8. Organization and Resistance 8.1. Mutualism

8. Organization and Resistance

Marcelvan der Linden 8.1. Mutualism

“Mutualism” refers to all voluntary arrangements, in which people make contributions to acollective fund, which is given, in whole or in part,toone or moreof the contributors accordingtospecific rules of allocation. The concept goes back to the nineteenth century and was probablycoined by the French social anarchist Pierre-Joseph Proudhon.The idea behind mutualism is simple: there are thingsinev- erydaylife people desire but cannot acquirefor themselvesasindividuals.Such thingscan consist of labour,ofgoods, or of money.There are two possiblereasons for the existence of such items.Onthe one hand, there are tasks that individuals cannot possiblyexecute on their own, within areasonable period of time. Forthese, they need other people to help them. Andonthe other hand,there are tasks which an individual could well execute him- or herself, but which would have significant neg- ative effects on the person involved, for example because workingtoobtain agood on one’sown is frighteningorstultifying. In both cases, individuals benefit by asking others for help. In compensation for this help, they can perform asimilar (reciprocal) task in return, or payfor it.Mutualist activities not onlyoccur among all kinds of workers,but also among other social classes. Mutualism is in this sense not class- specific, although it often is an important component of proletarian survival strat- egies. In agreat variety of circumstances workers have utilizedmutualist arrangements to make their livesmore liveable and less risky.Mutualism took agreat variety of forms in the past,and still does today. Yetpatterns and relations can be discerned. In general there are three kinds of mutualist arrangements, based on (i) scheduled demand and rotating allocation; (ii) scheduled demand and non-rotatingallocation; and (iii) contingent demand and non-rotatingallocation. Scheduled demand means that the people involved know in advancethatthey will have to perform acertain amount of labour,ortopay acertain sum of money or goods at some point in the future. There are two kinds of scheduled demand: one-off and recurring. Single expenses mayfor instance be refunded for ceremonies or parties, on the occasionofrites of passage, such as weddings or funerals. On such occasions,the individuals or households involved are in acute need of alarge amount of goods or money which they cannot supplybythemselvesinashortperiod of time. Among these single expenses, Iincludethe purchase of durables and invest- ments in capital goods. The second variety of scheduled demand is amatter of reg- ularly recurring expenses,such as the periodic strain on household resources at the end of the month. In these cases, mutualist associations can also provide asolution.

DOI 10.1515/9783110424584-025 492 Marcel vander Linden

Non-scheduled demand is unpredictable and unplanned, and usually comes as an unpleasant surprise (illness, unemployment,etc.). Rotating allocation means that all participants in amutualist arrangement will come in for their turn;there is then necessarilyalways amaximum number of participants (roughlybetween 10 and 200), because everyone wants to have his or her turn within areasonable period of time. Non-rotating arrangementsimplythat only some of the participants will receive money,labour or goods from the common fund. With non-rotation, there is no technical limit to the membership in these cases, and thereforesuch associations can contain large groups of people.

Scheduled demand and rotating allocation

In some cases mutualism revolvesaround the provision of labour;the participants in an arrangement can either rotatelabour,oruse labour for the production of one good, by which all can benefit.Inthe first case (rotation), one person first “con- sumes” the labour of the rest of the group, and after that another,etc. Such forms of labour rotation are known around the world.¹ Nicolaasvan Meeteren describes such an arrangement on Curaçao, which was popularthere until the first decades of the twentieth century: “Wheneverone needed to weed, plant or harvest,the cus- tom was implemented that was known as ‘saam.’ All neighborsthen agreed to work for each other once or twice in the week in the evening by moonlight.The beneficiary of the workprovided rum and refreshments. As the workers encouraged each other by singinginturns in ‘guenee’ or ‘Macamba,’ the work went smoothlyand everyone benefittedbyit.”² VanMeeteren thinks thatasaam had the advantage that the work was done much faster, because workers encouraged each other,which is very important,especiallyfor strenuous labour in the fields.³ Other writers confirm this con- jecture. David Ames offers twoexplanations:workinginagroup both stimulates friendlycompetition among workers,and is more agreeable: “Working with one’s companions,joking and singing, is obviouslyless tedious thansolitary labour.”⁴ In the second form of labour mutualism, the joint effort results in a shared prod- uct.The members of the collective gather once or several times to work together,for

 See e.g., T.S. Epstein, EconomicDevelopment and Social ChangeinSouth India (Manchester: Man- chester University Press, 1962),p.73; Alan Dawley, Class and Community.The Industrial Revolution in Lynn (Cambridge,MA, and London: HarvardUniversity Press, 1976), p. 57;Diana Wong, Peasants in the Making.Malaysia′sGreen Revolution (Singapore: InstituteofSoutheast AsianStudies,1987), p. 120.  Nicolaasvan Meeteren, Volkskunde vanCuraçao (Willemstad: no publisher,1947), p. 35.  Ibid.  David W. Ames, “Wolof Co-operative Work Groups”,in: William R. Bascomand Melville J. Hersko- vits (eds), Continuity and ChangeinAfrican Cultures (Chicago [etc.]: Chicago University Press, 1959), pp. 224–237, at 231. 8.1. Mutualism 493

the production of agood from which they all hope to benefit when it is finished.Col- lectively building acommunity centre or achurch are good examples. Labour mutualism often becomes less important when the role of money increas- es in the local economy. The tendencytobuy labour tasks individuallywith money then usuallygrows.OnCuraçao,the saam seems to have disappeared from the 1920s or 1930s onwards.Similartrends are visible in manyplaces.⁵ But thereare alsoex- ceptions to this rule. In the case of the Maka in Southeastern Cameroon, the rise of the cash crop cultivation instead stimulated labour rotation, because the Maka re- fused to perform wagelabour for the other villagers.⁶ It is asmall step from labour mutuals to mutualist institutions, wherethe fund consists partlyorwhollyofgoods or money.Labour rotation corresponds exactlyto the simplest kind of the so—called rotating and credit savings association (rosca), in which, however,the labour input is replacedbyacontribution in kind or in money. Forexample, an anthropological studyinthe early1960s recorded that Indian migrants on the island of Mauritius operated a rosca called a cycle or cheet: “A man or awoman calls togetheragroup of friends and neighbours. Suppose there are tenofthem, and each puts in Rs. 10.They then draw lots and the winner takes the Rs. 100.(Sometimes the organizer automaticallytakes the first ‘pool’.) The following month each again puts in Rs. 10,and another member takes the result- ing Rs. 100;and so it continues for tenmonths until each member has had his Rs. 100.”⁷ In other words, sums of money weredeposited in the cheet,but for the rest the logic was the same as in labour rotation. It is thereforenot surprising that some scientists believe roscasoriginated in rotatinglabour pools.⁸ Whether this ex- planationiscorrect has yettobeestablished by empirical research. But roscascan also be much more complex than in the simple case outlined above. The allocation of the order of rotation is central to roscas. It can be deter- mined by acommon arrangement among participants; an allocation by the organizer; by auction; or by drawing lots. In an auction, participants can of course exert a stronginfluenceonthe order of allocation, and this method can thereforelead to complex relations of debt and credit within the arrangement.Inthe case of Mauri-

 Charles J. Erasmus, “Culture,Structureand Process:The Occurrence and Disappearance of Recip- rocalFarm Labor”, Southwestern Journal of Anthropology,12(1956), pp. 444–469; Paul F. Brown, “Population Growthand the Disappearance of Reciprocal Labor in aHighland Peruvian Community”, Research in Economic Anthropology,8(1987), pp. 225–245.  Peter Geschiere, “WorkingGroups or Wage Labour?Cash-crops, Reciprocity and Money amongthe MakaofSoutheastern Cameroon”, Development and Change,26(1995), pp. 503–523.  Burton Benedict, “Capital, Savingand CreditamongMauritian Indians”,in: Raymond Firth and B.S.Yamey (eds), Capital, Saving and Credit in Peasant Societies (London: George Allen and Unwin, 1964), pp. 330 – 346,at341.  AnthonyI.Nwabughuogu, “The Isusu: An Instititution for Capital Formation amongthe Ngwa Igbo;its Origin and Development to 1951”, Africa,54, 4(1984), pp. 46–58, at 47;Mark W. Delancey, “Credit for the Common Man in Cameroon”, Journal of Modern African Studies,15, 3(1977), pp. 316– 322, at 319. 494 Marcel vander Linden

tius, we find that, likethe Indian immigrants on the island, the Chinese also had roscas. But these functionedinadifferent way:

“The Chinese on the island – as elsewhere – operateavariant of the cycle in which the ‘lenders’ (late drawers)ineffect receive interest payments fromthe ‘borrowers’ (earlydrawers). The participants bid for turns;aman in need of quick cash maybid to take Rs. 90 instead of Rs.100,if permitted to drawfirst,orhemay agree to put in atotal of Rs.110 over the cycle if he can have Rs. 100 immediately. Thus the other members of the cycle receive in duecourse morethan their contributions;the differenceisaform of interest paid to them by those with moreurgent need of money.Ifthe second and thirddrawingsare bid for as well, the total interest payments to the morepatient membersincrease.”⁹

The number of varieties of allocation through roscasthat have been invented is as- tounding, and the arrangementscould become very complex. Whysome roscasare more complex than others is still largely unknown. The sum that has to be deposited in every “meeting” in a rosca can vary considerably.Large sums of money must for example have circulated in the rotating manumission funds with which Brazilian slaves-for-hireboughttheir freedom in the nineteenth century.¹⁰ There are obviouslygoods tooexpensive to payfor with ordinary roscas. Houses are aclear example. In general, they cost so much that households have to save many years for them (if indeed they can save this amount of money at all). In such cases, a rosca can be employed in which the members do not receive apayment in every round, but after several rounds.If, for instance,ten families each want ahouse worth 10,000 and if these families deposit 1,000 every year in ashared fund, then one familycan buy ahouse after one year and after ten years all families have ahouse. Such ‘extended’ roscaswereestablished in the United States in the first half of the nineteenth century.Later they were introduced in manyother countries. roscasofthis type werealso referredtoas“termi- nating societies”,discontinued when all the founders had had their turn.

Scheduled demand and non-rotating allocation

As the roscasare in asense homologous to forms of rotatinglabour,the second form of labour allocation has acounterpart in the domain of goods and money.In

Benedict “Capital, Savingand Credit”,p.341;see also MauriceFreedman, “The HandlingofMoney: ANoteonthe Background to the Economic Sophistication of Overseas Chinese”,(1959) in: Freedman, TheStudy of Chinese Society:Essays. Selected and Introduced by G. William Skinner (Stanford, CA: StanfordUniversity Press,1979),pp. 22–26.  Maria Cecilia VelascoeCruz, “PuzzlingOut Slave Origins in Rio de JaneiroPort Unionism: The 1906 Strikeand the Sociedade de Resistência dos Trabalhadores em Trapiche eCafé”, Hispanic Amer- ican Historical Review,86, 2(2006), pp. 205–245, at 223, observes, that “the model of the manumission funds “seems to have been the esusu [rosca], aYoruba institution […]that the African diaspora introduced in several parts of the Americas.” 8.1. Mutualism 495

this variety,agroup savesacertain amountofmoney by meansofaperiodic contribution. They can subsequentlydoone of three thingswith this sum. They can buy a common good that remains acollective possession (a joint good), they can distribute the savedsum again among the participants (individual allocation of money), or they can buy goods that willsubsequentlybedistributed among the participants (individual allocation of goods). A jointgood can be anything.The Ethiopian mahaber is an example: “It usually has the purpose of providing assistance to those who are still in the countryside, not having migrated to an urban area. Thus, the residents of aprincipal city will meet periodically, and provide funds to support some project back in the homevillage or in the countryside, such as buildingaschool, hospital, road, community hall, or furnishing one of these facilities, or some other needypurpose.”¹¹ Afund created to be allocated simultaneouslycan, in the meantime,alsobe used as acredit facility.Inthat case, all members of agroup regularlydeposit money in the fund,but they can also temporarilytake money from it,promising to repaylater.Usually, amemberwho takesout aloan will have to payinterest. Such an arrangement is also referred to as an AccumulatingSavingsand Credit As- sociation (ascra).¹² Migrant workers in Cameroon have an institution which they call a family meeting or countrymeeting. These are associations of people from the same region, or from an area, wherethe samelanguageisspoken. Delancey describes the arrangement:

“The get-together frequentlyopens with some business transactions.Members contribute money to be held as savings by the associationsuntil the end of the year,and the treasurer deposits these funds in abank and/or maymakeinterest-payable loans to members – and, occasionally, to non-members.All savings and accumulated interest are returned to the membersinNovember or December,and this enables them to paytheir heavy Christmas expenses.But manyimmedi- atelyreturn alarge proportion of the accrued funds to the savings programme for the next year, which opens at the same meeting.”¹³

When agroup of people establishes acollective fund to buy means of production (in- strumentsetc.) and starts abusiness on own account,this is actuallyacombined buying, production and selling cooperativeemploying its members.Such arrange-

 Victor Gerdes, “Precursors of Modern Social Security in Indigenous African Institutions”, Journal of Modern African Studies,13(1975), pp. 209–228, at 219.  F.J.A. Bouman, “rosca and ascra:Beyond the Financial Landscape”,in: F.J.A. Bouman and O. Hospes (eds), Financial Landscapes Reconstructed:The Fine Art of Mapping Development (Boulder, CO: Westview Press, 1994), pp. 375–394,at376 – 377.  Delancey, “Credit for the Common Man”,p.320.See also the case of the porksocieties in Hong Kong’sNew Territories in the 1950s(Marjorie Topley, “Capital, Savingand Credit amongindigenous Rice Farmers and Immigrant Vegetable Farmers in Hong Kong′sNew Territories”,in: Raymond Firth and B.S.Yamey (eds), Capital, Saving and Credit in Peasant Societies (London: George Allen and Unwin, 1964), 157–86Topley, “Capital, Savingand Credit”,p.178). 496 Marcel van der Linden

ments have along history.The association which fourteen unemployed piano makers set up in Paris, one and ahalf centuryago,offers an illustration:

“They began […]bycollecting contributions of afew pennies from each member.Sincethey workedfromhome, most owned some of the necessary material for their trade: they contributed to the society in kind. On 10 March 1849they established the society with 2,000 francs worth of inventory and 229.50 francs in cash. Followingthis major accomplishment,the society was ready for clients.None came for two months.Ofcourse, the members obtained neither profitnor sal- ary;they survivedbypawningtheir personal belongings.The fourth month they found abit of repairworkand earned some money.Dividingitamongst themselves, they obtained6.60francs apiece. Each member kept 5francs fromthis modest dividend. The surplus (i.e. 1.60 francs per person) was used for afraternal banquet with their wivesand children to celebrate the association’sauspicious beginning. […]InJune, afew weeks later,they had awindfall, an order for an entirepiano costing 480 francs!”¹⁴

Contingent demand and non-rotating allocation

It is also possible that acollective fund is set up on the basis of periodic contributions, paid out in part or as awhole onlywhen acalamity occurs.The savings fund is then used as an insurance scheme.Again, there are two varieties: the money is usedtocover either individual risks or collective risks. There is a collectivecoverageofrisks when the group is threatened by acommon danger – adanger that can onlybeaverted by ajoint good. Daniel Defoe provided an example, when he wrote about farmersinEssex,Kent,and the Isle of Ely, who were jointlymaintaining walls against floods: they all contributed to the keepingupof those walls: “and if Ihaveapiece of land in anylevel or marsh, though it bonds no- whereonthe sea or river, yetIpaymyproportion to the maintenanceofthe said wall or bank; and if at anytime the sea breaks in, the damageisnot laid upon the man in whose land the breach happened, unless it wasbyhis neglect,but it lies on the whole land, and is called alevel lot.”¹⁵ There is an individual coverageofrisks when members of an association are in- dividuallythreatened by adanger,such as for instance illness, death, or disabilities caused by labour.Inthatcase, all members mayperiodicallycontributetoamutual insurance society,but onlythosemembers who need compensation for aspecific reason receive abenefit from the fund. Mutual insurance societies are based on ava- riety of social categories. Workers have organized mutual insurance accordingto

 Charles Gide, Les obstacles au développement des Coopératives de production (Paris:Association pour l’enseignement de la Coopération, 1923), pp. 19–20.Anaccountofaneyewitness can be found in: V.A. Huber, “Skizzen ausdem französischen Genossenschaftsleben”,in: V.A. Hubers Ausgewählte Schriften über Socialreform und Genossenschaftswesen. Edited by K. Munding(Berlin, s.a. [c. 1895]), pp. 889–957,at923–933.  Daniel Defoe, An Essay Upon Projects (London: Tho. Cockerill, 1697), section “Of FriendlySociet- ies”. 8.1. Mutualism 497

their occupation, place of residence, neighborhood, ethnicity,religion, temperance, or acombination of these categories. They often excluded women and aged people. John Iliffe reports about such an insurance arrangement organized by immigrant cas- ual labourers in the port of Dar-es-Salaam in 1937:

“The subscription was Shs.1.50amonth for committee members and Shs.1.00for ordinary members,relatively highfiguresbecause the union planned to provide benefits for its members. ‘They saytheir union is for the purpose of helpingone another when sick and for burial purpos- es,’ it was reported, and the rules promised that ‘the union will assist anymember in distress.’ […]Besides their desire for security,the membersalso soughtadvancement. ‘Every member should learn to read and write’,the rules stated, for which purpose ‘the Union will employ a teacher to instruct members in readingand writing’.”¹⁶

It is not uncommon that mutualist associations are linked to each other directlyor indirectly. People are sometimes members of several associations of the sametype at once. Amutualist arrangementcan alsobetransformed into acommercial enter- prise, or agame of chance. Andotherforms of organization (guilds, for instance) can be transformed into mutualist associations. Aspecial kind of transformation occurs when mutualist associationsbecome permanent,orare formallyinstitutionalized. If the rotation principle is from rotating associations, they can become institutionalized in this way. Institutionalized formsofnon-rotatingarrangements, such as ascras, are well-known, for instance in the caseofCredit Unions.Likemany ascras, their members share certain features,such as theirreligion or profession. They have acor- porate structure, and theirfunctionismainlytoprovide short-term cash credits to members at nominal rates of interest.Inthe course of the twentieth century, credit unions have spread from North America over large parts of the world.¹⁷ Men and women take part in all forms, but it seems thatrotating associations are often madeupmainlyofwomen, whereas men comprise arelatively large part of contingent associations. Asatisfactory explanation of this differenceingender com- position has not yetbeen given.¹⁸

 John Iliffe, “The Creation of GroupConsciousness Amongthe Dockworkers of Dar-es-Salaam 1929–50”,in: RichardSandbrook and Robin Cohen (eds), TheDevelopment of an African Working Class.Studies in Class Formationand Action (London: Longman, 1975), pp. 49–72,at55–56.  E.g., Eli Shapiro, CreditUnion Development in Wisconsin (New York: Columbia University Press, 1947; reprintNew York: AMS Press,1968); Neil Runcie (ed.), Credit Unions in the South Pacific: Aus- tralia, Fiji, New Zealand, Papua and New Guinea (London: University of London Press, 1969).  See also Shirley Ardener and Sandra Burman (eds). Money-Go-Rounds.The Importance of Rotat- ing Savings and CreditAssociations for Women (Oxfordand Washington, DC: Berg,1995). 498 Marcel vander Linden

Threats and securities

Like anyother collective activity,mutualist associationscan alsofail in manyways. In order to assess the specific nature of these threats, it is useful to remind ourselves of the essence of mutualist funds. In all cases, members contributemoney,goods or labour to ashared fund, from which subsequentlypayments are made to some or to all members. In some cases, especiallyinscheduled non-rotatingassociations, members can also borrow money or goods from the fund for acertain period of time. We can now distinguish between twofundamentallydifferent kinds of threats. Firstly, there are external threats, i.e. threats against which participantsinthe arrangement can do very little on their own. These threats can takethe following forms.¹⁹ – Members maynolonger be able to deposit money or goods or payoff aloan, because of changed circumstances. Take for instance mutuals in aworking-class area, wherefamilies are almost completelydependentonone employer for their income. In that case, the bankruptcyofthe employer will also endanger the mutual arrangements in that working-class neighborhood. – The fund of mutuals is threatened by violence, inflation, and so on. In China at the end of the nineteenth century, “the T’ai-píng rebellion, with its long train of sorrows,and the continual famines and floods of later years in NorthernChina, have tendedtobring loan societies into discredit,because experience has shown that thousands of persons have put into them what could never be recovered.”²⁰ – Especiallyincontingent associations, the danger exists that anatural disaster or economic downturn can affect an entirepopulation, so that manyorall members of amutual demand payment at the same time, and the fund is quickly ex- hausted. Afriendlysociety whose members work in the building trade will get into great difficulty,for example, if arecession occurs in the building industry causing widespread unemployment among many members of the association at the same time, and makes them applyfor abenefit. – Apart from these external threats,thereare also internal threats caused by individual imperfections. – Individual members do not paythe deposit agreed upon. The severity of such de- faultsvaries considerably.Inrotatingsocieties, it makes abig difference whether aparticipant failed to payher contribution before she receivedher payment, or afterwards. In the first case, the damageislimited; in the second case, the other participants suffer agreat loss.

 CompareShirley Ardener, “Women Making Money Go Round: roscasRevisited”,in: Ardener and Burman, Money-Go-Rounds,pp. 1–19,at5–7.  Arthur H. Smith, Village Life in China. AStudy in Sociology (New York [etc.]: FlemingH.Revell Company, 1899), p. 157. 8.1. Mutualism 499

– The administrator appropriatesmoney illicitlyfrom the fund,ormanagesit badly. The person who has the kitty in his home is continuallytempted to borrow money from it “just for ashort while.” Hotze Lont noted that this is not uncommon in Java, whereadministrators “usually try to repaythe loan before the association needs the money.” In this way, theiractions remain hidden and they continue to have personal accesstoaconvenient sourcefor financial emergen- cies. Sometimes, however,they lose control, and the fund suffers.²¹ – Especiallyincontingent organizations, members mayclaim apayment on false grounds by simulating illness, unemployment etc. – Members mayclaim and receive aloan on false pretenses, or not repayaloan in time, or onlypartly, or not at all.

Mutuals cannotdomuch against external threats (likewars, crises etc.) as such. At best,they can in some cases try to make themselvesless vulnerable by spreading the risk. Friendlysocieties, for example, reduced the likelihood that all members would suffer the sameadversity at the same time by means of supra-regional amal- gamation, which ensured that members came from different regionsand trades. And some roscasdeliberatelytried to recruit members with different economic back- grounds.²² Mutuals have manymorewaysofcombatting internal threats. Mutuals that are part of avery close community will suffer relatively little fraudand default.Shirley Ardener alreadypointed out how much people in such circumstances wereprepared to do to save face.²³ There are known cases of fathers who preferred that theirdaugh- ters became prostitutes, rather thanfail in their obligations to the local mutuals. Sometimes, ‘technical’ factors make fraudmoredificult.Itis, for instance, no coin- cidence that manymutual insurance associations initiallyfocused on funerals, because it is very difficult to simulate death. Verification becomes more difficult if the social bonds between members of amutual are not so strongor, in an even more extreme case, if members of agroup do not even know each other personally. The last caseisrelatively unusual, although thereare several known examples of this variant.²⁴ In case of asymmetrical information (when the founder of amutual has in- sufficientinformation about the reliability of acandidate member), precautions become crucial.

 Hotze Lont, “Juggling Money in Yogyakarta. Financial Self-Help Organizations and the Quest for Security”′ (Ph.D.thesis,Universiteit vanAmsterdam,2002),p.188.  Anon. “Partners:AnInformal Savings Institution in Jamaica”, Social and Economic Studies,8 (1959), pp. 436 – 440,at437.  Shirley Ardener, “The Comparative StudyofRotatingCredit Associations”, TheJournal of the Royal AnthropologicalInstitute,94(1964), pp. 201–229.  Abdoulaye Kane, “LescaméleonsdelafinancepopulaireauSénégal et dans la diaspora” (Ph.D. thesis,Universiteit vanAmsterdam, 2000), pp. 23f.; Aspha Bijnaar, “Kasmoni. Spaarzame levensge- nieters in Suriname en Nederland” (PhD thesis, Universiteit van Amsterdam,2002). 500 Marcelvan der Linden

In principle, there are three kinds of security measures available. Firstly, there are rules for selection: the threat to the arrangementcan be reduced by onlyallowing persons to join who are likelytomeet their obligations. Hereare some examples. – Entry is permittedonlyfor persons with whom members have not just afinancial relationship – for instance relatives, or people with the same ethnic background, or people who went to the sameschool.²⁵ – Entry is permitted onlyfor persons who are not likelyto“disappear” suddenly without trace. If the mutual has akitty which is more or less permanent,itis especiallyimportant to find an administrator who is firmlytied to aplace in one wayoranother.InroscasinJamaica, for instance, it was arule that the administrator should be aperson “with real property,such as ahome”,and “with a permanent address wherehecan always be found.”²⁶ Similarly,mutual benefit societies oftenentrusted their kitty to publicans or clergymen – persons who would risk agreat deal,ifthey werefound guilty of fraud. – Entry of new,unknown members passes through atrial period or (in the case of rotatingarrangements) puts them at the end of acycle,sothat potential deceit does little harm. – New members are selected on the basis of their reputation or their good name, i.e. the probabilistic beliefs the others hold about the potential member’sprefer- ences or feasible actions.²⁷ – Existing members act as guarantor for dubious members. In the Ethiopian ekub (a rosca), each member was obliged to supplyone or more guarantors,who would payincase of default,regardless of the reason whyamember had failed to meet his obligations.²⁸ – New members are required to payanentrance fee or bond to encouragetheir loy- alty,and/or are requiredtoprovide asecurity or collateral for the loan.

Monitoring provides asecond means of security.This practice is especiallyimportant in mutual insurances.Inhis studyofmutual aid societies in earlynineteenth-century Paris, Michael Sibalis shows how closelymembers kept an eyeoneach other.Onthe one hand, visiteurs wereappointed, who were supposedtovisit those who received sick benefits – bothinorder to checkthem out,and as an act of charity.Inthis context,the articles of association state that “The obligations of the visitors consist of surveillance, benevolence and humanity.The interests of the Society are entrusted to them; they should not make an exception for anyone.” Sometimes, the member of the board responsible for the selection of visiteurs was “not allowed to select them either from among his friends, or from among the neighbours who weretoo

 CompareGerdes, “Precursors of Modern Social Security”,p.215.  Anon., “‘‘Partners’”,p.436.  Christopher J. Ellis, “Reputation”, TheNew Palgrave DictionaryofMoney and Finance (London: Macmillan,1992),pp. 331– 332.  Gerdes, “Precursors of Modern Social Security”,p.214. 8.1. Mutualism 501

close to the sick person.”²⁹ On the other hand, ordinary members often spontaneous- ly scrutinizedeach other as well, as happened in 1823 when “asociety of engravers cancelled the sick benefitsofamember named Vialard when someone spotted him drunk in awineshop.”³⁰ Sanctions are athird precaution.Wecan distinguish between external and internal sanctions. In the case of internal sanctions, members of the mutual meet out punishments themselves. It is importanttoknow in this caseinwhose direct interest it is that the rules of the mutual are adhered to. If all the members have to payfor a loss together,they all benefit by punishing the offender.But if for example it was agreed that the coordinatorofarosca personally would act as guarantor for default or fraud³¹ onlythat person has an immediate interest in the punishment.Inthe case of external sanctions, either officials (the state authorities) can administer punishment,orthe largercommunity (such as the entire village). Such sanctions sometimes have aformal character,but they are often informal as well: in thatcase, the default- er quite simplyloseshis reputation, and is thereforeunable to join amutual again. In the case of the Ethiopian mutual insurance idir, “anymembers in arrears for two or more consecutive periods maybeexpelled – this news quicklyspreads, and an ex- membermay be barred from joining another idir.”³²

Conclusion

Mutualist arrangementswereand are operated around the world. However,the fre- quency of their occurrence varies considerably,depending on the social context.As- sociationswith scheduled demand seem to be especiallycommon in poor countries, and among migrants in poor and rich countries.Associations with contingent demand seem to be universal, but in advanced capitalistcountries they lost their small-scaleand non-bureaucratic character,insofar they had not been replaced alto- gether by government provisions.What is the explanation for the popularity of mutualism, or the lack of it,ingiven social and historical circumstances? There have of course always been alternativesfor mutualism.³³ Indeed, anyone with acertain degree of autonomywho regularlyneedsmoney,goods or labour can usually borrowthese on an individual, privatebasis, from other people in his or her direct social environment.Inthe case of fairlysmall sums of money,one

 Michael David Sibalis, “The Mutual Aid Societies of Paris,1789 – 1848”, French History,3,1(March 1989), pp. 1–30,at17.  Ibid.,pp. 16–7.  As in the cundina. See DonaldV.Kurtz, “The RotatingCreditAssociation: An Adaptation to Pov- erty”, Human Organization,32(1973), pp. 49–58.  Gerdes, “Precursors of Modern Social Security”,pp. 215–6.  See e.g., PeerSmets, “Housing Financeand the UrbanPoor:Buildingand FinancingLow-Income Housing in Hyderabad,India” (Ph.D.thesis,Vrije Universiteit Amsterdam,2002),Chapter 4. 502 Marcelvan der Linden

can often appeal to relativesoracquaintances. In the caseoflargeramounts of money,approaching asuperior and asking for credit would be the obviousthing to do. In all these cases, arelationship of dependence is formed, which can impede personal freedom and,inthe caseofpatronage by asuperior,could even result in debt bondage. It is therefore likelythat,normally, one would onlyresort to this kind of solution if, for some reason, other solutions werenot possible. These other solutions fall, broadlyspeaking, into two categories: mutualism and formal institutions, such as banks and insurance companies.What factors playapart in the choice between these alternatives? No doubt,animportant aspect of this choice is that mutualism is usually more than just aform of “micro-finance”. Apart from their manifest function of redistribution, mutualist associations usually have alatent function as well: they satisfy aneed for company, and asense of community solidarity.There is, especiallyamong new immigrants, agreat need for “clubs” and similar organizations, because they help the newcomers to adjust.³⁴ The sociable character of mutualist arrangements and their roots in communities differs from banks and insurance companies in important respects.Inthe first place, mutualism offers asolution to people who lack the willtosaveacertain amountof money or goods on their own.Bymeans of mutualism, an individual mayreach what JonElster called “imperfect rationality”:anindividual recognizes his or her own weakness,and voluntarilyappeals to external compulsion to realize what he or she would not achievebyhim or herself.³⁵ Asecond difference is that mutualist associations are oftenpsychologicallyand/ or practicallymore accessiblethan banks: official institutions are sometimes located at agreat distance, and one has to be prepared to make along journey to visit them; banks ask for asurety or guarantors for aloan, while mutualist arrangements need not do so in most cases because the participants know each other personally; official institutions are impersonal and formal, whereas mutualist associations are personal

 roscasare very common amongmigrants.InPapua New Guinea in the 1970s, roscaswere known amongmigrants in the townsas“sundaying” or “fortnighting.” One author comments: “it is acharacteristic of the labouringand lowerincome groups fromall parts of Papua New Guinea; it is not typical of public servants or other white collarworkers.” In asample of 28 workingfamilies in Lae, 22 heads of familyengaged in “sundaying” and in asample of 89 migrant workers around Goroka, 59 “sundayed”,percentages66and 79 respectively.Skeldon regards this as aprocess of adaptation: “The systemappears to recreateinamodified form the cycles of debt and credit,ofex- change and reciprocity in the traditional society.Ithelps to integratethe migrant intoanetwork of social responsibility in the urban environment.” Ronald Skeldon, “Regional Associations among Urban Migrants in Papua New Guinea”, Oceania,50(1979 – 1980), pp. 248–272, at 252–253.  JonElster, Ulysses and the Sirens. Studies in Rationality and Irrationality (Cambridge [etc.]: Cam- bridge University Press, and Paris: Editions de la Maison des Sciences de l′Homme, 1979), Chapter2; see also AbramdeSwaan, In Care of the State. Health Care, Education, and WelfareinEurope and the USA in the Modern Era (Cambridge:Polity Press, 1988), pp. 144 – 145. 8.1. Mutualism 503

and informal;³⁶ official institutions sometimes operate considerable financial or legal barriers.³⁷

 F.J.A. Bouman and K. Harteveld. “The Djanggi, ATraditional Form of Savingand Credit in West Cameroon”, SociologiaRuralis,16(1976), pp. 103–118, at 115–116.  In Papua New Guinea, for instance, the colonial authorities had, for along time, laid down re- strictions on the access of Chinese migrants to banks. “According to Chinese informants,the first bank loan was not grantedtoaChinese until the 1950s.” David Y.H. Wu, “To Kill Three BirdsWith One Stone: The Rotating Credit Associations of the Papua New Guinea Chinese”, American Ethnolo- gist,1(1974), pp. 565–583, at 570 –571. 504 Marcelvan der Linden