Libertarian mutualism, also known as American mutualism and co-op capitalism, is an economic theory that advocates worker democracy, free markets, and limited government. Adherents support private property, rights of the individual, and market choices, which includes the ability to run a traditional enterprises without coercion; whilst also supporting the right of workers to form co-operatives and buy property for common usage. It is a form of mixed economics .
The mindset behind libertarian mutualism holds its roots in the ideologies of free enterprise, socialism, mutualism, and libertarianism. If one follows the most fundamental ideas of each— that of open markets, worker ownership of the means of production, optional ownership, and liberty of the individual— then an economic ideal can be reached where there exists a healthy mixture of worker-owned enterprises and traditional enterprises with little political preference for either and extremely limited government involvement in the economy.
The idea is rooted in the fact traditional mixed economies are caused by a lack of worker co-operatives as an alternative to traditional enterprises and government welfare. Due to the profit motive , capitalist businessmen are strongly encouraged to reduce costs and wages to maximize profits, an act that can adversely affect the working class— whom naturally wish for the highest wages reasonably possible. The conflict of interest this causes leads to unions , income inequality , welfare , and other methods to protect worker rights. This causes a loss on a capitalist's profits, but allows the working class to pocket more money to be used for consumption. In particular, the issue of income inequality can severely slow the growth of an economy by reducing the amount of money being exchanged on the market.
Traditional methods of and ideas on rectifying owner-worker inequality oft involve expanding state power and control over economic matters rather than promoting worker empowerment through capital ownership within a free market environment. Through this method, worker-owned enterprises and traditional enterprises co-exist and build off of each other— worker-owners having higher salaries thus being able to contribute to the economy and pursue an expansion of capital whilst also being competitive with traditional owners, whom have incentive to rely on worker-owner symbiosis and/or automation.
These sorts of enterprises will then behave similarly to traditional capitalist enterprises, with profits shared between worker-owners acting as a sort of 'super-salary' that allows them to engage with the market on a greater level.
The concept behind this theory is that, in a libertarian mutualist economy, workers will be naturally drawn towards worker-ownership and thus away from traditional enterprises. Solutions would be to have workers in a traditional enterprise own a part of the business at which they work or co-work with worker-owned businesses for a dual wage.
One of the chief goals of pursuing a libertarian mutualist economy is to reduce income inequality by allowing workers the opportunity to become owners of a cooperative where the profits are distributed according to a meritocratic metric— besides basic wages, the more productive a worker-owner is, the higher share of profits they receive. This instills the profit motive , which dictates that maximum profits must be obtained. This promotes increased productivity and discourages idleness. However, it is basic nature to pursue the greatest profit for the least cost and energy expenditure. This, in turn, promotes the pursuit of a technotariat.
Traditional capitalists also pursue the creation of a technotariat as a means to stem labour flight to the higher-paying worker-run enterprises. This causes a runaway effect that strongly incentivizes research and development of automated methods of labour, both physical and mental. Thus, technostists prefer this system as a means to usher technostism into existence as an economic reality.