A guest contribution from ex-member and close sympathiser of the Socialist Party
The Indignados of Spain
Quite often, social movements seem to suddenly mushroom into salience from pretty small and obscure beginnings. Their growth tends to follow an exponential, not arithmetical, trajectory. As with mushrooms, it needs only the right ambient conditions. Beyond a critical threshold, this growth begins to accelerate and impact upon the social environment that nourished it, resulting in a kind of positive feedback loop: success breeds success.
For those of us who have striven in our different ways to forge a better world out of the crisis-prone, conflict-ridden one we live in, this is a reason to hope and persevere. The future is not predetermined or set in tablets of stone. Chaos theory and the Butterfly Effect have put paid to all such talk. Complex systems like human societies or weather patterns are susceptible to small changes that can give rise to large consequences. Social inertia can be overcome and, along with it, what has been called the “normative power of facticity” - the tendency to vest our existing state of affairs with moral legitimacy for no other reason than that it exists. Change, as the saying goes, is the only constant in a changing world and today it is noticeably speeding up. The question is not how we can prevent it but how we can shape it to suit our own ends. That requires that we clarify what sort of end it is that we seek to bring about. Human action is fundamentally teleological and purposeful even the workings of the physical universe are not.
Consider the example of the anti-austerity “Indignados” movement in Spain which burst on the political scene in May 2011. In some ways this was a precursor of the more famous Occupy movement that began in the US later that year and subsequently spread to more than 80 countries, popularising the slogan “we are the 99%” and giving impetus to the “democratic awakening” then occurring in many parts of the world. Indeed, the Indignados movement was itself a potent expression of this awakening within Spain. Organisations such as Democracia Real YA and others more directly concerned with economic issues like Juventud Sin Futoro played a pivotal role in this movement. Its origins can be traced back to the global economic crisis of 2007-8 which impacted on Spain more severely than in most other European countries and fueled growing discontent with an endemic culture of political corruption and town hall scandals at a time of deepening austerity for many.
Back in 2011 when movement made its dramatic entry onto the political stage, I was living in the Andalusian city of Granada. Tucked within the foothills of the Sierra Nevada mountain range and spilling out across the surrounding plain, Granada is famous for its alluring attractions that draw in tourists by the coachload: the exquisite beauty of the Alhambra Palace, the quaint charm of the old Moorish Albayzin quarter and the lively bustle of the tapas bars.
Less well known, perhaps, is the fact that the city has traditionally been a bastion of political conservatism, a stronghold of the conservative Partido Popular. It was all the remarkable, then, that Granada should have been the location of a particularly robust manifestation of the indignados movement. Though not on the scale of Madrid’s or Barcelona’s protests, for a city with less than half a million inhabitants it was still impressive. A huge and colourful march snaked its way along Avenida de la Constitucion and Calle Gran Via de Colon, ending up at the Town Hall. There, on the plaza in front, a mini “tent city” was later set up, hosting daily public meetings at which people could voice their opinions.
On the one or two occasions I attended, I could sense an almost palpable undercurrent of anger rippling through the crowd. Much of this anger was directed at the usual suspects - like the banking fraternity. Since the property bubble burst in Spain in 2008 some 400,000 homes had been re-possessed by the banks. The anguish this occasioned was such that in a number of highly publicised cases from different parts of Spain, including Granada itself, the victims of these repossessions opted to take their own lives by plunging to their deaths from their high-rise apartments or suiciding in some other fashion. The popular fury this provoked was whipped up even more by the government’s perceived desire to rub salt in the wounds by delivering financial aid to the perpetrators in the form of bank bailouts. TV coverage of these events showed angry crowds converging on homes about to be re-possessed and such was the pressure of public opinion that, by 2012, even the Spanish Banking Association (AEB) felt compelled to sheepishly modify and soften its own eviction procedures (Reuters, “Spain promises to spare needy from eviction after suicides” Nov 12, 2012)
But what of the wider picture? What sort of grand vision inspired the literally millions of people – between 6.5 and 8 million according to official estimates - (https://en.wikipedia.org/wiki/Anti-austerity_movement_in_Spain) – to participate in these protests?
There is a distinct danger of not seeing the wood for the trees. Appalling though bank repossessions are and thoroughly justified though the fury they elicit may be, they don’t just occur in a social vacuum. They happen within a particular social framework and are driven by a particular logic that ineluctably arises from this framework. I wanted to know to what extent the Indignados thought along these lines. Was it a movement of piecemeal reform, the earnest and well-meant endeavour to operate the abattoir in the interests of the cattle inside, or did it signify something genuinely new and revolutionary, a fundamental sea change in the way large numbers of people viewed the very organisational basis of modern society itself and the tacit assumptions underpinning it? The jury is still out on this question.
It is worth saying something about what this “organisational basis of modern society” might actually mean. To better understand what the “next” system might entail we need to understand what our existing system entails. These two things hang together. How we go about diagnosing contemporary capitalism will influence and condition what kind of solution we propose. But the converse is also true. Some aspects of this society will only come to be seen as problematic by taking up a vantage point beyond capitalism itself - albeit, only as a kind of “thought experiment” for the present. However, thinking outside of the box in this way, exercising our capacity for sociological imagination, depends on a lot on how we choose to define that “box” in the first place.
This point cannot be overemphasised. There can be no alternative to capitalism, no “next system”, unless we grasp as our basic point of departure, the very essence of what capitalism is about - its fundamental parameters. After that, everything else will tend to fall into place - including how we transition from this system to the next.
On this last point, I should briefly digress. It is sometimes argued that “the end justifies means” but I think this is wrong. It is putting the cart before the horse. Rather, I would suggest, it is the end that determines the means. A free and democratic society can only really be introduced by methods that are themselves democratic and free. As history has demonstrated time and time again, the brutal and authoritarian methods employed by the “liberators”, albeit quite possibly with the best of intentions, only ever seem to reproduce, even down to the smallest detail, the self-same brutal and authoritarian regimes they had ostensibly sought to overthrow. The label on the bottle may have changed but, for all practical purposes, the contents remain pretty much the same.
But the larger point I want to make here that for the end to determine the means we have obviously to know what that end involves and consciously embrace it as our goal. We cannot just drift along, rudderless and directionless, born aloft on the tide of history, so to speak, in the vague hope that we might someday chance upon the island of Utopia on our voyage of discovery. We need to know what it is, where it is and why it would benefit us to deliberately head in its direction. We need, in short, both a motive and a map. We won’t get there otherwise.
Part of the problem, I suggest, lies with what might be called the Myth of Progress – the belief that things are steadily getting better regardless and that one fine day we shall arrive at a point where, presumably, we will have little or no reason to alter anything about the kind of society we find ourselves in. It relieves us of the responsibility for creating a better society ourselves if we believe this is being done for us anyway. It makes for a sense of complacency which is the deadly foe of real change. This myth, originating in the Enlightenment, gathered pace in the 19th century. In the 20th century it suffered setbacks – notably, in the guise of two horrendously devastating world wars - but in the early post-war era, regained momentum.
In these years a kind of naïve techno-optimism took hold of and suffused the public imagination. Galbraith’s “Affluent Society” and a life of automated comfort and ample leisure awaited us all, tantalising lurking just around the corner. The Green revolution would banish hunger and medical advances would kill off disease. All we had to do was let the scientists get on with the job and elect governments dedicated to the grand cause of trickle-down growth. True, the emergence of environmental concerns and the threat of nuclear annihilation somewhat took the gloss off this optimistic worldview, yet still, it persists - at least, in one form if not another. Though we may now be somewhat less sanguine about others aspects of life, technological advancement, at any rate, continues to serve as the flywheel of this myth. We see this in the feverish anticipation with which each new version of iPad or iPod to enter the market, is greeted – the obsessive fretting over even the minutest difference in design and functionality. This is Marx’s “fetishism of commodities” with a modern twist.
Given all this, our continuing fixation with technical “fixes” to what are essentially social problems is perhaps, unsurprising. What this does is to vest power in the hands of the “fixers” – the experts and the decision-making elite - just as surely as it disempowers the rest of us. Technology, however, is never neutral - notwithstanding the trite argument that it is not the gun that is responsible for shooting the hapless victim but the person whose finger pulled the trigger. That is true in an obvious formal sense but besides the point.
In a deeper structural sense, technology is shaped by society as much as it shapes society. There is, in other words, a two-way street of reciprocal influences at work here where social factors mediate the impact of technologies on our lives.
More to the point, technology on its own cannot deliver utopia to us on a silver platter. If anything, technological advances frequently turn out to be something of a double-edged sword. The Law of Unintended Consequences evidently applies. Already, some pundits are starting to panic about the future impact of developments such as robotisation. A recent and widely referenced study (2013) carried out by two academics at Oxford University, estimated that 47 percent of jobs in the US are “at risk” of being automated in the next 20 years. That is nearly half of the total US workforce being axed – an astounding figure by any standard (http://www.eng.ox.ac.uk/about/news/new-study-shows-nearly-half-of-us-jobs-at-risk-of-computerisation).
Of course, ever since the early 19th century Luddites embarked upon an orgy of machine breaking in England, people have worried about the job-destroying potential of new technologies. Usually, however, the loss of jobs in the primary and manufacturing sectors has been compensated for by the creation of new jobs elsewhere - particularly in the services sector - leading to a huge expansion of that sector and an absolute growth in the numbers of employees overall. Now, it is argued, even the services sector itself is threatened by massive job losses due to technological innovation so that what we are facing is a qualitatively new situation altogether where employment itself will become an increasingly scarce commodity – and subject to “job polarisation” with the proliferation of poorly paid unskilled and insecure jobs. Hence the growing interest across the political spectrum in ideas like a Universal Basic Income - a kind of palliative that will, to an extent, weaken, if not entirely sever, the link between consumption and productive input that capitalism has traditionally relied upon as a means of “incentivising” its workers.
Be that as it may, this rather neatly illustrates my point about how society mediates the impact of technology. In the kind of society we live in at present where most of us are dependent on employment for a living, automation might well be considered a threat; in some other kind of society, however, it might be seen as a blessing and a boon. We need therefore to critically examine why it is that so many people in our present society are dependent upon employment as a means of gaining a living in the first instance if we are to effectively address this problem at all.
Murray Bookchin in his Post-Scarcity Anarchism (1974, Wildwood House) spoke of our “schizoid” attitude towards technology. We marvel at its potential but we also worry about its consequences. What this suggests is that a prescriptive approach to society’s problems based on elaborate technical fixes and large-scale social engineering, overseen by an expert elite that takes it upon itself to solve these problems on our behalf, is almost foredoomed from the start to disappoint.
We need a quite different approach, one that fundamentally starts with us – the “ordinary folk”, the “99 percent”, “working people” or whatever other terms you wish to attach to the great majority. We are not just the object of social change but its prime agent. It is we, in the end, who validate existing society and allow it to continue. Ultimately, the buck stops with us and blaming the politicians or the bankers for our woes – thus exonerating ourselves by embracing the status of victim - is simply a form of displacement. They are themselves, creatures of a system, we permit to exist through our own acquiescence. By blaming them we encourage the delusion that they could have acted in a manner that significantly departs from what they have been constrained to do under this system. The problem is no longer systemic but one of personal defect or moral shortcoming.
Fundamental change can only ever really come from the bottom up, not from the top down – by, for instance, appealing to “world leaders”. Society, as we know it, is the outcome of the values, beliefs, and outlook of the great majority and, consequently, any attempt to change it has to operate within this basic constraint. The notion that history is the product of “Great Men” (Carlyle) impressing their will and their personalities on the flow of events is what the Menshevik, Georg Plekhanov, called an “optical illusion” in his famous essay written in 1898 on “The Role of the Individual in History”. Far from history being the product of Great Men, Great Men are themselves the product of history, argued Plekhanov. If the individual called Napoleon has not existed, a Napoleon-like would have emerged anyway. In the chaotic circumstances of the time, the population of France craved a strong figure to restore order. Napoleon just happened to be that figure. (https://www.marxists.org/archive/plekhanov/1898/xx/individual.html)
So for fundamental change to happen, we need to seriously think about what kind of society we want, not just automatically assume things are going to better or, that there is nothing we ourselves can do, at least until the next election, to prevent our world sliding into ruin, having mortgaged our future to the “political establishment”. What good is that when once again, come to the next election, all we do is write out yet another blank cheque, this time enabling Tweedledee in place of Tweedledum to make decisions on our behalf? This fatalistic view which consigns us to the role of bystanders in history is utterly crippling and disempowering. What I am arguing for, instead, is a vigorously teleological or goal-oriented approach to our activity. We have to actively and creatively shape our own destiny, not as an exercise in wishful thinking, but out of the materials to hand and based on the observations we make of the real world around us and the potential it offers.
Our destiny is not pre-given. Back in 1992, the political scientist Francis Fukuyama confidently asserted in a controversial book, written in the aftermath of the fall of the Berlin Wall and the collapse of the Soviet regime, that the “end of history” as we know it, was in sight. As he put it: “What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of postwar history, but the end of history as such.... That is, the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government” (1992, The End of History and the Last Man, Free Press). This, of course, was yet another – some would say, rather desperate – attempt to salvage and reinstate the myth of progress earlier referred to - at least in its more traditional form in Western intellectual history as a sweeping statement about social progress in general, rather than being narrowly concerned with technological advancement as such.
Well, history has a way of making historians – and political scientists - eat their own words. Today, Fukuyama’s prognosis strikes us as painfully naïve. Even then, amidst all the fervour and excitement of the times, the storm clouds were already gathering. In large swathes of the former Eastern bloc, conditions did not improve but in many respects, worsened considerably, nourishing particularly virulent strains of xenophobic nationalism and authoritarianism. In the Middle East and elsewhere, the upsurge of Islamic fundamentalism and the terroristic outrages committed in its name – like 9/11 - put paid to idle thoughts that we had entered an era of tranquillity and peaceful contentment. Numerous wars around the globe still rumble on largely unresolved - some too low key to merit displacing reports of some celebrity's latest breast enhancement operation from the banner headlines, others flaring up from the embers to briefly catch the fickle eye of the mainstream media.
In Latin America, and elsewhere there has been a growing disenchantment with "neo-liberalism” and globalisation. Even in the very heartlands of Western Liberal Democracy itself, things do not bode well. Public disenchantment with the political establishment has reached unprecedented levels, exemplified by the election of Donald Trump on a populist ticket. The very institutional architecture of the New World Order seems to be succumbing to a kind of incipient fracturing as the recent vote on Brexit illustrates and everywhere there has been the spectre of protracted recession engulfing entire economies in a tidal wave of job losses and bankruptcies, swelled by a restructuring of the global division of labour and by the adoption of new technologies.
Technological optimism may still persist – though some commentators like Peter Thiel have argued that, with some notable exceptions such as computer technology, the rate of innovation has slowed considerably (“The End of the Future”, National Review online, October 3, 2011) - but is more and more counterbalanced by a pervasive sense of social gloom and gnawing anxiety that is the fin de siecle of our times. We are becoming ever more conscious of the yawning gap between the enormous promise that modern technology seems to hold and the social reality we live in. Social progress, such as it is, seems to be lagging further and further behind technological progress.
This discrepancy between the hopes and aspirations of people for a better world and the reality we live in does not mean that human intentionality has no bearing on the matter. Though history never quite turns out to be what any of us might have imagined, it would be mistaken to conclude this shows it to be impervious to human intentionality as such. Our hopes and our aspirations are key ingredients in the way things develop. It is not that they don’t make an impact but rather that they diverge so markedly, that is the problem.
This is our “post-modern” malaise. According to dominant ideology of individualism, the essence of who we are is defined by our separation and differentiation from others. This tendency towards social atomism reinforced by market competition makes for the kind of fractured world we appear to live in and the pervasive feeling of hopelessness in the face of those forces that seek to rule over us by means of the age-old strategy of sowing division.
We need to focus more on what we have in common and less on what divide us.
There is indeed strength in unity. The 17th-century poet, John Donne, famously wrote “No man is an island, Entire of itself. Every man is a piece of the continent, A part of the main”. Our fate as a species binds us to one another. So too should it, to that extent, therefore, bind our hopes and aspirations. The more closely these align, the more we see eye to eye, at least as far as the big picture is concerned, and with respect to the things that really matter to us all – like climate change or threat of nuclear extinction - the more likely will things tend to turn out as we would want.
This sounds almost like a truism but as far as transitioning to the next system is concerned its implications are profound. There can be no so such transition without the creative input and enthusiasm of ordinary folk in their millions who know what they want and are intent upon making the dream a reality. No technocratic elite, no matter how techno-savvy and propelled by motives as pure and white as the driven snow, can lead us to the Promised Land. We have to do it ourselves, though there is no guarantee that we will. There is no guarantee that the next system will ever materialise. History is not predetermined; we always have a choice. It is at least conceivable that instead of moving forward to the next system, humanity could be reduced by nuclear conflict to a pile of ashes by choosing to remain, if only by default, within a system that generates the very motives that make such a conflict possible.
So the transition to the next system has to be a conscious, democratic and majoritarian act. Indeed, by its very nature, it demands such a mandate. The development of our present system up to now literally presents us with no other alternative. The global diffusion of market capitalism and the seepage of money-based relationships and values into every nook and cranny of our social existence, draws us all inexorably into, and places us under the thrall of, a dense network of ever tightening interdependencies from which we can truly escape only by an act of universally coordinated and conscious repudiation. A social revolution in the way we think about the world.
Though such a revolution has, in the end, to be a majoritarian one, this does not preclude the possibility of creating little islands of lived reality that, as it were, help to subvert, the prevailing ethos of contemporary capitalism. Social experiments such as time-banking or setting up intentional communities of like-minded individuals, do indeed have an important role to play in the transition to another society. They serve as both a training ground and a seedbed in which the values, habits, and outlook of this new society might germinate and take root.
However, we need to be more discriminating in this respect; some experiments are more fruitful than others from the standpoint of fundamentally changing society. For all its conveniences, Bitcoin, touted by its libertarian promoters as a means to break the power of big banks, is really just a whimsical and foredoomed hankering after some “small is beautiful” version of capitalism. As one commentator noted, the so-called “sharing economy” that “leverages information technology through peer-to-peer platforms, empowering individuals to share goods and services through bartering, leasing or the swapping of private assets” seems to be primarily market-mediated although it has enabled the revival of some non-monetised initiatives as well (http://dissidentvoice.org/2016/11/the-true-sharing-economy-inaugurating-an-age-of-the-heart/)
So some experiments carry a greater risk of being co-opted by the system than others. We need more, and a greater diversity, of those kinds of experiments that prefigure, and can catalyse the transition to, the next system. But, on their own, and in splendid isolation, they cannot effect such a transition. They are too small, too easily crushed and too reliant upon, or vulnerable to, the outside world to permit this.
That is why a massive shift in social consciousness is needed - and a social movement embodying this consciousness. This will provide the kind of a supportive social environment in which institutions like intentional communities can begin to flourish.
We see this in the case of Copenhagen’s Christiania - a “semi-autonomous and socially minded community” of international fame. The important thing to note here is that Christiania has been able to exist for 45 years essentially because of the tolerance and acceptance of the city’s authorities and its citizens. However, Christiania illustrates both the strengths and weakness of an approach based on lifestylism and opting out of the mainstream. As Athlyn Cathcart-Keays observes, alongside the vibrant sense of community life, a “capitalist-style drugs supermarket” has emerged in recent years which, together with the prospect of gentrification (ironically induced by the very success of the community as a major tourist attraction), threatens to undermine much of what Christiania originally stood for (“Paradise lost: does Copenhagen’s Christiania commune still have a future”, The Guardian, 23 Sept 2016).
The lesson is clear: social experiments of this kind, through the power of example, can certainly influence the wider social environment but reciprocally will also be influenced by that environment. The potential synergy arising from this relationship is something that needs to be tapped into and utilised at both the micro and the macro level. But that presupposes a degree of alignment at these different levels - that they share the same vision and the same values.
Capitalism and anti-capitalism
To put more flesh on the bare bones of this argument let us begin by looking more closely at the kind of society we live in today.
Perhaps the most immediately striking thing about this society is the fact that goods and services are typically produced for the purpose of being sold on a market with a view to realising a monetary profit. Obviously there are exceptions to the rule but, for the most part, the satisfaction of human needs will – necessarily - play second fiddle to the profit motive. It does not matter fundamentally whether this happens under the auspices of the state as with the old Soviet Union where state enterprises were legally obliged, at risk of incurring heavy penalties (even if they were not actually shut down for making a loss), to pursue an operating profit upon which the central state ultimately depended for its revenue, or whether this happens at the behest of private corporations. It is the same basic system in the end.
Capital accumulation – growth - is the system’s basic raison d’etre and the accumulation of capital out profit is the means by which it fulfils this purpose. This expansionist dynamic at the very heart of the system is what fuels the vertical growth of businesses and national economies and it is also what historically drove capitalism to expand horizontally, spreading out across the globe from its heartland in Europe in search of new markets and raw materials to process into finish goods. It cannot be otherwise in a system in which business entities confront each as competing units. To compete they must accumulate and to accumulate they must realise a profit sufficient to enable them to do just that.
The scramble for market share is thus essentially a zero sum game which drives each competitor to prioritise profit above everything else. Their very commercial existence depends on it. This, in turn, translates into a constant downward pressure on costs, above all labour costs. The very solvency of a business, let alone its ability to expand, means ensuring that its cost outlay does not exceed its revenue and preferably falls far short of the latter. The bigger the profit margin, the better.
This gives rise to a peculiar contradiction. The wages or salaries that a particular business pays its employees, whilst being subject to the aforementioned downward pressure, are also the means by which workers in general, purchase commodities on the market. Yet it is this very market that businesses, in general, would like to see expand in size. A more robust market, more spending power in the hands of consumers, enhances the prospects of making a healthy profit. To put it bluntly, employers don’t mind a substantial hike in the wages of employees, providing this does not apply to their own! There is, in other words, a misalignment of collective and private interests. It is this Janus-faced quality of this system of market competition that really lies at the root of so many of the absurdities we see around us in such abundance.
Producing for a market with a view to profit does not mean, of course, that human needs are not being met under this system. Human existence would cease altogether if this were the case. But this is to look at the matter from the perspective of the consumer of final goods intent upon meeting his or her needs and, contrary to the myth, in capitalism, the consumer is not king. The gratification of human needs is secondary or incidental as far as the producer under this system is concerned.
The primary purpose of production, as I said, is to make a profit. If profit is not forthcoming, then, generally speaking, production grinds to a halt. The production of goods that could gratify a human need is only activated in response to what the economists call “effective demand” which is effective by virtue of the fact that it can it profitability met. Ineffective demand - that is, demand not backed up by sufficient purchasing power - simply falls under the radar. The system is not designed to respond to such a thing. The homeless person on skid row might crave a four square meal but such a craving counts for nothing under this system. To prevent that person starving, charity fills the void, not only in the pauper’s stomach, but in the very structure of capitalist society itself.
Ironically, the continued existence of capitalism is contingent upon a whole host of activities that transcend or break with the logic of the system itself. We are reminded of this every day within the setting of our own families. Without the massive subsidy provided by the huge non-marketised household sector, for instance, capitalism would collapse like a house of cards – though more likely credit cards than playing cards, given the growth of household debt.
The consequences of this systemic neglect of human need are as appalling as they are absurd. Take housing, for example. In Europe, there are some 11 million empty homes and 4.1 million homeless (Robert Neate, 23/2/14, “Scandal of Europe's 11m empty homes”, The Guardian). How can this make any sense? Of those 11 million, Spain has 3.4 million. The Great Spanish Property Boom from the mid-1980s to the early 2000s, partly fuelled by reckless speculators in cahoots with corrupt politicians, not only scarred large swathes of the Mediterranean coastline but led to a situation of significant overshoot which dramatically came to a head in the collapse in property prices in 2008. This huge backlog of unsold properties represents a deadweight on the Spanish economy which some analysts reckon will take years, if not decades, to recover.
Put the problem does not stop there. In addition to empty homes, both old and newly constructed, there are countless half–completed abandoned housing projects brought to an abrupt halt by the irrepressible forces of the market. I am reminded of this virtually every day. The skeletal remains of one such doomed project disfigure a particular hillside adjoining the autovia outside Granada that I frequently drive past, the odd crane here and there towering listlessly over some empty shell of a would-be house, seemingly frozen in time and presumably left there for no other reason than that its owners had no further use of it for the foreseeable future. But even this hardly captures the full extent of the problem. Throw into the equation the figures for empty offices, empty factories, empty warehouses, and so on – some of which could doubtless be converted into decent accommodation - and you arrive at a picture of systemic waste on a truly monumental scale.
Back in those heady days of May 2011, I wanted to find out what my local Indignados thought about these issues. The housing problem figured prominently in the protest although it was far from being the only one. After all, one cannot really disentangle one problem from another - they are all interconnected in various ways. In Granada itself, a ubiquitous graffiti slogan materialised around that time, daubed on walls and shopfronts which tellingly spoke of “people without homes and homes without people”. But how did the protesters envisage this kind of grotesque contradiction being overcome? What kind of long-term strategy did they have in mind?
The problem of making “homes without people” available to “people without homes” is that this runs straight into that most formidable and intractable of obstacles – that under a system of market capitalism profit must, in the end, prevail and there is frankly little or no profit to be made in turning over unpeopled homes to homeless people. They are homeless for a reason – poverty – and this poverty is hardwired into the very DNA of modern capitalism. Even if most of us have homes to live in we cannot escape its invasive reach.
Here, I am alluding to poverty in its relative sense. Absolute poverty, pockets of which can be found in even the wealthiest countries, can be seen as an elaboration or intensification of relative poverty rather than something distinct from it. Our system today requires that the majority are in a position where they have little option but to sell their working abilities – their “labour power” - to an employer for a wage. Without a willing, or acquiescent, workforce no business can hope to expand and flourish. The profit it makes ultimately derives from the difference in value between what workers are paid and what they produce or provide as a service on the market. It would be economic suicide for a business to pay it’s employees the full value of their product. It would deprive them of the means of accumulating capital and effectively competing with their market rivals.
For such a workforce to materialise, workers must essentially be deprived of any other means of securing a living than that of having to sell their labour power to an employer and indeed, historically speaking, this is precisely how capitalism came into being. This was a process dubbed “primitive accumulation”. Rural peasants were reduced to the status of wage workers through the enclosure of common land and through the decimation of home-grown cottage industries and their displacement by large-scale factory production that could undercut the former price-wise. The result was that huge numbers of people were forced by economic circumstances to migrate to the burgeoning towns and enter the labour market. Primitive accumulation is still going on today. Witness the enormous “land grabs” by agribusiness corporations, often with the compliance of local governments, in places like Africa.
So production for the market with a view to realising a profit, or “generalised commodity production”, goes hand in hand with another generic feature of capitalism – namely, a system of wage labour. Simply put, wages are the means by which workers buy back a portion of the fruits of their labour. Since a system of wage labour presupposes the separation – or alienation - of workers from the means of producing wealth this implies that ownership of these means is concentrated in the hands of a small minority. That is to say, it implies private or “sectional” ownership of the apparatus of wealth production and distribution - the factories, offices, stores, utilities, and so on.
All this should be fairly obvious and straightforward. To elaborate - you would not, for instance, think it sensible to talk of having to buy a loaf of bread from the bakery you own. It is because you own it that you can dispense with the formality of buying that loaf baked within its four walls. The same logic would apply if a group of people owned that bakery or, indeed, if the whole of society owned it. Actually, ownership by the whole of society of, not just the bakery, but all the means of the means of producing and distributing wealth – what is called a system of “common ownership” or communism – would in fact logically spell the complete disappearance of the market, of all buying and selling transactions, altogether. This what the famous Communist Manifesto of 1848 was getting at when it talked of the “communistic abolition of buying and selling”. Common ownership is what would make this possible. (https://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch02.htm).
So the very fact that buying and selling exists negates the idea that the means of producing and distributing wealth are owned in common. This is important to understand because common, or social, ownership is often confusingly conflated with state ownership. It is nothing of the sort. State ownership is actually a variant of private property – collective private property or the property of a distinct group vis–a-vis the rest of society.
When you think about it, ownership means the same thing as “ultimate control”. If I own something I exert ultimate control over the disposal of this thing– and vice versa. Certainly, there are degrees to which individuals exercise of control. Employees in a business exercise varying degrees of technical control in their workplace as part of the responsibilities they are charged with but they do not own this business. They do not exert ultimate control over it. That is the prerogative of their employers.
In the former Soviet Union the principal means of the production were nationalised but who actually owned these means? The short answer is those who controlled the state machine - the nomenklatura. In other words, the highest decision-making levels of CPSU, the managers of state enterprises and ministries, the top echelons of the military and so on. Here is where “ultimate control” – and hence ownership - over the economy was exercised.
As Paresh Chattopadhyay has ably demonstrated in his scholarly study of the Soviet Union, it was this small class of individuals that collectively owned the means of wealth production, not in de jure legal terms but in terms that really mattered – in de facto terms (1994, Marxian Concept of Capital and the Soviet Experience). This de facto class ownership was effected via the stranglehold that that class exerted on the state machine and, by extension, over the economy in general under the jurisdiction of the soviet state. As a corollary of this sectional ownership, the great majority in Soviet society were effectively excluded or “alienated” from these state owned means of production. They were obliged to sell their working abilities to their state employers for a wage or a salary to enable them to purchase goods on the market. In short, their economic position did not differ materially from the position of workers in the West.
This is what has prompted some commentators to argue that the system that operated in the former Soviet Union was merely a form of capitalism administered through the state – state capitalism. Not only did consumer goods take the form of commodities but so too did producer goods which were bought and sold between state enterprises and subject to legally binding contracts. Prices, in theory (though not always in practice), were “administered prices” set by the central authorities rather than being directly responsive to the interplay of market forces. This was a peculiarity of the Soviet variant of capitalism that set it apart from other variants and, in the view of its critics, often led to outcomes that were sub-optimal: severe shortages of some goods alongside embarrassing gluts of other goods.
Nevertheless, and irrespective of how their price was determined, these goods still took the form of commodities. They were bought and sold on the market and this is surely the main point. A regulated market economy even one so heavily regulated as the Soviet economy, is still a market economy.
Some dispute this conclusion and maintain that the Soviet Union was actually a “centrally planned economy”. However such a claim does not withstand close scrutiny. No plan handed down by GOSPLAN was ever actually implemented in full. Typically, plans were routinely adjusted in the course of implementation to fit the changing economic realities on the ground – meaning the plan did not so much guide, as was guided by, the latter. Sometimes there was no actual plan available to state enterprises at the start of the plan implementation period. Moreover, as recent research into the Soviet archives has revealed, for the system to even function on its own terms and to overcome the endemic problem of supply shortages, it virtually pushed state enterprises – albeit with a nod and a wink – into engaging in illicit horizontal transactions with suppliers in the vast shadow economy, bypassing the plan and often with the connivance of corrupt bureaucrats (P. Gregory and M Harrison, “Planning and Policy Under Dictatorship: Research in Stalin’s Archives”, Journal of Economic Literature, Vol. 43, No. 3, Sep., 2005)
It is important to mention all this since part of the process of formulating an effective alternative to our current system involves the repudiation of those approaches that have manifestly failed to offer such an alternative. It is beyond the scope of this essay to examine in detail why this was so in the case of the Soviet Union. Suffice to say, capitalism along the lines of a “command economy” model was probably more suited to an early phase of capitalist development characterised by extensive growth when the focus tends to be on building up the basic infrastructure of the economy; it is far less suitable when it comes to the intensive growth characteristic of a more mature and diversified economy.
In fact, the collapse of the Soviet Union was not the result of some huge groundswell of public opinion against "communism"; it was, rather, a consequence of a "revolution from above”. According to Kotz and Weir, the party-state elite, in the wake of Gorbachev's reforms and the deteriorating economic circumstances, opportunistically decided to switch allegiance from the jaded old bureaucratic model to "market capitalism" as a way of preserving and extending their influence and wealth (David Kotz & Fred Weir, 1997, Revolution from Above: Demise of the Soviet System). A key moment was in 1990/91 when the regional elites abandoned Gorbachev in favour of Yeltsin. Correspondingly, there was a widespread defection from Soviet to Republican institutions - most notably in the form of companies redirecting their tax payments to the latter. The shock therapy of 1992 which heralded a programme of rampant privatisation, provided some in the nomenklatura with a golden opportunity to seize direct control, this time as individuals, of much of the economic assets of Russia, using their considerable connections, political patronage and influence to morph into modern-day Russian oligarchs. Indeed, according to one estimate, even today, two decades on, 43% of the oligarchs were previously high-ranking members of the communist party ("Postcommunist Oligarchs in Russia: Quantitative Analysis Export", Serguey Braguinsky, The Journal of Law and Economics, Vol. 52, No. 2. pp. 307-349.) .
So more state ownership and control of the economy does not seem to offer any kind of exit route out of our present day global system. The proof of the pudding lies in the eating; the Soviet Union no longer exists. Yet, even so, the whole soviet experience continues to cast a long shadow that still obscures and limits our thinking. We are presented with a simplistic bipolar model of the world where the state constitutes one pole and the market the other. The governing assumption seems to be that if you reject outright the latter, that means you embrace the former and, taken to its extreme, this can be interpreted as signifying that you endorse something like the old soviet model of state capitalism.
Between the naked brutality of the state and the callous indifference of market forces, most people understandably opt for some kind of middle ground position along this spectrum – a so-called “mixed economy” purporting to represent the best of both worlds whereby the presumed wealth creating potential of the market is enthusiastically harnessed but its anti-social consequences are tempered by the actions of an intervening state. Excessive state intervention, however, goes the argument undermines competitiveness by saddling business with punitive levels of taxation; too little intervention, on the other hand, carries the risk of society being overwhelmed by the problem of externalities, the inadvertent by-product of market transactions. The trick is to get the balance just right.
This the standard fare served up by mainstream economists. At no point in this conventional discourse, however, do we have any inkling of a perspective that lies beyond this narrow bipolar state-market spectrum. This way of thinking comes with its own assortment of political labels. The more state intervention in the economy you advocate the more “socialist” your outlook. Extreme interventionism makes you a “communist”. By contrast, wanting less intervention and less regulation makes you somehow more “pro-capitalist”.
I find such talk highly misleading and, moreover, based on a false dichotomy. In fact, one of the most significant examples of large-scale state interventionism in the modern era was none other than that of Germany in the late 19th century under its iron chancellor, Otto von Bismarck. Bismarck was a vehement anti-socialist and 1878 passed the notorious “anti-socialist laws” in an ultimately doomed attempt to stifle the growth of organisations like the German Social Democratic Party. Under Bismarck, wide ranging nationalisation was carried out and the first modern welfare state was created - partly (by Bismarck’s own admission) to wean support away from his socialist rivals. Lenin himself greatly admired this state capitalist re-organisation of the German economy that Bismarck had initiated and urged his fellow Russians to “spare no effort in copying it and not shrink from adopting dictatorial methods to hasten the copying of it.” (V.Lenin, May 1918, Left -Wing Childishness And Petty-Bourgeois Mentality)
So this longstanding debate over whether one form of capitalism is preferable to another strikes me as largely irrelevant. The state and the market do not so much oppose, as complement, each other. To a great extent, they sing from the same hymn sheet. States need businesses to flourish and prosper as this is essentially where their tax revenues come from. Businesses, reciprocally, need states - not just to uphold and protect their property rights, maintain social order and foster an environment in which they can flourish and expand, but also to act as a kind of referee in their dealings with each other and to generally facilitate and promote their interests in the wider international context.
Contrary to the belief of “anarcho-capitalists” and others, capitalism is not defined by the presence of free markets and the absence of the state. Indeed, the anthropologist David Graeber has contended that it was actually the state that created the very institution of the market itself as a means of provisioning ancient armies (2011, Debt: The First 5,000 Years). Capitalism, being essentially a system of generalised wage labour, would never have come into existence without the active, and even brutal, the intervention of the state. Michael Perelman, in his book, The Invention of Capitalism: Classical Political Economy and the Secret History of Primitive Accumulation (2000), recounts how many of the leading figures in the development of classical political economy such as Adam Smith, David Ricardo and James Mill, while extolling the virtues of free enterprise, reveal in their diaries and private correspondence, a darker side to their thinking - a compulsive fascination with the theme of how to force a more or less self-sufficient rural populace to forsake its way of life and move to the towns to take up waged work in the factories. Publically, they eschewed state compulsion and interference in economic affairs but, privately, they embraced it enthusiastically and to the hilt insofar as it led to this outcome.
This notion that capitalism is to be equated with functioning free markets is not just promoted by ardent free marketeers, however, but also - ironically - by many of those ostensible opponents of capitalism that comprise the anti-capitalist movement. The focus of their animus tends to centre on what is called “neoliberalism” rather than what I would define as capitalism. In other words, a particular variant of capitalism rather than capitalism per se. Neoliberalism has been well described in one blog as follows:
“The term ‘neoliberalism’ refers to an economic program of deregulation, privatization, trade liberalization, corporatization and small government – a project to subject more and more economic activity to the whims of “the market”. At its core, neoliberalism is an attempt to make profitability the governing principle in all economic calculation. For this neoliberal aspiration to be approximated in reality, government must behave as if it is just another market participant” http://heteconomist.com/neoliberalism-the-attempt-to-subsume-society-into-the-market/
What these critics of neoliberalism seemingly want is that the government instead of behaving like just another “market participant” should more boldly assert its independence of, and stamp its authority upon, the market. In short, direct it to comply with social objectives other than just the pursuit of profit. But the market and the state are not mutually independent entities that face off each other in a posture of unremitting hostility. They are more like Siamese twins joined at the hip. As with any pair of twins there is the occasional spat that flares up between them – in this case over the scope of their respective roles and the perennial concern that one might be treading on the toes of the other.
The state can no more afford to completely override the market - the goose that lays its golden eggs – than the market can completely assert its independence of the state. The neoliberal order that began to take shape in the late 20th century represented a resurgence of classical economic liberal ideas in the wake of the dismal failure of the mainstream Keynesian-inspired macroeconomic strategy to avert the recurrence of economic crises. In other words, it marked an attempt to restructure the relation between the market and the state rather than sever it. In terms of our metaphor, one of our Siamese twins began to stamp its foot down more firmly and assert its authority when it became clear that the other had led them both up the garden path.
The belief that the sustained growth of the early post-wars years was essentially due to the application of this Keynesian strategy is based on a fundamental misreading of the situation. Such growth was primarily driven by the exigencies of post-war reconstruction. When this had played itself out it was almost inevitable that the familiar pattern of the boom-and-bust trade cycle would, sooner or later, reassert itself.
The basic mistake in that strategy of “demand management” or “pump priming” the economy, and it is one that is, unfortunately, being repeated by many in the anti-capitalist movement today, centres on its adherence to an “underconsumptionist” model of economic crises. According to this, crises occur because there is insufficient consumer demand in the economy to buy back the output of industry. So austerity programmes are opposed, not just because they impact negatively on the quality of our lives - which is true enough – but also because it is believed that “giving people more money” – injecting more demand into the economy - enables us to spend our way out of a recession.
It is this last claim that is fundamentally questionable – on both empirical and theoretical grounds. If a crisis was a result of the restricted consumption of consumer goods we would expect it to first take hold within the consumer goods sector of the economy whereas usually, it is in the capital sector that this happens. Moreover, as Marx long ago noted, crises are generally preceded by a period in which wages rise (Capital, vol 2, chap 20). The subsequent fall in wages would demonstrate, if anything, that the reduced consumption this entails is the result, rather than the cause, of, an economic crisis. In any event, as mentioned earlier, production tends to be tailored to what can be profitably sold on a market and no more - even if, in fact, some of what is produced may end up not being sold at all. The point is that this is an inadvertent consequence of the system’s operation and not what drives it.
Capitalism does not, and has no reason to, deliberately overproduce in relation to aggregate demand. Furthermore, the idea that aggregate demand is made up simply of what workers and capitalists together are able to spend on consumer goods overlooks the demand for producer goods which capitalists buy from each other. This was the point that Marx made in Book II of his Theories of Surplus Value in his criticism of Ricardo's pessimistic claim that spending money on new machinery diverts it away from consumption. In order to produce that new machinery, more labour would be needed, argued Marx, which in itself would tend to avert an underconsumptionist crisis. After all, more labour being employed means more wages being paid and hence an increase in the purchasing power of workers in general.
In the main, crises originate not at the level of the economy as a whole in the form of insufficient aggregate demand but, rather, in the inter-relationships between different sectors of the economy and the tendency for one sector to overproduce in relation to the demand for its products from other sectors and the consuming public. This is what is called the “disproportionality theory” of crises. As Marx noted, "if production were proportionate, there would be no over-production" (Theories of Surplus Value, vol. 11)
This tendency towards disproportional growth, which is intrinsic to a market economy, occurs because businesses are compelled by competition to seek to step up their output and increase their market share regardless of their market rivals who are, of course, similarly subject to these self-same competitive pressures. There is, in other words, no coordination between their separate production schedules. The consequences of this “anarchy of the market” will sooner or later manifest itself in one or other sector of the economy, to begin with. The over production of goods here in relation to the market demand for them will result in worker layoffs which will inevitably impact on the consumer demand for goods produced in other sectors. There will also be a reduced demand for capital goods which will likewise effect other sectors supplying these goods. As a result, a kind of knock-on or spillover effect will begin to take hold whereby the problem of over production will spread outwards from one particular sector to engulf an expanding number of other sectors leading eventually to a generalised recession. That, in turn, will lead to, amongst other things, the depreciation or writing-off of capital, which will then recreate the conditions that allows economic growth to return and a new cycle of boom and bust to commence. Some writers, like Andrew Kliman, attribute the chronic sluggishness of the economy in recent years to the fact that not enough capital has been written off to permit more vigorous growth.
There are one or two further observations that I would like to make in relation to this question of economic crises which will tie in very well with what I have to say in the next section.
Firstly, the suggestion that crises happen because of the inherent inability of businesses to coordinate their production schedules under conditions of market competition might appear to lend support to the concept of “society-wide central planning” alluded to earlier. This is the idea that the overall pattern of inputs and outputs should be coordinated in advance within a kind of gigantic Leontief-type matrix covering the entire economy. A process called “material balancing” would ensure against the possibility of acute shortages or surpluses occurring anywhere in the economy and the wasted potential this represents. Of course, this presupposes the centralisation of all decision-making in the hands of a single planning authority and, in effect, the elimination of market competition between production units.
The Soviet Union, as we saw, claimed to have initiated just such a system of centralised planning. This, it has been suggested, largely exempted it from the vicissitudes of the capitalist trade cycle that plagues Western economies. But, there are no grounds whatsoever for making such a claim. The planning system under the auspices of GOSPLAN was, as I indicated, to all intents and purposes, a sham. Disproportionalities were rife within the Soviet economy and particularly manifested themselves in the guise of endemic shortages of many kinds of consumer goods. Though officially unemployment was not supposed to have existed in the Soviet Union in practice it was conveniently disguised by keeping workers on the payroll when, in fact, there was little or no work for them to do.
However, the more important point to be made here is that this abstract model of central planned economy is, in any case, quite impractical. Since all the parts of the economy are organically interconnected, any change in the ratio of inputs to outputs anywhere in the economy will undermine the integrity of the Plan, meaning it will have to be reconfigured in its entirety. The problem is that in the real world change is inevitable and ongoing. For multiple reasons – population growth, shifts in consumer preferences, technological advances or even natural disasters - central planning in its literal sense of apriori society-wide planning will never even be able to get off the drawing board.
The inference we can draw from this is that no large scale advanced economy can possibly be planned in this overall sense. In other words, the different parts of the system - the different production units, for example – need to be able to adjust to each other’s constantly changing requirements via some sort of feedback mechanism. Conventionally, of course, this mechanism has been identified as Smith’s so called “invisible hand of the market”. However, in what follows I will outline an alternative form of this self-adjusting self-regulating mechanism which not only completely bypasses the market but removes it from the picture altogether.
One other observation on the subject of economic crises concerns the rather peculiar and unique role that money plays in the life of our modern capitalist economy. Back in the early 19th century a French economist by the name of Jean-Baptiste Say propounded what has come to be known as Say’s Law, namely: “A product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value” (1803, A Treatise on Political Economy). In other words, supply invariably creates its own demand.
Say’s critics, amongst them Marx and Keynes, attacked this law as an absurdity. If it were true, there could never be such a thing as a glut of unsold products on the market. In other words a recession. In fact, what Say was doing was basing his economic model on a system of barter. But a capitalist money-based economy is quite different to a barter economy. Under a system of capitalist trade, the seller of one commodity does not necessarily become the buyer of another. Marx put it thus: This whole subterfuge then rests on abstracting from money and from the fact that we are not concerned with the exchange of products, but with the circulation of commodities, an essential part of which is the separation of purchase and sale. (Theories of Surplus Value, Part 2, Ch XVII).
The possibility of a rupture in the circulation of commodities is always latent in the very form of capitalist trade. A seller who has just acquired money for the product she has sold is under no obligation to forthwith spend this money on some other product. It can be held back or hoarded, creating a time lag that can have significant economic repercussions. This is often the case when investors see no immediate prospect of a healthy return on their capital. So instead of investing, they hoard it or spend it on extravagances such as luxury houses or Objets_d'art that do little to generate jobs or spread wealth.
Needless to say, this frequently draw criticisms from anti-capitalists themselves. Ironically, it is almost as if these critics are remonstrating with investors for not being sufficiently resolute or capitalist-minded in their financial deliberations by ploughing back their huge profits into building up the real economy. As one critic complained (2012), the system encourages a “strike of capital”:
“It is resting on a mountain of cash locked up in the vaults of big companies in Britain and the US: an eye-watering £120 billion in Britain and a colossal $2 trillion in the US. Even Will Hutton in the Observer and Martin Wolf of the Financial Times, apostles of capitalism, frantically urge them to invest. In vain! The capitalists see no profitable outlets. The system is in the death grip of a huge debt overhang; zombie banks in zombie capitalism!” (http://www.socialismtoday.org/156/britain.html)
While there is no compelling evidence to suggest that the system is about to implode, there is something inherently perverse about a state of affairs in which human misery can magnify and multiply in the face of a technological potential that can make life materially comfortable for everyone. What absurd logic is it that condemns people to starve in the very shadow of the food mountains the market cannot absorb, that destroys food to prop up prices and pays farmer not to produce?
The problem goes way beyond the blatant immiserisation of absolute poverty. Few people in the West, at least, suffer from really serious physical deprivation; most of us have a home of sorts to live in and food on the table. However, what afflicts nearly all of us, even the comparatively well off, is a form of mental torture, the gnawing anxiety of chronic insecurity that condemns us to live lives that are not truly our own, that impoverishes us in so many other ways than just by restricting the size of our wallets.
This, I suggest, is what really lies at the heart of the indictment that can be levelled against our present system We feel ourselves to be in thrall to malevolent forces not of our own making and not even of those who so conspicuously prosper and benefit from this system. No one, for instance, deliberately and consciously engineered an economic recession. It is a phenomenon that seems to materialise out of nowhere against our collective wishes. A manifestation of the machine-like quality of the system we live under and within which we figure as mere cogs.
But it is not enough to “rage against the machine” as one notable American rock band called itself. As flesh-and-blood beings we need to go beyond this and assert our humanity in the face of a dehumanising mechanistic paradigm of thinking that seems to be province of social engineers of every stripe.
Strolling through Granada when the Indignados protest was in full swing I met a young woman distributing flyers. We struck up into a conversation about the movement. To my surprise she told me that at the local open-air meetings, there had been, along with the passionate tirades against usurious bankers, corrupt politicians and the like, some animated theoretical discussion on, amongst other things, the idea of a “society without money”.
I pricked up my ears on hearing this for this is an idea I have long mulled over myself. For hundreds of years it seems to have enjoyed a kind of subterranean existence, surfacing into the light of consciousness through the medium of art, literature and even overt political struggle – from Thomas More’s “Utopia” to Pieter Bruegel’s great 16th century oil painting, “The Land of Cockaigne”, which depicts a mythical land of moneyless plenty. James Buchan’s fascinating book Frozen Desire: An Enquiry into the Meaning of Money (1997) explores the epic struggle between money values and the romantic renunciation of those values in the long history of western thought. This clash of values came to a head in the 19th century with emergence of socialist political movements that explicitly identified their ultimate goal as, inter alia, a moneyless society. If the impetus towards such a goal has faltered that, I suggest, can in no small measure be put down to the fact that so many sincerely believed the great Soviet experiment in state capitalism would somehow pave the way to this kind of society. The ignominious collapse of that experiment, and the insidious idea it cultivated that any attempt to transcend market capitalism is doomed to end in the enslavement of the people to some political tyranny, has unquestionably helped promote the belief that there is no alternative to the system we live in.
Yet the idea of such an alternative refuses to die or go away. It is explicitly embodied in the aspirations and hopes of organisations like the Zeitgeist movement and others promoting what they call a “resource based economy. More importantly still, it is the subtext of our very social existence. The tendency, noted by Buchan, for money to become not just a means to fulfil our desires but the very incarnation of human desire – an end in itself – is daily rebuffed or contained by the “communism of everyday life” that David Graeber speaks of. As the song goes, the best things in life are free. There are practical limits to the extent to which cash nexus can insinuate itself into our psyche and mediate our human relationships. Beyond those limits we glimpse the possibility of another world.
Can we build on this resistance and create a society in which money completely ceases to exist? There is an unfortunate tendency to see the problem in terms of money per se. “Money is the root of all evil” is a common sentiment, though it misrepresents what the apostle Paul supposedly said his disciple Timothy which is that it was the “love of money”, not money as such, that was the problem (1 Timothy 6:10).
The point is that money is not a thing - it is a social relationship – and looking upon it as a thing is to adopt a kind of fetishised view of money which, ironically enough, is deeply disempowering because it obscures the very source of that powerful spell which money wields over us – how we relate to one another. What we need to be doing instead is to focus on the kind of social relationships that necessitate money and of which money is emblematic.
I have already touched on this to an extent. I have described our current economic system in terms of a constellation of generic features which interlock in an organic way such that each implies the existence of every other such feature. Class ownership of the means of production, generalised wage labour, production for sale on a market and so on, all hang together as a seamless whole. By the same token the next system, whatever the label you attach to it, has to be similarly conceived of as a seamless whole. This systemic or holistic approach is predicted on the assumption that the constellation of generic features that might constitute this next system must by their very nature negate or radically depart from what constitutes our present system, rather than represent merely a gentler, more humanised or sanitised version of the latter. No amount of legislation can induce a leopard to change its spots.
In what follows, I list and briefly discuss what I consider to be the core features that might define such a system. After that I will consider some of the chief objections raised against it and, in the course of doing that, will develop a more nuanced model of this proposed system.
(1) Common ownership
We tend to think of the various components of the natural world around us as being, quite rightly, the common legacy of humankind. In his famous lament of 1854, Chief Seattle’s chastised the white settlers of North America and their system of commercialised greed in these haunting words: “The earth does not belong to man; man belongs to the earth…All things are connected. Whatever befalls the earth befalls the sons of the earth. Man did not weave the web of life, he is merely a strand in it. Whatever he does to the web he does to himself”. The venerable old chief expressed bafflement at Washington’s offer to purchase land from the tribe. How can you buy or sell the sky or the warmth of the land, he pondered.
A primary characteristic of such “common property resources” is that they are non-excludable - meaning it is impractical, if not impossible, to prevent people making use of them. “Excludability” is related to, but is not quite the same as, “rivalry” in economic theory. If I intend to eat this apple then that obviously precludes you eating it. However if there was an abundance of apples to choose from then there would no longer be rivalry between us even if individual apples were still excludible. The very air we breathe, on the other hand, would hardly fall into either of these categories. Climate change exacerbated by the emission of greenhouse gases is a vivid illustration of our mutual interdependence and of the principle of non-excludability.
Yet, when it comes to the application of human labour to transform natural resources into the products we consume, this principle seems no longer to apply. According to the so called “labour theory of property” formulated by the 17th century philosopher, John Locke, something becomes mine by virtue of the labour I bestow upon it or exert in the making of it. The problem with this theory, however, is that we no longer live in a society of small scale petty commodity production, if we ever did. There is literally nothing you can point to and declare that it was the product of your effort alone. The material culture we are immersed in and daily consume is the outcome of highly socialised labour. Any particular item we can think of is in reality, directly or indirectly, the output of the combined inputs of millions of people right across the globe, as are we ourselves, along with the skills we have acquired. Human beings are also, in a sense, “products”.
So the principle of excludability expressed in this particular form of the labour theory of property would seem fundamentally questionable. The socialisation of the production process would seem to have as its logical corollary, the social or common ownership of the means of producing wealth. Our contemporary system of private ownership thus seems to operate against the very grain of how we go about producing wealth. To that end, it cultivates the myth that we live in some kind of “meritocracy” where the pattern of wealth distribution and income is supposed to reflect our individual contribution to society, our labour input.
The reality is quite different. A recent report by Oxfam reveals that a mere 62 billionaires own as much wealth as half the world’s population (https://www.oxfam.org/en/pressroom/pressreleases/2016-01-18/62-people-own-same-half-world-reveals-oxfam-davos-report). However, it is just not plausible to argue that such stupendous wealth could derive from any other source than the unearned income accruing to such individuals simply by virtue of their private ownership of staggering sums of capital. Common ownership makes this no longer possible and thus brings to an end the systemic exploitation of one section of society by another.
(2) Democratic control
Ownership of something, I earlier suggested, equates with the ability to exert “ultimate control” over it. Does that mean “common ownership of means of production” will entail all of us democratically exercising “ultimate control” over the entire apparatus of production? Well, no. Understood literally, that is not really feasible in a global society of 7 billion people for obvious reasons. Democracy, amongst other things, requires informed decision-making and the amount of information any one individual can assimilate is severely limited. The logistics of decision-making will tend to favour instead the principle of “subsidiarity” - the idea that issues should be discussed and decided upon at the lowest possible level compatible with their resolution. That is to say, where such issues make a significant impact.
In practice, this will generate a system of multi-tiered scales of organisation – local, regional and global – based on polycentric planning as opposed to unicentric or society-wide planning. Of course, this is what already exists but in the next system, I suggest, there would be, if anything, a greater preponderance of decision-making or planning at the local level (where the bulk of issues impacting on our lives tend to arise) and a reorganisation of production along more localised lines. Indeed, this would be more consonant with an environmentally friendly and sustainable approach to production itself. It would not only help reduce energy costs by cutting back on unnecessary transportation of the coals-to-Newcastle variety; it would also sensitise local communities to the ecological constraints of their immediate environment and foster a greater sense of self-reliance. In capitalism, by contrast, the built-in impulse towards globalisation though international trade, widens our ecological footprint and thereby weakens our sense of connection with, dependence upon and responsibility towards our immediate environment.
More localised control, however, does not equate with local communities taking local resources into local ownership. In fact, if anything, the very notion of “ownership” in this possessive sense as incarnated in the principle of quid pro quo exchange, would likely die out completely. Another way of looking at concept of universal common ownership of the productive resources of society is that nobody owns them at all. In de facto terms, there would be no “ultimate control” in that sense – or, at least, the term itself would be rendered meaningless in the same sense that the colour “red” would be rendered meaningless if we could only ever perceive the world around us in different shades of red. However, in terms of the argument I presented earlier, control would still be exercised at various levels that fall below this notional concept of “ultimate control” in much the same fashion as employees exercise varying degrees of technical control today within the firm over which their employers alone exercise ultimate control. “Ultimate control” (or ownership) is only meaningful by virtue of the fact that the owners of other firms are prevented from exercising such control in the case of this particular firm but the analogy breaks down completely when we try to apply it to the kind of society that I have outlined where the means of production cannot be monopolised by anyone
(3) Production solely for use
As has already been noted, this is implied in the very concept of common ownership itself. Common ownership of the means of producing wealth automatically precludes any kind of quid pro quo exchange relationship interceding between a person’s wants and the gratification of those wants. It implies therefore that this person has free or unmediated access to the goods and services that might gratify these wants as determined by this person herself.
Naturally, such an arrangement is only sustainable where there exists a technological infrastructure capable of delivering a level of material plenty for all and the cultural adaptation of individuals to such a reality in terms of the values and expectations they hold.
If common ownership of the means of production entails free access to the products of industry then, by extension, those products must be the output of labour that is freely provided, rather than forced. In every class-based society, the labour of most people is forced in some way. The need to produce an economic surplus that is then appropriated by the dominant class, necessitates such force. In modern capitalism, this is not usually effected by direct brutal methods (as was the case with, say, the corvee system under feudalism), but indirectly through the economic compulsion that derives from not having sufficient capital to live upon and therefore being required to sell your skills to an employer.
In a society where the productive resources are owned in common and you have free access to the products, these kinds of compulsion – political or economic – would fall away. Labour would be performed on a purely voluntary or unremunerated basis. That is not to say all compulsion as such would disappear. There is another kind of compulsion which is common to every conceivable kind of society – internalised moral compulsion.
For the hypothetical society we are talking about this is best summed up by the technical term employed by anthropologists – a system of “generalised reciprocity”. The sense of moral obligation towards others which is something that is inculcated in us through the process of socialisation, whatever kind of society we live in, exerts a powerful constraint on human behaviour and would arguably be strengthened in a society in which we no longer have to compete with each other and where our mutual interdependence will be much more transparent. This sense of moral obligation, will be supplemented by other motives that will induce individuals to freely contribute their labour for the betterment of themselves and the society they live in.
Countering the counter-arguments
There are several different arguments that have been advanced purporting to demonstrate that the kind of society I have outlined is not feasible. Here I focus on the principal ones.
(1) “Human nature”
Essentially, this argument states that it is not in our nature to freely cooperate, that any alternative to our existing arrangement will break down under the weight of the Free Rider problem and that without some form of rationing, like money, people will help themselves to as much as they can and inadvertently bring about a competitive struggle over resources that will culminate in social collapse.
However, this argument flies in the face of history, logic and science. There is no nature-given social template to which human beings are obliged to conform in order to function as a society. Historically we have lived under astonishingly diverse kinds of society. For over 95% of existence as a species we lived in small nomadic, food-sharing, hunter-gatherer bands – a sort of “primitive communism”. If there was such a thing as an innately determined social template it would probably be this.
It is our sheer adaptability that marks us out as a species. Though genes clearly play a role in the kind of people we turn out to be – we are not blank slates - it would be thoroughly misleading to suggest that we are genetically hardwired to live in any one particular kind of society. Advances in the science of genetics in the guise of the Human Genome Project have, ironically, repudiated this kind of crude biological determinism and offer instead a much more subtle and complex picture of the way in which genes and environment interact.
“Greed”, for instance, is not something that is innate; it is triggered or conditioned by an environment of scarcity. Anyone who has patronised one of those restaurants where you can eat as much as you like for a fixed price will understand that there are limits to how much you can eat before you baulk of the idea of another mouthful. “Scarcity” itself which, according to economic orthodoxy, stems from our insatiable appetites is actually a social construction; it reflects the kind of society we live in.
Partly, it is a projection of the insecurity we experience which is intrinsic to a system of market competition. We tend to over-compensate out of fear of what an uncertain future may bring. The atomisation of our individual destinies under this system throws us upon our own resources and so we strive to secure our futures by accumulating more than we really need. Partly, also, it is because social status today is linked to the conspicuous consumption and display of wealth that, there is technically no limit to the amount of wealth needed to augment our status. This is because the pursuit of status is itself a zero sum game. By contrast, where goods and services are freely accessible this particular concept of status becomes meaningless; the only way in which you can attract the respect and esteem of your fellows is through what you contribute to society, not what you take out if it.
Admittedly, scarcity is not just a matter of perception; it is also grounded in material facts. People do, after all, suffer real deprivation. But it is precisely in this regard that we can identify several clear productive advantages that our hypothetical next system would have over our present system.
Firstly, it would eliminate the waste associated with capitalist trade cycle which manifests itself in the kind of contradictions I have referred to. Secondly, without the constraints of the profit motive, producers will be able to freely innovate in ways that increase productivity – robotisation being an example – without the adverse consequences this has today.
Thirdly, and most importantly, most of the work that is carried on in the formal sector of the modern capitalist economy today will no longer be required. Financial services is a good example. This work, though indispensable to the operation of a money-based capitalist economy contributes nothing in itself to the satisfaction of human needs. The vast quantities of labour and resources tied up in such socially useless activities – most estimates based on data supplied by bodies like the American Bureau of Labour Statistics would suggest that over half of all employment in the formal sector today falls under this heading – would be freed up and redirected towards increasing socially useful production. That is, eliminating artificial scarcity.
Another aspect of the so called human nature argument concerns the “incentive problem”. It is suggested that without remuneration of some sort, there would be no incentive for individuals to freely contribute their labour. This claim is simply not credible. There are numerous reasons why individuals work, even under capitalism, apart from the prospect of acquiring money. Some evidence suggests that, if anything, money can act as a disincentive by undermining the intrinsic motive to work (http://www.bbc.com/future/story/20120509-is-it-all-about-the-money). It is not so much work that people object to as the conditions under which they work. Under a system of waged employment in which workers have little control over their work but have to submit to the authority of their employers, it is not surprising that negative attitudes to work prevail
Moreover, a substantial amount of work done today is, in any case, completely unremunerated - the household sector, the voluntary sector, mutual aid projects and so on – or what is called the “grey economy”. According to one estimate, in terms of total labour hours expended, the grey economy is slightly larger than the white and black economies combined (Charles Handy, 1984, The Future of Work). More recent evidence supplied by the UN suggests these proportions have not changed much.
(2) The Scalability Problem
In a nutshell, this argument maintains that the idealised set of relationships depicted here, while feasible in a micro-level face-to-face setting cannot be “scaled up” to the macro-level of society as a whole. This is not an argument about the feasibility of large scale cooperation as such, examples of which already abound. Rather, it is argued that the affective ties to underwrite this kind of institutional architecture would not be forthcoming in the society envisaged here.
This is mistaken for two reasons. Firstly it implies that altruism would be the sole motivating factor behind large scale cooperation in such a society. However, concern for the wellbeing of others is not the only reason why individuals might conceivably cooperate. They could also cooperate out of “enlightened self-interest” and I see no compelling reason why both motives could not operate in tandem. They don’t contradict, but complement, each other.
Secondly, it is simply not the case that affective ties are necessarily restricted to face-to-face situations. Numerous counter examples can be gleaned from the anthropological literature which refute this claim – like the tradition of hospitality towards strangers in cultures as diverse as the Bedouin or Inuit. These are traditional societies but in modern societies, too, we see another striking counter example in the case of nationalist sentiment. Whatever one’s view of nationalism, it unequivocally shows we are quite capable of emotionally identifying with others beyond our immediate circle.
Still another example is charitable donations to famine relief. That we are capable of connecting with remote others on the side of the globe – not just practically but emotionally too – and are more and more inclined to do so is an argument evocatively captured in the title of a seminal book by the moral philosopher, Peter Singer, The Expanding Circle: Ethics and Sociobiology (1981)
(3) The Economic Calculation Argument
This argument is principally linked with the Austrian economist, Ludwig von Mises, whose seminal work, Economic Calculation in the Socialist Commonwealth, written in 1920 , purported to show that it would not be possible to support a large scale advanced economy that dispensed with markets or price mechanism. Essentially, what Mises was saying was that in order to economise on resources you need some way of comparing different methods of producing a particular good in order to be able to select the least-cost combination of factor inputs. This necessitated reducing all such inputs to a common denominator – money – which presupposes market exchange and private property. Failure to do so would result in massive misallocation of resources and generalised impoverishment.
However, Mises’ argument was based on a fatal flaw which he could probably not have perceived at the time. He was living in the immediate aftermath of the Bolshevik revolution and so took as his only model of an alternative to market capitalism, the highly centralised economy the Bolsheviks aspired to bring about. Thus, he had no conception of an alternative that did not involve society-wide central planning. He did not seem to understand that it was indeed entirely possible to have a self-regulating system of production that overcame the insurmountable problems faced by a centrally planned economy but, at the same time, did not entail a market at all.
Of course, Mises was writing in an era when concepts such as “distributed computer networks” were unheard of. Yet it is precisely the technology of modern telecommunications developed by capitalism that makes capitalism’s transcendence eminently feasible. It is this technology that makes entirely feasible a self-regulating system of stock control employing only “calculation-in-kind” – not monetary calculation - as the very lynch pin of an alternative economy (https://libcom.org/files/CommonVoice3.pdf)
Indeed, in a sense such an alternative already exists right under our very noses; it is simply hidden from view by the predominant role that monetary calculation plays today. A modern supermarket, for instance, routinely uses calculation-in-kind to monitor and replenish its stock levels. Understanding this allows us to see how Mises’ original objection to a moneyless society can be decisively overcome. For once we are able to access data pertaining to the stocks of relevant factors of production we are in position to determine which factors we most need to economise on in terms of their “relative scarcity, applying the “Law of the Minimum” first formulated by the 19th century chemist, Justus von Liebig.
Oscar Wilde once wrote:
“A map of the world that does not include Utopia is not worth even glancing at, for it leaves out the one country at which Humanity is always landing. And when Humanity lands there, it looks out, and, seeing a better country, sets sail. Progress is the realisation of Utopias.” (The Soul of Man Under Socialism, 1891)
What I have sketched out in this essay is indeed a “utopia” in this sense. It is not a perfect society – there is no such thing - but it is, I suggest, a better one than our present one. It may well never see the light of day but that in itself is not a good enough reason not to strive after it. Concepts are the carriers of values. Like nitrogen-fixing rhizomes, they fix those values we choose to live by and, from our standpoint, help to enrich the surrounding soil into which they permeate. So it is with the kind of concept I have been promoting here; it cannot but have an effect even if it may never be put into effect.
In any case, what other options do we have? Conventional approaches to tackling the core problems of society have been put into effect and have all manifestly failed. As one rather profusely bearded and controversial thinker in the 19th century once helpfully suggested, we have nothing to lose but our chains by trying some other approach.