Mutualism

Mutualism proposes a society of independent producers and worker associations exchanging goods at their cost in labour through reciprocal contract and free credit, without capitalists, landlords, or a state — a market cleansed of the unearned income that lets some live off the labour of others.

Its most famous line contains its whole theory. When Proudhon wrote in 1840 that 'property is theft,' he meant a specific thing: property that yields rent, interest, or profit without labour is theft, while possession grounded in personal use and occupancy he actively defends. Collapsing that distinction produces the apparent paradox of an anarchist defending property; keeping it dissolves the paradox entirely.

Its proposed mechanism is mutual credit: cooperative 'people's banks' lending at cost, near zero interest, which would let workers acquire their own tools and land and so dissolve the power of capital gradually, without expropriation or a seizure of the state. Proudhon expected the new institutions to grow up inside the old order and quietly outcompete it.

It is the taproot of the wider anarchist tradition — the first self-described anarchism — and Proudhon was the man Marx broke with, a rupture that set the enduring divide between market-facing and communist anarchism. Its influence persists in the cooperative movement, credit unions, and complementary-currency experiments.

Its critics on the anarchist left (Kropotkin among them) argued that keeping markets and money keeps the competition and inequality that regenerate class power; Marxists dismissed its faith that capitalism could be reformed away through better banking as petty-bourgeois wishful thinking.

Because it wants markets without capitalists, it is routinely misfiled as either watered-down socialism or a species of capitalism, when it is a distinct third answer: exchange and possession, yes — rent, interest, and wage-labour, no.