WHEN SARA HOROWITZ got her first job as a labor lawyer at a firm in 1994, she writes, she assumed it “would come fully loaded. Benefits just came with a job after all, and I assumed mine would include health insurance, a retirement plan, and the protection of basic labor laws. I assumed that a safety net would be there if I needed it. I was wrong. America’s safety net was already in free fall then. Today, it’s almost gone entirely.”
Horowitz’s new employer had classified her as an independent contractor, lumping her in with the estimated 57 million Americans “outside a traditional employer-employee relationship, facing irregular income, with little to no unemployment insurance or employer-sponsored health insurance, no employer-sponsored pension and no job security.”
America’s 40-year indulgence of every-man-for-himself, winner-take-all capitalism is failing tens of millions of working Americans who can’t afford a house, or childcare, or health care, or eldercare, or saving for retirement. No wonder that 40 percent of Americans by some estimates don’t even have a rainy day fund to cover $400 in unexpected expenses, like when your car needs an unexpected repair. “Today, many of us are not having a good workday, and we’re not having a good workweek or work year,” Horowitz writes. “We don’t feel secure; we bear too much economic risk on our own. Today’s economy is leaving us exhausted, exposed, and alone.”
One novel solution is summed up by the title of Horowitz’s new book, Mutualism: Building the Next Economy from the Ground Up. She says the concept came to her while she pursued a master’s degree in public policy at Harvard’s Kennedy School of Government, in 1995. That year, she founded an organization that grew into the Freelancers Union, which today provides a safety net for half a million members – independent workers across wide variety of professions. Prior to the Affordable Care Act, the union offered health insurance for workers ineligible for employer-sponsored plans. It also offers legal protections when employers fail to pay freelancers for their work. Key to the organization’s success and growth is pooling resources and sharing risk across a large base of members, plus a self-sustaining business model. Its web of members wove a safety net where there was only economic insecurity before.
Horowitz drew inspiration from the labor movement in the decades prior to and during the New Deal era. She looked at the rise and organizational design of industrial labor unions that not only bargained for fair pay and better working conditions but also created cooperative housing in New York, health clinics, and insurance companies and banks for members, providing loans to workers who did not qualify for conventional mortgages.
In scaling the Freelancers Union, Horowitz recreated for a new generation of workers what her family had done before her. One of her grandfathers helped to found the International Ladies Garment Workers Union. Her father was a labor lawyer, her mother a member of a teachers union. Growing up in a union household in Brooklyn gave Horowitz a strong egalitarian streak, as did the Quaker school she attended. There, she met a legend of the civil rights movement, Bayard Rustin, and learned about his work with union leader A. Philip Randolph, to organize the 1963 March on Washington for Jobs and Freedom, where Martin Luther King Jr. delivered his “I Have a Dream” speech at the Lincoln Memorial.
The first half of Mutualism describes America’s long tradition of mutual aid societies, from Benjamin Franklin founding the first mutual fire insurance company in 1752, to the dairy cooperative Cabot 
Creamery, which distributes cheese and butter to market on behalf of Yankee farmers. She recounts the custom of mutual assistance that supported African Americans through and out from slavery — the Underground Railroad, the AME church, and the organizing genius of leaders like Randolph and Rustin – as well as lending circles and faith communities that helped immigrants become established on America’s shores. Looking overseas, she notes strong cultural support for mutual reliance in the European regions of Emilia-Romagna, in northern Italy, and the Basque country of Spain.
The latter part of the book outlines how to resurrect America’s tradition of mutual reliance and reweave its safety net, which Horowitz argues collapsed from “neglect on the left and sabotage on the right.” The attack from the right came from Milton Friedman and the Chicago School of laissez-faire economics who convinced executives that the only purpose of a business is profits and the only constituency that matters to a business is shareholders. The left neglected its working-class constituency beginning in the 1960s, after the publication of Michael Harrington’s book, The Other America, revealed pervasive poverty in the US.
The book catalyzed LBJ’s Great Society and its focus on helping the impoverished, narrowing the wider mission of FDR’s New Deal. At the same time, Baby Boomers came of age upon a cult of individualism, growing into a generation of libertarians who typically claim to be “fiscally conservative and socially liberal” — which is another way of saying they want an America where you’re free to be yourself, but free from any obligation to bring about economic freedom for others. Through it all, America lost the sense that we’re all in this together, which sustained us through the Great Depression and World War II.
Robert Putnam, the Harvard scholar and author of Bowling Alone, has written a new book, The Upswing, in which he recounts “how America came together a century ago and how we can do it again.” If Putnam is correct that American history swings like a pendulum between eras of individualism on the one hand and eras marked by mutual concern and collaboration on the other, then Horowitz’s book may point us toward our future.
What makes “mutualism” an “ism” or an ideology is its belief in using economic mechanisms to fill in shortcomings of unrestrained capitalism. It is not another term for private charity, or centralized state-sponsored socialism, or publicly funded programs that merely offer handouts. Mutualism, Horowitz argues, is a way of offering a hand up that rewards self-determination, solidarity, and reciprocal obligation. Making it flourish also requires a sympathetic government and capital with the patience to stand back and watch it grow.
Mutualism offers an alternative to social welfare programs and international NGO efforts that rely on paternalistic service provider-client relationships that breed learned helplessness. Writing in the New York Times this month, Bret Stephens noted how billions in US aid to Haiti may have staved off mass starvation, but the model “fosters dependence, invites embezzlement, enervates the institutions of state and civil society, discourages local initiatives, misdirects capital to donor-favored schemes, enriches the well-connected and enrages everyone else. It’s also degrading. Treating people as helpless has a bad way of making them so.”
Horowitz shares that skepticism of professionals who tell aid recipients in condescending ways how to solve their problems, which makes her a rarity today: An original thinker on the left with appeal on the right. After receiving a MacArthur Fellowship in 1999, she was given a Social Entrepreneurship Award in 2003 from the right-leaning Manhattan Institute, which promotes personal responsibility and market driven solutions to public problems. Another winner that year was Chuck Colson, the Nixon aide who went to prison for his role in Watergate and came out the evangelical Christian founder of Prison Fellowship Ministries. The back cover of Horowitz’s book includes a promotional blurb from Oren Cass, a policy advisor in Mitt Romney’s two presidential campaigns and the author of The Once and Future Worker: A Vision for the Renewal of Work in America.
Mutualism will interest social entrepreneurs, community activists, faith leaders, union organizers, policy wonks and managers of large pools of money at foundations, pension funds, insurance companies and endowments with a long-term perspective. It should also inspire any capitalist with a conscience, people like former Massachusetts governor Deval Patrick, who joined Bain Capital six years ago to advise on social impact investing.
A brief book, Mutualism left me eager to learn more from a wider range of success stories, especially in environments that lack Boston’s wealth of networks. The microcredit lending model pioneered among poor women in Bangladesh by Nobel Prize winner Muhammad Yunus gets only a brief mention in the book. (Horowitz says unscrupulous lenders have hijacked the model for profits.) Yet, for readers unfamiliar with Gameen Bank (“village bank”), its most important lesson is how and why its mutual microcredit model works. Poor women join peer-to-peer lending circles, where they pool their savings in small, regular increments, then jointly oversee microloans to fellow members, and stand accountable to all for repayment on time. The intimacy and interpersonal trust built among participants explains why the model’s loan default rate of 1 percent is so low.
Mutualism also omits the largest mutual aid fellowship in the world, Alcoholics Anonymous, which declines funding from outside sources and is self-supporting through member contributions. Working through distributed local groups, without hierarchy, AA and other 12-step recovery programs have helped millions of people achieve what generations of religious temperance movements and government fiat (Prohibition) could not: liberation from addiction and social isolation.
Formed in 1935 by two white-collar professionals who managed to help each other stay sober, AA’s early success spread like a virus. When its representatives went to philanthropist John D. Rockefeller Jr. to seek funding to scale the program in a formal way nationwide, Rockefeller turned them down. He told them that professionalizing AA with medical staff and bureaucracy would ruin the peer-to-peer relationships that made it work. His unexpected reply was filled with hope, and prescience.
Mutualism is a hopeful book. As Horowitz writes, “This generation, I hope, will be able to see that workers who have turned to one another—like the garment workers of the 1910s, the autoworkers of the 1930s, the civil rights organizers of the 1960s, the rural cooperative grocers of the 2010s, and the urban mutual aid organizers of [today]—are all doing the same thing: helping themselves, and one another, by taking responsibility for their own destinies. When we turn to one another, we find that we already have the collective wisdom and grit to build our shared security—a new social contract—once again.”
Carter Wilkie was a speechwriter for President Bill Clinton, an advisor to Boston Mayor Thomas M. Menino, and is co-author of Changing Places: Rebuilding Community in the Age of Sprawl. His first piece for CommonWealth appeared in 1999.