What is Mutualism?

What is Mutualism?
by Clarence Lee Swartz

In collaboration with The Mutualist Associates (1927)

Chapter X. Methods of Realization

It is the chief merit of Mutualism that its program is in line with the past growth of society. In medieval times, the relations of men were fixed; their opinions, calling, places of residence, earnings, in short, their social and economic life, was more or less static - established by custom and authority. The great progress made since those days is due to the increase of individual freedom in the various spheres of human activity. Mutualism proposes a further extension of liberty, in conformity with this historic development.

Thus the immediate program of Mutualism is presented:

In the social sphere, it is the creation and support of such voluntary associations as will be able to supersede the present coercive system, and, in the economic field, the creation and support of such voluntary agencies as will sharpen individual initiative and responsibility, and free economic life from the oppressive hand of authority and privilege.

As it has been in the past, progress will be slow and tedious, almost imperceptible to contemporary observers. It will be nothing spectacular, like a glorious but futile revolution, but just a continued application of hard work, common sense, eternal vigilance - the only way in which any change for the better has ever come about.

Because Mutualism will remove, for the benefit of all producers, the present artificial limitation of production of all commodities, and because it will abolish exploitation, without subjecting men to the slavery of coercive communism, it should appeal to those persons who prefer the variegation of liberty to the dull mediocrity of equality. The present system is changing, and the question for each student to, answer is: Shall the people create their own voluntary forms of organization, or shall they increase the powers of antiquated authority and accept its rules and regulations for the conduct of their lives?

It is a most hopeful sign for the virility of the human race that, in spite of all the meddlesome paternalism of the State, which, through its maze of laws and regulations, tends to subvert and extinguish initiative by discouraging individuality and the precious sense of personal responsibility, there should still exist a surprisingly large number of altogether voluntary activities and associations. The chief distinction between these and State activities is the personal initiative at the base of the former, and the consequent observance of the principle of voluntary cooperation; while in the nature of the latter there is an arbitrary imposition, compelling contributions and membership at all costs, in the face of varying aptitudes, inclinations, and even of outraged protests. This applies to any function which the State may arrogate to itself, whether it be in religion, education, art, commerce, or industry.

In religion, so far, the right of the State to interfere is denied in this country. But it will need a firm and decided stand on the part of all clearheaded people to curb the present demand of religious leaders for compulsory religious instruction in the public schools, and to counteract the ridiculous opposition in the backward states to the teaching of evolution in the higher institutions of learning.

In the educational field there are organizations like the Society for the Promotion of Simplified Spelling, the Society for the Advancement of Science, and a large number of private museum societies and educational groups of varying size and influence, all developing initiative and an increasing sense of personal responsibility among their members. All these organizations are worthy of support. Every liberal or radical will find it desirable, as a means of educating the people, to belong to one or more of such societies, especially the local ones, which are of necessity more restricted in their appeal, and therefore more in need of support. For it must be remembered that the most valuable activity in behalf of freedom must take place in the educational field, and that there can never be too much of it.

Other valuable expressions of private initiative are the many hospitals, sanatoriums, and asylums founded and maintained by benevolent societies and religious groups. They are usually superior to State institutions, and their increase is to be looked on with favour, as they will tend to lessen the need for and importance of the pompous, red-tape-bound State institutions.

Another encouraging indication is found in the world of business, where there is an increasing number of joint owners of all sorts of business enterprises. The current types of corporate organization make possible undertakings of such a scope and magnitude that the government itself would hesitate to engage in them. And yet, not so long ago, such accumulations of private capital and resources were supposed to be impossible and all enterprises of any size used to make appeal for State aid before commencing operations, believing themselves unable to succeed without it. Today, the tables are turned, and instead of corporations asking the State for aid, they have become so rich and powerful that the power of the State is being invoked to curb them.

However, it is not the corporate structure which needs to be fought, but the development and continued existence of all sorts of abuses which are made possible through the State protected special privileges, analyzed and criticized in previous chapters of this book. In the absence of monopolistic franchises, of interest extortion, of royalties and patent control, of "protective" tariffs, and of non-occupying landownership, the public service corporations, for instance, would have to render satisfactory service to their patrons - service at cost - as their failure to do so would cause other corporations to be organized by dissatisfied individual patrons or by another independent group of individuals, with the result that the original corporation would be obliged to improve its service or retire from the field.

Practical Program

When the reader has pursued this discussion to this point he will have discovered that Mutualists believe that their ideals may be realized, to a considerable extent, under the present governmental regime, and in spite of many of the laws now on the statute books. It is not claimed, however, that the complete program and plan of Mutualism can be carried out in that way, and it must be obvious to even the casual reader that there are many laws that stand in the way. Therefore, Mutualists seek to remove these impediments.

Especially in the case of Mutual Banking, it would be difficult to make any great headway against the federal law that now imposes a tax of ten per cent on all issues of money other than that issued by the government itself or through the national banks. In addition to this, there are laws in many states making it a criminal offence to issue any sort of notes that may pass as money.

Now, there are various ways in which these unnecessary and obnoxious laws may be eliminated. The first, which suggests itself to the person who believes in the efficacy of political action, is that of repeal by the legislatures and Congress. That step may be pursued, possibly with good results. In fact, it is an admirable procedure, and may be prescribed in even more cases than those directly bearing on the inauguration of Mutualism. But it should be pointed out that there is a certain tradition that militates against that step. How rarely has any law been repealed outright! It seems to be a common notion that no law is ever to be taken off the statute-books unless another one is to be put in its place. That has been the history of legislation in the past, and there are few signs of any change.

Despite that gloomy outlook, there is, however, work of that kind which must be done. Where laws have been enacted - through ignorance or deliberate intent - that stand directly in the way of the realization of Mutualist ideals, their abrogation or nullification must be secured somehow. Where obstructions in the road of progress cannot be surmounted they must be removed.

Whether, according to Oppenheimer and one school of sociologists, the State originated in aggression, or whether, according to other authorities and investigators, it developed from primitive attempts to associate for defence, the fact remains that, at the present time, its operations partake more of the former nature than of the latter. While some of the activities involved in the realization of Mutualism can be carried on under the present laws on the statute books, many of the more vital and essential elements are frustrated and at times wholly prevented by these laws, as in the case of Mutual Banking. But it should be borne in mind that it is difficult to arouse any enthusiasm in legislators for the repeal of laws, for the simple reason that there is rarely a great and insistent demand for the simple repeal of a law. Most people believe that all the ills that beset society may be cured by more and ever more legislation. When a law fails to do its work it is forgotten, and not until its positive results become intolerable evils is there any pressure brought to bear on legislators for its direct and unconditional repeal.

Another element that tends to make repeal difficult is the fact that most laws create a number of offices for the purpose of administration and enforcement, and these offices are filled by the henchmen of the legislators and other politicians. If these offices are abolished by the repeal of the laws, the officials holding them will lose their positions, and the bosses whom they serve will be forced to provide other situations for them. This is not easy for them to do, and therefore the bosses will be extremely reluctant to impose that burden on themselves. In other words, that is one of the main reasons why they are so cold toward any proposition for repeal. And modern politics offers no solution for that problem. To go into productive labor in order to earn an honest living is not to the taste of that class of persons.

Still another formidable force ever present to obstruct any attempt to repeal undesirable laws lies in the fact that the office holders now number about one in every ten of the population of this country. They are engaged in the administration and enforcement of the various laws, and the fear of the loss of their jobs lines them up solidly against repeal.

In the mind of the superficial thinker, even though he may be imbued with a desire to halt the ravages of privilege and monopoly, there seems to lurk the idea that humanity can be made "good" by law. To him, there must be a statutory remedy for every social ill. The Mutualist, on the other hand, knows that people are never made better by law - that, in fact, law even tends to retard the development of the higher social instincts in the individual. Mutualism proclaims the already demonstrated fact that liberty, coupled, as it must be, with responsibility, is the real creator of character and the developer of initiative, of self-reliance, of honesty, of probity, and of consideration of others, since the free man must carve his own career, and he must realize that all his acts must be performed at his own cost.

Thus the political slogan of the Mutualists may be said to be:

Opposition to new laws and the abrogation of old ones.

Their task is to spread the gospel of enlightened laissez faire, following the principle that it is of more importance to refrain from action, when in such action there lies the element of invasiveness, than it is to act, even though the act may seem to be a beneficent one, or performed with benevolent intentions.

If, therefore, a stop may be put to the grinding out of more laws, and if the ones now on the statute books may be gradually abolished (beginning with the most pernicious ones), in this way paving the way for the eventual elimination of all useless laws, Mutualism will have been able to demonstrate that even the useful activities now imperfectly performed by the State, including the protection of life and property, can in time be much better performed, by voluntary association and mutual effort.

Mutualists, therefore, advocate the forming of voluntary associations which can demonstrate in actual practice that the various services and functions performed by governments can be furnished and discharged better and cheaper by such associations.

The beginning should be made with economic functions - those dealing with production, distribution and finance - many of which governments have arrogated to themselves. Then education would come, and would be followed finally by those activities which are concerned with the protection of life and property.

With each step taken, all the entrenchments of privilege and power gradually will give way, as business methods and intelligent self-interest become the guides instead of the inefficient and cumbersome systems followed by the State, loaded down, as it is, with its multiplicity of operations, and endowed, naturally, with so little capacity for change or improvement.

Thus government will be almost imperceptibly superseded by the simple, mobile associations that will be as highly specialized as circumstances may require.

While the reader may be willing to grant the feasibility of voluntary associations assuming those commercial and industrial activities which the government now is supposed to perform, making laws, administering justice, conducting courts and hiring policemen may seem to be so essentially public functions that he finds it hard to think of these functions delegated to private associations. But a few illustrations will show how they can be better administered in this way.

A stock exchange, with its by-laws and rules, can discipline its members more quickly and effectively than it could do it through a lawsuit. Its decisions are more respected and more feared than are those of the courts. They are shorn of the technicalities, quibbles and delays with which our court procedure is filled. If business associations and business people generally were to adopt voluntary arbitration of disputes, the number of lawsuits would rapidly diminish.

The matter of protecting property under present conditions is one for which there exist federal, state, country, and municipal governments, and yet a citizen, to get actual protection, must and does employ a private watchman; and on this last and cheapest agency of protection, outside of all organized authority, he places his greatest reliance, the others having all failed to protect him, even though he has been taxed exorbitantly for their support.

Ignoration of Laws

In the law prohibiting the manufacture and sale of intoxicating liquors, this country has the most drastic exhibition of the misuse of political power that modern history records. That abuse of power is unconditionally upheld and approved by only a minority, though decidedly a fanatical and militant group, of the people. Therefore the majority, either covertly and timidly, or openly and brazenly, according to circumstances, violate the law in every particular every day of the year. And, knowing that in so doing they injure no one, they have no conscientious scruples about it.

Before prohibition came in, the open saloon, with its effect on politics, was said to be the great evil. It was determined that the liquor interests must be outlawed; but outlawing the open saloon has outlawed the greater part of the community, and the bootlegger is more in evidence and is a more powerful influence in politics than the saloonkeeper ever was. This is all the result of making a non-invasive act unlawful when public sentiment is not clearly in favour of the law, and it shows how the people can ignore and nullify an invasive law when a sufficiently large number of them do not approve it. When the people finally realize that prohibition has bred much more corruption than the saloon ever did, the Eighteenth Amendment will be repealed or become a dead letter, because it is practically unenforceable.

Another conspicuous example of what changing public sentiment can do toward nullifying a law by evasion is that of the marriage law. During the last few decades public sentiment concerning the conjugal relations of men and women has undergone a significant change. In fact, many of the regulations imposed by church and State have become utterly obsolete, and scarcely anyone thinks of conforming to all of them. In the process of evolution human experience has discovered that the conventions of yesteryear are, in many ways, unsuited to present conditions, and, since there is still sufficient public sentiment to prevent the abrogation or alteration of the laws to any great extent, there is nothing left to be done, by those who find conformity intolerable, but to ignore, evade and even violate the oppressive injunctions. Many persons never take the trouble to comply with any of the law's requirements concerning their conjugal relations, because they find its mandates too onerous. The development of the conception of freedom along these lines has been so great in recent years that, to a great number of persons, who cannot even be designated as advanced thinkers, the marriage laws, in many of their provisions, have become grossly violative of personal liberty, and constitute a meddling by the State in what most persons now consider a purely private and essentially mutualistic arrangement between two individuals.

While few changes in the statutes of the various states regarding marriage and divorce have been made in the last fifty years, the manner in which the law has been construed and applied by the courts shows that a veritable revolution is taking place. A few years ago, divorce proceedings were lengthy and before a jury, and the judge commonly felt it his duty to prevent a separation. In the progressive states, all this is now changed, and, where no defendant appears, the trial is before the judge alone. If no legally recognized grounds for the divorce exist, the plaintiff magnifies the charges of "cruelty," "desertion," "non-support" etc., and the judge grants the decree, the whole trial taking but a few minutes. The granting of alimony to women is becoming less frequent, particularly in cases where there are no children and where the woman is capable of self-support and there is no necessity for it. Here may be seen the wearing away of the old traditions even, without the conservative and orthodox realizing the changes that are continually taking place in all institutions.

The traffic laws are another group that embodies, along with many wise and useful regulations, many stupid and intolerably harmful rules that everybody violates when out of the sight of the traffic officer. And such violation is the strongest evidence of good citizenship, except that it leads the unthinking and the unscrupulous to violate likewise the regulations that all admit are for the safety and convenience of everybody. The huge number of regulations, by their very mass, puzzle the citizen, who can no longer discriminate between the useful ones and the senseless ones. Thus it is that the number and complexity of the traffic laws make it difficult for the driver of a machine to know what to do, especially when he passes from the jurisdiction of one set of regulations into that of another. He literally does not know "where to turn."

Many of the less important laws are openly and guilelessly ignored or violated every day, to say nothing of the constant and consistent evasion of taxes by rich and poor, pious and pagan, without the least sense of wrong-doing; but the citation of the foregoing is sufficient to point the way to the ultimate refusal of everyone to support or recognize any authority which denies equality of liberty or which fails to give an equivalent in services for every cent demanded for them. Mutualism emphasizes the fact that its principles are founded on the "law of pure equity", and it should be noted that all those laws whose violation, evasion, or ignoration have been cited are themselves denials of pure equity and of individual initiative, free contract, and voluntary association, upon which Mutualism is founded.

Passive Resistance

Until a majority of the people can be brought to see the need for the legislative repeal of certain laws, passive resistance suggests itself as the best means for securing relief from the oppression of such statutes. This is a method that seems to occur most readily to the average American, for he is always eager to ignore and evade any law that is not supported by a preponderance of public opinion. He has no great reverence for law as such, and he is encouraged in that disregard of laws and regulations when he observes the impunity with which they are, in many conspicuous instances, violated and flouted. He sees, furthermore, that a great deal of sumptuary and otherwise obnoxious legislation receives only hypocritical support from many who were instrumental in securing its enactment, and this decidedly lessens his respect for it. The way is therefore open for making a law so unpopular that the community will not consent to its enforcement. When, as recently occurred, a great state voted in a referendum by a majority of three to one to demand of the federal government the right to practically nullify, within its own borders, an important Act of Congress, with what success can the continued attempt to enforce that enactment in that state be made? To all intents and purposes the Volstead law is a dead letter in the state of New York, and there is no likelihood of its resurrection. The enforcement officers must make some sort of attempt to punish violators of the law, but they will find it difficult to secure convictions before juries. Other laws can be made as odious as that one, and when that happens it makes little difference whether the formality of repeal has been gone through or not.

It is, of course, obvious that true passive resistance means abstinence, rather than action. Therefore it is always more difficult for governments to punish a person for refraining from doing than for doing. The person who refuses to obey when commanded to act is less likely to land in jail than the one who ventures into forbidden places. Likewise he who talks too much is more likely to get into trouble with the police than he who keeps his mouth shut. It is difficult for the ardent official meddler to trump up a charge against a person who utterly refuses to do anything.

That, briefly, is the essence of passive resistance - to do nothing. To refuse to participate in any of the invasive acts of government may at times be construed as a punishable offence; but when a sufficiently large number of persons persistently refuse so to act, constituted authority is helpless, and in the end, if the procedure is carried to its limits, must succumb. The force that can be brought to bear by a large number of passive resisters is practically irresistible, and that force has the added advantage of being non-invasive.

For instance, since Mutualism holds, that no title to land except actual occupancy and use should be recognized, if a certain number of homeless and starving people should, in accordance with Mutualist principles, squat upon a tract of vacant land being held and not used by some absentee owner - such as a great railroad company, for instance - and should return to the land as fast and as often as they were evicted by the sheriff, that would be a perfect example of passive resistance, provided they suffered themselves to be removed from the land each time without physical opposition. The effect of this would be to baffle and harass invasive authority, just as the non-rent-paying tactics of the Land League in Ireland in the last century baffled and harassed the British government up to the time that the tenants were betrayed by their leaders and ordered to submit.

If no other end be immediately gained, such methods always bring the invading forces into disrepute and place them in the position of being oppressors of helpless persons. In short, that traditional and universal policy of aggression would be stripped of its glittering trappings of glory and put in its true light of unconscionable roguery.

But passive resistance must not be confused with non-resistance. It is, moreover, quite easy to differentiate between the two. Non-resistance is precisely what its etymology implies - no resistance. Passive resistance, on the other hand, is most emphatically resistance, but it is not resistance by overt acts. It is negative. It is abstention, non-participation, and those who employ it do not do things, but refrain from doing things. There is, moreover, another difference between passive resistance and non-resistance. The former is considered, by those who advocate it, a matter of expediency; and they believe that it is the most efficacious of all methods. Non-resistance, on the other hand, is commonly regarded, by those who adhere to it, as a fetish, or something that is worshiped as a universal panacea for all forms of aggression; and, as such, it will be found to be advocated largely by those who view it from a religious angle.

To resist passively is to place the burden of action and aggression upon the enforcers or the upholders of the things resisted. Such resistance may take the form of refusing to obey any sort of mandate, especially when the obedience would involve action, and it may be carried, of course, to the extent of the resister's willingness to suffer the consequences, bearing in mind that such penalty is not ordinarily so great as for performing a forbidden act

Strikes, in their simple form, are a true type of passive resistance. It is not yet a crime - in time of peace - to stop work; but those who exploit labor are bending every effort to have it legally so made, and some of the people's "representatives" in Congress and in the various legislatures are constantly trying to secure the enactment of such laws. Picketing - meaning verbal attempts to persuade workmen to join in a strike and to dissuade other workmen from taking the places of strikers - is a logical extension of passive resistance, and is in no sense a violation of the principle of equal liberty. When picketing is accompanied by violence or threats of violence in any form, such as forcibly preventing the workman who refuses to strike or the strike-breaker from entering the "struck" plant, or doing him bodily harm for declining to be persuaded, it is not passive resistance and is a violation of the principle of equal liberty; and Mutualism clearly and sharply draws that distinction.

Mutualists, however, lend no ear to those court decisions, and to the contentions of employers generally, that the so-called "sympathetic" strike is an infringement of the principle herein postulated - always provided that there exists no contract which such strike may violate.

Striking work is so clearly the mere exercise of an undisputed right to refrain from an act that, no matter how far removed from the primary motivation of such cessation of work, no refusal to continue un-contracted labor can by any stretch of the imagination be construed as a denial of anyone's liberty. To pretend the contrary is to countenance human slavery - no more, no less.

As an instance of how passive resistance has brought about the repeal of an unpopular law, it is pertinent to cite the case of the poll tax. The evasions of the payment of this tax, and the various obstacles thrown in the way of its collection, have made it decidedly difficult to enforce the law - so much so, in fact, that it has been repealed in most, if not all, of the states. This is an example of the successful operation of passive resistance.

After all efforts to secure the repeal of laws have accomplished their utmost, after ignoration, evasion and violation of especially abominable ones, together with the exercise of passive resistance to its fullest extent, have brought about the greatest consequences, there still remain other means of securing the nullification of such legislation as shall not already have succumbed.

This may be done by discrediting, in various possible ways, any particular law. The courts themselves are unwittingly doing much to aid this work. Some glaring illustrations can be seen in the various legal decisions against so-called conspiracy. Courts have frequently held that many acts, when performed by individuals alone, may be perfectly lawful, but, when performed by two or more persons, become a "conspiracy," and all conspiracies are adjudged to be unlawful.

For judges to contend that the mere number of persons engaged in an enterprise controls the character of it is to render law ridiculous, since it is only necessary to pursue their reasoning to its logical extremity to show its fallacy - or, perhaps, only the judge's bias. No court would think of deciding that, although one man may innocently worship God in the privacy of his own home, the moment he goes to church and joins with others in that gesture he becomes a conspirator and should be dragged off to jail. Yet a perfect analogy to that case is the one in which one workman may cease work and go home and his rectitude be unchallenged, whereas, if he should, in company with other workmen, hire a hall and discuss the matter, he would then be engaged in a conspiracy and should be amenable to punishment. Such is the bewildering inconsistency of the judicial mind!

Let the courts sufficiently multiply such absurdities and law will become a joke. 

Tendency to Evade Taxes

Everyone is familiar with the reluctance with which the average citizen faces the tax collector. Tax dodging, wherever possible, is practiced by high and low, rich and poor, pious and impious, without distinction, And, in all cases, without the slightest compunction. Since this habit is indulged in by persons who give no other evidence of dishonesty, it may be believed that the motive is not to shirk a just obligation, but that there is an almost universal feeling that no equivalent ever is received for money thus taken.

This skepticism is due to the common knowledge that the politicians who administer the government are rarely capable business man, are primarily influenced, in the expenditure of the taxpayers' money, by political considerations or motives of self-aggrandizement, and have every other temptation to become prodigal in dispensing funds the provision of which is not due to their own industry.

Even the most uninformed citizen is aware that all government undertakings are incompetently conducted, that the taxpayers' money is wasted right and left, that there are hordes of grafters in all such operations, who must be taken care of, and that favoritism, at the expense of efficiency, is everywhere the rule rather than the exception.

On the other hand, all experienced business men know that no private enterprise could ever, be successfully conducted by the methods pursued by political management and control, and that, were not the supply of funds for covering government deficits inexhaustible by reason of the power of compulsory taxation, every government project would be bankrupt today.

Small wonder, then, that the harassed and beleaguered taxpayer turns eagerly and naturally to the only mitigation of his distress, which is to evade payment of his taxes wherever possible. The poll tax, the harshest form of taxation ever conceived, has now been abandoned in many states, for it was discovered that more and more citizens were evading it by the simple expedient of failing to register and vote, since the registration lists were the means relied upon by the assessor for locating the person who had no assessable property. Expediency, that ever-faithful friend of evolution and progress, has again pointed to a logical and serviceable form of passive resistance.

Therefore, by withdrawing support from the State, where it may be done with impunity, and by ignoring it wherever possible, and where its hand bears most heavily upon the non-invasive citizen, the rigors of governmental interference with individual liberty and with the practice of the principles of Mutualism may be modified by creating a vacuum around the arch-aggressor.

Voluntary Association

If today a small proportion of our population - say, a number equal to one person in every hundred - were to become Mutualists, a great deal could be accomplished without delay. One per cent of the men in a city, believing in Mutualism, could put it into practice in its most important application. Moreover, when they have come to realize that, by exchanging all their products and services at cost, they can double or treble their several incomes, they will be willing to work together faithfully to achieve that result.

What is likely to take place is as follows: One percent of a city of a million is ten thousand. If these ten thousand men all had their accounts at the same bank, and the officers of the bank understood Mutualistic finance, credit could be extended to these depositors under the present system, and no government currency would be needed at all. These Mutualists would pledge one another, when credit was given to any one of them at the bank, to draw upon that credit by check only. The Mutualist receiving this check would not ask for cash, but would deposit the check to his own account and also draw upon his account by check. None of these people would ever draw money, and in all dealings with one another they would dispense with cash altogether. This need work no hardship upon any of them, as ninety-nine per cent of all payments, including all of the wholesale and most of all the retail transactions of businessmen, are now made by check anyway. Cash is needed only for "till" money of the retail merchant and for other similar, incidental purposes. Most large firms are now paying their workers by check, and, among the better paid workers, there are many who have checking accounts at the banks. As soon as this number increases to a sufficient extent, cash will become practically unnecessary.

A method like the above, if adopted, would bring the Mutualists together to deal more and more with one another. The uniting of this group for the purpose of fair dealing would immediately give every member ten thousand potential customers. Business or professional men spend a lifetime in acquiring such a clientele, and no intelligent and successful man lets anything happen which will cause him to lose a single customer or client. The very fact that he can be trusted is his greatest asset. If any member of this group cannot be so trusted, it means that he cannot appreciate equitable dealings and cannot work on a basis of mutuality. The group would then reject him and he would be thrown back into the civilized cannibalism to which he had been accustomed and from which he really had no desire to escape.

The transacting of business with one another by check necessitates that Mutualists be acquainted with one another and deal with one another, to the gradual exclusion of the non-mutualistic public. The latter would soon see the advantages derived by Mutualists from this arrangement and would not be slow to follow their example.

If a system of doing away with cash should strike the reader as rather fanciful, his attention is directed to the ways of doing business which are adopted when money fails or banks suspend. It might be imagined that the trial of new financial plans would be difficult in times of money panic and uncertainty, when confidence is gone. But, strangely enough, these are the very times when new methods of finance are tried out and found to work well. Attention has already been called to the Rentenmark in Germany, after the inflation of 1922.

When the panic of 1893 was in full swing in the United States, many banks suspended, bankruptcies and foreclosures multiplied, and ruin seemed general. The solvent banks could not meet all the calls on them for cash, so the clearing houses issued certificates to circulate instead of money - a clear violation of the federal law, but wholly ignored by the authorities. The issuance of such a credit currency in the first place would have made the panics impossible. But the financiers will not issue it until the panic has come and everything is falling to pieces. Then the credit currency steps in and saves the day.

During the panic of 1907 resort was again had to this method. There were weeks when business men saw no currency but these clearing house certificates, and, as the banks refused to pay in cash, the clearing house certificates constituted practically the entire currency except for what little cash there was still in circulation.

If a credit currency can function so well when panic and uncertainty reign, it surely can work in normal times. All it needs to be successful is fair dealing and mutual trust. With the proper supervision, the chances of unfair dealing could be reduced to a point where it would be an inexpensive matter to cover them fully by a safe insurance.

As for the farmers, they must be shown that their salvation lies, not in special privileges or state aid, but in stopping land speculation; in pooling their capital and resources for cooperative action, substituting the credit of the group for that of the individual; in furnishing this credit to themselves at cost (if necessary by circumventing the injurious banking laws), and thus creating a working capital on which there is no interest to be paid; in systematizing distribution so that all products sold will have come from the nearest feasible producing center, thus eliminating much time and expense in unnecessary hauling; in systematizing production by gathering and distributing information as to the need and desirability of certain crops, so as to avoid overproduction of some and underproduction of others and the evils accompanying such a condition; and, finally, in practicing and working for the promulgation of all other Mutualist ideas.

Myron T. Herrick, former American Ambassador to France, points the way when he says in his book, Rural Credits:

The farmers of the United States do not need any special privileges or government aid. If methods were simplified and technicalities eliminated, cooperation, or organized individualism based on private initiative and mutual self-help, would eventually be applied to all their activities.

A Mutualist could not have expressed it better.

Trade associations similarly could be greatly benefited by adopting the principle of furnishing credit to themselves at cost. Mr. Hugo Bilgram of Philadelphia, in The Cause of Business Depressions, has made some practical suggestions as to how this could be done. The reader will also recall certain passages earlier in this chapter. The Mutual Bank idea, with its elimination of business depressions and consequent bankruptcies and failures, should readily appeal to the business man. Trade associations would find only gain in the abrogation of the patent laws. They could get out from under the heels of the financiers and monopoly holders and need no longer feel afraid to give service. Mutualism should appeal to them, too.

Organized Labor's Opportunity

As to the labour organizations, their members would benefit most by the adoption of Mutualism. There are thousands of idle men in unions, with millions of hours of service going to waste daily because of inadequate demand for them.

The giving of credit is usually thought of as the lending of something by a rich man, the creditor, to a poor man, the debtor. Who could possibly imagine the poor man to be the creditor? And yet, every workman is the creditor of his employer, for a limited weekly period at least, until he gets his pay check. Teachers and other salaried people have to work a whole month before receiving payment. During that time they are the creditors of their employers. But these are cases of enforced credit, while this inquiry is concerned with voluntary credit only.

When a workman is out of employment, which happens periodically in the building trades, his enforced idleness is a loss to himself and to the community. If the services of the idle men of the community could be exchanged, all this loss could be turned into gain. Workmen always manage somehow to live through limited periods of enforced idleness; it would not make it any harder for them if they gave service without immediate compensation in cash during such periods.

Let a theoretical case be taken by way of illustration.

Suppose Jones, who is a carpenter, wants to build a house. He has the plans, owns a lot and has fifteen hundred dollars in cash, with which to pay for his material, but no money to pay for labor. Suppose, further, that thirty of his fellow workmen, belonging to the various building trades, were idle and were willing to give him a week each of their idle time, which would be enough to build the house, and that they also were willing to wait for their compensation until they, in turn, should be in need of his help, when he should be idle. The pay to which they would be entitled would be evidenced by thirty promissory notes of (for instance) fifty dollars each, which Jones would redeem in services from time to time.

Here we have an illustration of idle man giving credit by converting their time, which would otherwise be lost, into wealth, for out of the idle time of these thirty men thirty houses could be built, each man giving one week to the construction of each house. The guaranteeing of the promissory notes could be done by the organizations to which the men belonged, or they could be secured by mortgage lien on the house. This theoretical case could be worked out in practice with very little difficulty, if these men understood what mutual credit could do for them. The moral of the story is that there is no one in the community so poor that he cannot give credit, for whoever gives goods or services to another, before receiving their equivalent in similar goods or services in return, is giving credit.

Once the Mutual Bank is operating, money will be available practically without interest to any responsible producer, so that his independence will no longer depend upon the whim of the usurer, but upon his determination and his ability in his line of work. There will be big factories and small shops, and the demand for wage labor will be greater than the supply, with the result that wages will soar until they approach the full value of the work done.

Due to the elimination of interest, rent and privileged profits, under Mutualism the cost of commodities will be much lower and money therefore will have more buying power, in addition to wages being higher.

Is this not a condition worth working for?

Once the Mutual Bank is established, Mutual exchange will permeate all society and demonstrate everywhere the benefits to be derived by adhering to the cost principle, so that society may at last move in the right direction.

For the inauguration and successful operation of the Mutual Bank, a considerable number of representatives of diversified industries would be essential. The organization of such a group must be the first task of those who wish to put that phase of Mutualism into practice. The co-operatives have such an aggregation already at hand, organized and trained in associative effort. Here, then, a beginning can be made, if such associations can be brought to perceive the immense benefits to all society to be derived from this extension of their principles. These associations have the psychological foundation and the mechanism for the purpose. Mutualism offers them this opportunity and assures them of its hearty co-operation.

The methods of approach for the credit group of organizations must, by now, be self-evident.

Money and insurance at cost; occupancy and use, as essentials to land ownership; adherence to the law of equal liberty; and voluntary association, no compulsion for the non-invasive individual - all these are tenets of Mutualism which can never be emphasized too strongly.

All things which make for the maximum of individual liberty compatible with equality of liberty are part of the Mutualist programme, no matter from what quarter they are tendered.

And, per contra, anything which limits the liberty of anyone below the point needed to retain equality of liberty is a danger to the individual, and therefore to human society as a whole, and in consequence is rejected by Mutualism.

Liberty is the first need of man. For Liberty is, as Proudhon so well stated, not the daughter but the mother of order.