On the Mutualists

by Gustave de Molinari (1871)


Molinari

Mutualism in the 19th century had two components,
      (1) a statist "crank" banking scheme promising free capital to workers, and
      (2) a private property system based on possession - occupation and use.
Molinari is ridiculing the former thrust of mutualism, as advocated by Pierre Proudhon and others.

We arrive at the third group, that of the mutualists, composed principally of the old disciples and admirers of Proudhon: Langlois, Longuet, Tolain, etc. They are the Girondins of the socialism of 1869. They reject, M. Langlois especially, a violent transformation of society. They are not of the opinion of M. Ducasse, shouting to the meeting of the Chapelle: “It is not with gold, it is with iron that questions will be resolved.” They want to untie the Gordian knot, and not cut it. However, if they are averse to using iron, they also distrust gold. They prefer paper. The pivot of their system is a bank, and what bank? That of [John] Law was nothing in comparison.

The bank of mutual credit will begin by suppressing specie [gold and silver], that tyrant of circulation. Specie currency suppressed, there will be no more interest, for it would be visibly abusive to make someone pay interest for simple bits of smudged paper that a Marinoni press can furnish at a rate of ten thousand per hour, in all denominations. But if paper takes the place of specie currency, and if paper is loaned gratis, if one can buy tools, houses, and lands with this marvelous medium of exchange which would cost nothing, it is clear that we will gladly dispense with paying rent in order to obtain the simple possession of a tool, a house or a plot of land.

"When one has nothing to pay his rent," said Mr. Vautour, "it is necessary to have a home of one's own." Well, one would have a home of his own, and care nothing for Mr. Vautour; and if one still consents to pay his rent to that odious proprietor, it would be on the condition of acquiring a part of what he is pleased to call his property. To pay his rent, that would be no longer to “rent,” but to “buy.” You pay, I suppose, a thousand francs of rent. Well, at the end of eight years, you will only have to produce your eighty receipts in order to become proprietor of your lodging. But what will become of Mr. Vautour, if he has the misfortune of having punctual and faithful tenants? It is clear that at the end of eight years Mr. Vautour will no longer be proprietor. His only recourse is to become a tenant himself, which will allow him, at the end of another eight years, to become a proprietor again. That is mutualism!

We don’t know if this system will be very likely to help the building trades, but we beg our readers to believe that we exaggerate nothing, and that mutualism boasts of suppressing the rent of houses and the rent of lands as easily as the interest on money. Here is, however, a singularity which, if not inexplicable, is at least unexplained, in that ingenious system: it is that the Bank which would loan gratis to everyone could not continue without a monopoly. It would be absolutely impossible.

Acting surprised by my opposition to monopoly one evening at the gathering at the Redoute, Mr. Langlois was very worked up, and he claimed that economists would return the human species to the savage state. The State, cries the seething mutualist, has a monopoly on the police and on the carrying of letters, of the sale of gunpowder and tobacco; why would it not exercise a monopoly on banking? Okay! But the State does not protect the citizens for free, it does not transport the mail for free, let alone furnish powder and tobacco for free.

Suppose it pleased the State, for example, to give to the French people “gratuity of tobacco,” as it is always a question of giving them gratuitous education and many other gratuities, would it still be necessary to maintain the monopoly of state control? Would we see the opening of many “un-free tobacconists” in competition with the “free tobacconists”? Finally, would that competition be so pernicious as to prevent the beneficent system of free tobacco from establishing itself in France?

How then could a free bank be established except on the condition of being rigorously protected against the banks charging interest, and invested with a monopoly on circulation? That is what Mr. Langlois has neglected to explain to us. In any event, the gratuity of capital in all its forms being established, thanks to the intervention of the Bank of Mutual Credit (in 1848, it was known by the name of Bank of Exchange), labor alone would obtain a remuneration, and the laborer, no longer having any tribute to pay to that tyrant, now dethroned, enjoys his full product. How are products exchanged? By virtue of the principles of “equal exchange” and the “equivalence of functions.” On this point, doesn’t mutualism oddly resemble communism? That is why, despite their disagreements — more apparent than real — mutualists and communists do not fail to join together against their common enemies, the economists.


— Working translation by Shawn P. Wilbur (2012)

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