The way to reorganize the billions of dollars spent to confront climate change, to redistribute wealth to the working and middle class, to restore solidarity in our communities and to enable more of us to live our lives with equanimity is a ‘what is old is new’ frame called mutualism.
Mutualism is a breakthrough workaround to the same-old-same-old that gets rehashed in the current “blah blah sphere” of social media, think tanks, podcasts, and foundation and corporate board rooms.
Mutualism is hiding in plain sight. It’s been with us for centuries. Every culture has a way to build solidarity and organize its wealth collectively, such as unions, cooperatives, and immigrant lending circles.
Enslaved people formed benevolent burial societies and banks. Those institutions went on to be the building blocks of the civil rights movement. Rural electric cooperatives serve our myriad rural communities with affordable energy. Garment-worker unions in the 1920s in the United States created the remittance system that immigrants use today to send money to their families in their home countries. Those same unions also created affordable housing models that are still relied on.
Mutualism provides communities with the capacity and know-how to actually run social-purpose institutions and create distributed networks that propagate easily.
Yet mutualism has been pushed out of the picture by both the left and the right, by foundations and philanthropy, and by government and the for-profit sector.
We can change all that by getting clarity about what mutualism is, building upon its re-emergence, and then being part of the new mutualist wave.
Three Principles of the Mutualist Sector
All mutualist organizations share these three essential characteristics:
Principle 1: Mutualists are formed into solidaristic communities. Each has boundaries based on solidarity. In unions, workers come together to bargain against a specific employer. In cooperatives, members produce, group purchase, or market together. The members of
mutual-aid groupsare typically neighbors located in the same geographic area. In faith communities, adherents share a common belief system passed down generationally within families.
Principle 2: Mutualist entities have a shared economic mechanism. This means that the community typically has an economic model like dues, service, fees, paid events, time banks, bartering, or lending circles. This economic mechanism enables the community to pool its own revenue, to control that revenue, and to recycle it back within the community.
Principle 3: Mutualists create institutions with a long-term focus. Through mutualist institutions, members can pass down wisdom from generation to generation. As humans, we live one life, but institutions are vessels to hold insight, ideas, values and lessons beyond one person’s lifetime to reach future generations.
Reclaiming the Mutualist Sector
The economy is a three-lane highway of government, the private sector, and the mutualist sector.
But in the last 40 years, and now as we confront climate change, the mutualist lane has become the highway’s shoulder, and the highway looks as if it only has two lanes: one for the private sector and one for the government.
As climate change becomes our top priority and the push to build the next era’s infrastructure begins, we have a chance of a lifetime to redirect government climate-change expenditures and restore mutualists to their proper third lane.
To do this, we need to start with a guarantee that a certain percentage of government contracts must be performed by the mutualist sector.
This will help create new anchor economic systems upon which local communities can build. Mutualists will generate new mutualist markets, create additional private sector jobs, and catalyze new markets for a more prosperous middle of the economy.
If we don’t develop a policy agenda for restoring the mutualist third lane, we will see the same play we’ve been watching for the last 40 years play out again. Here’s the basic plot:
- Scene 1: We rely on mutualists to immediately respond to natural disasters (for instance). They organize food pantries, get people critical medication, take care of pets, comfort one another and create mutual aid networks. In short order, they pioneer innovative solutions within their communities and have mapped their mutualist
- Scene 2: FEMA and other government agencies come in and, after thanking the local community profusely, they begin to outsource all activity away from local mutualist groups. The majority of these services go to the for-profit sector.
- Scene 3: Venture capital and private equity are not stupid, and see what a great deal this can be — especially given the enormity of effort needed to address climate change. They see huge returns for businesses to address climate change and build new infrastructure. In the last 40 years, investors and industry have written the rules they need to get fabulously wealthy from these investments.
The result of this three-act play repeating over and over again is a massive, scaled-up uniformity with a series of lower-paying jobs done by workers who are often moved across the country by giant placement agencies. These huge contracts fail to ask local people to give of
their talent, and their knowledge of how their communities work. Mutualists build all this local infrastructure with their hearts and souls, only to watch “experts” swoop in and swoop out without their input or consent. And these big contractors don’t share their returns on investments!
Sadly, many of today’s titans of industry have gone one step further to create massive greenwashing strategies, such as impact investing, ESGs, and other social-purpose business designations that let them continue to drive income inequality and ensure that their workforces aren’t unionized.
In popular discourse and culture, they’ve gotten into the mutualists lane, and have declared themselves the change agents, the drivers of impact, the real “good guys.”
But the climate just gets worse, income inequality has only increased, and two generations have been deprived of the lessons of the mutualists whose social movements — civil rights, unions and cooperatives — have transformed our economy, our society and ourselves.
Culture and history matter. The next generation needs to learn anew about mutualist strategies for their own survival, and for their children’s.
We need to take back our lane.
Public policy and think tankers need to evolve their frame. They are stuck in a binary
two-lane-highway mindset that only offers them a choice between free markets and centralized government. New thinkers need to reclaim the lost mutualist tradition in their fresh analysis of public policy.
The Three Point Plan to Rebuild a Robust Mutualist Sector
1. Grow a new mutualist capital market
Think what this could look like after climate change drives the next natural disaster. Communities could have mature mutual-aid networks, with community members rehearsed in getting food, medicine and childcare to those who need it immediately. Yes, it needs coordinated local institutions, along with mayors and local leaders with foresight, vision and humanity. This is all possible because faith groups, unions, cooperatives and mutual aid groups are already on the ground across the country.
Where to begin?
Start seeding the field with RFP and fellowship programs to build small mutualist groups with community support, and local members, who can pass the hat and get involved. Foundations and governments need to make this requirement the first phase of their funding as well. Like startups, most will fail, but it’s the group that starts to grow and demonstrates a likelihood of success that will need follow-on funding.
Build a pipeline for mutualists to begin the growth process. Small mutualist organizations can tap into funding by showing that there is a community need for their work, that they have a strategy to solve the problem, and that they have some nascent leadership. The startup world has a great model in Y Combinator, and in social-entrepreneur fellowships such as Ashoka and Echoing Green. This model helps develop the pipeline, and demonstrates the intermediary strategy needed to build the pipeline over time.
Grow current mutualists. They are already experienced in building communities and revenue, and have the ability to grow if capital markets are organized properly. But they can’t solve the next era’s challenges without active support and protection as a sector. Even though the mutualist sector must grow to meet our rapidly expanding survival needs, they already run hospitals, insurance companies, credit unions, union pension funds, rural electrical coops, and mutual-aid organizations in virtually every city and town. Their economic reach is already in the trillions of dollars right now!
Build these new capital markets into law and the Constitution. Italian cooperatives have a form of capital called “indivisible reserves” that enable real growth over time. Indivisible reserves are an innovative capital tool embedded in the Italian Constitution. Each cooperative returns 3% of revenue back to cooperatives’ capital funds. Each new cooperative is eligible to get startup funding from this capital pool, which sits on their balance sheet. The result is a capital market created for new cooperative formation, and each successful cooperative must ‘pay it forward’ to keep the sector vibrant.
2. Next role of government: Safeguard the mutualist lane
The first order of business for the government at all levels is to make sure it does not do the job of the mutualists. In the three-lane highway of economic activity, the government needs to stay out of the mutualist lane. The government’s role is NOT to provide the service, but to build up the mutualists to do the job. Governments must deploy strategies for creating a mutualist market similar to the Italian model.
Next, we need to move away from the idea that the government should “outsource” its functions to the nonprofit sector as a way to trim government. Instead, government contracts need to go to the mutualist sector so it can do its job of rebuilding democracy by providing for the needs of their communities.
In this model, mutualists get paid market rates for the services they render, and can use any margin to invest back into their organizations on R&D, developing seasoned staff, and starting more complex mutualist enterprises over time.
Governments spend whether they are right or left wing. Natural disasters happen and climate change disasters will only be increasing. Government dollars already go to education, health care, maintaining land, hospitals, technology, veterans affairs, subsidizing key industries — the list goes on and on.
The point is, one key way for governments to support and rebuild the mutualist sector is to make sure that the mutualist sector is included in procurement and other programs so they can bid and win those projects.
A lot of this is happening at the margins, almost willy nilly. The tax code is already deployed to provide the nonprofit sector, ESOPS, unions, rural electric cooperatives with preferred treatment. Instead of this scattershot approach, the IRS, and antitrust and state insurance regulations, need to be readjusted and strengthened to see this as a whole mutualist sector.
3. Mutualists and local communities have to advocate for themselves
Mutualists must devise a Mutualist Index to gauge how effective governments are at the local, regional and national level in increasing the number of cooperatives, community gardens, urban farms, mutual-aid societies, credit unions, mutual insurance companies, collective wellness centers, unionized workplaces, rural electric cooperatives — to name a few — in their area.
The next political leaders will learn how to ‘map mutualism’ because this will be their political base. Since so much of this is happening at the local level, here’s a Mutualist Mayor’s to-do list:
- Start a small local mutualist fellowship program to identify potential change agents in your area.
- Provide building space, empty land or zoning preference for mutualists to gather and to help communities.
- Grow municipal and rural technology assistance to build local infrastructure where users can control their data.
- Pioneer the rollout of the MutualistIc Index to measure the growth of mutualists so we can evaluate what in government builds mutualism and what does not.
Mutualism will transform us by changing our culture
The best way to see this transformation is to imagine A Mutualist Day. Our daily lives will not be just living to work. Instead the idea of ‘living’ will be about experiencing mutualist ecosystems to enable you to be the whole person you want to be.
This turning toward mutualism requires a profound change within ourselves. While condemning hyperindividualism within capitalism may now be fashionable, we need to go deeper. The change is probably so deep that it’s in our brain chemistry. We are all trained to be so individualist that our first impulse is to critique from our own vantage point. In fact, we are a nation of “critique-ers.”
Instead, we must behaviorally switch our brains to becoming “builders.” We need to see that we first have to recognize what our individual needs are — and be free to be honest with ourselves. Then, we need to see who else is working together already and join them. If no one, then YOU need to get started to be what Bill Drayton of ASHOKA calls a change agent in an EACH [Everyone A CHangemaker] world.
What is completely lost in our hyperindividualist economy is the very thing that people need — a way to be less lonely and anxious. People’s isolation and fear diminishes when they are asked to help others as peers, by being a part of organizations together. Mutualists create systems by bringing people together regularly to decide on what they should do and how they should run.
To heal ourselves and to build democracy, “We the Mutualists” need to engage people into shared economic and political institutions where our fates are bound up together. We build our collective institutions to provide the services we need, and have a vested interest in making them successful. In the context of our shared destinies we also understand our differences.
This is how we begin our strong pivot toward mutualism — with small, practical tasks that ask us to help ourselves, our neighbors, our co-workers. These kinds of actions have been carried out from generation to generation before us all, and are what make us feel human, cared for and loved. These are the building blocks of every successful social movement in our country’s history — and the building blocks of our democracy.