Book: “Mutualism on building economic power for the mutualist ecosystem”


As economists and theorists circle around the idea of the “future of capitalism,” the old-new concept of “mutualism” is emerging from the bottom up, as the next “ism” beyond capitalism that provides the moral compass and game plan we need.

The mutualist sector is a giant trillion-dollar sector of the economy, running through our country's history, but hiding in plain sight. The mutualist sector is made up of unions and their pension funds, cooperatives (including well-funded agricultural and rural electrical cooperatives), the mutual aid groups that sprung up across the country since COVID, and faith communities with their universities, health systems, and real estate holdings.

This mutualist sector gives us the blueprint for a reciprocal economy centered on local communities focused on meeting our most pressing needs: addressing climate change, income inequality, and racial equity. Silicon Valley investors have seen the tea leaves of the future as they move toward “group infrastructure” (i.e. Zoom, Facebook Groups, Google Groups, Substack, etc.) to take advantage of the human honing device for collectivity and togetherness.

The “job” for the next generation is to marry this new technological group infrastructure with our De Tocquvillian ability to self-organize, to build the future economy from the ground up. The pathway for activists, foundation leaders, think tankers, and elected officials is to take their cues from the robust local communities rich with networks of community groups who have the “job” of delivering the next safety net infrastructure of health care, child and eldercare, training, and food delivery. But while they are already knee-deep in building this infrastructure, they are underfunded and almost entirely deprived of the right kind of capital and focused government help. The mutualists need the government to give them a preferred position to the for-profit sector along with the right kind of capital so they can achieve hyper-local, long-tail scale.

This new mutualist market will align capital to social objectives rather than large returns on investment. This is the kind of impact investing that is realistic about the size of the return when you have truly groundbreaking and transformative goals. This alignment will enable huge growth to fundamentally transform the economy and democracy. This is what FDR did in the 1930s with unions by giving them the job of raising wages through unions and then letting them do that job through collective bargaining.

I wrote Mutualism: Building the Next Economy from the Ground Up so you can become a practicing mutualist. Through a mutualist lens, you will see new approaches and activists who are already building the next safety net. I hope you will follow the four-point mutualist game plan, learn about the future of capital, gain insight into the needed future role of government, and most of all, understand what role you need to play to transform yourself, our economy, our country, and our world.—Sara Horowitz

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Mutualism is an old idea: we can look towards one another to solve the most intractable problems we encounter in our lives. The instinct to help our neighbor in times of crisis is so natural to us that when we are given the tools to do so—to help our peers, and to ask for help in return—we know exactly what to do.

We need mutualism now more than ever. When the coronavirus pandemic hit America in March of 2020, we all felt an absence where our federal and local governments should have been. We were left guessing: Could we travel outside of our cities? Should we take our children out of school? Where could we get masks? We were left stranded, abandoned in our homes, afraid of running out of food. Like the tree we didn't know was rotten until the storm knocked it over, for the first time many Americans realized that they had no safety net. They realized they had nowhere to turn but towards one another.

So into the vacuum left by government, communities stepped up instead. From New York City to Colorado to Seattle and everywhere in between, neighbors began helping neighbors, forming mutual aid societies to meet their most urgent needs: access to food, medication, masks. An ad-hoc infrastructure—powered by technologies usually reserved for corporate productivity like Slack and Airtable—enabled donations of time, money, even blood and plasma. Communities helped each other assemble a new, ad-hoc safety net from scratch, and the process of rebuilding began. This was the mutualist instinct at its most basic, and most pure.

This mutualist instinct is as old as humanity, and just as durable. It’s how the earliest Americans met their most essential needs; how the labor movement transformed the American economy by building the first safety net for workers in the 1910s and 1920s; how the New Deal enshrined that safety net in the middle of the American century; and how a remarkable coalitfion of mutualist organizations galvanized the civil rights movement by building power over the course of decades. Over the years mutualist institutions have taken many forms, and have been called many things—cooperatives, unions, religious groups, communes, mutual aid societies, mutuals, kibbutzim, tontines, fraternal societies, women’s organizations, trade associations—but they all spring from a common impulse: if neither government nor market forces are solving a problem that you and the people in your community share, why not solve it yourself?

I’ve been practicing mutualism all my life. My family was steeped in union tradition. My grandfather was the Vice President of the International Ladies Garment Workers Union. My great grandmother and grandmother were garment workers. And my grandmother lived till 96 spending much of her later decades in union housing on the lower east side of Manhattan.

When I started organizing freelancers into the nonprofit that became the Freelancer’s Union in 1995, I built a mutualist strategy on what I learned from my union past to build a next economy safety net because freelancers were excluded from the labor legislation of the 1930’s New Deal and desperately needed security. As we focused on the future with a strong grounding in the past, we were practicing mutualism, pure and simple.

My first goal was to create a steady source of revenue for the Freelancers Union by selling affordable group health insurance to freelancers. The Freelancers Insurance Company and brokerage we built wasn’t just a successful insurance business (though with nearly

$1,000,000,000 in revenue over the ten years we operated, it was that). The revenues from our insurance brokerage let us steer our own ship: we could turn down funding that wasn’t aligned with our goals, and the insurance we offered signaled to freelancers that our union had real value.

Freelancers Union began to build an ecosystem for freelancers of services, education and advocacy with the Union becoming the anchoring institution. My strategic North Star was the Amalgamated Clothing Workers of America and its visionary leader Sidney Hillman. Over time Hillman came to see Amalgamated’s mission as broader than just collective bargaining. Hillman built the Amalgamated Housing Cooperative in the Bronx, the Amalgamated Life Insurance Company, the Sidney Hillman Health Clinic, and other union businesses. To fund it, he started his own bank: the Amalgamated Bank of New York. Hillman used the revenues from these union businesses to continue to build out the union’s social mission to serve his community of workers. Following in Hillman’s footsteps, Freelancers Union started an ecosystem of mutualist businesses of our own: on top of our insurance company and primary care center, we built a technology company to support our backend, a network of local community and education for freelancers all over America called Spark, and an advocacy arm that helped win protections from wage theft for freelancers through the Freelance Isn’t Free Act in New York.

But I am convinced that whatever political power the Freelancers Union built over time was first and foremost thanks to the strong foundation of our economic power. When organizations for social good can fund themselves with their own independent economic mechanism, that community’s political power increases dramatically. From the higher altitude afforded by that power, mutualist ecosystems can form bridges with other mutualist ecosystems to achieve change at an even wider scale.

As I built the Freelancers Union, I started to see the patterns of mutualism in every successful social movement in America. What I’ve come to see is that the most profound social change often begins simply: when groups of people come together to solve their own problems by building the institutions they need, usually out of nothing more than basic practicality.

Mutualism is really just another word for a simple truth: citizens can join together to solve their own problems, even the most intractable ones. Mutualism is a whole sector of the economy that has existed for hundreds of years.

The membership numbers and reach of these sectors of the economy are huge. There are about $19 trillion in union pension funds and $198 billion dollars in the agricultural sector of the cooperative movement alone. Mutualism works—it scales—it's just that we’ve forgotten how to build mutualist organizations. Once we recognize the mutualist sector for what it really is—a massive sector of the economy already changing the lives of people in a real, day to day way—then we can support it through policy tools like tax codes, zoning ordinances, insurance regulation. We can build it into a great mosaic of organizations that will make up the safety net that tomorrow’s workforce so desperately needs: institutions like health clinics, education centers, lending circles, mutual insurance, affordable cooperative housing, and more. We’ll be building on a long and proud history that is not only deeply American, but that is also deeply human.

But before we can build new mutualist organizations into our communities, we need to learn to recognize mutualism when we see it. There are three characteristics that every mutualist organization has in common, from the most modest informal mutual aid societies, to the most sophisticated cooperatives or labor unions.

These three principles are:

  1. Mutualist organizations have a social purpose: to solve a social problem for a community. A mutualist organization exists to serve its members, not to make a profit.
  2. Mutualist organizations must have an independent, sustainable economic mechanism. Revenues must exceed expenses. In other words: a mutualist organization must have a way of making money.
  3. Mutualist organizations have a long-term focus. They are intergenerational institutions with leadership infrastructure and capital strategies that equip them to serve future generations. They are built to outlast their members.

The history of mutualism runs like a bright line through the history of our country. So why is it so hard for us to see today?

Like the fable of the blind men and the elephant, one reason is that when we look at the history of our country, we often only see parts of the whole: From Benjamin Franklin’s first all-volunteer fire brigade, founded in 1736; to the Utopian experiments of the 19th century; to the rich and complex network of mutual aid societies developed by African Americans beginning during slavery and lasting through Jim Crow until the Civil Rights era; the golden age of unions that my grandfather helped usher in; the massive agricultural cooperatives that still power much of our economy today- practicing mutualism is a deeply American instinct. It is possible to look at the history of our country not just as the history of democratic government, or the history of capitalist markets, but rather as a history of all the ways people have come together to solve their own problems since America’s founding. But without the frame of mutualism, it’s hard to recognize how much each of these kinds of organizations have in common.

But we’ve also lost sight of the mutualist sector because since the 1970s, it has been consistently hollowed out by sabotage on the right and neglect on the left. The right eviscerated unions in the service of short-term profits and market efficiency; the left split the working class in two and began to see government as the only means of effecting real social change. Progressives came to see government as the only tool capable of achieving social change at scale, stopped investing in organizations built around mutualist reciprocity, and as a result stopped replenishing the mutualist sector of our economy with new organizations capable of meeting the challenges of today’s moment. We’ve lost our mutualist muscle memory as a society, and the result is that the mutualist sector has not only become hollowed out, it's become almost invisible. And the social safety net—originally built on a base of mutualist organizations—is all but gone.

This book is about how we can rebuild it. If we can come to recognize and invest in the mutualist sector again, we’ll see that it is perfectly positioned to deliver tomorrow’s safety net. After all, when we break down the safety net into component parts, it’s a set of solutions to human needs—universal health care, education and jobs training, affordable quality food, clean drinking water, unemployment insurance, the protection of workers from exploitation—that we can begin to solve ourselves, just as we have done in the past.

We don’t have to wait for government to get started, and we shouldn’t. Mutualist leaders who solve these problems locally will have the first move, and as those leaders build power through their economic independence, they'll be able to petition government for the kind of regulatory changes that will let their organizations thrive. Once government begins to prefer mutualist organizations in the market, government will effectively give the mutualist sector a “job”: the job of delivering safety net businesses to the communities that these mutualist organizations already serve. This will be the economic basis for the new social sector, and in the gaps left by today’s government a world of new, local organizations—organizations dedicated to providing for human needs—will flourish.

To build the next safety net, we’ll need to build bridges between unlikely constituencies again. But change at the kind of massive scale we need is always anchored locally, in communities that organize themselves. To grow these mutualist organizations into mutualist ecosystems and beyond, we need to think about scaled solutions to society’s problems in a new way.

Rather than big box scale—think Amazon, Walmart, or Starbucks, which extract profit for investors rather than returning it to the communities they serve—scale through mutualism looks like a diverse but interdependent biological ecosystem. This biodiverse scale allows a common solution to a social problem to have almost infinite regional, cultural, and local variation and control. Instead, building the next safety net needs to be a local strategy tuned towards the needs of the communities we’re already a part of—a strategy that can address issues as diverse as food quality and availability, climate change, racial equity and inclusion, skills training, housing: in short, the elements of a strong society and a life well lived.

What if we were able to harness this unprecedented social interconnectivity to build an unprecedented economic interconnectivity, a long tail with millions or even billions of dollars running through new collectivized networks? What if we were able to replicate what the early unions, cooperatives and mutualist organizations were able to accomplish in the 1910s and 1920s, but use technology to scale it to a degree that those early American innovators could never have dreamed of?

I think we can do this. In fact, we’re doing it already. Look around you and you’ll begin to see people building the necessary infrastructure: workers embedding themselves in rich networks of peers online; Zoom and other technologies that allow us to come together in groups; communities starting mutual aid circles using technologies like Slack, WhatsApp, Airtable, Substack, or Google Groups; technology startups conceiving of new approaches to insurance or lending; alternative and crypto currencies, massive social change mobilized through the social networks we already belong to. We are already building the social purpose economic engines that point towards our mutualist future, a future in which we take as much responsibility for the welfare of our peers as we do for our own.

The 2010s were an era of critique, of fast capital, snap judgements, and quick wealth. If we are to weather the change that is coming our way, the 2020s must be an era of building, of humility, of practicality, of social change through the relentless application of our species’ amazing capacity to solve problems when we need to. Future generations will measure us by the institutions we leave them. What will those institutions be?

The change we need won’t start with government. It won’t be foundation funded. It won’t happen on Twitter. You won’t vote it into office. You won’t nominate it to be the candidate of a major party. People you once considered to be political allies may not understand it; MSNBC and Fox News will not know how to talk about it; your friends may not get it.

The political realignment is producing strange bedfellows. Freelance software designers in San Francisco may realize they have more in common with factory workers in western Pennsylvania than they do with the men and women who run Apple, Facebook, or Amazon. Uber drivers in Queens may realize they’re not so different from freelance writers in Los Angeles. Farmers in the reddest heartland states may realize they share an economic model with some of the bluest grocery stores in Brooklyn.

The revolution, when it comes, will start where it always has: with people. Specifically, with groups of like-minded people, yoked together by shared geography, a shared community, a shared economic stake, or a shared belief who come together to try to solve an intractable problem that government or markets either can’t or won’t solve for them. Profound change will come when we individually stop waiting, and collectively start building.

Read more stories by Sara Horowitz.Sara Horowitz (@Sara_Horowitz) is the founder of the Freelancers Union and the Freelancers Insurance Company. Formerly chair of the board of the Federal Reserve Bank of New York, Horowitz is a recipient of the MacArthur Fellowship and has been featured on NPR and in The New York TimesThe Wall Street Journal, and The Atlantic, among other publications.