Like all modern terms, there will be disagreements on what, exactly, mutualism means, but It seems that some “mutualists” want only individual tradesmen or very tiny business concerns to exist. This shows a profound ignorance of economics, or else they want to see 7 billion humans die off due to destroying the industrial society that feeds us. The iron law of the division of labor can not be repealed. Anarcho-capitalists, anarcho-libertarians, or market anarchists, on the other hand, are not opposed to the corporation itself, but are opposed to the government granted special privileges that enrich them under our present crony-capitalist model. Of course, some mutualists think a factory can be OK as long as all the workers are paid according to the amount of their labor inputs — regardless of the value of said labor. It is as if a kid in Algebra class gets paid with an A for doing page after page of wrong calculations and the kid that got the right answer in three lines gets an F.

The “market,” in the sense of exchanges of labor between producers, is a profoundly humanizing and liberating concept.

As the quote indicates, these people can only see “the market” in terms of producers trading hours of labor. A short look at the differing pay rates in the NFL here in America will show one that people earn what they are worth, not how much “labor” is put forth.

Many left-anarchists are anti-war and that is great, but unless you are pro-market and pro-private property you are not really an enemy of the state. The state, you see, is the institutionalized agent of aggression against private property rights which forms the basis of liberty of the individual and the market. But we often we find that “mutualists” or “syndicalists” are just pseudo-anarchists who are hostile to free markets and private property rights. Yes, yes, they sometimes claim to love the free market but only if they get to control the market and make everyone do as they say. So much for freedom, eh?

No matter the label, if the “mutualist”, “syndicalist”, “left-anarchist”, or what have you is willing to concede that no force should be used to dictate their Utopian vision on the rest of us and that people should be free to trade without any coercion from any group then I can support their right to go try their wrong-headed ideas out someplace. Let the market decide how people will act after we do away with the beast called the state. Of course, the only way to stop coercion and have peaceful, voluntary cooperation is for the property rights of the individual to be respected at all times. I hope the mutualists understand that, but it is obvious some of them don’t.

Sometimes I talk to mutualists or syndicalists and find that they are simply against the corporation as it exists in our economic system now. Market anarchists like myself are also against the crony-capitalist system we have now. Many of our large corporations are given all sorts of special privilege, favorable regulations, grants, and other give-aways under our current government. But that issue is not the same as saying that the corporate form of organization is inherently bad. We can, however, agree that the present corporate welfare is as bad if not worse than welfare for the individuals.

One very sticky point with many on the left is the idea of “limited liability” of corporations. Typically they don’t understand the issue.

Rothbard:

… None of this means that tort law itself is in no need of reform. The problem is not really quantitative but qualitative: who should be liable for what damages? In particular, we must put an end to the theory of ”vicarious liability,” i.e., that people or groups are liable, not because their actions incurred damages, but simply because they happened to be nearby and are conveniently wealthy, i.e., in the apt if inelegant legal phrase, they happily possess “deep pockets.” Thus, if we bought a product from a retailer and the product is defective, it is the retailer that should be liable and not the manufacturer, since we did not make a contract with the manufacturer (unless he placed an explicit warranty upon the product). It is the retailer’s business to sue the wholesaler, the latter the manufacturer, etc., provided the latter really did break his contract by providing a defective product. Similarly, if a corporate manager committed a wrong and damaged the person or property of others, there is no reason but “deep pockets” to make the stockholders pay, provided that the latter were innocent and did not order the manager to engage in these tortious actions. To the extent, then, that cries about an insurance crisis reflect an increased propensity by juries to sock it to “soul-less corporations,” i.e., to the stockholders, then the remedy is to take that right away from them by changing tort law to make liable only those actually committing wrongful acts. Let liability, in short, be full and complete; but let it rest only upon those at fault, i.e., those actually damaging the persons and property of others.

I conclude that I can’t be a “mutualist” since I have read too much economics and economic history. The mutualists want to try the idea of collectives joined somehow with mostly individual tradesmen. I wish them all the luck in the world with that but I know that the division of labor leads to the greatest wealth for the greatest number of people. They want to believe that labor forms the basis for value but that is just an often debunked fallacy. A dangerous fallacy at that. And, unfortunately, there are many mutualists who applaud and promote blatant theft of other people’s property. I hope they are a minority in the movement but I fear that theft of property is an inherent part of mutualism.

So, what do I think of “mutualism”? Not much given what I understand of their philosophy. I do agree with many of their ideas as long as we are talking about a system with no coercion that allows mutual, voluntary, free-will cooperation among people — but we already have a term for that and that term is market anarchy or anarcho-capitalism.

UPDATE: Since Dr. Long wanted more citations, here (first and second) are a couple by Stephan Kinsella that I have long thought very good on the certain aspects of this topic.