The end of capitalism has begun(theguardian.com) |
The end of capitalism has begun(theguardian.com) |
Secondly, he's citing 'information technology' as being the death of 'capitalism'. An industry, arguably the most aggressively capitalistic.
Then he talks about corporate monopolies (anyone who's read economics 101 would tell you corporate monopolies are rarely result of unadulterated capitalism, but rather state corporatism).
He mentions big companies using public data, most of that public data is generated, collected and shared openly by private companies to start with. I'm not even sure what his point was there...
Then he talks about alternative currencies, something which bloomed in response to flailing, devaluing state currencies. Which is just about the most free-market response to state currencies...
The next paragraph he references briefly the 'sharing economy', something pioneered and spearheaded by companies such as Airbnb and Lyft. Truly great success stories of consumer capitalism.
"The solutions have been austerity plus monetary excess. But they are not working." - What? Our public spending has increases by £50bn, how is this 'austerity'? The cuts have slowed down our public spending and even that has made us one of the strongest economies in Europe. So I'm not sure where he's getting the 'not working' from.
"Even now many people fail to grasp the true meaning of the word “austerity”. - Oh, the irony.
Most of the fluffy scenarios he describes, whereby private individuals make voluntary, mutually beneficial agreements with each other, is almost the very definition of capitalism!
Let's talk about this point as a whole. Firstly, I don't think it is well substantiated, and there are numerous examples to the contrary- Microsoft, Standard Oil, United Fruit, telecoms, airlines, railroads- almost anything which requires significant initial investment to grow. But, more importantly- why distinguish between capitalism and what you call "state corporatism"? The corporations who lobby the state, or coerce the state, or even cause the formation of an authoritarian state in ways that work in their favor are merely being good capitalists- they're simply better at competing than other capitalists! When United Fruit coerces the US government into supporting a foreign coup, or a corporation coerces the police or military to massacre striking workers, or big oil asks for huge subsidies- it's no different from a capitalist perspective then investing in advertising or aggressive expansion, and all are about increasing control and centralizing power. If there were no state corporatism, how long would it be before a capitalist caused it to come about? Campaign finance laws, monopoly regulations, and public opinion can be rolled back or simply ignored until power is consolidated; the inherent unequal distribution of power in capitalism means that a comparative few people will always be capable of doing this. In the words of Woodrow Wilson: "If there are men in this country big enough to own the US government, they are going to own it". State corporatism, monopology, and inevitably authoritarianism are the end game of capitalism, not a perversion. You can't put limits on the definition of capitalism so that the second anyone is any good at it, and the most obvious oppression that being good at capitalism causes is then apparent, that suddenly it's "not capitalism" anymore because they didn't play by your rules in a system where the actual rules are what those with money say they are. Hopefully, this should make you more critical of the inherent viability of capitalism.
Airlines-- government regulated, airports are local government monopolies and they limit competition.
Microsoft- Not a monopoly in any line of business
I have been waiting for a long time for someone to come up with an example of an actual natural monopoly that exercises monopoly pricing power. In every case so far, either they had competition, or government is the one that was limiting competition in the first place, usually by regulation.
United Fruit got its monopolies by subverting Central American governments, then maintained them by using the power of the United States government, up to and including actual raw military force.
If there's a better historical example of state corporatism, I can't think of what it could possibly be.
A historically accurate definition of capitalism (unlike communism for instance, capitalism was given name for the existing system and not for utopian ideal), I believe, would be that it is a system with two characteristics:
1. Most of means of production (capital) is privately owned.
2. Human labor is a market commodity.
I don't agree with the article that death of these things (and so capitalism) is coming, although I can certainly (being a leftist) imagine a free market system where neither of these conditions is true. For example, a system where large majority of economic production happens in democratically controlled worker cooperatives.
No, that is the definition of a free market. Capitalism is a framework of ownership that operates in markets of varying degrees of freedom.
A barter economy is a free market, but not usually a capitalistic one.
The author is pointing out ways that the free market is starting to outgrow it's reliance on the ownership framework of capitalism and how capitalism's framework of ownership has problems dealing with the valuation and ownership of information.
I suspect we will increasingly see the old capitalistic structures use governments and force to hold the line against the free market.
It is often much easier to compete by sabotaging competitors and potential competitors than by competing on the merits of the product/service that you provide.
Neoliberals have been very effective at promoting confusion between free and open markets (which most definitely require some form of regulation to remain free and open) and captialist/private ownership framework, largely to further deregulation and the rent seeking opportunities it affords.
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1. "CAPITAL"-ism with a capital "C": the policy that when labor and capital do something together, capital should get the bigger share of the return.
2. "Laissez-faire": a market that has as little regulation from the government as possible.
3. "Free market": a market that is generally untainted by what are considered "artificial" external manipulations, such as price-fixing, etc, that prevent it from reaching a natural equilibrium.
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These sometimes contradict. For instance, pure laissez-faire can easily lead to monopolies, which hinders the ability of the "free market" value. Also, it's not clear at all that "CAPITAL"-ism naturally follows from either 2 or 3.
And even when you break it into these concepts there's still plenty of room for interpretation.
Where you want to lay claim to 'capitalism' as meaning 'free markets' I believe he chooses to relegate the term 'capitalism' to the sort of crony-stroking global corporate fascism that has evolved instead of free markets. I've often thought that free market advocates should just give up on claiming the "real" meaning of the term capitalism and just invent a new word that can't be conflated as easily.
That said, I'm not sure what to think about this gentleman's article and conclusions. It seems he is able to identify things that actually ARE real problems... however my initial reaction to what he describes as 'postcapitalism' is to be skeptical and to suspect that he may have an agenda. His rhetoric is notably light on actual details, however it has a subtle yet distinct flavor of forced redistribution that leaves an unpleasant taste.
That would be historically ironic, wouldn't it? So much so that it has a ring of truth about it. Nature loves a good paradox.
By contrast, all the overtly socialistic authoritarian-Leninist states have evolved into slave states, mafia states, and totalitarian state-capitalism.
Marx's original idea really wasn't that. Boiled down, Marx argued that capitalism would transcend and obsolete itself through its aggressive over-production and innovation. It wasn't something to be imposed from above. It would evolve out of capitalism itself.
Sorry for veering slightly off topic but since you mentioned this, may I ask if you have a recommendation of a few important books that would make a core of a "economics 101"?
In the end there are several schools of economics. So it depends what Economics 101 text someone read. ;)
> Secondly, he's citing 'information technology' as being the death of 'capitalism'. An industry, arguably the most aggressively capitalistic.
He's not talking about the info-tech industry being capitalistic, but rather some of the contradictions inherent within a capitalistic info-tech industry. Relying on scarcity of a product that has effectively zero marginal cost is a very strange place to be in.
> Then he talks about corporate monopolies (anyone who's read economics 101 would tell you corporate monopolies are rarely result of unadulterated capitalism, but rather state corporatism).
And anyone who's gotten beyond econ 101 knows that these black-and-white conceptions of the econ 101 capitalism have little to do with modern economic discourse or policy.
> He mentions big companies using public data, most of that public data is generated, collected and shared openly by private companies to start with. I'm not even sure what his point was there...
His point was that trying to make a business around owning, hoarding, and making scarce the public and private interactions of the populace at large (e.g. Facebook) is a shaky foundation.
> Then he talks about alternative currencies, something which bloomed in response to flailing, devaluing state currencies. Which is just about the most free-market response to state currencies...
This is where I started to become really convinced you had missed the forest for the trees. Yes, non-state currencies are a pet project of free-market purists. Yes, they are also a huge pet project of post-capitalists and marxists. If you would stop labeling the author as one of "them" in your political world-view that you are sworn to defeat, I think you may start to see a lot of parallels between what he's describing and what you seem to think of as "free-market capitalism".
> The next paragraph he references briefly the 'sharing economy', something pioneered and spearheaded by companies such as Airbnb and Lyft. Truly great success stories of consumer capitalism.
Again, you're so obsessed with your definitions of these labels that you're missing the whole point. "AirBnB and Lyft are private companies, therefore they cannot have anything to do with a large-scale transition in market dynamics!" sounds rather silly, don't you think? Especially when the author speaks incessantly about how new models are emerging naturally within old systems rather than the traditionally marxist conception of workers using the state to effect change?
> "The solutions have been austerity plus monetary excess. But they are not working." - What? Our public spending has increases by £50bn, how is this 'austerity'? The cuts have slowed down our public spending and even that has made us one of the strongest economies in Europe. So I'm not sure where he's getting the 'not working' from.
I don't know what world you live in where you don't think we're in a period of "austerity" right now. That's literally all that finance ministers and politicians and bankers and economists are talking about. Whether or not this fits your pet definition of what "austerity" should mean, the rest of us are going to continue using that word in the way that we have been using it and all seem to understand just fine.
> Most of the fluffy scenarios he describes, whereby private individuals make voluntary, mutually beneficial agreements with each other, is almost the very definition of capitalism!
Again -- you're focusing on proving the author wrong ("Haha! Contracts made without threats of violence are capitalism, but you said capitalism was ending!") rather than even beginning to listen to what he was saying in a holistic manner.
If you're fanatically obsessed with defending a econ 101 definition of capitalism: sure, you got him. There will still be voluntary mutually beneficial agreements; capitalism will survive.
For the rest of us: this article was not about the word "capitalism", it was about what arrangement of "voluntary, mutually beneficial agreements" can be expected to exist, writ large, in a system where marginal cost of production quickly approaches zero.
Corporatist despotism is the logical conclusion of any laissez-faire capitalist economy just as Stalinism is the logical conclusion of any Marxist economy. Businesses are sticky and over time will tend to clump together, for efficiency reasons, into larger businesses. Once these businesses reach critical mass, they start to have a significant amount of influence over politicians through lobbying and campaign contributions. They use this influence to do something called "regulatory hedging" whereby they can squeeze out competition and achieve monopoly through introducing complicated legal requirements that make it tough for the little guy to get ahead. The FDA and federal tax codes are good examples of this.
This will continue to happen time and again until we put in place good checks against businesses consolidating too much power. Of course, it's too late for that since we've already let them control our political system.
Wouldn't another fix be public financing of campaigns and a ban on contributing private money to elected officials in any capacity?
> individualism replaced collectivism and solidarity
I find myself wondering if I am part of a remaining few who treasure that. I value self-sufficiency over dependency, moreso as I get older. I have come to realize that there can rarely be an imposed collective benefit that didn't come at the expense of at least one individual. The answer to "is it worth it?" will be dependent on which one you ask. Likely the same for "is it moral?" if I had my guess.
That said, I don't think individualism can last forever. The fast exchange of ideas gives incredible power to well coordinated groups. Will it descend into mob rule? Maybe, maybe not. Time will tell. We see regular examples of internet mobs taking down powerful people and companies. The recent Pao take-down comes to mind here. People have their opinions on whether or not it was justified, and mine is irrelevant here, but to me what is most striking was the sheer effectiveness of it. Eventually "we" will figure out how much power we wield and put it to use on targets of more consequence than the CEO of a cat picture website. Occupy could have really shaken things up with the right leadership in place. They were tactically effective, but lacked a leader to put them to effective use to achieve an end.
I think the time of the collective is fast approaching. As long as it's a volunteer collective, I have no issue. If it's forced at the threat of violence, I think my opinion would differ. I am not convinced that history inspires confidence on this one.
edit: small clarification
I find it interesting that the EU took over the currency, interest rates and inflation are set by state actors, and that now we're seeing articles such as this one that blame economic liberties for the failure of the system.
Maybe from the magnetosphere. Otherwise, it's blatantly false ... well, at best limited to the coddled middle class western world, but only post WWII, and only if you exclude Vietnam, the Gulf War, and other major conflicts, the NSA's antics, and pretty much anything that happened in economics... perhaps with the exception of collateral debt and high frequency trading, which were progressing something ... I'm just not sure anyone really stood for it except its positive results on their bank accounts. I suppose Mao, Hitler, Pol Pot and the Japanese Empire were 'progressivist' by some definition, though!
Ie I can't even dismiss it as typical Guardian progressive ranting - because there is no coherent story to dismiss, more of a hot-potch of terms.
Putting it down in the 'not even wrong' file.
This is a fascinating dynamic. How do you charge for information when nearly anyone can replicate it for free?
* Novelty - sure you can get civ4 for 2 dollars, but civ5 is "more desirable".
* Punishment - hexrays blacklisting engineers that use IDApro without a license.
* Technical - DRM it is only mildly effective, but architectural solutions such as gmail or WoW have a low piracy rate.
* Rewards - benefits to compliance, such as steam backing up your saved games and giving you hats.
If a nation were to completely ignore IP law would that provide a competitive advantage to that nation?
Second, information is corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant.
I don't understand how this follows. Wouldn't having more information mean that prices form more correctly?
Lots of people get themselves into trouble pontificating on how the flow of information makes markets work or not work. What they often fail to notice is that there is also a market for information itself, and that it's not really necessary to special case "information" differently than any other necessary input.
they have struggled to describe the dynamics of the new “cognitive” capitalism. And for a reason. Its dynamics are profoundly non-capitalist.
I believe the author refers to Yann Moulier Boutang's theory, espoused in his book Le capitalisme cognitif (translated in to English as Cognitive Capitalism): http://www.amazon.com/Cognitive-Capitalism-Yann-Moulier-Bout... .. I actually had it sitting on my bookshelf here in China (had to wait for the translation to come out before ordering) .. must remember to read it now!
Author needs to get out more.
The need for work hasn't reduced, it's just changed.
The issue is that someone will need to be doing the work and the people doing the work aren't going to put up with giving the majority of their pay to the rest of society (that don't need to work) for very long.
This idea will eventually lead to total wealth distribution and then the issue will be how you decide to split up the money.
Do we then need to have control on the number of kids a person can have? How about risky behavior (so health care costs aren't that high)?
Also, who decides how it's split up?
All of the articles about basic income and 'post capitalism' only take into account what will happen in the very beginning, which might seem like it's working.
They never discuss the long-term where 3 generations of families are living off of the system and the continued dependence of more and more people. What happens when the number of people on basic income vastly outnumbers the amount of people working? Will the government force people to work? A revolution? Starvation??
Capitalism is not perfect, but it's the one system that not only brought us the most technology and advancements, but also brought the most people out of poverty.
Most of these ideas aren't new. They have been tried and failed and are now just being re-packaged and prettied up into something that seems more palatable.
Internet mobs have completely failed to take down any number of other bad CEOs, or influence the policy of any nation state in a significantly positive way.
The disconnect is leverage. You can rant all you like online, but corporations only care about sales and the bottom line. Unless Team Rant has a measurable effect there you have no real influence at all.
Internet mobs have been good at shaming middle- and low-status individuals who attract envy and/or who say the wrong thing in public. Careers and reputations have certainly been damaged or destroyed.
But don't confuse that kind of schoolyard game for political or economic influence - they're completely different things.
I don't think this article is really talking about 20th century centralized socialism as we've understood it. I think we do have the potential to shed that cold war narrative and explore other more self-organizing possibilities.
Both aspects have their merits, and it is very easy to see that those merits are fundamental necessities. Governance is hard.
Bernie Sanders, the presidential candidate, makes an interesting point. He questions the whole idea of economic growth as a national goal. “Unchecked growth – especially when 99 percent of all new income goes to the top 1 percent – is absurd. Where we’ve got to move is not growth for the sake of growth, but we’ve got to move to a society that provides a high quality of life for all of our people."[1] There's something to be said for that. You get what you measure and optimize for, and US policy has been to optimize for GDP. Maybe we should be optimizing for median per capita real income per hour worked, or "how much does an hour of work buy for most people". That's a number you never used to see in the press, but it shows up more now.
[1] http://www.washingtonpost.com/blogs/wonkblog/wp/2015/07/13/w...
Re the Bernie Sanders quote, it's actually not true (http://www.politifact.com/truth-o-meter/statements/2015/apr/...).
For start it omits taxes and wealth transfers - and secondly it measures 2009-2013.
2009 was the year right after the crash when 1% experienced a sharp decline in income.
Thirdly, the huge increase in healthcare (hence insurance) costs is largely carried by employers. That's one of the main reasons for stagnant wages of late - total compensation has been increasing but the increase is flowing into benefits - thus flat income.
I have been thinking myself about the issue of inequality and think it's being obfuscated by the language used (whereby it's discussed in terms of rich vs poor instead of US poor vs foreign poor).
Ie - how are the wages for the top 1% (lawyers, doctors, bankers, etc) affecting the wages for the bottom 50%? If anything I think that immigration has been a much larger factor (for the low skilled / paid sector of the economy).
FYI because it is not clear from the article, but this is actually a marketing piece for a book:
Postcapitalism is published by Allen Lane on 30 July.
Paul Mason is the award-winning economics editor of Channel 4 News. His books include Why It's Kicking Off Everywhere: the New Global Revolutions ('Compact, urgent, present-tense, declarative and addictive' - Andy Beckett, Guardian); Live Working Die Fighting ('Indispensable, brilliant' - Ken Loach; longlisted for the Guardian First Book Award); and Meltdown: The End of the Age of Greed ('Lucid and sharply polemical' - Oliver Kamm, The Times).
But the underlying cause of the crisis was the fact that the rules of capitalism have the property of being exploitable by large financial institutions unless they are under strict public oversight, and even this has been shown to be ineffective. Rational self-interest by banks which damaged the world economy forced Greece into a series of austerity measures which progressively weakened their economy and their ability to pay their debts, locking them into a series of pressure to take yet more loans under terms which lowered their ability to repay them. The logical end of this was their most recent deal which surrendered national sovereignty over their economy.
So what we see from this example is that capitalism has shifted most of the power to those most able to manipulate it, financial institutions, and led to the degredation of national sovereignty. The extreme end of this scenario would be a world without any nations controlled entirely by banks, but I doubt we will get to that point before alternative models take hold, as very few people want to live in that kind of world.
That's an awful lot of people. Are you sure the problem's not in the system?
Tied to one currency they lost the most effective means of combating budgetary and economic issues. Worse, as they become weaker it becomes ever harder for them to generate the hard currency they need.
So if anything what happened is exactly the opposite of capitalism, they could not compete because the rules agreed by governments prevented them. Yes Greece shares fault for working the books but the EU was formed to only favor the powerful countries and protect their interest, this was no union
The more capitalist weaker economies (note: most are poorer than Greece) seem to be doing just fine.
https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&...
If you're trying to define existing system, I would disagree that exchange is voluntary here, unless you play with words and say people are free to die of hunger. (Also it's not clear what "private ownership of labor" means.)
If you're as capitalism designating some other ideal system (based on your values), for example anarchocapitalism, you should be aware that these always failed too, sometimes even more horribly than attempts for communism. But then anyway, why would you attempt to call this ideal "capitalism"?
This is actually the basic contradiction in your thinking. You say "the system we have is not really a capitalism", so the problems (that many people see) are not problems of capitalism. But then why do you want to call it capitalism, if not as the reference to what we have today?
Why can't you and a democratic cooperative operate in the same free market?
Imperialism is the goal, capitalism is the excuse.
Imperialism, the Highest Stage of Capitalism
Sorry, that is simply not correct.
These are things that occur when the government has too much power. It doesn't matter what it calls itself. For instance, the Soviet Union engaged in plenty of imperialism (far worse than anything United Fruit ever did), despite being Marxist.
>"Sorry, that is simply not correct."
We may be at an impasse, because to me and many others, it is not only logically apparent that capitalism leads to state corporatism, but verified by empirical evidence throughout quite a bit of history. Can you explain why you disagree - I'm genuinely curious and open minded. Do you think it is not to the advantage of a capitalist entity to lobby for and obtain a government granted monopoly? Do you think that it is not to the advantage of capitalist entities to influence the political process in their favor as much as possible? If there was no state presence at all, do you think it wouldn't be to the advantage of a capitalist entity to effectively create and exhibit control over one? Or, do you think these things have not, or do not, happen in reality?
Capitalism is inherently a system which encourages the consolidation of power. I think the key issue is that while you've presented "government" as something inherently different than private market forces, often the two go hand-in-hand. If all government power in a capitalist state was removed, it would be only a matter of time before a "privatized" replica of the worst aspects of government is created, only this time without even any pretenses of not being controlled by a capitalist elite. You say "It doesn't matter what it calls itself", and I think that's something that can be restated. Power is abused by many who don't call themselves a government. There is little to no difference between capitalists who seek to control a government and a people, and the authoritarians you have called out.