What is Mutualism?

Mutualism is a term that has been used variously over the past 200 years to refer to a loosely related group of economic theories, political ideologies, and, more recently, a specific kind of synergistic relationship between two or more species. 

For our purposes, mutualism isn’t a specific theory or ideology but rather a strategic awareness derived from two essential observations:

  • While individuals deploying selfish strategies may successfully compete for a larger share of resources within a given group, in the competition for group survival, the advantage belongs to those composed of more significant concentrations of individuals deploying altruistic strategies;

  • Groups composed of more significant concentrations of individuals deploying altruistic strategies are capable of developing societies that are at once more complex, more productive, more adaptable, and more sustainable.

The popular conception of evolutionary natural selection as “the survival of the fittest” evokes processes of individual reproductive selection, in which the fittest individuals dominate the competition for mates, leading to the dominance of their genes in the subsequent generation. However, it is less common to understand that how natural selection plays out across entire groups can be much more decisive for genetic survival than how it plays out between individuals competing for mates or other resources. 

Natural selection at the group level is often where essential evolutionary benefits are advanced. At the group level, traits like altruism, which may seem disadvantageous in the competition between individuals, become decisive advantages for an overall group. Groups with individuals who behave more altruistically will cooperate, adapt, and survive better than those made up of individuals who act more selfishly and thus are less inclined to subordinate their interests to the group’s interests.

Mutualist organizations (mutuals) are designed based on the understanding that enterprises are groups subject to the dynamics of natural selection and will benefit from features designed to attract the participation of more altruistic individuals while deterring the participation of more selfish individuals. 

Accordingly, mutuals feature four distinctive characteristics, all of which function to attract altruistic participation and deter selfish participation:

  • They exist to serve a social purpose rather than merely to generate profits;

  • Their design limits the potential for consolidation of wealth by a small number of private interests;

  • They prioritize long-term sustainability and adaptability over short-term growth and profitability;

  • They function independently of the artificially catalyzing assistance of major donors, investors seeking outsized returns, or changes in public policy.

Mutualism as a Guiding Value

As a guiding value, mutualism functions as a remedy to the distracting norms of:

  •    wealth consolidation;

  •    the prioritization of short-term growth or profitability over long-term sustainability, and;

  •    Artificial growth acceleration through reliance on major donors, investors seeking outsized returns, or public policy changes brought about by strategic lobbying or electoral advocacy. 


The Norm of Wealth Consolidation

Wealth consolidation is such a standard function of business that, for many, it may be hard to imagine companies that don’t adhere to this norm. Still, there is nothing inherent to the operation of a thriving business that requires it to consolidate wealth. And there are considerable strategic advantages to be gained by companies capable of resisting the norm of defining success as delivering profits to a small group of owners or investors.  

Mutuals’ ownership structure prevents or restricts the potential for wealth consolidation, and by such structuring, they open up new strategies for competition. For example, companies that are structured so that it is only possible to acquire ownership shares by earning them as employees may have an easier time recruiting and retaining top talent, even while providing less monetary compensation. Employees may feel more rewarded with less salary if they know that the company’s payroll savings will go towards investments in the sustainable growth of the business (a business which, as employees, they own.) However, they may insist on the highest compensation they can negotiate if they think the company will use the money it saves through lower employee compensation to pay dividends or stock buybacks for a handful of concentrated owners. This kind of employee satisfaction and loyalty increases engagement, creativity, and efficiency and activates countless competitive advantages for mutually structured businesses.

The Norm of Prioritizing Short Term Profit/Growth Over Long Term Sustainability 

Similarly, mutual structuring allows the prioritization of long-term sustainability over short-term growth and profit-taking. Because mutuals lack a consolidated core of owners, they naturally avoid strategic tensions caused by consolidated ownership. For example, decisions that would deliver owners and investors windfall profits likely conflict with strategies designed to ensure the long-term health of the enterprise by reinvesting excess revenues in sustainability measures. It’s considerably less likely that one person will defer $1,000,000 of immediate individual enrichment in the interest of long-term group stability than that 10,000 employee-owners will each defer $100 of immediate personal enrichment in the interest of long-term group stability. Mutuals avoid this conflict by preventing the consolidation of ownership that makes it possible.

The Norm of Artificial Acceleration

Finally, because mutuals have structures that allow them to prioritize long-term sustainability over short-term growth or profit-taking, they are less sensitive to the urgency presumed by the norm of artificial acceleration. This freedom from haste allows them to pursue organic market-based strategies for sustainable growth while being less vulnerable to the special interests of major donors, to the pressures of investors seeking quick and outsized returns, and to the shifting sands of public policy.

Fairpoint “Mutualism”

Again, the role of our guiding values is to direct our attention away from common areas of strategic preoccupation that can so easily distract innovators and derail their innovations. We don’t mean the words we use to describe mutualism to establish a strict standard or suggest inflexible rules for how our projects should operate. Their function is merely to direct our attention as an organization toward creative and strategic possibilities that we wouldn’t be able to see if we weren’t deliberately turning our attention away from the default norms of “business as usual.” 

Mutualism is a concept that shifts our attention away from selfish strategies and towards strategies based on cooperation. It reminds us of the natural advantages enjoyed by groups made up of higher concentrations of altruistic actors. It reminds us to turn away from the urgency that demands compromises in exchange for artificial shortcuts and gives us the courage and patience to pursue the strength, diversity, adaptability, and sustainability of organic market-based growth.