New Harmony, formerly named "Harmony," was built by the Harmony Society, headed by George Rapp (also known as Johann Georg Rapp). This was the second of three towns built by the German religious group, known as Rappites. When the society decided to move back to Pennsylvania, they sold the 30,000 acres (121 km2) of land and buildings to Robert Owen, the Welsh utopian thinker and social reformer for $150,000, who then changed the name from "Harmony" to "New Harmony." Owen recruited residents to his model community, but a number of factors led to an early breakup of the communitarian experiment.
The experiment was established in 1825 and dissolved in 1829 due to constant quarrels. The town banned money and other commodities. American individualist anarchist, Josiah Warren, who was one of the original participants in the New Harmony Society, asserted that community was doomed to failure due to a lack of individual sovereignty and private property. He says of the community: "It seemed that the difference of opinion, tastes and purposes increased just in proportion to the demand for conformity. Two years were worn out in this way; at the end of which, I believe that not more than three persons had the least hope of success. Most of the experimenters left in despair of all reforms, and conservativism felt itself confirmed. We had tried every conceivable form of organization and government. We had a world in miniature. --we had enacted the French revolution over again with despairing hearts instead of corpses as a result. ...It appeared that it was nature's own inherent law of diversity that had conquered us ...our "united interests" were directly at war with the individualities of persons and circumstances and the instinct of self-preservation... and it was evident that just in proportion to the contact of persons or interests, so are concessions and compromises indispensable." (Periodical Letter II 1856)