Tuesday, November 17, 2015

Moving into a Post- Capitalist world - A book by Paul Mason. 'Market forces' past its used by date!

Someone once told me I am always captured by the last book I have read.

Paul Mason
There is some truth in this. I also can’t resist ordering books I have heard reviewed on National Radio that capture my interest. One such book was Paul Mason’s ‘Post capitalism – a Guide to Our Future ‘- the author was interviewed by Kim Hill.

The ideas in the book certainly have impressed me and all I will be able to do will share, best I can,  some of his  ideas. I really enjoyed the historical development of the relationship between labour and power and, in particular, the dramatic rise of socialism and capitalism.

Well worth a read. It was referenced by speakers at the recent NZ Labour Party Conference which I recently attended.

The book is premised by the belief that ‘for the developed world the best of capitalism is behind us, and for the rest it will be over in our lifetime’.

‘What started in 2008 as an economic crisis morphed into a social crisis, leading to mass unrest’. There are two ways it can end. In the first scenario, the global elite clings on’ but with stagnating
Escaping the neo liberal box
growth and growing inequality.

In the second scenario, as ordinary people refuse to pay the price, a variant of what happened in 1930s could emerge.

In both scenarios, the serious impact of climate change, demographic aging, mass migration and growing debt will combine to create chaos by 2050.

 Mason proposes an alternative, we ditch neo -liberalism; then we save the planet – and rescue ourselves from inequality – by moving beyond capitalism. There is a growing consensus as to how you do it: suppress high finance, reverse austerity, invest in green energy and promote high waged work. But, as Greece found out, any government that defies austerity will clash with the global institutions that protect the 1%..

‘Neo - liberalism’, writes Mason, ‘ is the doctrine ofuncontrolled markets: it says that the best route to prosperity is individualspursuing their own self-interest…. It says the state should be small…that financial speculation is good; that inequality is good’ and that the natural state of humankind is ‘individuals competing with each other’. And, of course, unions need to be crushed.

The route to a new future beyond capitalism has been created by technology ( just as the printing press provided the impetus to create the Renaissance). Modern  technology, through automation, has reduced the need for labour to produce goods. Secondly information technology corrodes the markets ability form prices correctly - - consider the ease of downloading music from the internet. Thirdly there is the rise of collaborative production – Wikipedia, the biggest information product in the world is free as is the rise the ‘creative commons’.

Networked world
'A networked world',  Mason believes ‘offers an escape route’ and this ‘must be driven by a change in our thinking about technology, ownership and work itself’.

‘In the old socialist project the state takes over the market, runs it in favour of the poor instead of the rich, then moves key areas of production out of the market and into a planned economy’. This has been tried but it hasn’t worked.

The state’s future role is to create the framework for change.   ‘The new information technology has created a new agent for change; the educated and connected human being. Revolutions in highly complex information driven society will look very different from the revolutions of the 20th century.’

The challenge of the future is between the availability of free and abundant goods (with minimal labour input)  and a system of monopolies, banks and governments trying to keep things private, scarce and commercial. ‘Everything comes down to the struggle between the network and the hierarchy, between old forms of society molded around capitalism and new forms of society that prefigure what comes next’.

The power elites and the financial institutions have a lot at stake. The idea of TINA (there is no alternative) is now under attack. ‘Millions of people are beginning to realize they’ve been sold a dream that they can never live’. There is no ‘trickle down’; growing inequalities are a feature of capitalist societies

In his book Mason writes that  in the decades after WW2  prosperity was the result of state ownership and control. It was an era that resulted in technological changes and the spreading of best practices. This came to a halt with the oil shocks of the 70s and with President Nixon removing the gold standard for the dollar.

This was the beginning of neo-liberalism – Thatcher, Reagan and in New Zealand ‘Rogernomics resulting in the dis empowerment of worker unions and the rise of business elites and corporate domination.

Mason’s book is premised on the concept of cycles of political change in power structures; neo-liberalism is coming to end.

It is Mason's belief that the  new information technology, rather than creating a new and stable form of capitalism, is dissolving it; corroding market mechanisms, eroding property rights and destroying the old relationships between wages, work and profit
Recommends Mason's book

More radically it is leading us towards a post capitalist economy; a move as great as when the financial merchant families replaced the power of the feudal monarchs' ; a change that will redefine the nature of work itself as automation takes effect.

This automation will result in making human labour largely redundant  resulting, for many, more free time than work time  leading to the problem of what to do with the millions of people whose jobs are automated? In this process work will lose its centrality as part of a person’s identity. Networked individuals will increasing become a power for change.

Transitions are always hard to understand as the plot of Downton
Changing times in an earlier era 
Abbey illustrates. The question is how will humans have to change in order for post capitalism to emerge?

Four time bombs Mason writes  will create the press for change – all are interrelated an all will require dramatic action.
Peace talks 1939

The first is climate change – the result of ‘free market’ capitalist economic growth -primarily caused by the use of carbon fossil fuels  to fuel economic growth. Strong positive action focusing on renewable energy will help but, as Mason writes, ‘more and more the climate talks…come to resemble the peace treaties that paved the way for the Second World War’.
The aging problem

The second time bomb is the demographic problem of aging, potentially as big a threat as climate change but with a more immediate economic impact.  Fewer and fewer workers will be available to pay  pensions and the  care of an aging population. This is an irreversible change added to by falling birth rates.

The demands of spending on pensions, health and care will create devastating problems of public debt.

The fourth time bomb is the impact of mass migration resulting from poverty. Mason predicts that we have not seen anything compared to what is to come. 'Either poor countries will become richer or poor people will migrate to richer countries.’

Notwithstanding all these problems, even following the GFC of 2008, the ‘financial aristocracy  is determined to go on living as if the threats outlined above are not real,’ believing that market forces will solve all problems. Those in power will do whatever they can to avoid real transformational change that requires the end of neo-liberalism and the development of a post capitalistic world. The illusions, bred over the last twenty-five years, feed our paralysis – the illusion  that everything is going to be OK.

This false sense of security, echoing the feelings prior to the outbreak of World War Two, will eventually require dramatic action.

Only states and states acting together can organize positive actions – responding to the challenges that lie ahead will require more state ownership and will require more planning than anybody currently expects..

Mason’s book provides an antidote to despair. For all the rhetoric about free markets, the capitalist system will not provide any answers and, rather, will contribute the problems..

The theme of Mason’s book is that technology is developing a world that requires fewer workers and introduces the idea of a transition to a world without work driven by information technology able to produce goods almost for free; a challenge to profit orientated capitalism. In the future people will be involved in providing services beyond the market – for example free information through Wikipedia or the creative commons.

In his final chapter Mason outlines what a post capitalist society might involve. He calls it Project Zero as its aims are a zero- carbon energy systems; the productions of machines, products and services with zero marginal costs; and the reduction of labour time as close as possible to zero.

This is not about returning to deadening state control but rather will require a state foresight and guidance rather than command and control; networks rather than hierarchies.

 Mason outlines five principles.
The 1 %

Test all proposals on a small scale before attempting them on a larger scale.

Design transitions to ecological sustainability, responding to problems as they emerge.

This transition will not be just about economics but will require the emergence of new kinds of people that will be created created by the growth of networked communities. The growing cohorts of networked citizens will have different perceptions from their parents or grandparents. 

The fourth principle will be to attack all problems from all angles.  The rise of networked citizens allows them to organise meaningful spontaneous actions as powerful agents of change beyond the control of governments,  political parties and corporations. New forms of democracy will need to evolve allowing solutions to be found through a mix of small scale   experiments that, if shown successful, can be scaled up through top down action.

The fifth principal for a successful transition is to maximize the power of information. Already aggregated data about our lives is available too often controlled by governments or corporations.

There will be a need to create democratic control over aggregated information to prevent its misuse by states and corporations.  Once information has been 'socialised' it will have the power to amplify the results of collective action by mapping problems and providing immediate assistance.

In Mason’s scenario decision making is decentralised; the structures needed to deliver it emerge
during the delivery; targets evolve in response to real-time information – and all actions should e modelled through simulations tools before enacted for real. ‘The best method is for small groups to pick a task, work on it for a bit, document what they’ve done and move on.’

Top level aims of a post capitalist project would be:

Rapidly reduce carbon emissions -work towards sustainability

Stabilize and socialize the finance system to take into account problems of aging, climate change and debt.

Deliver high levels of material prosperity and well-being by facing up to inequalities in society.

Gear technology towards the reduction of necessary work – eventually work becomes voluntary with  the rapid transition towards an automated society.

Such changes will require a ‘new spirit’ – a new attitude to replace the current misplaced faith in ‘market forces’ which is unable to solve current problems.

Mason’s solutions provide his best guesses and is open to be changed by the wisdom of others.

‘The most challenging arena for action is the state; we need to think positively about its role in the transition to post capitalism.’

The state has to see itself as one of nurturing new economic forms to the point where they take off.’ Currently the state, under neo-liberalism, has been deregulated to allow marketization, corporatisation and privatisation in such areas as education and health. ‘The state has to reshape markets to favour sustainable, collaborative and socially just outcomes. ’Local energy systems could be incentivised and infrastructures developed to allow local innovation. The state has to ‘own’ the agenda for responses to the challenges of climate change, demographic aging, energy security and migration’.

Governments will have to do something clear and progressive about debts – in countries that are unable to repay debts they could be written off.

Collaborative business models need to be fostered. The tax system needs to be reshaped to reward the creation of non-profits and collaborative productions. 

Large corporations need to be controlled by regulation. This might sound harsh but similar restrictions outlawed slavery and child labour despite protests of factory bosses and plantation owners. 
New minds required

Monopolies to be be outlawed. ‘For twenty five years’, Mason writes, ‘ the public sector has been forced to outsize and break itself into pieces; now would come the turn of such monopolies such as Apple and Google’.

‘Public ownership delivered in the past huge social benefits and in the post capitalist society it would deliver that and more.

Public provision of water, energy, housing, transport, telecoms infrastructure and education would feel like a revolution as these have been privatised under ‘market forces’ for the benefit of a few.

'A mix of government encouraged initiatives and highly regulated corporations would create the framework of the next economic system, not its substance.’ ‘There is no reason to abolish markets by diktat, as long as you abolish the basic power imbalances that the term ‘free market’ disguises.’ Innovation and creatitivity would be rewarded. Patents and intellectual property rights would be designed to taper away. State funded research should be free and shared.

‘The only sector where it is imperative to suppress market forces completely is wholesale energy. To meet climate change with urgent action the state should take ownership and control of the energy distribution grid, plus all big carbon suppliers of energy. Renewable sources of energy need to be subsidized. Mason believes in' decentralizing and allowing local communities to keep the efficiency gains they make’.
The neo-liberal position

The next big piece of social technology would be focused on the financial system. Central nationalized banks should have sustainability targets. Other banks would need to be restructured to reward innovation and to be penalised for speculative rent seeking loans.

The biggest structural change to make post capitalism  possible is to establish a state guaranteed universal basic income. 

The purpose of a basic income is to formalize the separation of work and wages and to subsidize the transition to a shorter working week, or day, or life.

The idea is simple: everybody of working age gets an unconditional basic income from the state funded by taxation, and this replaces the unemployment benefit. Other forms of need-based
welfare would still exist topping up the basic income.

This move would radically accelerate technological progress. One study states that 47% of all jobs in an advanced economy will be redundant due to automation – this would result in an enormous unemployment problem. A basic income paid out of taxes gives people a chance to build a life in a non –market economy allowing individuals to involve themselves in work or non-work activities. 
The fiscal cost for this would be high costing, according to UK figures, twice the current welfare bill.. This would be affordable if current tax exemptions were abolished  combined with cost saving changes to other public spending.

‘Under this system there would be no stigma attached to not working.  The universal basic income would be an antidote to the low paying service jobs that capitalism has created over the past twenty-five years that pay little and demean the worker.

As we pursue these goals, a general pattern is likely to emerge; the transition to post capitalism is going to be driven by surprise discoveries made by groups of people working in teams’. ‘This is not going to be a controlled process. The most valuable thing that networks can do ( and individuals within them) is to disrupt everything above.

Asking what is the end state is not the wrong question according to Mason. Post capitalism is a ‘beginning state’.

As the reproduction cost of labour shrinks dramatically the employment problems that have defined human history will shrink or disappear. ‘So instead of looking for an end state, it’s more important to ask how we might ... escape a dead end.’

We are entering an era when the labour that is necessary to sustain life falls and free time grows – where the division between work and free time is blurred.

Mason concludes his book writing, ‘we are at a moment of possibility; of a controlled transition beyond the free market, beyond carbon, beyond compulsory work.What happens to the state? It probably gets less powerful over time- and in the end its
function are assumed by society.’

‘What happens to the 1%? 

Their ideology tells them their uniqueness has made them successful but their success depends on a plentiful supply of cheap labour and repressed democracy –  where inequality is rising. 'To live in a world so separate, dominated by the myth of uniqueness but in reality so uniform, constantly worrying you’re going to lose it all, is- I am not kidding, tough.’

‘But there is good news. The 99% are coming to the rescue. Post capitalism will set you free.’

Not an easy book to summarise. Best you read it for yourself

Mason is asking readers to imagine a more socially just and sustainable society beyond capitalism – a world we can help shape rather than simply react to problems that face us .

Link to the corporate takeover of society - including education

Pope Francis - inequality and capitalism and Thomas Piketty

Lestor Thorow - challenges that lie ahead for capitalism

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