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 Times, the Wall Street Journal, and The Atlantic, among other publications.
Below, Sara shares 5 key insights from her new book, Mutualism: Building the Next Economy from the Ground Up (available now from Amazon). Download the Next Big Idea App to enjoy more audio “Book Bites,” plus Ideas of the Day, ad-free podcast episodes, and more.
1. Build from the ground up.
Our economy is not just an abstract system. When you start thinking about your local community and the people you know, you think differently about allocating resources for schools, healthcare, and well-being on an equitable basis. You imagine doing these things better by working together; this mindset is how mutualism empowers people to come together to solve their problems alongside the government, businesses, and nonprofits.
Mutualists are in every town and neighborhood in America. Just look around: credit unions, food cooperatives, religious congregations, yoga studios, unionized workplaces, schools, government offices, supermarkets, a mutual aid group that sprang up to help neighbors during COVID. You have probably even heard of cooperatives like REI, King Arthur Flour, Land O’Lakes Butter, Cabot Cheese, or ACE Hardware.
What does all of this bottom-up, local, civic infrastructure have in common? They share three principles of mutualism:
- Mutualist organizations have a purpose to solve a social problem for a community. A mutualist organization exists to serve its members, not to make a profit.
- Mutualist organizations must have an independent, sustainable economic mechanism. In other words, they must make enough money to cover expenses, for which a transaction of time (like time dollars) or using a distributed ledger, can work.
- Mutualist organizations have a long-term focus. They are intergenerational institutions that are built to outlast their members.
Mutualism is not a new concept—it exists in biology, and it was first applied to political economy by Pierre-Joseph Proudhon in the 19th century. But for our era, mutualism needs to be repurposed to give us the tools to restore our economy and democracy. To do this, we can find inspiration in nature.
2. Give mutualists the ability to build on a bio-diverse scale.
Mutualists are poised to build on a new kind of scale—a bio-diverse scale—because they aggregate billions of dollars of community assets. Mutualists focus on the social good in their communities, and create a virtuous cycle that generates revenue and recycles that back into the local community. The problem is that in our current form of capitalism, the mutualists are blocked from developing on a bio-diverse scale. A combination of laws, regulations, and norms dictate that mutualist assets be transferred to the control of private equity and venture capital firms for investment. The social intention is lost. Let’s be clear—the communities that generate these assets are never asked if this is okay with them. Meanwhile, the financial industry reaps enormous wealth. Instead of fueling profits for the very tippy-top of the 1%, this wealth should be reinvested closer to the source—the mutualist communities that generated the assets in the first place.
“Mutualism empowers people to come together to solve their problems alongside the government, businesses, and nonprofits.”
Another reason to cultivate the bio-diverse scale is because mutualists are well-positioned to build and deliver tomorrow’s safety net. Mutualists, like religious institutions, have wide networks of social services. Mutual aid societies help communities rebound after disasters and pandemics. Cooperatives provide affordable food to communities living in food deserts. Unions negotiate for high-quality insurance and benefits. In 1935, Franklin Delano Roosevelt did something amazing: He gave unions the job of negotiating workers’ pay, and gave them a dedicated lane on the three-lane highway, separate from the private sector and government. Unions then organized workers by the millions, helped spur the rise of wages, and directly attacked the problem of income inequality.
The mutualist sector could scale like never before, producing a bottom-up stimulus rooted in local communities, but only if we do three things:
- Give mutualists the same tax status as nonprofits, to create new capital pools designed with sustainable returns.
- Require private equity and venture capital funds to invest a percentage of their holdings in the mutualist sector. That’s only fair since the mutualists aggregated the money in the first place.
- Encourage foundations and endowments to invest a percentage of their grants and investments into the mutualist sector as well. Against a backdrop of rising inequality and political instability, our leaders need to focus on getting mutualists to scale in order to save democracy.
3. Rebuild, protect, and nourish at the roots.
To understand how mutualism can strengthen our democracy, it turns out shrimp and the coastal habitats (specifically mangrove forests) provide an excellent analogy. Mangrove forests are wetland ecosystems that support many types of trees, shrubs, and other plants. Shrimp and other sea creatures like to hang out and snack around the roots of this plant life. The roots of these forests create an ecosystem that not only supports literal biodiversity, but also acts as an oasis and barrier from turbulent tides and strong winds.
The overlapping, tightly-woven root system of the mangrove forest protects the land it abuts by absorbing much of the force of tsunamis. Unfortunately, mangrove forests are being destroyed. The short-term interests of property developers and industrial shrimping boats all too often lead to the clearing of coastlines, or at least to significant damage of the root systems. Local communities that have long fished the rich, bio-diverse mangrove forests are being displaced along with the mangroves and shrimp.
What is lost is difficult to measure. Not just a place or a livelihood, but a collective knowledge and a sustainable ecosystem that served as a buffer for other systems. Local life becomes more precarious, and tsunamis become more devastating. Once a tsunami hits, the destruction affects everyone, from luxury hotel developers to fishing communities. There is a net loss of social and ecological resilience.
“Against a backdrop of rising inequality and political instability, our leaders need to focus on getting mutualists to scale in order to save democracy.”
Here’s the parallel to our democracy: The mangroves with the shrimp are our civic institutions that keep our democratic infrastructure stable. Because we have not replenished and protected these institutions, they have weakened or been destroyed. Democracy is too vulnerable and fragile right now, making us vulnerable to political tsunamis in the form of demagogues and conspiracy theorists.
Building up mutualism is how we can restore our democratic ecosystem. Let’s unlock the power of people self-organizing in their communities across the cultural spectrum. That means those in red states will want to see their deeply rooted faith organizations and agricultural cooperatives grow, because they trust them and provide for what local communities need. Those in blue states will want to see growth in their trusted unions and food cooperatives, using these institutions to repair democracy from our collective roots. We don’t need to wait. We don’t need to worry about political gridlock or financial backing. We can immediately start rebuilding the mangrove forests of democracy. American history is full of inspiring examples of mutualists connecting big systems with local roots.
4. Look for mutualist bridge-builders.
The work of civil rights and labor leaders A. Philip Randolph and Bayard Rustin offer important examples of building from local root systems up to the highest levels of decision-making and power. In 1952, Randolph organized the Pullman porters (attendants on long-range railroad sleeping cars employed by the Pullman Company) into a union called the Brotherhood of Sleeping Car Porters. To increase their leverage against the Pullman Company, the union fought hard to join the American Federation of Labor and become the catalytic force behind integrating it. Randolph went on to integrate the United States military in 1941.
Randolph and Rustin worked for decades to align the movements they were rooted in. These movements stretch back hundreds of years to the cooperative movements of Black workers dating to the 18th century. This Black mutualist activity included Black schools, insurance companies, credit associations and banks, and other cooperative organizations. In political economist Jessica Gordon Nembhard’s wonderful book, Collective Courage, she uncovered a remarkably detailed history of early Black mutualist activity in America.
As Randolph and Rustin architected the 1963 March on Washington for Jobs and Freedom, they understood that the deep reservoir built up by these past mutualists would be essential to the march’s success. Rustin specifically invited the support and sponsorship of mutualist organizations, aware that they understood how to move the levers of power and engage in the political process.
“We don’t need to wait. We don’t need to worry about political gridlock or financial backing. We can immediately start rebuilding the mangrove forests of democracy.”
Tomorrow’s changes will emerge from the ground up when today’s visionaries build the lasting structures around their ideas, and when they look for ways to connect to other social movements just like Randolph and Rustin did. Their vision will grow out of the problems they solve for their communities, but the institutions they create will bridge across groups and even outlast them. To create the mutualist future, we need the next generation of builders, because builders are the ones who change the world.
5. Your Mutualist Future: A Four-Point Action Plan.
- Map the mutualists. Get familiar with your churches, mosques, temples, yoga studios, synagogues, credit unions, cooperatives, unions, mutual aid groups, farmer’s markets. Find out what they are already doing. If you see a need that’s not being addressed in existing circles, you might want to start your own group—maybe a Facebook group, but make sure you have a plan to move your group away from Facebook to a community platform that gives you control of your data, and also gives you tools and infrastructure to build group power.
- Be reciprocal. Find out how your concerns relate to others. First, just listen. What do they need? What do they have, and what can you offer? Time? Knowledge? Introductions to your neighbors?
- Make the mutualists your political base. They are a network that is already tapping into people’s needs, values, and skills.
- Make their agenda your agenda. Imagine the possibilities of connecting your local efforts to those of other mutualists and the larger political agenda. Together, we can realign the social safety net in America so that it’s rooted in the organizations that people trust in local communities.
You can see mutualism at work in communities around the world. For example, in Bologna, in Northern Italy, a significant percentage of their whole economy is cooperative. You go into a local restaurant where workers are eating and you’re like, “If this were New York, this would be a luxury meal.” But there’s not a punishing work ethic over there—taking time for yourself and for each other is part of daily life, and that’s because of the mutualist economy and culture.
There will be economic indicators to show that mutualism is working, but it will really come down to quality of life. What’s your day like? What’s your hope for your kids? Do we collectively take care of one another? Are you connected to nature, connected to your community? Do you have time to think, and read, and enjoy life? That’s really the mutualist future.
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