Where this comes from

Mutualism: equals helping equals

Mutualism is the idea that ordinary people can meet their needs by pooling what they have, as equals, without a boss or a charity in charge. The French thinker Pierre-Joseph Proudhon gave it its name in the 1840s. He imagined workers trading the fruits of their labour fairly through a "People's Bank" that would lend at almost no interest. But the practice is much older than the word.

1. Always Burial clubs, harvest sharing, rotating savings circles. Across Africa, Asia and Latin America, hundreds of millions of people still save and borrow this way.
2. 1827 Josiah Warren's Time Store in Cincinnati prices goods by the hours of work that went into them.
3. 1832 Robert Owen's Labour Exchange in London lets craftspeople swap goods using "labour notes". It closes within two years, swamped by paperwork and by goods nobody wanted.
4. 1844 The Rochdale Pioneers, 28 weavers in northern England, open a shop owned by its customers. Their rules become the model for co-operatives worldwide.
5. 1849 Proudhon's People's Bank signs up thousands of members, then closes when he is jailed for criticising the president.
6. 1864 Friedrich Raiffeisen founds a rural credit co-operative in Germany. Today's credit unions, with hundreds of millions of members, descend from that idea.
7. 1932 The Austrian town of Wörgl issues its own money in the Depression. Roads get built and unemployment falls, until the central bank shuts it down a year later.
8. 1934 Swiss businesses start the WIR network: they give each other credit instead of borrowing from banks. It's still running nearly a century later.
9. 1983 Michael Linton starts the first LETS, a local exchange trading system, in Canada's Comox Valley. Thousands follow worldwide in the 1990s.
10. 2001 During Argentina's economic collapse, millions of people trade through barter clubs. The clubs later fail, flooded by forged and over-printed paper credits.
11. 2009 Sardex starts in Sardinia: thousands of local businesses trade on mutual credit after the financial crisis.

The pattern repeats. Mutual projects work brilliantly at first, and then many hit the same walls.

The walls mutualism kept hitting

• Bookkeeping

  Every trade had to be written down, added up and posted to members by hand. LETS groups typically ran on one or two volunteers who eventually burnt out.

• Forgery and over-printing

  Paper credits can be copied, and whoever runs the press can print too many. That is what sank Argentina's barter clubs.

• Trust in the bookkeeper

  Members had to trust that whoever kept the books kept them honestly, with no way to check.

• Distance

  A group that worked in one town couldn't easily trade with the next one, so most stayed too small to matter.

• Being shut down

  From Proudhon's bank to Wörgl, projects that depended on one person or one licence were easy to stop.

• Free riders

  People who took credit and never gave back drained small groups, and nobody wanted the job of chasing them.

Market socialism: markets without masters

In the 1930s, economists including Oskar Lange argued that you could keep prices and markets, which do a good job of matching supply to demand, while changing who owns things. Instead of private owners taking the profit, workers and communities would own the businesses and share what they earn.

The idea has been tried in different shapes. Yugoslavia ran firms under "workers' self-management" from the 1950s to the 1980s, inside a one-party state. In Spain's Basque Country, the Mondragon co-operatives, founded in 1956, grew into one of the country's largest business groups, owned by its workers. Thinkers such as David Schweickart (economic democracy) and John Roemer kept refining the design.

Technomutualism belongs in this family. It keeps the market, the useful part, and changes three things: who owns the marketplace, who creates the credit, and who can see and change the rules. What makes it different from earlier market socialism is that it doesn't wait for a government. Communities can start it themselves, today, with tools they own.

What technology changes

Each wall that stopped mutualism now has a technical answer that the members themselves can own:

1. Bookkeeping → software

   A phone app records every trade the moment it happens and shows each member their own balance. No volunteer posts statements at midnight.

2. Forgery → signatures

   Each payment is signed with a secret key only the payer holds. A forged payment simply fails the check: there is no paper to copy.

3. Over-printing → zero-sum credit

   In mutual credit, every credit has a matching debit, so all balances always add up to zero. Nobody can print extra, because there is no printing press.

4. Trusting the bookkeeper → open code

   The rules are open-source software. Anyone can read exactly how balances, limits and fees are calculated, and every change to the rules is public.

5. Distance → federation

   Communities run their own servers and connect to each other over the internet, so a town in Australia can trade with one in Kenya without a central company in between.

6. Being shut down → copies everywhere

   Open-source software can't be confiscated. If one server is closed, a community can restore its records elsewhere and carry on.

7. Free riders → earned limits

   Credit limits grow with a member's trading record, so newcomers can't run up big debts and disappear.

None of these is magic, and none replaces good people. They take away the boring, error-prone and corruptible jobs that used to fall on a few volunteers, so the people can spend their energy on each other.