By Glenn Ashton · 7 Aug 2009
The current global economic turmoil gives rise to the question, "If capitalism dies, what alternatives exist, or will emerge, to replace it?"
The question inevitably provokes utterly predictable positioning. The stock response that capitalism has already trumped communism, to the degree that the old communist bogeymen of Russia and China have embraced the capitalist model, is dishonest.
Do we really have to take an either/or position regarding capitalism and communism? Western culture thrives on polarised debates; it's either Liberals versus Conservatives, Democrats versus Republicans, the ANC versus the DA, or when we discuss economic theories, capitalism versus communism. This is unhelpful.
Polarisation habitually excludes the middle, common ground from what should be a rational discourse. Discussion is dumbed down by adopting the antagonistic rhetoric of the either/or, black/white, good/bad, winner/loser polarisation. Surely there is much more than just capitalism or communism? Our polarisation automatically excludes a broad spectrum of alternatives.
The supremacy of capitalism, epitomised by the runaway behemoth of neo-liberal globalisation, in turn propelled by the power triumvirate of the Washington consensus - the World Bank (WB), The International Monetary Fund (IMF) and the World Trade Organisation (WTO) - has sharply accelerated the accumulation of wealth by the already rich, while the living standards of everyone else are eroded. The gap between the haves and dispossessed has grown, along with a precipitous decline in ecological integrity and resilience. Respected economists such as Joseph Stiglitz have highlighted the moral bankruptcy of the neo-liberal free market system.
The claimed successes of capitalism are certainly not the result of free markets. Markets have never been less free. The wealthy nations of the world have destroyed agricultural production in the mainly agriculture reliant developing world by giving upwards of 350 billion US dollars per annum to their destructive and uncompetitive industrial farming models. This sum almost equals the total of US Aid to Africa since independence. The consequence is the decimation of the economies of Southern agrarian nations.
The global trade in oil, food, pharmaceuticals, commodities, money, goods and services are all controlled and more importantly, profited from, by a minority who have singularly failed to share or devolve the economic advantages. Control lies within an elitist corporate-political nexus. Our markets are clearly neither free nor democratic.
Trade is controlled through cynical bi- and multilateral agreements that have inordinately benefited the North, the OECD, the First World. The original colonial regime has evolved into a Washington consensus directed neo-colonial model. The corporate political nexus has displaced employment to the lowest paying, lowest cost sources, no matter how unrepresentative their governments may be. Western aligned governments have undermined the interests of the global working classes, each seeking to cut deals with misanthropic corporations in a rush to the bottom.
There are better definitions for the present system than capitalism. Terms such as oligarchy and plutocracy are far more accurate. An oligarchy is rule by a dynastic privileged elite, historically reliant on public servitude. Plutocracy is a better fit – the rule of the wealthy.
The broad church of neo-liberal capitalism has strenuously decried such definitions as pejorative. Yet the insistence that modern capitalism is really about free trade, unregulated markets and the inherent self-correction of free markets belies the facts.
Recent economic bailouts highlighted capitalisms failure. Had governments and central banks not intervened and injected staggering amounts of capital to prop up the global banking and trading systems, the entire house of cards would have auto-combusted. The bailout, funded by the prospective wealth of this and future generations, enjoyed no democratic participation and was enacted solely through the proxies of the plutocratic, corporate-political nexus.
We clearly need a far more functional democratic, participatory, accessible and egalitarian system. One useful model may be that of economic democracy, or participatory economics as described by Robin Hahnel, Michael Albert and many others. The concept of economic democracy has been well developed in clear and sensible language. It promotes the devolution of power and a shift away from a hierarchical system toward inclusive participation in decision-making. It would directly curtail the influence of overpaid, sociopathic corporate leaders.
The most equal major northern nations are those which have retained the strongest institutional controls over corporations and which meaningfully reallocate and redistribute excessive profits. Japan, the most economically equal of OECD states, has the highest proportion of former trade union officials on the boards of large corporations.
In the EU, nearly 70% of employees' earnings are protected by collective agreements against only 17% in the USA, reflecting the latter's far greater economic inequality. The well-established models of socially democratic Nordic nations are intrinsically redistributive.
There are dozens of creative models for participatory economics but it is defined by six broad values: equity, mutual respect, mutually beneficial outcomes, participatory self-management, efficiency in using resources and environmental sustainability. It perceives the market as an instrument to accomplish societal goals and not as tool solely focussed on maximising profit.
A potential difficulty lies in implementation of alternative systems. Transitions need to be seamless, simultaneous and fair, in order to be orderly. One possible tool for implementation is the 'Simpol' or simultaneous policy. The aims of Simpol have much in common with participatory democracy, including global social justice and halting environmental destruction through regulating international capital. Simpol suggests introducing simultaneous, multilateral changes into the political and economic mix in order that transitions occur as seamlessly as possible across local, national and regional levels.
There are many other alternative economic models. Ordinary South Africans have pioneered the implementation of a radical but sensible alternative economic exchange, using public domain money, not central bank controlled money. This exchange presently reaches nearly 150 member groups across 18 nations, from Australia to Zimbabwe. This system that has evolved from the South African New Economics Foundation’s Cape Town Talent Exchange heralds a democratic, participatory trading mechanism free from the constraints of corporate and political interference.
The stale, polarised debate about capitalism's displacement of communism is a tired empty discussion that leads nowhere. Can we honestly use GDP as the measure of success of a nation when Cuba, which not only remains steadfastly communist but also has far better indicators of education, housing, nutrition and health care than its mighty northern neighbour, the USA, is considered an economic basket case?
The new Bolivarian movement promoted by Venezuela's Hugo Chavez and supported throughout Latin America is the realisation of a socially responsible regional economic system. It has broad roots such as those forged in Chiapas, Mexico, where a workers' democracy was instituted. The proposed Latin American Bolivarian Alternative for the Americas has created a bank to finance regional social programs and aims are afoot to expand this to a Bank of the South, to displace the influence of the World Bank and IMF. It would be constructive for co-operative alliances such as NEPAD to shift their focus to similar goals.
It is interesting to note the decline of the role of traditional trades unions in failing to articulate or implement meaningful changes or to create adequate pressure on national economic policy. The Reaganomic, Thatcherite years saw the usurping of workers rights across the board, epitomised by the morphing of the UK Labour Party into a introspective, autocratic, neo-liberal political party that forgot its roots. The historical militancy, social solidarity and visionary concepts that made labour and trades unions the power they were by the end of the 19th Century are now absent, rendering labour and trades unions into faint reflections of their old selves.
Reinvigoration of the labour movement can only occur when common visions and goals are shared. It is unacceptable to accept the globalisation of goods and services, of corporate governances and of tax haven status without granting the same freedoms to labour to seek mobility, fair returns and representation in decision-making. Groups like Via Campesina and global landless workers movements are returning unionism to its agrarian and democratic roots.
If common purpose is not established amongst the dispossessed, unemployed and workers' movements against the dominant economic model, the contribution of trades unions will remain divisive, self interested and irrelevant. There are increasingly accessible means for egalitarian communication; they simply need to be engaged. The dialogue has already begun.
A more equal global financial system requires a radical redistribution of global resources that more fairly represent individual interests and democratic involvement. Any emerging system must halt the externalisation of costs and impacts on environment and society. Ecosystems are both our collective wealth and mutual life support mechanisms. They can no longer be plundered for the benefit of the few.
No doubt any new emerging economic model will contain some aspects of capitalism, but must equally adopt aspects of environmentalism, socialism, federalism, collectivism, progress, technology and modernity. Most importantly we need to ensure that any system that replaces the old must be completely democratic and participatory. Without broad social control the dominant corporate political nexus will reassert itself and we will simply end up where the trouble bega
As long as we depend on international capitalistic concepts such as the oil-price, selling to the highest bidder, which is in a logical conclusion the most exploitent states such as the USA and the EU (and China furthermore) we can never emancipate our socialist solidarity from these states as we most depend on their goodwill to pay us the highest price.
By pure Logic you can tell us that this is leading us nowhere but into higher dependancy on the states which we, in common sense would assume to be the mother of so much socio-economic suffering in our part of the globe.
Isn't there a more noble and better way to get around?
"Civilisation" as we know it has become too complex and is breaking down. There is no obvious rational fix when the basis of the problem is emotional unintelligence. Climate change, peak oil and in general the limit to growth are applying the smashing hammer blows. While the majority of people are driven by greed and fear the suffering will continue. Making friends with your neighbours and looking for ways to help them may perhaps be a good start.
I liked your very last sentence:
"Most importantly we need to ensure that any system that replaces the old must be completely democratic and participatory. Without broad social control the dominant corporate political nexus will reassert itself and we will simply end up where the trouble began."
I think that you are absolutely right in this.
A proposed economic system that you do not mention in your article is 'Socioeconomic Democracy' which would democratically curb the build up of excessive wealth by any individual. The book by Robley E. George, 'Socioeconomic Democracy,, An Advanced Socioeconomic System' [ISBN 0-275-97376-X] is well worth a read.