This has been causing some excitement in liberal-left circles, as it apparently means would-be lefties can just wait for “post-capitalism” to happen, while working in retail management or small business:
The red flags and marching songs of Syriza during the Greek crisis, plus the expectation that the banks would be nationalised, revived briefly a 20th-century dream: the forced destruction of the market from above. For much of the 20th century this was how the left conceived the first stage of an economy beyond capitalism. The force would be applied by the working class, either at the ballot box or on the barricades. The lever would be the state. The opportunity would come through frequent episodes of economic collapse.
Instead over the past 25 years it has been the left’s project that has collapsed. The market destroyed the plan; individualism replaced collectivism and solidarity; the hugely expanded workforce of the world looks like a “proletariat”, but no longer thinks or behaves as it once did.
If you lived through all this, and disliked capitalism, it was traumatic. But in the process technology has created a new route out, which the remnants of the old left – and all other forces influenced by it – have either to embrace or die. Capitalism, it turns out, will not be abolished by forced-march techniques. It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviours. I call this postcapitalism.
As with the end of feudalism 500 years ago, capitalism’s replacement by postcapitalism will be accelerated by external shocks and shaped by the emergence of a new kind of human being. And it has started.
Postcapitalism is possible because of three major changes information technology has brought about in the past 25 years. First, it has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages. The coming wave of automation, currently stalled because our social infrastructure cannot bear the consequences, will hugely diminish the amount of work needed – not just to subsist but to provide a decent life for all.
Second, information is corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant. The system’s defence mechanism is to form monopolies – the giant tech companies – on a scale not seen in the past 200 years, yet they cannot last. By building business models and share valuations based on the capture and privatisation of all socially produced information, such firms are constructing a fragile corporate edifice at odds with the most basic need of humanity, which is to use ideas freely.
Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.
Almost unnoticed, in the niches and hollows of the market system, whole swaths of economic life are beginning to move to a different rhythm. Parallel currencies, time banks, cooperatives and self-managed spaces have proliferated, barely noticed by the economics profession, and often as a direct result of the shattering of the old structures in the post-2008 crisis.
…read the whole article here
A comrade comments:
“It’s complete nonsense; not only utopian in the worst sense of the word but also depressingly gradualist and reformist (its central claim is that ‘post-capitalism’ will just sort of emerge as the result of a proliferation of… well, I don’t know what exactly: file sharing?).
“The ‘would-be lefties’ drawing the conclusion that they can ‘wait for post-capitalism to happen’ – i.e., without having to think, or organise, or act, or struggle in any meaningful way at all – seems to me an entirely faithful reading of the article.
“It’s like the worst bits of Owen and Proudhon repackaged for the digital age and dressed up as some amazingly innovative, novel theory. But at least those people (even Proudhon, who was basically a reactionary) had a bit of fighting spirit about them, wanted to build a movement (of sorts), and wanted people to fight the system (in however distorted or misguided a way). What does Mason want us to do? Surf the web?
“It’s actually quite sad from a guy who probably ought to know better, and who only a few years ago was writing books about how the key aspect of contemporary capitalism was the globalisation of the working class. He seems now to have decided that this isn’t really that important after all.”
By Camila Bassi (reblogged from Anaemic On A Bike):
“The Yankees have invented a stone-breaking machine. The English do not make use of it, because the ‘wretch’ who does this work gets paid for such a small portion of his labour, that machinery would increase the cost of production to the capitalist.” (Marx, Capital: Volume One)
My recent visit to Shanghai was the last of nine in which I have glimpsed urban development ‘the China way’. My photo story captures themes present in each of my visits that have haunted me. The former Chinese Communist Party leader, Deng Xiaoping, who hailed in the era of ‘opening and reform’, famously said: “Development is the only hard truth.” If capital is akin to a monster, then a gigantic monster was set loose in Shanghai from 1990, and has gluttonously and mindlessly trampled over people and eaten up land ever since – commodifying and extracting surplus-value at a reckless speed. Over the years, the sight of low-rise alleyway, working class living that is half demolished, with people still residing within it, has been less and less prominent in downtown Shanghai, simply because more and more of the demolition has been completed. The working class have been largely moved out of the centre to the isolating high-rise apartments of the suburbs – placed within new tower blocks that have been as quickly put up as old homes have been destroyed, and which signify urban regeneration that will fast degenerate. Shanghai is urban dystopia. It is a city of hardware, with no regard for software: culture, civil society, freedom to pause, and to think, and to question. If one sits in a taxi at night driving through the dazzling skyscrapers of Pudong, the Special Economic Zone just over the river from downtown Shanghai, one feels like one has entered Ridley Scott’s Blade Runner. It’s an uncomfortable feeling.
The scale of Pudong is a frightening mash-up of the might of global capital and the muscle of Chinese totalitarianism – this is urban development, the China way. It is the subtle sights of Shanghai that have always struck me the most, and the absences too: where are the poor? Space and place is so controlled in Shanghai’s centre that one can stroll from Starbucks to Starbucks, visiting global retail chains in between, and simply miss the missing population. What we call gentrification in the West appears on such a vast scale in Shanghai that what one can actually see – if awake enough – is capitalism at its most naked. There’s the next, near-erected skyscraper, such as the one I walked passed once by the Bund at midnight, with orange sparks against a black sky right at the top, generated by welding, as rural migrant workers toil for little pay and no health and safety protection. And there’s the rural migrant workers digging holes in roads and pavements with pick axes and shovels, such rudimentary equipment which once puzzled me. Yes, labour in China is that exploited, it is cheaper to employ workers to dig into concrete with pick axes and shovels than it is to employ a worker and a digger.
This is where you will get the best information and analysis (from a social democratic angle):
Labour is lucky this global story blew up in a week already dominated by a tax avoidance row: it was a Tory blunder to put up the Monaco-dwelling head of Boots to call Labour a “catastrophe”, when his company pays a fraction of the UK tax it did before switching its base to Switzerland. Timing is important here: the HSBC revelations haven’t emerged on Labour’s watch. Both Eds have frequently – and rightly – apologised for Labour’s feeble regulation of banks pre-crash, while always reminding Cameron and Osborne that they called loudly for less banking “red tape” in those days.
Ms Toynbee isn’t always a favourite with us here at Shiraz, but the piece quoted from above is a hum-dinger, and well worth reading in full.
Left Foot Forward‘s Ruby Stockham, meanwhile, has put 4 questions to David Cameron that should be repeated ad nauseam between now and the election.
But it’s worth remembering that the crimes of HSBC under Stephen Green (aka Lord Green of Hurstpierpoint and minister for trade and investment between 2010 and 2013) were not restricted to colluding in tax fraud: they also extended to money-laundering.
In 2012, HSBC agreed to pay a $1.9 billion fine for money laundering for clients that the US authorities said included Mexican drug cartels (as well as providing services to lenders in Saudi Arabia and Bangladesh though to include supporters of al Qaeda).
The Daily Telegraph‘s David Hughes reported on July 17 2012:
While the Treasury select committee is giving the third degree to Mervyn King and his chums over the Libor debacle, a potentially much bigger banking scandal is breaking in the United States. The US Senate has launched a coruscating attack on HSBC for its slapdash approach to money-laundering regulations. The bank could face a $1 billion fine.
According to Senator Carl Levin, chairman of the US Senate Permanent Subcommittee on Investigations, “the culture at HSBC was pervasively polluted for a long time.” Just how polluted was revealed in the Senate report into the scandal. For example, between 2007 and 2008, HSBC’s Mexican operations moved $7bn into the bank’s US operations. According to the report, both Mexican and US authorities warned HSBC that the amount of money could only have reached such a level if it was tied to illegal narcotics proceeds. This is explosive stuff for the “world’s local bank”, as HSBC calls itself.
As these other, perhaps even more serious, scandals from the noughties have not been widely reported in the last few days (except by the FT‘s excellent Jonathan Guthrie), here are a couple of links to articles from July 2012:
David Hughes’s Telegraph piece (quoted from above), here
The Telegraph‘s report on the US Senate’s findings, here
Ned Simons at the Huffington Post (which mentions the alleged al Qaeda funding) here.
Reviewed by Hans G. Despain in Marx & Philosophy Review of Books
Capital in the Twenty-First Century
The Belknap Press of Harvard University Press, Cambridge MA, 2014. 696pp., $39.95 / £29.95 hb
About the reviewer
Hans G Despain
Hans G Despain is Professor of Economics and Department Chair at Nichols College, Massachusetts. He encourages your correspondence: email@example.com
Capital in the Twenty-First Century is a most impressive book that deserves great attention. Piketty insists that social scientists generally, and economists in particular, must confront and examine “facts” (574-5). This is what he sets out to do in his momentous nearly 700 page text.
The title suggests the book may be offering homage to Marx’s nineteenth-century Capital. Let us be clear from the beginning it is not. Nonetheless, this book will be appreciated by Marxian political economists, while at the same time a frustratingly theoretical disappointment.
Piketty’s book is nothing short of revolutionary in establishing flows of income over time. He establishes that there is a tendency toward the hyperconcentration of wealth, and the rise of a new “supermanagerial” class (315-21). Piketty leaves no doubt that it is class that matters and structural “class warfare” predominates in twenty-first century capitalism (246). Crucial to Piketty’s studies of capitalism is that there exist no economic laws determining distribution of income and wealth (274, 292-4, 361-4). This is an enormously important point, and a return to classical political economy with a vengeance, especially to Marx whereby distribution is a function of series of institutional power relations, rooted in production relations. These summaries will surely, and should, excite Marxian social theorists. However, Piketty’s definition of capital as a financial measure of physical equipment, money, financial assets, land, and other valuables will discourage Marxian social theorists. I will come back to these crucial points.
The primary problem with the book is an underdeveloped social theory and normative philosophy. Consequently, Piketty’s policy recommendations are impressively anemic and aimed at perpetuating exploitation of the economically vulnerable populations. In the end Piketty wants to take the ‘hyper’ out of hyperexploitation and reestablish good old-fashion exploitation with higher minimum wages, taxes on capital, progressive income tax, and limits on inheritance.
With emphasis, Piketty defends the strengthening of the “social state” or the historical development of public education, healthcare, social security, unemployment compensation, and income support for the poor (471-92). Moreover, he maintains that deficits are not bad in-and-of-themselves, but must be spent wisely and should not be paid for with fiscal “austerity” but by means of central-bank-generated-inflation and/or a tax on capital (540-70). This defense of the “social state” and federal deficit pushs Piketty into the area of (political) philosophy, social ethics, and morality. Piketty is well-aware of this (479-81). He recognizes that the so-called “science of economics” is more accurately political economy that generates enormous normative philosophical implications (574).
This gets well ahead of our story and the details of Piketty’s book. The essence of the book is remarkably straight forward and is intended for a popular audience. Piketty brilliantly succeeds on this account and should be duly praised. The essential argument is that capitalistic economic growth inevitably slows. As the rate of economic growth diminishes, the past accumulated “capital”/wealth gains in importance (233), and indeed allows past wealth “to devour the future” (378). Piketty calls this a “fundamental law of capitalism” (166).
This fundamental law of capitalism means that the “return on capital” (r) is greater than the economic growth (g): r > g. As a prosperous and industrialized capitalist economy begins to stagnate, past wealth becomes more important and powerful and inequality begins to increase rapidly (572). Thus, one of Piketty’s main goals “is to understand the conditions under which such concentrated wealth can emerge, persist, vanish, and perhaps reappear” (262).
According to Piketty, the primary mechanism (25) causing inequality is the fact that the rate of return on capital is 3 to 5 times greater than the rate of growth (233). Thus, the structural tendency of capitalism toward stagnation and 4-5% rate of return on capital means that markets and competition do not reduce inequality (370). It is in this sense that there is a “logic of accumulation,” based on the divergence between the rate of return on capital and economic growth (22-7), that accounts for the very high concentration of wealth throughout capitalist history (377).
The Daily Mirror today returned to its radical, campaigning best, with a front-page lead report by Kevin McGuire on slave labour in Qatar. To the best of my knowledge, it’s the first time a British tabloid has raised the issue of the murderous conditions of migrant workers in Qatar as the Emirate prepares for the 2022 World Cup (though Nick Cohen has written some excellent pieces for the Observer).
The Mirror‘s report:
Qatar is accused of working 1,200 people to death in its £39billion building bonanza for the 2022 World Cup.
An investigation by the Mirror into the oil-rich Emirate revealed horrific and deadly exploitation of migrant workers, who are forced to live in squalor, drink salt water and get paid just 57p an hour.
Campaigners fear the death toll could reach 4,000 before the Finals kick off. One worker told us: “We are treated like slaves and our deaths are cheap.”
FIFA faces renewed pressure to show Qatar a World Cup red card following the exposure of mass deaths and vile exploitation of construction workers in the region.
A team of British trade union leaders and MPs warned that the 2022 tournament is being built “on the blood and misery of an army of slave labour”, after uncovering appalling abuse during a visit to the Gulf monarchy.
Qatar is accused of working 1,200 migrants to death since being awarded the World Cup in 2010 and campaigners have insisted the shocking death toll could reach 4,000 before a ball is even kicked in the Finals.
On a mission organised by Geneva-based Building and Woodworkers’ International, a global federation of construction unions, I witnessed and heard distressing evidence of systematic mistreatment on an industrial scale. Sneaking into squalid labour camp slums under the cover of darkness, frightened workers lured to Qatar with false promises of high salaries complained of persecution.
One Nepalese carpenter, paid the equivalent of just 95p an hour, said: “We’re treated like slaves. They don’t see us as human and our deaths are cheap. They have our passports so we cannot go home. We are trapped.”