Communism works given abundance? Or does it?

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Iain M. Banks with his ‘Culture’ novels has given us by far and away the best imagining of a future communist society, namely: The Culture. 

Typical is this, from Iain M. Banks' short story "The State of the Art" where the narrator reflects: "Money is a sign of poverty. This is an old Culture saying I remember every now and again..."

The Culture's post-scarcity society has transcended the need for money. From such a vantage point, the presence of money implies that resources are limited and need to be allocated, whereas in the Culture, advanced technology ensures abundance for all. 

Marx, himself, could not have put it better.

But Banks’s Culture had something else present day humanity does not: ubiquitous genomic engineering.

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Luxury communism: a world where automation, artificial intelligence, and biotechnology have eradicated scarcity. The conventional (Marxist) vision is one of equality, abundance, and freedom from toil. It seems almost churlish to entertain deep skepticism regarding such a utopia.

The material logic of luxury communism is straightforward. Advances in technology make goods and services cheaper, energy cleaner, and human labour effectively unnecessary. Automation manufactures products with little to no human oversight; AI runs everything; biotech revolutionises agriculture and healthcare. A universal basic income (or free goods and services) ensures that everyone has access to life’s essentials and, soon after that, life’s luxuries.

Freed from the drudgery of work, they say, people could pursue creative, intellectual, or spiritual fulfillment (cf. the projected fantasies of those bourgeois intellectuals: Marx, Engels and Trotsky).

"From each according to his ability, to each according to his needs."

History tells us something else. When material concerns diminish, struggles for symbolic goods - status, power, recognition - intensify. Privileged elites in ancient Rome, medieval Europe and beyond often engaged in bitter rivalries not for survival but for prestige.

These conflicts were no less destructive than battles over land or wealth.

Think of the culture wars we see around us. Their ‘precariat’ foot-soldiers are not starving - although they plainly aspire to those enhanced material privileges to which they feel entitled - but their elite leadership is generally well-provisioned: it’s power, prestige and dominance which motivate them.

The sociologist Thorstein Veblen famously described the "conspicuous consumption" of elites, where the display of excess becomes a competitive weapon. Prestige, by its nature, is a scarce commodity. A luxury communist society, no matter how materially abundant, would still foster competition for symbolic dominance.

The result? Endless power struggles dressed in new clothing.

If only these patterns were merely ‘cultural’. But culture is the expression of biology. Humans evolved in environments where resources were limited, and high-position in dominance-hierarchies ensured survival. Traits like competitiveness, aggression, negotiation skills and status-seeking were selected over millennia. Those hierarchies don't look like going away.

Could we genetically-engineer our way out of this trap? We didn’t evolve for abundance, but given it, perhaps we could engineer the necessary adaptations? The resulting "dove society" might prioritise empathy, cooperation, and collective well-being over hierarchical and competitive drives.

Technically this could, of course, work. Genetic traits influencing aggression, impulsivity, or competitiveness will be understood and may be edited out. Likewise, empathy, patience, and long-term thinking could be genetically enhanced. The result? A society designed for harmony, not strife.

The evolutionary "hawk-dove" model now makes its voice heard. Hawks are aggressive, taking what they want by force; doves are cooperative, caving in to avoid conflict. Generally dove societies are unstable, their members replaced by hawks, although under some boundary conditions a 'mixed strategy' can be stable, though still one in which conflict is necessarily built in (those hawks!).

And perhaps a dove society is just too boring, too stationary and too stagnant. Doomed to extinction through tedium. 

Even Iain Banks preferred to write about Special Circumstances, the least ‘harmonious’ and ‘placid’ wing of the Culture, comprising those individuals ruthless and devious enough to deal with uncouth, vibrant and so very alive ‘barbarians’.

So perhaps the real problem with luxury communism is that it only works in a society of losers.

We’re never going to colonise the Galaxy that way, are we, Mr Elon Musk?

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Atomised - Marx, Houellebecq and Wilson

Perhaps every generation wakes up one day and realises that they live in a society of apparently-atomised individuals - and that the ideologies of the day celebrate that fact.

It certainly came as a revelation to me, as a child in primary school, that society wasn't actually for anything, that it seemed to have no overarching purpose. Where, then, was purpose to be found?

Religion?

The purposelessness of society and - with the decline of religion - the lack of any sense of life-meaning has conjured many things. The literature of Michel Houellebecq (cf. 'Atomised'), the activist-faddism of the new petite-bourgeoisie, the fetishism of feelings over rational analysis - these are all particularly salient today. But such epiphenomena have always been somewhere present in stabilised bourgeois societies.

This is what Marx wrote in "On The Jewish Question" (1843).

"Security is the highest social concept of civil society, the concept of police, expressing the fact that the whole of society exists only in order to guarantee to each of its members the preservation of his person, his rights, and his property. ...

The concept of security does not raise civil society above its egoism. On the contrary, security is the insurance of egoism.

None of the so-called rights of man, therefore, go beyond egoistic man, beyond man as a member of civil society – that is, an individual withdrawn into himself, into the confines of his private interests and private caprice, and separated from the community.

In the rights of man, he is far from being conceived as a species-being; on the contrary, species-life itself, society, appears as a framework external to the individuals, as a restriction of their original independence. ...

It is puzzling enough that a people which is just beginning to liberate itself, to tear down all the barriers between its various sections, and to establish a political community, that such a people solemnly proclaims (Declaration of 1791) the rights of egoistic man separated from his fellow men and from the community, and that indeed it repeats this proclamation at a moment when only the most heroic devotion can save the nation, and is therefore imperatively called for, at a moment when the sacrifice of all the interest of civil society must be the order of the day, and egoism must be punished as a crime. (Declaration of the Rights of Man, etc., of 1793)."

So here Marx is counterposing the social nature of humanity, its 'species-being', with the bourgeois concept of the autonomous individual, the social-atom coolly prepared for purely formal and transactional relationships with others.

It's a point made often. People instinctively yearn for community, remember fondly their 'war years'.

Yet Marx and the Marxists have never been clear about what a society founded upon the expression of 'species-being' would actually be like. Marx's utopian vision seemed to be that everyone would selflessly strive for the communal benefit of .. well, everyone else.

After all, it seems to works for ant colonies.

Yet our best, modern, biological understanding is that people work for and with family and friends in the everyday sense. There can be a commitment, a loyalty, to the imagined-communities of larger constellations - such as companies, countries or more abstract causes (only the latter being currently lauded).

And this seems psychologically-grounded in the belief that fellow (and presently unknown) members of or adherents to these above-Dunbar's-number 'communities' will have a propensity to enter into alliances of reciprocal altruism at need. That is to say they are already marked as 'potential friends and allies'.

But nothing gets done in practice without actual links with actual people, stable over time. And so we see that, contrary to the official story of a society of empowered individuals, all existing institutions - especially elite institutions - are composed of networks of people who typically have known each other a long time, who think similarly and who broadly trust each other. (The granularity of trust-groups is particularly fine in politics!).

Survey the media families (those familiar journalists, editors, presenters in the newspapers and television networks); the political dynasties; those families with durable military traditions; the elite universities which welcome the same names generation after generation.

Biology will out. Humanity's true species-being is a network of contending, alliance-making micro-tribes, surprisingly stable over the generations.

This is what made Robert Charles Wilson's wonderful The Affinities less a piece of social extrapolation and more a simple relabelling of what we already see around us.

The transcendence of bourgeois hypocrisy about the real nature of people and its lies about human nature are not to be found in the society of ants - unless future humans are going to be a singular clone-network (I would advise against this, citing bananas).

We are what we are and we need a mode of production which is aligned with that, absent unimagined qualitative 'changes/improvements' in human psychology. I'm still looking to total automation .. and a rocky transition to that state .. on a timescale of centuries, but not millennia.

- Adam Carlton (also published on Booksie).

Capitalism incompatible with total automation/slavery

In the previous post, "Five questions on the last days of capitalism", I discussed the evolution and final fate of capitalism - which will be very different from the violent revolutionary end imagined by the Leninist left.

In this post I want to zero in on the exact mechanics of the final days of capitalism. Little of what follows is original, but it's seldom brought to prominence.

1. Start point: a model capitalist economy with competition

Our economy consists of a number of identical competitive companies serving an anonymous market. Each company spends per working period:

• £10 on constant capital c (= depreciation, raw materials, premises etc), 
• £4 on wages v (= 4 labourers at £1 each)

with a rate of surplus value s/v of 100%. This means that £4 of surplus value s is produced in the working period. So c = 10, v = 4, s = 4.

Revenue = c + v + s = 10 + 4 + 4= £18     -  4 labourers remember. Assume 18 objects are produced at £1 each.

Profit p = revenues - costs = £18 - (£10 + £4) = £4.

Rate of profit = profit/cost = p/(c + v) = 4/(10 + 4) = 2/7 = 29%.

2. The power of innovation

One of the companies buys some better machinery which bumps c up from 10 to 11 but which allows two workers to be eliminated. Their numbers look better:

c = 11, v = 2, s = 2 (same s/v) so c + v + s = £15.

Suppose that 18 objects are still produced in the working period. Initially the innovator can sell at the going market rate of £1 each - a total revenue of £18.

Revenue = £18. But his costs (c + v) = 11+2 = £13 are lower.

Profit = £18 - £13 = £5 .. and rate of profit = p/(c + v) = 5/13 = 38%.

This is far better than his business rivals (stuck at 29%).

3. Other companies follow the innovation

But all too soon other companies follow suit. Prices fall due to competition until each company finds that for itself:

New revenue = c + v + s =  £11 + £2 + £2 = £15

New profit = (c + v + s) - (c + v) = £15 - £13 = £2.

New rate of profit = p/(c + v) = 2/13 = 15%.

But the previous market equilibrium profit was 29%! Now each employer is worse off.

But the 18 objects now cost only £15, or 83p each. Consumers benefit from the wonders of competition and innovation driving productivity.

4. Robots now eliminate all labour

The robots are coming! A progressive innovator buys more automation which bumps c from 11 to 12 and which eliminates workers altogether.

c = 12, v = s = 0.

As before, 18 objects are produced in the working period and the going rate is still 83p each. Our innovator takes advantage of existing market pricing.

Revenue = £15 as before, but costs = £12 only (no wages).

Profit = £15 - £12 = £3 and the rate of profit = 3/12 = 25%.

An improvement over his competitors (who only see 15%) but again, they soon follow suit.

5. Everybody adopts total automation: no more wage bills

Competition drives prices down to costs (there is no surplus value s).

Revenue = 12 and cost = 12.

Profit = 0 and each object costs 12/18 = 66p. Except no-one is making any.

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Discussion

Slaves or robots: it makes no difference

I assert the above model holds whether the total automation is clever machinery, some humanoid AGI or a human slave.

Nonsense, you reply. A slave is just a worker where the employer is paying for food and shelter directly, rather than via wages.

Not so fast! The slave has to be bought as well as maintained - just like any other piece of capital equipment. What then is the cost of a slave in a competitive market?

The cost of a slave = expected-output-value - maintenance-costs (all discounted).

In one cycle above, assuming the slave is bought at price c and is as productive and exploited as a wage-worker (s/v = 1) then:

output-value produced by slave = (v + s) and maintenance-cost = v, so using the definition:

slave-cost = c = (v + s) - v = s                   - (values/costs here for one work cycle).

People (not slave-owners though) forget to include the initial cost of the slave, which already factors in the 'value' the slave will create.

Suppose c_R represents the cost of the raw materials the slave works with and other non-slave constant capital costs. In a work cycle or period:

revenue = c_R + value-added-by-the-slave = c_R + (v + s)

costs = c_R + slave-cost + slave-subsistence = c_R + s + v.

Profit = revenue - cost = [c_R + (v + s)] - [c_R + s + v] = 0.

There have been capitalist economies with slave sectors of the economy

You say, there have been slave-owning sectors of capitalist economies, the antebellum south, and I remind you that this is well-trodden territory on the left.

Read more at this post: "Total automation under capitalism?" - the topic area is the theory of equalisation of the rate of profit between sectors with differing levels of automation and the concept of prices of production.

It's perfectly possible for sectors of a capitalist economy to transition to total automation (point 4 above). The automated sectors extract value produced by workers in other sectors through profit equalisation. But it's not possible for the whole economy to 'lose its workers'.

8. What kind of an economy can you have with total automation?

What does work, you ask. Absent complete overproduction capability ('abundance') of everything, there will be a need for exchange between different production units: commodity exchange at value via simple (or petty) commodity production. Like in the Roman empire, or during feudalism. In this mode of production, exchange is driven by the need for use-values. The dynamic is not profit maximisation.

One can only hope that innovation and dynamism in such an utterly-transformed society of the future is not stifled. Perhaps the AIs will have some objectives of their own? Not everything that is wonderful and creative in human affairs is driven by capital valorisation.

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You will have observed that the cost equation for a slave already incorporates elements of rent. Yet the treatment here is not definitive. As Poulantzas reminds us (Classes in Contemporary Capitalism, chapter 1), 'capital is not a thing'. In arithmetical examples social relationships are reified.

So I'm thinking that the 'expected value of future output' term in the value of a slave is similar to the way we value a share. Marx called this fictitious capital. Compare with the labour involved in delivering the slave as a market-commodity (reproduction, transport and transaction costs) which is how we normally value constant capital. Not sure how to bring these two paradigms together. On this rather opaque thought I must leave it.

Update: Reading Poulantzas (Classes in Contemporary Capitalism, Productive and Unproductive Labour: 2) I am reminded that slaves are not produced in factories.

Slave traders are engaged in non-productive labour and the commodity price form of the slave, like that of the bond or share, is not derived from some quantity of abstract social labour incorporated in it.

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My further posts on Marxist theory.

Modelling total automation under capitalism (a progress report)

What actually happens to a capitalist economy as automation increases, employees are laid off and the budget for workers' wages tends to zero? It's possible to explore this in a spreadsheet using Marx's equations for expanded capitalist reproduction (which I wrote about here).

You divide the economy into Department 1, which makes machines (capital goods) and Department 2 which makes consumables (wage goods and luxuries). Then you iterate through cycles in which you try to make both Departments more capital-intensive while aggressively laying off workers.

There are some constraints: Department 1 sells Department 2 its machines; Department 2 supplies the consumption needs of workers and capitalists in Department 1. The following quantities need to stay non-negative:

1. Constant capital (machines, factories, raw materials) - c
2. Variable capital (wages) - v
3. Capitalist personal remuneration (dividends) - a
4. Overall sector profits - s  (or p, when adjusted to equalize the rate of profit between Departments).

Additionally the rate of surplus value s/v can't go through the roof. You can't have one worker alone in an enormous factory who works ten minutes to produce the value of their own wage, and then eight hours plus to provide the surplus value which pays for dividends and the next round of automation investment (s/v = ~50). They really wouldn't buy-in to that.

Click on the figures to make the spreadsheets large enough to read. You are not meant to understand what's going on - just to get an impression. More detailed stuff later.

Department 1: s/v tends to infinity while production is anaemic

The problem is this: as automation increases and the number of workers declines in Department 1, those few left have to (unrealistically) produce far more value than their wages to keep the edifice afloat.

Meanwhile the collapse in the number of workers overall leads to a chronic decrease in demand for Department 2's consumer goods. No new machines are being bought: instead there's accelerated depreciation - which destroys surplus value, hitting profits there.

Department 2: this sector begins to collapse

To reiterate: with decreasing demand for wage-goods, Department 2 finds itself losing the value invested in its machines, not buying more. Depreciation hits surplus value making Department 2 increasingly unprofitable.

So far I've been unable to find a combination of parameters which allows capitalism to eliminate all its workers. I'll keep trying ... .

More: Five questions on the last days of capitalism.

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You ask, why use the framework of Marxist economics? Because orthodox (ie bourgeois) economics has no interest or explanation as to where profit comes from:

"Rent, wages, interest, and profit are the four factor incomes that land, labor, capital, and enterprise provide respectively."

Roughly the idea that if you put some money into 'enterprise' then by some magic it can become larger (profit). Magic is not a good analytic framework for edge cases of capitalist reproduction.

Where did the capitalists come from? - Henri Pirenne

The high-bourgeoisie rules the planet. World-striding 'entrepreneurs' and bankers live gilded lives. The top 1% et cetera.

But it was not always so.

How fragile was the state of being a capitalist in the beginning! Unlike the lords of feudalism or antiquity, the proto-capitalists had no military forces at their disposal and relied upon alien, hostile institutions for the security of their business transactions - and for their own personal safety. How often were moneylenders simply killed or exiled by those powerful nobles indebted to them?

Reflecting upon Helen Dale's tantalising question - Could the Roman Empire have produced capitalism in 200 BC? - I came upon this strange, short and enticing free book.

Amazon link

This 36 page text is the address of Henri Pirenne (1862-1935) given at the International Congress of Historical Studies, London, April, 1913. It's a really interesting 40 minutes read (did I mention it's a free Kindle book?).

Here is some of what Pirenne, who had an interesting life, has to say.

"The ancestors of the bourgeoisie must then be sought, specifically, in the mass of those wandering beings who, having no land to cultivate, floated across the surface of society, living from day to day upon the alms of the monasteries, hiring themselves to the cultivators of the soil in harvest time, enlisting in the armies in time of war, and. shrinking from neither pillage nor rapine if the occasion presented itself.

It may without difficulty be admitted that there may have been among them some rural artisans or some professional peddlers, But it is beyond question that with very few exceptions it was poor men who floated to the towns and there built up the first fortunes in movable property that the Middle Ages knew.

Fortunately we possess certain narratives which enable us to support this thesis with concrete examples. It will suffice to cite here the most characteristic of them, the biography of St. Godric of Finchale.  He was born of poor peasants in Lincolnshire, toward the end of the eleventh century, and from infancy was forced to tax his ingenuity to find the means of livelihood. Like many other unfortunates of all times, he at first walked the beaches on the outlook for wreckage cast up by the sea. Then we see him, perhaps by reason of some fortunate find, setting up as a peddler and travelling through the country with a little pack of goods (cum mercibus minutis).

At length he gathers together a small sum, and one fine day joins a troop of town merchants whom he has met in the course of his wanderings. Thenceforward he goes with his companions from market to market, from fair to fair, from town to town. Having thus become a professional merchant, he rapidly gains a sufficient sum to enable him to associate himself with other merchants, charter a boat with them, and engage in the coasting trade along the shores of England, Scotland, Denmark, and Flanders.

The company is highly successful. Its operations consist in carrying to a foreign country goods which it knows to be uncommon there, in selling them there at a high price, and acquiring in exchange various merchandise which it takes pains to dispose of in the places where the demand for them is greatest and where it can consequently make the greatest gains.

At the end of some years this prudent practice of buying cheap and selling dear has made of Godric, and doubtless of his associates, a man of important wealth. Then, touched by divine grace, he suddenly renounces his fortune, gives his goods to the poor, and becomes a monk.

The story of Godric, if one omits its pious conclusion, must have been that of many others. It shows us, with perfect clearness, how a man beginning with nothing might in a relatively short time amass a considerable capital. Our adventurer must have been favored by circumstances and chance. But the secret of his success, and the contemporary biographer to whom we owe the story insists strongly upon it, is intelligence.  ...

The fortunes acquired in the wandering commerce by the parvenus of the eleventh and twelfth, centuries soon transformed. them into landed proprietors. They invest a good part of their gains in lands, and the land they thus acquire is naturally that of the towns in they reside. From the beginning of the thirteenth century one sees this land held in large parcels by an aristocracy of patricians, viri hereditarii, divites„ majores„ in whom we cannot fail to recognize the descendants of the bold voyagers of the gilds and the hanses.

The continuous increase of the burghal population enriches them more and more, for as new  inhabitants establish themselves in the towns, and as the number of the houses increases, the rent of the ground increases in proportion. So from the commencement of the thirteenth century, the grandsons of the primitive merchants abandon commerce and content themselves with living comfortably upon the revenue of their lands.

They bid farewell to the agitations and the chances of the wandering life, They live henceforward in their stone houses, whose battlements and towers rise above the thatched roofs of the wooden houses of their tenants. They assume control of the municipal administration; they and their families monopolize the seats in the échevinage or the town council. Some even, by fortunate marriages, ally themselves with the lesser nobility and begin to model their manner of living upon that of the knights. ...

This was destined to last, as is familiar, until the moment when in England at the end of the eighteenth century, on the Continent in the first years of the nineteenth, the invention of machinery and the application of steam to manufacturing completely disorganized the conditions of economic activity.

The phenomena of the sixteenth century are reproduced, but with tenfold intensity Merchants accustomed to the routine of mercantilism and to state protection are pushed aside. We do not see them pushing forward into the career which opens itself before them, unless as lenders of money. In their turn, and as we have seen it at each great crisis of economic history, they retire from business and transform themselves into an aristocracy.

Of the powerful houses which are established on all hands and which give the impetus to the modern industries of metallurgy, of the spinning and weaving of wool, linen, and cotton, hardly one is connected with the establishments existing before the end of the eighteenth century Once again, it is new men, enterprising spirits, and sturdy characters which profit by the circumstances."

Henri Pirenne confuses his mercantilists with his capitalists. The former buy cheap and sell dear; most of what they accomplish is the shifting of value around. Capitalists, on the other hand, buy labour-power and appropriate surplus value: they do preside over the creation of new value. Capitalism as a mode of production requires the employment of workers in commodity production for the market - not a feature of medieval times except at the margins of the highly-regulated guilds.

However, his 'stages theory', in which the merchants and proto-capitalists of each generation make their money and cash in, to join and reinvigorate their pre-capitalist elites, is surely correct. It was ever so.

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The Roman Empire enslaved available labour. It didn't seem to have occurred to anyone that this might be a moral atrocity: there were no abolitionists in antiquity, although slaves were often freed on a personal basis.

The main thing preventing a capitalist transition seems to have been the lack of proto-capitalists. There were certainly many 'new men' who made their fortunes in trade around the Mediterranean and farther afield. As Pirenne similarly observes for the mediaeval period, it was invariably the case that they then bought status and prestige by converting their fortunes into land and slaves.

As a matter of fact, Roman artisan workshops did not expand into proto-companies powered by wage labour, which would have marked the onset of capitalism-proper.

Amazon link

I'm still struggling to put my finger on exactly why no bourgeoisie developed in Rome, but maybe this book by the renowned Ellen Meiksins Wood will help (I've just started it). More later.

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Marx anticipated all this with his knockabout "Genesis of the Industrial Capitalist", Chapter 31 of the first volume of Capital.

Military skills

In a remote region of Eastern Europe, Prince Henry presided over an isolated principality still stuck in the mediaeval age.

Henry was a consummate, peerless warrior, skilled at jousting with the lance, a master of sword and axe. He would lead his knights across the small plains of their homeland in military exercises.

One day, his hermetic kingdom finally came into contact with the outside world - the Russians to be precise. As these things go, disagreements arose. The Russians proceeded to address their minor inconvenience.

Henry and his men faced the invasion in glorious array, the Prince in full armour on his war horse leading the way. Across the other side of the plain appeared the vanguard of the Russian forces: spetsnaz troops supported by Armata tanks, helicopter gunships and artillery. Prince Henry gave the order to charge. The ensuring battle must have lasted .. well, all of four minutes.

The question arises: did Prince Henry have military skills?

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My view. It's a mistake to get too philosophical about this, treating it as a debate about definitions or eternal abstract categories. Prince Henry and his men trained hard and long and were plainly differently-skilled to his peasants. So they plainly had military skills.

But in the current military context, those skills were useless and could not be leveraged into military effectiveness. In contemporary war-fighting, they had no military skills.

Both things can be true. The term 'military skills' is relational, it's not a thing.

Interestingly, this argument can be formalised: Having military skills is not exactly a predicate.

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Note: this fable is isomorphic to the discussion of Marx's theory of value as debated between David Harvey and Michael Roberts.

"Marx: A Very Short Introduction" - Peter Singer

I was impressed by the readability and erudition of Peter Singer's VSI to Hegel, so decided to read his take on Marx.

Amazon link

I was disappointed. Singer is affectionately amusing on Marx's life and I agree with him that Marx retained a (materialist-reframed) Hegelian perspective throughout his life's work. But Singer struggles with Marx's notoriously tricky concept of value (abstract human labour), buying the argument that machines can create surplus-value. In Marxist thinking, only human labour can do that, reflecting the distinction between labour and labour-power.

Once you don't 'get' Marx's theory of value, then the theory of capitalist dynamics tends to go too, and you're left with a static evaluation of Marx's specific predictions, most of which did not track capitalism's evolution throughout the twentieth century.

Singer thereby concludes by seeing Marx more as an ethical philosopher than anything else, but that's a retreat too far. I would, however, be even harder than Singer on Marx's lamentably blank-slate view of human nature, which fatally undermines any naive presentation of Communism.

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Singer also wrote this book, which is on my list:

Amazon link

I had thought I might be the only person in the world who cared about the synthesis between Marxism and evolutionary theory, specifically human sociobiology. But I guess that along with Peter Singer I should now add David Reich to my list of good guys too, although he's a liberal-leftist, not a Marxist.

No communism without abundance

PDF link

This is the exact quote I was looking for (page 11 of the text above).

"this development of productive forces ... is an absolutely necessary practical premise because without it want is merely made general, and with destitution the struggle for necessities and all the old filthy business would necessarily be reproduced"

Marx, The German Ideology, Part I, Feuerbach, Opposition of the Materialist and Idealist Outlook.

This remark seems commonplace, but its cold-eyed assessment of human nature contradicts the voluntarism which underlay Stalinism - and other over-enthusiastic projects to build the socialist utopia based on good intentions.

Q. "How do I get into Marxism?"

Marx is newly fashionable again, but it's a daunting task to take on the four volumes of Capital. And in most fields you don't retrace the founder's tortuous strugglings. In physics, students don't read Newton's or Einstein's original works: they read textbooks.

Marx wrote about what he knew, which was the inner dynamics of capitalism as a mode of production. A good start is "Understanding Capital" by Duncan K. Foley (search "understanding capital foley pdf").

Amazon link

Foley concentrates on the economics, is very clear and writes in a modern paradigm cross-referencing contemporary ideas in economics. The book is thematically-organised across Marx's economic work and is short (170 pages).

Amazon link

As a complement, there's Michael Heinrich's "An Introduction to the Three Volumes of Karl Marx's Capital" - this link is to the online PDF or search "marx capital heinrich pdf". It's similarly short (224 pages), well-written and conceptually clear. Heinrich is more focused on the actual contents of each volume. He also writes about topics Marx intended to address but never got around to, including the theory of crises, the state and communism itself.

Marx wrote very little about post-capitalist social organisation. Without data this would have been no more than speculation. It was down to Lenin, Trotsky, Stalin, Mao and many others to theorise later developments - in ways I would argue were profoundly mistaken.

What flag on your coffin?

At Princess Diana's funeral, her coffin was draped with the Royal Standard Flag.

Thus her life and memory were appropriated to the historical traditions of the British elite, their heartfelt commitment to ideological continuity from early feudalism to world-straddling empire.

Would Diana have identified with that manifest destiny?

I asked Clare what flag she would like her coffin bedecked by. She pooh-poohed the idea; she wants flowers - lots of them. And in a sense that's right, the coffin-flag has to express your final and most profound identity, the culture which in the end you claim. But I think Clare's sense of identity is, at its very foundation, cultural Catholicism.

Catholics don't have a flag as such, but the nearest is the flag of the Vatican City.

It's not nearly as aesthetic as one might like.

And me? I'm not tribal, I value my inner skepticism above all revealed wisdom. My flag should represent the epitome of scathing criticism concerning all deceptive agenda-ideologies.

Yes, I would like the flag of the Comintern draped across my coffin (or painted upon it). From those early days (1919-22) when all was youthful idealism, before the harsh realities of European defeat and 'primitive socialist accumulation' derailed the dream and brought forth the lies.

Why are cows sacred in the Hindu tradition?

From Marx's Capital, Volume 2, Chapter 12 (1885), (quoting observers).

"While the peasant farmer starves, his cattle thrive. Repeated showers had fallen in the country, and the forage was abundant. The Hindoo peasant will perish by hunger beside a fat bullock.

"The prescriptions of superstition, which appear cruel to the individual, are conservative for the community; and the preservation of the labouring cattle secures the power of cultivation, and the sources of future life and wealth.

"It may sound harsh and sad to say so, but in India it is more easy to replace a man than an ox." ...

"Desertion of life, without reward, for the sake of preserving a priest or a cow . . . may cause the beatitude of those base-born tribes."

One could almost suspect a conscious decision by high-caste Brahmans to create a religious rite protective of cattle, the foundation of an agrarian economy which found them at the apex.

I don't know to what extent these conditions of existence still apply, 130 years later, in rural India. Increasingly, however, the concept of the sacred cow will devolve into a natural experiment in cultural inertia.

Now what's the story on the pig?

Marx and the party girls

I think it's fair to say that Marx didn't write a great deal about prostitution and brothels - but he certainly wasn't a fan.

In the Marxist tradition, a 'sex worker' (in a business framework) is just another worker selling her (it's usually her) labour power to create surplus value. Once a brothel has employed her, their interest is to maximise the value of her activities. Her own choices in the matter are not a major concern.

This creates an ideological problem for those naive enough to believe that brothels have, as their main function, to make 'sex work' safer. So in this recent BBC website article, Sabrinna Valisce writes:

""They started talking about how stigma against 'sex workers' was the worst thing about it, and that prostitution is just a job like any other," Valisce remembers.

It somehow made what she was doing seem more palatable.

She became the collective's massage parlour co-ordinator and an enthusiastic supporter of its campaign for the full decriminalisation of all aspects of the sex trade, including pimps.

"It felt like there was a revolution coming. I was so excited about how decriminalisation would make things better for the women," she says. ...

But she soon became disillusioned.

The Prostitution Reform Act allowed brothels to operate as legitimate businesses, a model often hailed as the safest option for women in the sex trade.

In the UK, the Home Affairs Select Committee has been considering a number of different approaches towards the sex trade, including full decriminalisation. But Valisce says that in New Zealand it was a disaster, and only benefited the pimps and punters. ...

"I thought it would give more power and rights to the women," she says. "But I soon realised the opposite was true."

One problem was that it allowed brothel owners to offer punters an "all-inclusive" deal, whereby they would pay a set amount to do anything they wanted with a woman.

"One thing we were promised would not happen was the 'all-inclusive'," says Valisce. "Because that would mean the women wouldn't be able to set the price or determine which sexual services they offered or refused - which was the mainstay of decriminalisation and its supposed benefits."

Aged 40, Valisce approached a brothel in Wellington for a job, and was shocked by what she saw.

"During my first shift, I saw a girl come back from an escort job who was having a panic attack, shaking and crying, and unable to speak. The receptionist was yelling at her, telling her to get back to work.

I grabbed my belongings and left," she says."

It's reminiscent of children aged 9 or 10 working 18 hour days, which Marx wrote so scathingly about in Capital Vol 1. Surprisingly, despite their liberated views on sexuality, the elite don't seem very happy that their own daughters should move into sex work.

Evolutionary psychology reminds us of what we all know. Women in general are quite choosy who they have sex with, since their mate will provide half the genes of their children.

The corresponding and innate emotional, psychological drives are violated in both prostitution and rape.

Because the former is generally economically-motivated rather than inflicted by violence, the sisterhood gets confused. Muddying the water is that phenomenon of social parasitism, female psychopathy, exhibiting a strategy of promiscuity which can apparently make prostitution a congenial occupation for them. You can always find a woman to tell you that prostitution is great.

---

Anomie, the felt pointlessness of life, is frequently seen on the evening streets. This is the subject of a new Channel 5 TV show (which screams 'trash'), entitled "Bad Habits, Holy Orders: what happened when five party girls moved into a convent" featured in The Times today.

"Five new girls arrive at the Daughters of Divine Charity convent in Swaffham, deep in rural Norfolk. The first, Paige, 23, has, between her red go-go boots and her miniskirt, a gap large enough to display the entire face of Nicki Minaj that is tattooed on her thighs. She is struggling to pull a suitcase the size of a small wagon across the gravel courtyard. It’s full of her clubbing lingerie. She is joined by Rebecca, 19, another committed hedonist who seems to sum up their situation when she realises what their new home is, crying: “F***, I’m in a f***ing nunnery.”

"It’s a fair guess that this Channel 5 reality-TV experiment, called Bad Habits, Holy Orders, wouldn’t have taken much of a “sell”. “Think Sister Act,” the executive would say, “crossed with St Trinian’s.” Then, more sheepishly, wiping the froth off his chin: “It’s basically some party girls in G-strings in a convent.” And lo it came to pass."

So what do you think? Wildly self-centred, tantrum-prone party girls met by uncomprehending, disapproving nuns? It all ends in some gigantic, collective hissy-fit?

You wouldn't be more wrong.

"Then it is time to have tea with Sister Thomas More and Sister Francis, a double act of smiley, grandmotherly types from mother-superior central casting. I open with what I think is a small-talk question about why modesty is important for nuns. “They seemed to be in the habit of wearing very little,” says Sister Thomas More of the visitors. “I think it’s a turn-on isn’t it, for men? If you are completely naked, you are asking for trouble . . . We have ourselves to blame sometimes. So I think modesty is important.”

"At this the PR woman looks up from her laptop: “But no means no for women, doesn’t it?”

"Sister Thomas More says: “Sometimes they don’t know what no means, do they?”

"I try to help out: men should respect consent no matter how a woman is dressed?

“That’s all right if you’re with men who are going to respect it.”

"We move on. Their views are representative of a generation who grew up in a more restrictive age for women. Their calling as nuns, they tell me, has given them a life of travel and freedom that surpassed the alternative life of domesticity that was awaiting them.

"In practice, their attitude to the young women is fond and non-judgemental; mostly they are worried for them. Sister Francis clucks over them, concerned that they are “chilly” in their minimal garments and sympathetic to the aesthetic pressures society puts on them."

And what about the effects (of the nunnery) on the girls?

"Rebecca, as no one would have predicted, loves her session with the nuns in an old people’s home. After she leaves the convent she gives up clubbing, starts a long-term relationship, returns to college to do a healthcare qualification and reconciles with her father, who says that her going to the convent had achieved all that he never could. “You broke me,” he tells Rebecca.

"Gabbi says she felt her Instagram feed was all that people valued her on. “I felt useless.” The convent helped her to “remember being back when I was 14, the last time I felt like my real self”.

"Tyla is volunteering with the homeless. Paige gets a tattoo of a crucifix and Sarah changes her hours — she used to sleep from 7am to 5pm; now she works as a personal assistant. Her friends tell her to stop talking about moderation. They say: “Sarah, we don’t even know what it means.”

"There’s only one word for the young women’s attitude to their transformation: evangelical. If they do post on social media, it is to urge compassion, with the hashtag “love yourself”, which they thought up together at the convent. It isn’t quite “love God” or “love thy neighbour”, but it means a lot to them just the same. "

The God who gives a value system and sense of community to the nuns may be illusory, but by believing in Him their lives do gain purpose. In an evolutionary sense it's hopeless - as 'Brides of Christ' their genes are terminated - but in the environment of evolutionary adaptation which selected for their sense of communal dedication, their instincts were aligned with best and most successful social practice.

In a society where the economic structure assigns the orderly 'production of surplus value under the direction of the capitalist enterprise' as the individualised purpose of each non-elite person's life, the constellation of human psychological drives do struggle to gain traction in daily routines.

The failure of the Tory party to inspire people, the success of Momentum ('The World Transformed'): these phenomena are not hard to understand.

---

Note

It is commonplace, in this sort of article, to say that anomie will be overcome under socialism or some such. Sadly, no further justification is ever given.

The previous generation often observed that life had never been more meaningful than during World War II. There was a sense of comradeship and community in the war which they missed ever after.

One is hardly surprised. Humans evolved in small groups faced with towering existential problems which only collective teamwork could overcome. We are descended from those who succeeded in that, so it's no surprise we feel fulfilled by collective teamwork in situations of existential threat.

But wasn't socialism/communism going to eliminate existential threat? Won't we all be terribly bored? And wasn't that always the critique of Heaven and all utopias?

A compelling criticism indeed, perhaps only to be addressed by the directed modification of our own psychologies under communism. Marx wrote,

"In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.

Marx, German Ideology (1845).

Not everyone will think this a description of their own utopia! But Marx is plainly on to something in the matter of choice. We'll have to identify worthwhile objectives (as a Darwinian I'd be thinking pro-survival and pro-expansion), arranging that we self-engineer both capability and desire.

Marx and a Universal Basic Income (UBI)

Marx, as far as I know, did not explicitly write about the impact on capitalism of the widespread introduction of a universal basic income.

He did however, (in chapter 33 of Capital, Vol 1) write about an equivalent situation: the economics of the early Australian and American colonies.

Because the land was unowned, it was possible for new, penniless immigrants to rapidly acquire a homestead for themselves and their families, making them effectively self-sufficient.

"Free Americans, who cultivate the soil, follow many other occupations. Some portion of the furniture and tools which they use is commonly made by themselves. They frequently build their own houses, and carry to market, at whatever distance, the produce of their own industry. They are spinners and weavers; they make soap and candles, as well as, in many cases, shoes and clothes for their own use. In America the cultivation of land is often the secondary pursuit of a blacksmith, a miller or a shopkeeper.”

This makes capitalist production difficult.

"The absolute population here increases much more quickly than in the mother-country, because many labourers enter this world as ready-made adults, and yet the labour-market is always understocked. The law of supply and demand of labour falls to pieces.

On the one hand, the old world constantly throws in capital, thirsting after exploitation ...; on the other, the regular reproduction of the wage labourer as wage labourer comes into collision with impediments the most impertinent and in part invincible. ...

The wage-worker of to-day is to-morrow an independent peasant, or artisan, working for himself. He vanishes from the labour-market, but not into the workhouse. This constant transformation of the wage-labourers into independent producers, who work for themselves instead of for capital, and enrich themselves instead of the capitalist gentry, reacts in its turn very perversely on the conditions of the labour-market. ...

It avails him [the capitalist] nothing, if he is so cunning as to import from Europe, with his own capital, his own wage-workers. They soon “cease ... to be labourers for hire; they... become independent landowners, if not competitors with their former masters in the labour-market.” ...

“Our capital,” says one of the characters in the melodrama, "was ready for many operations which require a considerable period of time for their completion; but we could not begin such operations with labour which, we knew, would soon leave us. If we had been sure of retaining the labour of such emigrants, we should have been glad to have engaged it at once, and for a high price: and we should have engaged it, even though we had been sure it would leave us, provided we had been sure of a fresh supply whenever we might need it.”

But sadly not. This little difficulty in kick-starting American capitalism was, however, only temporary.

"On the one hand, the enormous and ceaseless stream of men, year after year driven upon America, leaves behind a stationary sediment in the east of the United States, the wave of immigration from Europe throwing men on the labour-market there more rapidly than the wave of emigration westwards can wash them away.

On the other hand, the American Civil War brought in its train a colossal national debt, and, with it, pressure of taxes, the rise of the vilest financial aristocracy, the squandering of a huge part of the public land on speculative companies for the exploitation of railways, mines, &c., in brief, the most rapid centralisation of capital.

The great republic has, therefore, ceased to be the promised land for emigrant labourers. Capitalistic production advances there with giant strides, even though the lowering of wages and the dependence of the wage-worker are yet far from being brought down to the normal European level."

In Marx's time, the mid-nineteenth century, working class factory life was truly horrendous. This is well-documented in the later chapters of Capital Vol 1.

What lessons can we learn for the twenty first century?

If people can genuinely acquire the necessities of life without labouring for wages then most - given a free choice - won't be signing up as employees. They may do voluntary work or various leisure activities .. but clocking in every day? Forget it .. though work that was interesting and not coercive might still attract a few economically-self-supporting individuals.

I offer you the example of the recently-retired on good pensions.

Taken in the round a UBI set at the level of the average wage would be strongly subversive of the continued operation of a capitalist economy. Pitched at a subsistence level as a variant of welfare, it's a different story.

---

Capital Volume 1, which I've just completed, is an eclectic book. The first four chapters are rather abstract, dry and repetitious although not too intellectually demanding. They are necessary, however, to establish the foundation for the rest of the book.

Subsequent chapters alternate between conceptual analysis (interesting but quite repetitive) and detailed anthropological/statistical studies buttressing and illustrating the economics. Generally they come down to the appalling conditions of the working class of the time, mostly in England.

The last part of the volume is a very interesting account of the process of capitalist rise from the ashes of feudalism. Broadly answering the question: where did the working class and the capitalist class actually come from?

Marx is a very verbal thinker, avoiding mathematics and equations. Everything is explained in words which can help understanding while simultaneously hindering it. If only he had formalised his concepts while retaining the helpfully-tutorial explanations; most modern accounts do that.

I personally found it useful to have Marx's reproduction equations in mind as I read the volume.

Next is Volume 2, where we move from production to exchange.

Marx on Slavery

Expecting a vitriolic rant on the absolute evils of slavery in the antebellum American South? There are plenty of those, but here Marx is more interesting, more analytic:

"This is one of the circumstances that makes production by slave labour such a costly process. The labourer here is, to use a striking expression of the ancients, distinguishable only as instrumentum vocale, from an animal as instrumentum semi-vocale, and from an implement as instrumentum mutum.

"But he himself [the slave] takes care to let both beast and implement feel that he is none of them, but is a man. He convinces himself with immense satisfaction, that he is a different being, by treating the one unmercifully and damaging the other con amore.

"Hence the principle, universally applied in this method of production, only to employ the rudest and heaviest implements and such as are difficult to damage owing to their sheer clumsiness. In the slave-states bordering on the Gulf of Mexico, down to the date of the civil war, ploughs constructed on old Chinese models, which turned up the soil like a hog or a mole, instead of making furrows, were alone to be found. Conf. J. E. Cairnes. “The Slave Power,” London, 1862, p. 46 sqq.

"In his “Sea Board Slave States,” Olmsted tells us: “I am here shown tools that no man in his senses, with us, would allow a labourer, for whom he was paying wages, to be encumbered with; and the excessive weight and clumsiness of which, I would judge, would make work at least ten per cent greater than with those ordinarily used with us.

"And I am assured that, in the careless and clumsy way they must be used by the slaves, anything lighter or less rude could not be furnished them with good economy, and that such tools as we constantly give our labourers and find our profit in giving them, would not last out a day in a Virginia cornfield – much lighter and more free from stones though it be than ours.

"So, too, when I ask why mules are so universally substituted for horses on the farm, the first reason given, and confessedly the most conclusive one, is that horses cannot bear the treatment that they always must get from negroes; horses are always soon foundered or crippled by them, while mules will bear cudgelling, or lose a meal or two now and then, and not be materially injured, and they do not take cold or get sick, if neglected or overworked.

"But I do not need to go further than to the window of the room in which I am writing, to see at almost any time, treatment of cattle that would ensure the immediate discharge of the driver by almost any farmer owning them in the North.”

From Note 17 of "Chapter 7: The Labour-Process and the Process of Producing Surplus-Value", Capital Volume 1.

In this chapter Marx notes the extreme inefficiency of slavery as compared with the capitalist purchase of labour-power rather than the person of the labourer themselves:

"Then again, the labour-power itself must be of average efficacy. In the trade in which it is being employed, it must possess the average skill, handiness and quickness prevalent in that trade, and our capitalist took good care to buy labour-power of such normal goodness.

"This power must be applied with the average amount of exertion and with the usual degree of intensity; and the capitalist is as careful to see that this is done, as that his workmen are not idle for a single moment. He has bought the use of the labour-power for a definite period, and he insists upon his rights. He has no intention of being robbed.

"Lastly, and for this purpose our friend has a penal code of his own, all wasteful consumption of raw material or instruments of labour is strictly forbidden, because what is so wasted, represents labour superfluously expended, labour that does not count in the product or enter into its value. [note 17]."

Generalised slavery is incompatible with the capitalist mode of production as the use of slaves does not create surplus value - the basis of profits. Classical antiquity was not capitalist.

Putting aside moral issues, slaves replacing workers is a form of total automation. But unlike designed systems, human beings are understandably unenthused by a lifetime role as servitor.

Diary: what I'm reading

Amazon link

Peter Turchin recommends this book in his latest, rather blood-curdling post. He writes,

"It is strange to actually live in a society experiencing a structural-demographic crisis, after studying many examples of such crises in the past. Unfortunately the crisis is developing largely according to the classical pattern. The degree of political polarization is at its highest levels since the (First) American Civil War. Intra-elite infighting is tearing the Republic apart. ...

"Steve is one of the “heterodox economists” (meaning that they are pretty much ignored by the mainstream). His starting point is the theory of Hyman Minsky (another economist who was largely ignored by the profession). Minsky’s theory makes a lot of sense to me, however. Let me try explain it in one paragraph.

"The main dynamical driver is the magnitude of private debt (combining what’s owed by both corporations and households) in relation to GDP. Currently this indicator is at 150% of the US GDP. Why is it bad?

"Actually, for a while, as private debt grows, things are just fine because expanding credit drives economic growth (think of new housing construction during building booms). But eventually the cost of servicing accumulated debt starts to depress consumption (the more you pay for your mortgage, the less money you have to buy things). Falling consumption results in overproduction of goods and declining profits for businesses, which makes investment a losing proposition. Credit collapses, businesses go bankrupt, or downsize their labor, less employment means even less consumption, and (absent large-scale increase in government spending) the economy enters a downward-trending “death spiral” of a prolonged depression.

"The precise timing of the turn-around point is very difficult to predict (it’s another example of earthquake-like dynamics). Yet Steve Keen is one of very few economists who predicted the General Financial Crisis (GFC) of 2007–2008.

"If Steve is right in identifying the main cause of the GFC, then we should listen to what he says in the book about the likelihood of another crisis in the next few years. Unfortunately, the news is bad, because we are still at a very high level of private debt in relation to GDP."

Turchin also sees the world economy in the 'winter' phase of the current Kondratiev cycle (I recently wrote about these here).

In any event, I acquired the book and will read it along with this:

They say the first four chapters are tedious, and that after that, things pick up (most readers have abandoned by then). In these early chapters Marx writes at length and repetitiously about the nature of the commodity, use-value and exchange-value, money and the transformation of money into capital.

He's a lively writer, always good for a venomous quip at the expense of an opponent; his knockabout style is far from politically-correct. It helps to be aware of just how important - how foundational - these concepts are for the whole development of Marxist economics.

Still, I'm glad I've got beyond chapter four.

Diary: what I'm reading

I encountered Hegel (1770-1831) through others: Marx, Engels, Lenin, Trotsky, Lukács. He seemed to precurse those theorists as some dark formless cloud: Jehovah brandishing an absolutist dialectical idealism.

It's time to engage with the void, to sketch the contours of the man himself. Although I have only just started Frederick Beiser's book, Georg emerges as a rather earnest young intellectual, engaged with Christianity (he trained in a Protestant seminary), absorbed into the early Romantic movement which brought us Keats, Byron and Shelley.

Amazon link

His mature works, however, have a reputation of being 'difficult' and obscure.

---

I'm prepared to add Hegel to my - rather short - list of heroes, joining Marx, Lukács and J. S. Bach. One day I need to do the Central European pilgrimage, searching out the geography of their lives and times.

When I was studying philosophy at Warwick University c. 1970, I reacted strongly against the anachronistic treatment of Plato, Aristotle, St. Anselm, Descartes, Kant et al. I was being asked to study in isolation systems of ideas based on outmoded, rigid categories of thought applied to an obsolescent framing of problems.

In most cases modern physics, computer science and AI had totally transformed the paradigms in which these issues were posed. I felt like I was being asked to learn the Phlogiston theory of heat on equal terms with modern Thermodynamics and Statistical Mechanics - yet none of the lecturers seemed to notice or care. I never subsequently changed that opinion.

I guess that made me a historicist - like Hegel .. and Marx.

For Marx, philosophical categories were mediated by and abstracted from the concrete (social) experiences of individuals within their specific historical circumstances: "The ideas of the ruling class are in every epoch the ruling ideas".

Made a lot of sense to me.

And this is the best you could do?

Over the last thirty to forty years, capitalism leveraged the developing Internet and a rapidly-industrialising Far-East to reorganise itself on a thoroughly global basis. It's just a fading memory now, the latter part of the twentieth century with its industrially-based national capitalisms, first-world manufacturing and millions of production-workers in secure, well-paid and unionised jobs with prospects.

The advent of globalisation coincided with massive overproduction in manufacturing (cf the car industry, steel)  so that the smart money moved into finance. Bailed out in the aftermath of 2008, and with a dearth of profitable investment opportunities, the global elite continue to enjoy their luxuries while the masses stagnate .. and wonder where their lives are going.

We all know something about globalisation and many of us want our politicians to fix it. Part one of Tony Smith's book reviews the leading proposals for reform.

Amazon link

---

As I mentioned in a previous post, I learned a lot from Tony Smith. Here is how he begins: the quotes below are taken from his chapter 8, "A Marxian Model of Socialist Globalisation".

"The various models of globalisation examined in part one are designed to ... provide a spur to reform existing institutions and practices.

1. Proponents of the social state call for a renewed state commitment to social welfare and full employment. 


2. Neoliberals advocate increased free trade and capital liberalisation, along with the dismantling of 'crony capitalism'. 


3. Defenders of the catalytic state insist that public authorities must aggressively and comprehensively provide the necessary preconditions for a region's successful participation in the global economy. 


4. Democratic-cosmopolitan theorists propose a global social charter guaranteeing the material preconditions for autonomy and substantive equality of opportunity."

Smith has little difficulty in establishing that all four schools of thought (since they accept the continuing existence of capitalism) fail to propose realistic measures which put a 'democratic' control of economic activity ahead of relentless global profit maximisation.

---

There is, of course, no end to the list of critics of capitalism. But the socialist alternatives are completely tarnished, are they not? By the disastrous experience of 'soviet communism'?

Smith tackles this issue with commendable rigour and honesty:

"A wide variety of objections have been proposed against Soviet-style bureaucratic central planning, widely taken to be either the only form of socialism or the form to which all others degenerate. I shall first list what I take to be the eight most significant criticisms of this framework. ..."

Smith's case against state bureaucratic-socialism is familiar:

"(i) Ownership of the means of production lies in the same hands as control of the coercive state apparatus. While this arrangement may not make the worst forms of totalitarianism inevitable, no one familiar with the historical record could deny its close association with authoritarian regimes.

(ii) Ownership by everyone in general is equivalent to a lack of ownership by anyone in particular. When private property rights to capital goods are not defined, no one has an incentive to use them efficiently.

(iii) Product quality tends to be poor. It is far easier for planners to formulate, implement, and monitor plans in quantitative than qualitative terms. The lack of an effective feedback mechanism connecting producers and users/consumers also leads to a neglect of product quality.

(iv) The informational burdens placed on bureaucratic central planning are now almost universally acknowledged to result in economic inefficiency. Central planners cannot appropriate adequate information regarding all potential inputs, all potential outputs, and all potential social wants and needs, when possible inputs, outputs, and wants and needs are all changing over time.

(v) If we take planners as 'principals' and managers of enterprises as their 'agents', centralised bureaucratic planning necessarily tends to generate severe principal/agent problems. Collective ownership leads managers to distort the information they pass on to central planners, underestimating the output their enterprises are capable of producing while overestimating the inputs required to produce any given level of output.

(vi) Authoritarian central planning is not able to develop successfully in areas where personal initiative and creative responses to unforeseen problems are important. Ordinary workers feel dehumanised and cynical, with pernicious economic effects.

(vii) State ownership of the means of production and centralised planning by a bureaucratic caste cannot match the technological dynamism of capitalism. In certain circumstances, bureaucratic central planning is able to attain considerable extensive growth, that is, growth resulting from the mobilisation of greater and greater inputs. And, in certain sectors where mass resources could be devoted and where success or failure was relatively easily measured (for example, space, military, heavy industry), significant accomplishments were in fact attained in the Soviet Union and elsewhere.

But this sort of social order is unable to generate intensive growth based on the more efficient use of inputs. The lack of incentives for managers to engage in risky activities like innovative behaviour is surely a significant factor. Managers appropriate few of the fruits of such activities when they are successful, and may suffer significant penalties when they are not.

(viii) A lack of hard budget constraints allows inefficient firms to continue in production and even expand over time.

Taking all of these factors into account, most observers conclude, it should have come as no surprise that bureaucratic central planning with state ownership of the means of production eventually generated vast material and spiritual stagnation."

It's surprising how many nostalgic communists and left social-democrats have still not taken these forceful (and thoroughly correct and legitimate) points on board.

"These considerations appear to justify the conclusion that there is simply no feasible alternative to capitalist markets with private ownership of the means of production. Market competition appears to provide private owners with incentives to ensure a level of efficiency and dynamism unattainable in either bureaucratic socialism or market socialism.

"One can accept this conclusion without having to deny that capitalism brings with it profound social costs. Financial crises, environmental crises, extreme levels of economic and political inequalities, and so on, are not likely to ever be entirely eliminated. But the harms they inflict can be lessened over time.

"If there is no feasible and normatively attractive alternative to a capitalist framework, lessening these harms must be our goal, and the failed project of collective ownership of the means of production must be unequivocally abandoned.

"In the present historical context, the burden of proof lies entirely with those who continue to call for the socialisation of the means of production [my emphasis]. Meeting this burden requires developing an alternative model of socialism capable of avoiding the fundamental structural flaws listed above."

---

You can imagine at this point how excited I was that such an incisive and profound thinker was about to unveil a model of post-capitalist economics and politics which might actually work!

"I shall adopt the model of economic democracy developed by David Schweickart, adding three modifications to make it a more adequate alternative form of globalisation."

David Schweickart's book is called "After Capitalism" (2002) by the way: I haven't read it.

"The model Schweickart defends has the following essential elements:

(i) Production and distribution are primarily undertaken within worker collectives. Workers are not hired as wage-labourers by capital; they instead join worker collectives as fellow members. There is a basic right to employment, with state enterprises providing jobs for those unable to find positions in collectives."

Hiring is the easy bit. Smith does a fair amount of hand-wringing later in the chapter when he considers how you might have to get around to actually firing workers.

"(ii) Managers of worker collectives are democratically accountable to those over whom they exercise authority, either through direct elections or through appointment by a workers' council that is itself directly elected. These enterprises are required to have representatives from a range of social movements (environmental groups, consumer groups, feminist groups, and so on) on their boards of directors, accountable to those movements."

Given the intellectual coherence and balanced judgement observed in radical social movements in the real world, I think you can guarantee that they would wreck any otherwise-viable economic enterprise. I might also mention the ample opportunities for rent-seeking and intimidation.

"(iii) Worker collectives produce public goods, inputs into the production process, or final consumption goods. Funds for the first are directly allocated to collectives by the relevant planning agencies (see below). The latter two categories of products are offered for sale in producer and consumer markets.

"In Schweickart's view, attempts to centrally plan all inputs and outputs in a top-down fashion are simply not feasible, at least not in a complex and dynamic economy. But it does not follow that capitalist market societies are the only acceptable forms of economic organisation.

It is possible to imagine a feasible and normatively attractive society combining markets with the socialisation of the means of production, that is, a society making use of producer and consumer markets after abolishing both capital markets and labour markets."

This doesn't pass the innovation test. Would Steve Jobs have got the funds he needed from the relevant 'planning agency'?

"(iv) Workers in enterprises are granted use rights to facilities and other means of production. But ultimate ownership rights remain with the local community. Workers cannot use their enterprise as a cash cow and then walk away; they have a legal duty to maintain the value of the community's investments. If sufficient depreciation funds cannot be appropriated from revenues to maintain the value of these investments, it is the responsibility of community banks to shut down an enterprise."

Shutting down a community enterprise? Yes, that's going to happen. To be fair, Smith himself worries about that but his Pollyanna assumptions that everyone would 'do the best thing' are unfortunately just so much pie-in-the-sky.

"Once depreciated funds have been deducted, the remainder of the revenues from public allocations or sales in consumer/producer markets (apart from the taxes to be considered below) are then distributed among the members of the collective according to formulae set by the democratically accountable management."

Incidentally, this focus on local communities is endearingly Victorian but hopelessly anachronistic. Modern globalised industry (which Smith agrees is a productivity advance that post-capitalism needs to build upon, not roll-back) increasingly organises both production and employee-allocation globally. Localised, and presumably small-scale communities are simply not the scale at which state-of-the-art enterprises operate at.

"(v) The origin of funds for new investment and public goods is a flat tax on the non-labour assets of all enterprises. In Schweickart's proposal, the rate of this tax is initially set by a democratically elected legislature, operating on the national level. This legislature also decides on the appropriate division of revenues between funding for national public goods and funds that are allocated to democratically elected regional and local legislative bodies.

"Each of these assemblies, in turn, must also decide upon the level of funding for public goods to be supplied in the relevant geographical area vis-à-vis the level of funds set aside for distribution to the level below it. These legislative bodies can also set aside a percentage of funds for investment in areas of pressing social needs."

It's touching that Smith thinks that allocations of resources in the billions of dollars are going to be somehow resistant to powerful lobbying, rent-seeking and every form of power-play. Plainly the human nature that Smith sees is not the same as most of us observe.

"(vi) After all decisions have been made regarding the general level of new investment and the order of social priorities, and after funds required for public goods on the national, regional, and local levels have been allocated, the remaining revenues are distributed to local communities on a per capita basis (at least this should be the presumption in the absence of compelling reasons to do otherwise, such as the need to temporarily favour historically disadvantaged regions).

"Community banks would then undertake the actual allocation of new investment funds to worker collectives. The boards of directors of these banks would include representatives of a broad range of social groups affected by the banks' decisions. New enterprises would be formed, and existing ones expanded, through allocations by community banks rather than private capital markets."

Still this idea that 'local communities' are the essential unit of future social organisation. Leading edge corporations today operate globally and have to raise resources on global financial markets. Any socialist alternative is going to have to recognise that global is not simply the additive sum of hundreds or thousands of local community banks.

"(vii) When allocating investment funds for new worker collectives and the expansion of existing ones, community banks must take three main questions into account. Is there likely to be sufficient demand for the output of the given enterprise for it to maintain the value of the community's investment and provide adequate income for its members? Will the investment provide stable employment? And is the investment consistent with the set of social priorities democratically affirmed on the national, regional and local levels?

"Extensive external financial and social audits can be regularly imposed on all enterprises and community banks to assess their performances in terms of these criteria. These independent social audits are a crucial component of the socialist version of the principle of transparency, institutionalising a level of accountability and transparency far beyond the limited neoliberal version of the principle.

"Community banks can then be ranked on the basis of the results of these audits. The level of income of the staff of a particular bank, and the amount of funds allocated to this bank for distribution in the future, are determined by the bank's place in this ranking."

I think we're looking at an impenetrable veto-network here. How many crucial innovations were funded by capitalists taking a punt? There will be precious few punts in the above arrangements.

"(viii) In Schweickart's model, there are no markets for capital assets, and so there will be no capital flight in the form of cross-border investments in capital assets. There will also be little foreign direct investment, since worker collectives are unlikely to outsource their own jobs, and community banks are assessed according to the extent they create employment in their own communities. But there will still be trade across borders.

"For a period of time, this may include trade with regions that have not institutionalised a version of economic democracy. In such circumstances, regions committed to socialist globalisation should follow the principle of fair trade rather than 'free' trade. To ensure that this occurs, Schweickart calls for a 'social tariff'." If oppressive labour practices hold down wage levels in a given region, the prices of imports from that region will be raised to what they would have been had worker income been comparable to the level prevailing in the importing country.

"A social tariff will also be imposed to compensate for a lack of adequate spending on the environment, worker health and safety, or social welfare in the exporting nation. The revenues collected by this tariff will then be distributed to the groups in the exporting country with the best record of effectively implementing anti-poverty programmes, whether or not they are agencies of the government."

A touching faith in (chronically ineffectual) do-gooding organisations and a complete lack of insight into the intractable developmental issues in the third world, particularly sub-Saharan Africa.

"I believe that three additions to this framework should be made:

"(ix) Schweickart does not investigate the monetary dimension of international trade in his model. I believe that the proposals made by Paul Davidson discussed in the last chapter are incompatible with capitalist social relations, but quite feasible if socialist production relations are established. In the latter set of circumstances, it would be possible to have something like Davidson's International Monetary Clearing Units serve as the sole form of world money. It would also be feasible to establish a set of rules that ensure that excessive trade imbalances do not persist, and that the burdens of adjusting to the imbalances that do arise are not disproportionately imposed on the most vulnerable regions of the global economy.

"(x) David Held's proposals for democratic-cosmopolitan law are also incompatible with capitalist social relations, as Chapter 4 established. But they, too, would be feasible if socialist production relations were in place. More specifically, a level of global governance above the state should be established. This would include a representative assembly selected more democratically than the United Nations, a global social charter, an international court of justice, and so on."

Ah yes, world government through a beefed-up UN. presumably with a world army to enforce its decisions. That will go down well. If only we could all get along, like a vast ant colony of genetically-related and sterile individuals.

"(xi) Schweickart holds that local communities within a nation ought to receive new investment funds on a per capita basis. In this manner, the material preconditions for both individual autonomy and flourishing communities are furthered. The force of this argument extends to the global level. There should be a democratically accountable socialist international planning agency to ensure the provision of global public goods. It must also guarantee that regions across the planet have access to new investment funds in direct proportion to their population in the absence of special considerations (such as the need to temporarily favour previously disadvantaged regions of the global economy).

"This is an extension of Held's proposal for global social investment funds, but with these funds now replacing, rather than merely 'complementing', global capital markets. In this manner, the systematic tendency to uneven development that afflicts all possible forms of capitalism could be abolished."

We know how popular transfer payments are.

"This model of economic democracy undoubtedly needs to be greatly supplemented and modified, and compared and contrasted with other approaches with which it shares 'family resemblances'. Once again, however, the goal here is not to provide a fully fleshed-out blueprint of the single best form of socialism. If the model is developed enough to show that a feasible and normatively attractive socialist alternative is possible in principle, that is sufficient."

So you can see how unimpressed I was by Tony Smith's model of post-capitalism. A fantasy of infeasible cooperation and general niceness. To be fair, Smith recognises that not everyone will be thinking altruistically of the greater good of all humanity all of the time, but his architecture kinda presupposes that.

It's what happens when you ignore biology and your model assumes a human nature which would indeed work if almost everyone was a sterile clone.

Still, even if the solution is utterly unconvincing, the analysis isn't bad. I listened to Professor Smith lecturing for an hour last night - to a rather sparsely-attended class at Iowa State - and I was impressed by what he had to say about current global economic difficulties.

Tony Smith, Iowa State University, October 25, 2016.

He comes across as a slightly manic Bernie Sanders.

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I am still waiting for the Martian Marxist, the social scientist who simple analyses without confected, activist rage.

I am also of the opinion that a post-capitalist future will emerge from a capitalism which has automated away almost all routine jobs. Call me a fan of AI and robotics.

What happens when the few remaining jobs are at a level of skill and intelligence denied to, say, 95% of the workforce? Those 95% will insist on a radical reordering of things, one which is probably incompatible with the reproduction of capitalist relations of production.

But it will be better.