Part 02, Chapter 40 : Mutualism in the Service of Capital

[Liberty, July 16, 1887.]

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In a long reply to Edward Atkinson’s recent address before the Boston Labor Lyceum, Henry George’s Standard impairs the effect of much sound and effective criticism by the following careless statement:(91 ¶ 1)

Mr. Atkinson does not even know the nature of his own business. He told his audience that his regular work is to stop the cotton and woolen mills from being burned up. This is a grave blunder. Fire insurance companies are engaged in distributing losses by fire among the insured. As a statistician he knows that statistics show that in New Hampshire, when the State was boycotted by the insurance companies, the number of fires was reduced by thirty percent. He does not save buildings from fire.(91 ¶ 2)

This is a gross slander of one of the most admirable institutions in America,—none the less admirable in essence because it happens in this instance to exist for the benefit of the capitalists. Mr. George unwarrantably assumes that Mr. Atkinson is engaged in an insurance business of the everyday sort. This is far from true. He is the president of an insurance company doing business on a principle which, if it should be adopted in the banking business, would do more to abolish poverty than all the nostrums imagined or imaginable, including the taxation of land values. This principle is the mutualistic, or cost, principle.(91 ¶ 3)

Some time ago a number of mill-owners decided that they would pay no more profits to insurance companies, inasmuch as they could insure themselves much more advantageously. So they formed a company of their own, into the treasury of which each mill pays annually a sum proportional to the amount for which it wishes to insure, receiving it back at the end of the year minus its proportion of the year’s losses by fire paid by the company and of the cost of maintaining the company. It is obvious that by the adoption of this plan the mills would have saved largely, even if fires had continued to occur in them as frequently as before. But this is not all. By mutual agreement the mills place themselves, so far as protection against fire is concerned, under the supervision of the insurance company, which keeps inspectors to see that each mill avails itself of all the best means of preventing and extinguishing fire, and uses the utmost care in the matter. As a consequence the number of fires and the aggregate damage caused thereby has been reduced in a degree that would scarcely be credited; the cost of insurance to these mills is now next to nothing, and this cost might be reduced still further by cutting down an enormous salary paid to Mr. Atkinson for services which not a few persons more industrious and capable than he are ready to perform for less money. Mr. Atkinson’s insurance company, then, does save buildings from fire, and Mr. George’s statement that it does not is as reckless as anything that Mr. Atkinson ever said to prove that the laboring man is an inhabitant of paradise.(91 ¶ 4)

Moreover, it is the height of stupidity for any champion of labor to slur this insurance company, for it contains in germ the solution to the labor question. When workingmen and business men shall be allowed to organize their credit as these mill-owners have organized their insurance, the former will pay no more tribute to the credit-monger than the latter pay to the insurance-monger, and the one class will be as safe from bankruptcy as the other is from fire. Yet Mr. Atkinson, whose daily life should keep this truth perpetually before his mind, pretends that the laborer can achieve the social revolution by living on beef-bones and using water-gas as fuel. Can any one think him sincere?(91 ¶ 5)