The Wall Street Crash of 2008 destroyed an estimated €50 trillion of the world’s assets, which is equal to one year of the combined labour of humanity. As a direct consequence, millions of children face the prospect of ‘long-term irreversible cognitive damage’, according to Patrick Montjourides, from the UNESCO’s Global Monitoring Report team. Rising food prices and growing unemployment have already led to the death of between 200,000 and 500,000 children and many more will suffer brain damage in future due to malnutrition.
Yet many still claim that there can be no alternatives to capitalism. ‘We cannot picture to ourselves a world that is essentially different from the present one, and at the same time better,’ claims Francis Fukuyama. (1992: 46) This sentiment is echoed by left wing critics who denounce the current system but suggest that ‘it is easier to imagine the end of the world than it is to imagine the end of capitalism’. ( Fischer, 2009:2) The roots of much of this pessimism stem from a belief that the USSR was a form of ‘actually existing socialism’. The fall of the Berlin Wall and the subsequent collapse of the USSR are taken as proof positive that public ownership of enterprises and socialist planning cannot work.
The global Occupy movement has begun to change that. It inspired millions across the world and has bridged continents with its catch-cry about the 99 percent who are excluded from economic decision making.
The roots of the movement lay in the magnificent revolt in Egypt which toppled the dictator Mubarak. Despite a decade of officially inspired Islamophobia – which was originally associated with Bush’s war on terrorism – many people learnt from that revolt. The tactics of occupying central city squares soon spread to Spain, Greece and America and a global movement was born.
Its first achievement was to open a space whereby it becomes possible to think of alternatives to capitalism. In the recent past, an often demoralised and defeated left thought that the only realistic prospect was to seek a reform and a humanisation of capitalism. But there is now new energy and confidence among anti-capitalists as many more ask: could there really be a different type of society?
Resistance will be strengthened if an understanding about possible alternatives grows. Most people are more likely do battle if they think there is a chance of winning. As long as Margaret Thatcher’s motto that ‘There is No Alternative’ is accepted, it becomes harder to fight for the smallest of change. How, therefore, might we think of post capitalist alternatives?
A discussion on a post capitalist society will be more fruitful if we avoid two common but mistaken approaches.
One is to suggest that there already was an alternative in the communist societies and it failed miserably. But this ignores how these were characterised by a high level of state control and had little to do with human freedom. However, the USSR and the communist regimes of Eastern Europe were not an alternative to capitalism but a mirror image of it. They were controlled by bureaucratic elites who ran the economy as a military industrial complex to compete with their cold war rivals in the USA. There was no democracy, no independent unions, and no element of workers control. The consumption fund to provide goods and services for the population was systematically squeezed to pay for a huge military machine. They had nothing in common with the anti-capitalist alternatives advocated by Rosa Luxemburg or Karl Marx or, despite the many distortions, Lenin. The Irish socialist, James Connolly, explained the difference fairly succinctly,
Socialism properly implies above all things the co-operative control by the workers of the machinery of production; without this co-operative control the public ownership by the State is not Socialism – it is only State capitalism. (Connolly 1899)
So an alternative to capitalism cannot be based on more top down state control.
This began to change with the early utopian socialists who were the first to highlight the flaws of the new society born with the French Revolution and the Industrial Revolution. Behind the proclaimed goals of ‘liberty, equality and fraternity,’ Henri de Saint Simon, Charles Fourier, and Robert Owen detected another form of class rule – with one difference. Instead of poverty arising from famine and scarcity, Fourier proclaimed that ‘poverty is born of abundance itself’ (Engels, 1993: 68). These writers suggested that class division could be replaced but, unlike their earlier predecessors, they wanted to create practical experiments to show how their Utopia might work.
The philanthropist Robert Owen used his wealth to found the New Lanark commune where 1,800 people worked and children were given free education for the first time. Followers of Fourier founded colonies in the USA known as ‘phalanxes’ that were designed for communal living. The experiments were often short lived but the utopian socialists foretold new ways of thinking that were incredibly progressive.
Marx and Engels praised these early utopian critics of capitalism and were often inspired by the ‘gems of thought’ (Engels, 1993: 64) that were contained in their sometimes fantastic forms. Engels watched with interest the founding of communist colonies that were supposed to be models of a new society. However, they saw these experiments merely as precursors of a real movement for change and when attempts were made to draw up detailed blueprints for a future society they became particularly critical. In a celebrated section in the Communist Manifesto, they announced their break with all forms of utopian socialism. Their reasons for so doing are still relevant for thinking about how a transition out of capitalism might occur.
Marx and Engels argued that a utopian sees a new society arising from the ‘personal inventive actions’ (Marx and Engels, 1973:95) of individuals who use reason to put to right the wrongs of society. How or why masses of people might embrace their particular model becomes a matter of chance or fantastic hope. The only strategy that utopians could adopt was teaching and propaganda by example. Despite a lack of resources available for their experiments, they aimed to overcome all obstacles to create a shining example for others to follow. At the heart of this model was, therefore, an inherent elitism. The model builders undoubtedly cared for workers, but they saw them only as the most suffering class, incapable of any independent initiative. The path to a new world had to be hewn by brighter and morally better people who provided an example for others to follow.
In contrast with this utopian approach, it is better to look at the real movements that arise within our society and ask if they can pose a practical way of taking our productive powers forward. Capitalism has always generated huge oppositional movements and the Occupy phenomenon is just the latest. Organised labour has been the key component of these movements – whether that labour is by hand or by brain. By examining the actual experience of workers movements, we may be able to discover potentialities for how society could be better organised.
Moreover, these potentialities might assist the development of human productivity. Contrary to Stalinist distortions, this does not mean building gigantic steel mills in order to endlessly increase output. For Marx, the improvement in the productive capacity was linked to the goal of expanding human sensitivity and freedom. Nevertheless it remains the case, that some forms of social organisation can help to increase wider productivity of society while others obstruct it.
It can easily be demonstrated, for example, that a market based system is damaging to the environment and threatening our very survival as a species (Magdoff and Foster 2011). Similarly, a system based on commercial secrecy and the extension of a regime of intellectual property is detrimental to the sharing of knowledge and the advancement of science (Krimsky, 2003).
The central contradiction of our society is that as we have become ever more dependent on each other, we have lost control of our lives to a mysterious force called Markets. We wake up each morning to hear how ‘The Markets’ are displeased by policies of elected government and, like demonic forces, express their displeasure through regular punishments. The oracle for these Markets are the ratings agencies who periodically issue judgements and force governments into line. But the pressures that they exert are about as helpful as a demolition crew. If the Wall Street crash of 2008 has taught us anything it is, surely, that untrammelled free markets vandalise society and throw us backwards. They destroyed an estimated €50 trillion of the world’s assets, equal to one year of the combined labour of humanity (Harvey 2010: 6). If our society is to move forward, we need an alternative that puts democratic decision making in command of an economy rather than ‘Market forces’
We can suggest three main ways this can be organised
First, the main economic units of society should be publicly owned. The current Boards of Directors of corporations should be given redundancy notice and asked to re-train themselves for more useful work. To the cry, that this is an intrusion on their rights, we can only reply that they often treat workers like disposable hankies. So what goes around, comes around.
Democracy is also undermined as by the sheer size of corporations. Currently, 52 of the largest economic units in the world are corporations and 48 are states. The method of decision making in a corporation and a state differ fundamentally. In a corporation, voting is according to how many shares you have been able to buy – in a democratic state, it is one person one vote. A corporation is organised through the dictatorship of money – a country, officially at least, treats all citizens as equal. Public ownership of large economic units is, therefore, a precondition for extending democracy.
Public ownership and economic co-operation could also lead to greater efficiency. For one thing, it would reduce wasteful spending on advertising. In 2008, $613 billion (€423.3bn) was spent on the global advertising bill — money that could have been used to eliminate world hunger.
Public ownership could also do away with planned obsolescence where cars or washing machines are built to break down after a period. Capitalism would barely survive if consumers bought a smaller number of high quality goods over their life time.
It would also remove the problem of “externalities”, whereby the real costs of a product are off-loaded onto society rather than the direct manufacturer. A commercial farmer who fills their animals with growth-inducing drugs does not have to deal with the medical costs that arise later.
It is not necessary to take small companies into public ownership and, for a period, market relations would undoubtedly persist in a post-capitalist society. However, a pre-condition for any economic alternative is that control of the largest corporations is taken away from the hands of the few.
Public ownership is often associated with highly bureaucratic and, sometimes, inefficient enterprises. Sometimes this is exaggerated in the right wing press and they often forget that few state enterprises could possibly rival privately owned banks for imbecility and inefficiency. Nevertheless bureaucratic top down management is a feature of all aspects a capitalist society – in both the public and private sectors. As an alternative we need self-management and economic democracy where the direct producers determined the nature of their work.
In our present society, management are paid to think, conceptualise and plan. The assumption is that those who work do not have the “brains” to do this. Ironically, despite much higher levels of education, there is a more rigid division between mental and manual work in our society than any other.
Over the past four decades, the dominant tendency has been the decrease in autonomy in white collar work. Before the seventies, the focus of much managerial ‘science’ was on manual workers and various Taylorist schemes were devised to intensify work effort. This continues today under the new guise of ‘team-working’ and ‘multi-skilling’ but a new front has been opened with the emphasis on control of white collar work.
In the past, white collar occupations like teaching and nursing were subject to a ‘trust’ culture where it was assumed that participants had internalised the dominant professional norms. This meant that they had considerable discretion in the organisation of their working day. Now there has been a shift to an audit culture where benchmarks, Key Performance Indicators and ‘outputs’ dominate work organisation. A growing layer of management is involved in absurd exercises to measure the immeasureable in order to intensify competitive pressures among staff. The result is that many white collar employees regularly complain about paper work and stress.
This managerialism is both unproductive and inappropriate in a world where the modern workforce is highly literate and numerate. Is it really the case that a small managerial team of, say, fewer than 20 people have more ideas than the hundreds who work for them? Is it really necessary to ‘manage through stress’ by league tables and artificial quantitative measures?
Workers’ self-management is the antidote to bureaucracy. It implies that regular assemblies are held at work and plans are drawn up — through extended discussion and successive iterations — on how the pattern of work is organised.
Instead of top-down managers, co-ordinators would be elected by the workforce to ensure their smooth implementation. The involvement of workers who are presently “not paid to think” would, surely, unleash a new wave of creativity and innovation. It would do away with needless, unproductive paper work and develop new forms of work motivation which relies on sharing experiences and learning co-operatively on how to do work better.
Even if the large corporations were taken into public ownership and workers control of production prevailed, there still has to be a mechanism through which the resources of society are allocated for different human needs.
Under capitalism, this takes place according to the laws of supply and demand. If there is a huge demand for, let’s say, holiday packages the prices will increase. These high prices send out a signal to capitalists to charter more planes and hire hotel spaces. Through such mechanisms the ‘hidden hand’ of the market is said to allocate scarce resources in an efficient manner.
But how just how efficient is a system which cannot allocate cheap water purification tablets to the five million people who die from water borne diseases each year?
And if the hidden hand works so well, why will millions of people lose their jobs because of the current global downturn? Instead of pretending that there is a great machine known as the Market which we must adore but not interfere with, we need structures to decide how to allocate resources and to plan what will be produced.
Such a plan would seek to establish what people need though democratic mechanisms and would establish targets for different sectors of the economy based on such needs. The aim of such planning would be to eliminate the problems of over-production and imbalances which lead to economic crises. These problems inevitably arise in a profit-driven economy.
We need to disentangle some confusion because some still associate a planned economy with the former ‘communist’ regimes in Eastern Europe. But they had as much resemblance to Marx’s vision as the Spanish Inquisition had with the teachings of Jesus Christ.
Typically, a handful of people in the Politburo of the Communist Party made decisions on where investment was to be allocated. Their overall aim was to reduce consumption — the share of an economy distributed to workers — and to transfer resources to heavy industry.
During the Cold War, investment in the iron and steel was intimately connected to the arms industry. Planning was therefore driven by the logic of military competition – rather than the needs of the mass of people.
Output targets for each sector of the economy was, accordingly, decided through bureaucratic commands. But this led to its own internal form of chaos. When the Politburo in Moscow ordered so many tons of raw pig iron to be produced, the local bureaucrats in Minsk or Odessa conformed by either producing inferior quality goods or by manipulating the figures.
Without genuine transparency or accountability, the economy relied on fictitious data that made genuine planning impossible.
Planning also occurs in private capitalism today. Contrary to the impression created by its ideologues, capitalism does not work according to pure market mechanisms.
In the late twentieth century, a massive centralisation occurred as merger and acquisition activity grew by five fold in the 1990s. As a result, every major industry is dominated by an oligopoly – a small number of competing firms who often reach ‘understandings’ on pricing structures with each other. A growing proportion of the world’s economy, therefore, takes place according to the dictates of gigantic multi-national firms rather than a ‘free market’.
Democratic planning requires that all economic information is available to the public. Despite hypocritical talk of transparency, capitalist society is shrouded in secrecy, as Irish banking demonstrates.
We still do not know who controlled the largest block of shares in Irish banks. Even though the Anglo-Irish bank is nationalised, we are not told about the assets of the developers who took out huge loans from ‘our’ bank. We do not even know the names of the bondholders for whom we write cheques for billions of euros.
If people are to collectively decide how to allocate resources, commercial secrecy must be abolished. There will be no need for such secrecy in an economy built around co-operation rather than competition. The absurd notion that individuals can hold ‘intellectual property’ over knowledge will also have to be abolished. How can we develop the productive forces of society, if individual scientists ‘own’ the fruits of scientific research and can charge a fee for giving others access to the data?
Genuine planning will require a form of economic democracy that goes well beyond the limited political democracy of capitalism. It requires co-ordinating institutions where delegates discuss and deliberate on where the major funds for investment are to be allocated and what type and what quantity of goods are to be produced.
To accurately reflect the needs of society, delegates will have to be mandated from gatherings of their constituents and will have to report back regularly. To safeguard against bureaucracy and elitism, there should be a facility to re-call them if they do not carry out their mandate.
Once these requirements are in place, it becomes easier to see how planning might work as it involves both centralised and de-centralised decision-making.
At a central level, a socialist society needs to democratically decide the length of the working week and what areas of the economy should be de-commodified. Instead of pricing mechanisms, there should be decisions on what are essential free services which can be paid from general revenue. Obvious candidates include education, health and public transport. Less obvious areas that require debate are sectors such as car insurance or the digital media.
Pricing mechanisms allocate scare resources but they do so in an unequal and inefficient manner because they require additional administrative structures to collect money. De-commodification allows for positive synergies. Universal free health care, for example, would be built around preventative healthcare. Instead of taking your car for annual service and neglecting your body, you might be encouraged to have regular health checks in order to minimise use of more costly hospital resources.
Delegates to a central council will also have to decide on where the main areas of investment will be allocated, what proportions each sector of the economy will receive and what the expected targets are for output.
Right wing economists suggest that this type of planning is too complicated. But if a large supermarket chain such as Tesco can plan the supply of vast numbers of different commodities to appear on its shelves through a ‘Just in Time’ system, why cannot information technology be used to make the key investment decisions?
It is perfectly possible to draw up alternative allocation models and to outline the economic consequences of each. These models can then be voted on by delegates of the people.
In a market regime, resources are allocated chaotically after people have already signalled their wants through purchasing decisions. The current crisis shows, however, that this leads to over-accumulation in some areas such as housing as profit becomes the sole motive for responding.
None of the above implies a perfect or utopian society — only a better one. Nor do the above suggestions constitute a model to be followed. They are merely illustrative of the fact that another world is possible — and worth fighting for.
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Connolly, J (1899) ‘State Monopoly versus Socialism’ Workers Republic, 10 June http://www.marxists.org/archive/connolly/1901/evangel/stmonsoc.htm
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Fukuyama, F. (1992) The End of History and the Last Man, New York: Free Press.
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Magdoff, F and Foster, J.B. (2011) What Every Environmentalist Needs to Know About Capitalism, New York: Monthly Review.
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[Thank you Kieran for this contribution]
The writer is a sociology lecturer in University College Dublin, Ireland. He is the author of Marx and the Alternative to Capitalism (2011) and Ireland’s Economic Crash (2009). He is a member of the Socialist Workers Party and is on the steering committee of the United Left Alliance which currently has five members in the Irish parliament.
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