Economics After Capitalism: A Guide to the Ruins and a Road to the Future

Economics After Capitalism

Economics

After Capitalism

A Guide to the Ruins and

a Road to the Future

Derek Wall

Forewords by David Bollier and Nandor Tanczos

First published as Babylon and Beyond, 2005

This revised expanded edition first published 2015 by Pluto Press

345 Archway Road, London N6 5AA

www.plutobooks.com

Copyright © Derek Wall 2005, 2015

The right of Derek Wall to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.

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ISBN978 0 7453 3508 7Hardback

ISBN978 0 7453 3507 0Paperback

ISBN978 1 7837 1302 8PDF eBook

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CONTENTS

Foreword to the New Edition by David Bollier

Foreword to the First Edition by Nandor Tanczos

Acknowledgements

1Warm Conspiracies and Cold Concepts

The Anti-capitalist Movement

Globalisation, Capitalism and the Arguments for Neo-liberalism

What’s Wrong with Capitalism?

Diversity or Chaos: Cataloguing Different Anti-capitalisms

Debating Apocalypse

2Vaccinating against Anti-capitalism: Stiglitz, Soros and Friends

Stiglitz and Soros

Stiglitz and Soros on Financial Crisis, Recession and Austerity

From Keynes to Bretton Woods

Against Washington

Asymmetric Information and Reflexivity

1001 Uses for a Dead Karl Polanyi

Anti-empire

Vaccinating Against Anti-capitalism

3White Collar Global Crime Syndicate: Korten, Klein and Other Anti-corporatists

The Rise of the Corporate Criminal

The Hidden History of Humanity

Unnatural Monopolies

Global Government Inc.

Outsourcing

Adam Smith’s Ecotopia

4Small is Beautiful: Green Economics

Against Growth

Economics as Alienation

Bad Trade

Green Alternatives to Globalisation

A Green New Deal

Beyond Green Anti-capitalism

5Planet Earth Money Martyred: Social Credit, Positive Money and Monetary Reform

IMF Apocalypse

Financing Enclosure and Ecocide

On the Attac

Monetary Reform

Lets and Local Currencies

Positive Money

6Imperialism Unlimited: Marxisms

Marxist Economics: The Utter Basics

Marxist Theories of Imperialism

Marxist Approaches to Globalisation

Castro on Globalisation

David Harvey’s Seventeen Contradictions of Capitalism

Marx in Caracas

Marx Beyond Marx

7The Tribe of Moles: Autonomism, Anarchism and Empire

Anarchist Marxism

Marxist Anarchism

Foucault on Rioting

Empire as a Pure Model of Capital

Strategy

8Ecosocialist Alternatives: Marx’s Ecology

The Anti-capitalism of the Poor

The End of the World?

Socialism and Ecology

Malthusianism as Murder

Ecotopia

Ecosocialism in the Twenty-first Century

9Women of the World Unite: Feminist Economics

Feminist Revolutions

Deirdre McCloskey and the Methodological Challenge to Economics

Amartya Sen’s Reformist Feminism

The Unhappy Marriage of Frederich Engels and Revolutionary Feminism

Ecofeminism

Autonomist Feminism and Zerowork

The Ostrom Alternative

10 Life After Capitalism: Alternatives, Structures, Strategies

Marx, Ostrom and the Commons

Defend, Extend and Deepen the Commons

Alternatives

The Mirror Stage

Bibliography

Index

Mr. Lebeziatnikov who keeps up with modern ideas explained the other day that compassion is forbidden nowadays by science itself, and that that’s what is done now in England, where there is political economy.

Dostoevsky 1993: 14

FOREWORD TO THE NEW EDITION

David Bollier

As a cascading series of crises converge – economic, ecological, social – what better time to review the long history of anti-capitalist thinking? The past is rich with important lessons, ones that can help orient us to grapple with present-day challenges, refine our strategic judgement and develop practical alternatives.

History can be instructive in a double sense: it can show us what worked and what didn’t work, and so guide our own efforts, but it can also reveal that the past does not define the scope of realistic ambitions today. The future is not yet written. If Economics After Capitalism demonstrates anything, it is that we must step bravely into history with our own creative energies and seize the unique opportunities of our time. But because time is short and the challenges are great, we must do so with intelligence and resolve.

Although our mainstream institutions are loath to admit it, we are in the midst of a civilisational crisis. Existing structures and practices are crumbling. The moral and political legitimacy of the nation state and international governance bodies is waning. The relentless promises of economic growth, consumerism and ‘progress’ are being exposed as utopian fantasies. The neo-liberal vision can now be seen as not only grossly unfair and unattainable, but deeply destructive of our planet and human well-being.

But how to move forward?

It is helpful to revisit the many traditions of anti-capitalist critique, dissent and creative world-making, as outlined in the pages below. ‘The past is never dead,’ wrote William Faulkner. ‘It’s not even past.’ From reformist finance to green economics, anarchism to ecofeminism, and Marxist economics to the commons, we actually have a rich palette of experiences, ideas and alternatives to draw upon. Some of these anti-capitalist traditions seem deeply rooted in their times and therefore feel remote, while others are perennial and timeless, ready to be thrust into action immediately. Some approaches feel highly prescriptive and run the risk of becoming totalising, rigid ideologies, while other challenges to capitalism function more as open-ended templates that invite creative improvisation.

I see great potential in the commons as an attractive framing paradigm and discourse because it is not just a critique of capitalism but a constellation of constructive, working alternatives. It consists of general design principles, ethical norms and a diverse array of actual projects that resemble fractal variations on a theme. The commons is less of an ideology or critique than a meta-framework of principles and values that describes a wide variety of collective action projects, each with their own situational politics, cultural and geographic circumstances, and intellectual character. Indeed, the commons is already serving as a staging area in which numerous movements of self-identified commoners are working out the details of what the commons means to them in their particular local, political, economic and ecological circumstances.

Despite a diverse range of on-the-ground realities for commoners, they adhere to a general principle of ‘unity in diversity’. This is entirely appropriate not just in a time when globalised capitalist markets have penetrated most corners of the earth, but at a time when most of humanity is now interconnected through a single network of networks, the Internet, which for the first time brings us together (fitfully) as a single human species. The commons seizes this moment in global culture by offering us a vision of human society that is inclusivist, ecologically minded, and committed to social justice and basic human needs. It demonstrates that, pace the claims of economists that we are all Homo economicus, selfish, utility-maximising individuals, human beings can in fact self-organise themselves to create fair, sustainable systems of governance and management for their shared wealth. This has in fact been the primary mode of self-governance throughout human history. Unlike the nation state and capitalist market, which have trouble respecting ecological limits and minimising social conflict, the commons is predisposed to internalise negative economic externalities, welcome participation by ordinary people and cultivate an ethic of sufficiency. No wonder it is seen as an attractive alternative to bureaucratic systems and predatory markets.

Unfortunately, the commons has long been eclipsed by the destructive interventions of the market/state duopoly, otherwise known as ‘enclosures’. It has also been crippled by the smear that it is an inherently impractical, failed model for managing resources – a brilliant cover story to justify the private appropriation of the common wealth. That tradition was given new life in 1968 when biologist Garrett Hardin published his famous essay, ‘The Tragedy of the Commons’. Few people then or now have dared to consider that Hardin was not really describing a commons; he was describing an open-access regime – a free-for-all in which there is no community, no rules, no monitoring of the resource and no penalties for those who violate community rules. This, of course, is a scenario that more closely resembles the normal working of unfettered ‘free markets’ than the that of the commons – the tragedy of the market, one might say.

The ‘tragedy of the commons’ parable has nonetheless been embraced by conservative ideologues and property-rights advocates for nearly fifty years, as a useful way to discredit collective action to protect shared wealth. As a result, exiled from the circle of respectable policy making and politics, the commons has remained largely invisible, and the state and the market are routinely portrayed as the only two serious systems of governance and production.

Margaret Thatcher famously declared, ‘There is no alternative’ – a phrase memorialised in the acronym TINA. She was keen to forestall any challenges to her neo-liberal agenda and to bully dissenters into submission. In truth, the more accurate acronym for our time is TAPAS – ‘There are plenty of alternatives.’ In the years since the 2008 financial and economic crisis, there has been a stunning efflorescence of creative projects, intellectual critiques and political movements dedicated to forging a new path forward.

These can be seen in the many citizen movements in New York City (Occupy), Madrid (Indignados), Athens (anti-austerity protests), Istanbul (Taksim Square uprisings), Cairo (Arab Spring) and Rome (Teatro Valle occupation), all of which were and are less intent with negotiating with mainstream political institutions than with changing corrupt, rigged systems of governance. The system itself is the problem, in other words. With similar intent, political parties such as Syriza in Greece, Podemos in Spain and the international Pirate Party are trying to achieve fundamental change through elections. Efforts in Ecuador and Bolivia are promoting Buen Vivir – the ethic of ‘good living’ – as an alternative to neoextractivist policies.

Beyond these groundswells of political action, there are many serious economic and social movements gaining strength and focus. Most of these challenge capitalist logic and culture in some fashion, but most are also careful not to be defined or limited by the narrow terms of capitalist discourse. These creative, boundary-stretching movements include the Social and Solidarity Economy, which is pioneering new models of social provisioning and mutualism, especially in Europe and Brazil. There is the Degrowth movement, which is developing a new vocabulary of simplicity, autonomy, conviviality and care as key elements of a new economy. There is the burgeoning Transition Towns movement, which is anticipating the impact of ‘Peak Oil’ and climate change by re-imagining and building more self-sufficient local economies. There is the Sharing Economy movement, which apart from its venture capital-driven sector, is dedicated to developing projects and policies that enable people, especially city-dwellers, to cooperate and share their personal lives, neighbourhood spaces, productive activities and offices.

While some elements in the cooperative movement have lost track of its original vision, there are heartening signs of public-spirited innovation in this world, too, especially with multi-stakeholder cooperatives and new vehicles for community development and finance. The world of Internet-based peer production is exploding, going well beyond familiar open source software and social networking models to include developing open design and manufacturing of cars, furniture and farm equipment; open data collectives; open source computer boards and electronic equipment, and wiki-style humanitarian relief services. The global sharing of knowledge and design is being joined to local, modular, customisable production, pointing to new, more convivial modes of non-capitalist production. In Barcelona alone, for example, there are now more than a dozen ‘Fab Labs’, with special fields of expertise – all linked to a global network of Fab Labs and the Maker movement.

One can also point to the many food-related movements that are challenging the global apparatus of capitalist agriculture and food distribution: the anti-GMO activists, the seed-sharing collectives, Community-Supported Agriculture, permaculture, agroecology and agroforestry, the Slow Food movement, La Via Campesina, relocalisation projects, among many others. One could name many other transformation-minded movements – the environmental justice movement, the many coalitions fighting for climate change policies, and opponents of rapacious, anti-democratic free trade and investment treaties.

The truly encouraging news is that these many movements are no longer content to work in isolation from each other; they are finding out that they have a great deal in common as victims of market enclosures and as co-creators of a new sort of economy and society. New federations of cooperation are arising, and new synergies are developing – between digital commoners and natural resource commoners, between commoners of the industrialised North and citizen movements of the global South, and between indigenous peoples and activists. The relentless urgency of climate change is acting as an accelerant for many such collaborations, spurring new political action and convergence among movements.

It is the burden of those who wish to displace capitalism to demonstrate that there are indeed humane, fair alternatives. It must be shown that a different logic and ethic will not only work, and work well, but that they can prevail in practical settings, in real-world politics and in formal law and policy making. This is precisely what it is happening now, but it is a ragged, provisional frontier – one that must be consolidated, defended and pushed forward.

Given the declining legitimacy and efficacy of the neo-liberal capitalist agenda – its myths and logic no longer make sense; its ecological and social devastation can no longer be sustained – it is impossible to ignore the fresh, practical, sophisticated visions of these various movements. No one can tell precisely how the structural disabilities of a troubled, recalcitrant capitalist system will be addressed and replaced. It is not self-evident how a more humane, eco-sensitive set of institutions, legal principles, social practices and cultural norms will take root, flourish and rebuff the logic of capitalism. Surely much will depend on how each of us engages personally with the epic transition ahead, hopefully with a deep understanding of the movements that have preceded us. For that, please read on …

David Bollier

Commons Strategies Group

Amherst, Massachusetts

FOREWORD TO THE FIRST EDITION

Nandor Tanczos

Human beings face the greatest challenge in the history of our species. We face the destruction of the life support systems on which our very existence depends, and we face it because of our own activity.

There are some who deny or diminish that threat. They mostly either retreat into fairy tale thinking – that technology, or the ‘free’ market, or UFOs will save us – or hope that by closing their eyes they can make it go away.

Yet the evidence is mounting almost daily that the threats are very real and are gathering momentum. A new report from the UK is saying that if we don’t turn carbon emissions around in the next decade, we will not be able to stop runaway climate change whatever we do.

Authoritative voices are warning us that we are very close to the point where world demand for oil will outstrip the capacity of the oilfields to supply. Our total dependence on fossil fuels, the use of which has provided the energy for an enormous expansion of human activity and population, is like a chemical addiction. And as the US has recently confirmed in Iraq, strip a junkie of their supply and the temptation to turn to crime can be irresistible.

‘The American way of life’ said George Bush Sr, ‘is not negotiable.’

A time of crisis, however, is also the time of greatest opportunity. More and more people are waking up to the need to change, to change at a fundamental level, and to change right now. People are waking up to the fact that the institutions of society that so many have put their trust in are failing us. Government won’t do it. Big business can’t do it.

Because the challenge we are facing is about more than changing a few policies or practices. It requires a fundamental rethink of what it means to be a human being. Government and business can become allies, but the power to make real change lies in the hearts and the lives of ordinary people.

It is already happening. The international people’s movement against genetically engineered (GE) plants and animals has demonstrated how the reckless agenda of multinational corporations, aided and abetted by our own governments, can be stopped in its tracks and rolled back. One conglomerate has been outed bribing government regulatory officials in Indonesia, GE companies are pulling out of the EU and Australia, and GE agriculture firms are facing massive stock market losses. The promised gold rush is proving to be a fantasy, largely because of global consumer resistance.

While the campaign has significant support in the scientific community, for many ordinary people it began as a sense that something just didn’t feel right. That feeling is often quickly backed up by investigation, but the sense of something being fundamentally arrogant and wrong about GE is the key – it is our humanness talking to us.

What is it to be human? Western society, at least, defines us as individuals whose value can be judged by what job we have, what colour credit card we have, what kind of car we drive and the label on our clothes.

Yet beneath these displays of status, real people are emotional, social and spiritual beings – intrinsic characteristics that cannot be considered in isolation from each other. We seem to have forgotten that our relationships – with one another and all the other beings with whom we share this beautiful planet – are fundamental to who we are.

There is a passage in the Bible that says ‘where there is no vision, the people perish.’ The inability to step back and clearly see and understand the ‘big picture’ is the central problem that we face in the world today. The main motivations for western industrial society for the past few hundred years – belief in unlimited growth and technology as the solution to all problems – are the very things that are killing us.

We cannot grow forever on a finite planet. If we continue to assume that endless growth and consumption is possible, and disregard the biosphere’s capacity to meet our greed, and if we continue to neglect social justice and fair and sustainable wealth distribution, we will reap a bitter harvest.

Neither will technology on its own fix the problem. Yes, we need better technology, more efficient technology that uses non-polluting cyclical processes and that does not depend on fossil fuels. But just more technology will not do, because the problem is in us and the way we see ourselves in the world.

We humans think that we can own the planet, as if fleas could own a dog. Our concepts of property ownership are vastly different from traditional practices of recognising use rights over various resources. A right to grow or gather food or other resources in a particular place is about meeting needs. Property ownership is about the ability to live on one side of the world and speculate on resources on the other, possibly without ever seeing it, without regard to need or consequence.

The ability to ‘own’ property is fundamental to capitalism. Since the first limited liability companies – the Dutch and British East India Companies – were formed, we have seen the kidnapping and enslavement of 20–60 million African people and the rape, murder and exploitation of indigenous people around the world. Colonisation was primarily about mercantile empires, not political ones. It was all about forcing indigenous, communitarian people to accept private individual ownership of resources, which could then be alienated, either by being bought or stolen. The subsequent political colonisation was just about how to enforce that ownership.

Today property rights are being extended through the General Agreement on Tariffs and Trade (GATT) and trade-related aspects of intellectual prosperity rights agreements (TRIPS) and through institutions such as the World Trade Organization (WTO) and the World Bank. Private property rights are being imposed over public assets such as water, intellectual property and, through genetic engineering and biopiracy, on DNA sequences. Even traditional healing plants are under threat. In Aotearoa – New Zealand – we have had multinationals attempting to patent pikopiko and other native plants. This is all part of the ‘free’ trade corporate globalisation agenda – to create tradable rights over our common wealth, accumulate ownership and then sell back to us what is already ours.

This is only possible because we have lost our place in the scheme of things. We think of the environment as something ‘over there’, as something separate from human activity, something to either be exploited or protected. The reality is that we are as much part of the environment and the planet as the trees, insects and birds.

It is time to relearn what it means to be human.

Nandor Tanczos served as a Green Party MP in Aotearoa/New Zealand Green Party between 1999 and 2008, and wrote this foreword for the first edition of this book in 2005.

ACKNOWLEDGEMENTS

My wife Emily Blyth has read drafts of this book, and been immensely supportive, while Nandor Tanczos and David Bollier have been generous in providing introductory material. Romayne Phoenix, Freda Davis and Mária Dokupilová all provided useful suggestions for improving the text. And a shout out to Chris Kraft. And to Alex for the zazen.

1

WARM CONSPIRACIES AND COLD CONCEPTS

The capitalist epoch will come to be seen as one in which we relied on incredibly crude economic mechanisms called ‘markets’. Markets are like machines for coordinating and relaying information, but they are only effective in relaying limited kinds of information in very circuitous ways. Markets are often thought to be highly efficient, but in the future they will be seen as highly inefficient and costly. Markets not only fail to take account of social and environmental costs, but they also generate instability, insecurity, inequality, antisocial egotism, frenetic lifestyles, cultural impoverishment, beggar-thy-neighbour greed and oppression of difference. (Albritton 1999: 180)

Frank Knight is often described as the founder of the Chicago School. The economics department at the University of Chicago, famous for Milton Friedman and other neo-liberal economists, inspired Mrs Thatcher, Ronald Reagan and other right-wing politicians. It could be said that their neo-liberalism, which promotes capitalism above all else, has transformed the world and now dominates our planet. Democrats from Obama to Clinton, and Labour leaders from Bob Hawke to Tony Blair, accepted many of the Chicago School’s key assumptions and the ‘Washington consensus’ of deregulation, privatisation, tax cuts (at least for corporations), slashed welfare, and reduced trade union rights, based on Chicago School economic sentiments, remain almost universal today.

However, in 1932, on the evening before the US presidential election of that year, Frank Knight did something very odd indeed. He gave a lecture entitled ‘The Case for Communism: From the Standpoint of an Ex-liberal’, and