Nature, democracy and community aren’t partisan issues. No-one sensible, of any political persuasion, speaks out against them. They’re essential for human well-being. But they’re being destroyed, and disunity wastes energy and prevents us from being able to do anything about it. New administrations come in and reverse the policies of the previous administration, and so we zigzag slightly from left to right, but the trajectory is still towards the precipice. There are currently two main perspectives when it comes to political economy, that are divisive and growing further apart, exacerbated by social media.
The Labour / Democrat position
Big banks and corporations extract wealth from communities and individuals to pay shareholders; then the wealthier shareholders deposit this extracted wealth in tax havens. So the idea is that we elect good people and parties to regulate their bad behaviour, stamp out corruption, tax them properly, and redistribute this money back to communities, where it’s needed. This is ‘capitalism lite’.
The Conservative / Republican position
Reduce regulation and taxes – especially for the big corporations, as they will be the engines of growth. We’ve got to attract the big corporations to our country so that we can compete with other countries. Don’t redistribute wealth back to communities – give people the incentive to make money. People have to pull their socks up and start businesses, or get jobs in Amazon warehouses. This approach actually requires a lot of government, to prop up and administer the interests of the corporate sector. This is ‘capitalism heavy’.
The mutualist position
There’s a third way that’s about supporting small businesses, co-ops and sole traders rather than giant corporations. Instead of allowing the corporate sector to extract wealth from communities, and then trying to tax it back to spend in communities, it’s about preventing the extraction of wealth from communities in the first place. Predistribution rather than redistribution, if you like.
We do this by building decentralised, mutually-owned institutions – including community energy, community-supported agriculture, worker co-ops, housing co-ops, community land trusts, the ‘Preston Model’, free & open source software, self-employment, etc. – business models that keep wealth in communities.
I’d argue that mutualism is a new way of looking at things – owning things together and keeping power and wealth decentralised. It’s neither statist nor corporatist. Private ownership of the means of production works well at the human scale – small businesses and shops, smallholdings, family firms, sole traders – but not at the large scale because it concentrates wealth and power in too few hands and delivers corporatocracy. Collective ownership of the means of production also works well at the human scale, when it’s voluntary rather than imposed from above – but not at the national scale because it concentrates power, and power corrupts.
I’m a mutualist. I want to help build an economy that is decentralised (as much as possible) and mutually-owned (as much as possible). Mutualism is politically neutral, involving non-extractive businesses in a free market. I can see similar approaches developing in other fields, such as health or crime prevention (working together to develop healthy lifestyles in communities rather than having a system that damages health, which is then fixed after the fact, using corporate medicine; or building strong communities that discourage crime, rather than building more prisons and punishing ‘criminals’ after the fact).
But there’s a particular development that makes me believe that the time for the mutualist approach is now.
Mutual credit
I believe that the ideal, decentralised, mutually-owned exchange system for this economy is mutual credit. See here for an introduction to the topic if you don’t know what it is. Mutualist businesses and institutions have been around for a while, but they’ve always used the current, bank-controlled money system. Now we have the possibility of a global mutual credit trading network, and a recession that will provide the impetus for people to use it, due to a lack of conventional money.
Nothing we do to try to move to a sustainable, healthy and democratic society will work as long as we have the current money system, because money has two conflicting functions. It can be used to buy and sell things, and it can be used to store, hoard, accumulate and become wealthy with. As long as that’s the case, money will gravitate towards stored wealth, because money attracts money and gives access to the political system. This continues until so much money is concentrated, and so little is circulating that the economy crashes – as it has many times – and will continue to do so until those two functions are separated. During crashes, communities are devastated and ordinary people suffer. During booms, nature is destroyed. So there’s never a ‘good’ part of the boom and bust business cycle.
Groups of people are now building the infrastructure and the technology to separate the exchange and store of wealth functions of money. A new, decentralised economy can be built around it from the edges, in communities, and it can be federated to the global level. It will work if we use it. Mutual credit is a 19th century idea, whose time has come, now that we have the internet; the ability to federate: a growing awareness of what’s happening to nature; and a Covid-induced economic slump.
I want to make it clear that this isn’t about expediency though – mutual credit genuinely doesn’t have any ideological baggage. This is confusing for many people, who have to pigeonhole ideas before they can address them. Mutual credit is just a tool, albeit a powerful one. During an interview with Tom Greco, he suggested that mutual credit can be a bridge between left and right: “It definitely is a bridge, because we’re not getting into ideological arguments which go nowhere. I’m not concerned about ideology, I’m concerned about practicality – what works, what’s going to make things better. I don’t think we can reform the existing system, so it means we have to reinvent it, rebuild it from the bottom up.”
The working class is key
The Labour party have lost the working-class. That centralised, statist, ‘we know what’s best for you’ approach – a very middle-class approach – is over. Mutualism has to be the new way. And as soon as the working class recognise the benefits that will come their way with this approach, it will start to take off all over the world, just as it’s now taking off in Africa. I want to talk to the large numbers of working-class people, recently laid off, with a redundancy payment, wondering what to do next. Well, unemployment beckons, unless you fancy an Amazon warehouse, or driving for Über. But there’s an alternative. You can have meaningful, interesting work; enough pay for a decent life; safe, friendly, interesting communities; and you can have autonomy, with no-one telling you what to do.
To the left and right
I say to the right – if you believe in the free market and competition, then give small businesses the freedom to compete in a free market. That means we must prevent politicians from bailing out giant corporations if they fail; from automatically giving government contracts to corporations; from giving banks a monopoly on issuing money; from taxing independent coffee shops but not taxing corporate chains properly; from taking jobs with corporations; from listening to their lobbyists; and from taking their money. These things don’t represent free competition, but the opposite – welfare for those who need it least.
[As an aside, I’d also like to ask the right why they present as rational and scientific, but not when it comes to the discipline of ecology.]
And I say to the left – you’re not going to be able to tax back wealth that’s been extracted from communities. The amount of money stashed away in tax havens continues to grow despite all the rhetoric opposing it. Small businesses can’t compete with giant corporations that pay virtually no tax – it would be better for small businesses if taxes were abolished altogether. At least then the playing field would be level (and by the way, I think small businesses would wipe the floor with large corporations if there were a level playing field – but that’s for another article.)
I say to both left and right that you’re wrong in focusing your criticism on just one side of the corporate-state alliance. However, I believe that unity is possible around the issues of decentralisation and scale. The real debate isn’t around left vs right, or state vs corporate, or justice vs freedom – it’s around large-scale, centralised power vs decentralisation and human scale. I don’t want to argue with people who oppose mutualism for whatever reason. I just want to talk with people who would like to help build this kind of economy. It’s already being built, and it works. This is practical, not theoretical.
NB: There’s a book on the way about building a new economy around a mutual credit core.
