Yanis Varoufakis: capitalism isn't working. Here's an alternative
When Margaret Thatcher
coined 'Tina' - her 1980s dictum that 'There is no alternative', I was
incensed because, deep down, I felt she had a point: the left had neither a
credible nor a desirable alternative to capitalism. Leftists excel at
pinpointing what is wrong with capitalism. We wax lyrical about the possibility
of some “other” world in which one contributes according to one’s capacities
and obtains according to one’s needs. But, when pushed to describe a fully
fledged alternative to contemporary capitalism, for many decades we have
oscillated between the ugly (a Soviet-like barracks socialism) and the tired (a
social democracy that financialised globalisation has rendered infeasible).
During the 1980s, I
participated in many debates in pubs, universities and town halls whose stated
purpose was to organise resistance to Thatcherism. I remember my guilty thought
every time I heard Maggie speak: “If only we had a leader like her!” I was, of
course, under no illusion: Thatcher’s programme was despotic, antisocial and an
economic cul-de-sac. But, unlike our side, she understood that we lived in a
revolutionary moment. The postwar class war armistice was over. If we wanted to
defend the weak, we could not afford to be defensive. We needed to advocate as
she did: out with the old system, in with a brand new one. Not Maggie’s
dystopian one, but a brand new one nevertheless.
Alas, our lot
had no vision of a new system. Instead, we were in the business of bandaging
corpses while Thatcher was digging graves to clear the way for her spanking new
spiv capitalism. Even when we were putting up a splendid fight in defence of
communities that deserved defending, our causes screamed “anachronism” –
fighting to preserve dirty coal-fired power stations or the right of male
rightwing trade unionists to reach sordid deals behind closed doors with the
likes of Robert
Maxwell and Rupert Murdoch.
Just as when the
Soviet Union collapsed in 1991, we on the left – social democrats, Keynesians
and Marxists alike – had the sense we would live the rest of our days as
history’s losers, so in 2008, with Lehman’s collapse, those living the ideology
of neoliberalism saw history erupt with similar soul-destroying force. Some
years later, surveillance capitalism forced tech-evangelists, who thought they
had seen in the internet an irresistible global democratic force, also to shed
their illusions.
Two years ago I decided we need a blueprint, a sense of how democratic socialism could work today, with our current technologies and despite our human failings. My reluctance to attempt such an undertaking was immense. Two people helped me overcome it. One is Danae Stratou, my partner. From the week we first met, she has been telling me that my critique of capitalism meant nothing unless I could answer her pressing question: “What’s the alternative? And precisely how would things – like money, companies and housing – work?” The second, and most unlikely, influence was Paschal Donohoe, Ireland’s finance minister and president of the Eurogroup. A political opponent who thought little of me as a finance minister (a mutual assessment), he was kind enough to write a generous review of an earlier book of mine. While Donohoe liked my account of capitalism he thought the book’s ending, in which I tried to sketch some features of a postcapitalist society, was “most disappointing”.
He was right, I
thought. So I decided to write Another Now. In a bid to
incorporate into my socialist blueprint different, often clashing, perspectives
I decided to conjure up three complex characters whose dialogues would narrate
the story – each representing different parts of my thinking: a
Marxist-feminist, a libertarian ex-banker and a maverick technologist. Their
disagreements regarding “our” capitalism provide the background against which
my socialist blueprint is projected – and assessed.
Capitalism took off in
earnest when electromagnetism met share markets at the end of the 19th century.
Their coupling gave rise to networked megafirms, such as Edison, that produced
everything from power stations to lightbulbs. To finance the huge undertaking,
and the massive trade in their shares, the need arose for megabanks. By the
early 1920s financialised capitalism roared, before the whole juggernaut
crashed in 1929.
Our current decade
began with another coupling that seems to be propelling history at dizzying
velocity: the one between the enormous bubble with which states have been
refloating the financial sector since 2008, and Covid-19. Evidence is not hard
to spot. On 12 August, the day the news broke that the British economy had
suffered its greatest
slump ever, the London Stock Exchange jumped by more than 2%. Nothing
comparable has ever occurred. Financial capitalism seems finally to have
decoupled from the underlying economy. Another Now begins in the late 1970s, straddles the
crises of 2008 and 2020 but also sketches out an imaginary future,
and concludes in 2036. There is a moment in the story, on a Sunday evening in
November 2025 to be precise, when my characters try to make sense of their
circumstances by looking back to the events of 2020. The first thing they note
is how drastically the lockdown changed people’s perception of politics.
Before 2020, politics
seemed almost like a game, but with Covid came the realisation that governments
everywhere possessed immense powers. The virus brought the 24-hour curfew, the
closure of pubs, the ban on walking through parks, the suspension of sport, the
emptying of theatres, the silencing of music venues. All notions of a minimal
state mindful of its limits and eager to cede power to individuals went out of
the window.
Many salivated at this
show of raw state power. Even free-marketeers, who had spent their lives
shouting down any suggestion of even the most modest boost in public spending,
demanded the sort of state control of the economy not seen since Leonid
Brezhnev was running the Kremlin. Across the world, the state funded private
firms’ wage bills, renationalised utilities and took shares in airlines, car
makers, even banks. From the first week of lockdown, the pandemic stripped away
the veneer of politics to reveal the boorish reality underneath: that some
people have the power to tell the rest what to do.
The massive government
interventions misled naive leftists into the daydream that revived state power
would prove a force for good. They forgot what Lenin had once said: politics is
about who does what to whom. They allowed themselves to hope that something
good might transpire if the same elites that had hitherto condemned so many to
untold indignities were handed immeasurable power. It was the poorer and
the browner people who suffered most from the virus. Why? Their poverty had
been caused by their disempowerment. It aged them faster. And it made them more
vulnerable to disease. Meanwhile, big business, always reliant on the state to
impose and enforce the monopolies on which it thrives, boosted its privileged
position.
The Amazons of this
world flourished, naturally. The lethal emissions that had temporarily subsided
returned to choke the atmosphere. Instead of international cooperation, borders
went up and the shutters came down. Nationalist leaders offered demoralised
citizens a simple trade: authoritarian powers in return for protection from a
lethal virus – and scheming dissidents. If cathedrals were the
middle ages’ architectural legacy, the 2020s will be remembered for electrified
fences and flocks of buzzing drones. Finance and nationalism, already on the
rise before 2020, were the clear winners. The great strength of the new
fascists was that, unlike their forerunners a century ago, they don’t need to
wear brown shirts or even enter government to gain power. The panicking establishment
parties – the neoliberals and social democrats – have been falling over
themselves to do their job for them through the power of big tech.
To stop new outbreaks
governments tracked our every move with fancy apps and fashionable bracelets. Systems
designed to monitor coughs now also monitored laughs. They made earlier
organisations specialising in surveillance and “behaviour modification”, like
the infamous KGB and Cambridge Analytica, seem positively neolithic. What was the moment
when humanity lost the plot? Was it 1991? 2008? Or did we still have a chance
in 2020? Like epiphanies, the fork-in-the-road theory of history is a
convenient lie. The truth is we face a fork-in-the-road every day of our lives.
•••
Suppose we had seized
the 2008 moment to stage a peaceful hi-tech revolution that led to a
postcapitalist economic democracy. What would it be like? To be desirable, it
would feature markets for goods and services since the alternative – a
Soviet-type rationing system that vests arbitrary power in the ugliest of
bureaucrats – is too dreary for words. But to be crisis-proof, there is one
market that market socialism cannot afford to feature: the labour market. Why? Because,
once labour time has a rental price, the market mechanism inexorably pushes it
down while commodifying every aspect of work (and, in the age of Facebook, our
leisure too).
Can an advanced
economy function without labour markets? Of course it can. Consider the
principle of one-employee-one-share-one-vote underpinning a system that,
in Another Now, I call corpo-syndicalism. Amending corporate law so
as to turn every employee into an equal (though not equally remunerated)
partner is as unimaginably radical today as universal suffrage was in the 19th
century. In my blueprint,
central banks provide every adult with a free bank account into which a fixed
stipend (called universal basic dividend) is credited monthly. As everyone uses
their central bank account to make domestic payments, most of the money minted
by the central bank is transferred within its ledger. Additionally, the central
bank grants all newborns a trust fund, to be used when they grow up.
People receive two
types of income: the dividends credited into their central bank account and
earnings from working in a corpo-syndicalist company. Neither are taxed, as
there are no income or sales taxes. Instead, two types of taxes fund the
government: a 5% tax on the raw revenues of the corpo-syndicalist firms; and
proceeds from leasing land (which belongs in its entirety to the community) for
private, time-limited, use.
When it comes to
international trade and payments, Another Now features an
innovative global financial system that continually transfers wealth to the
global south, while also preventing imbalances from causing strife and crises.
All trade and all money movements between different monetary jurisdictions (eg
the UK and the eurozone or the US) are denominated in a new digital accounting
unit, called the Kosmos. If the Kosmos value of a country’s imports exceeds its
exports, it is charged a levy in proportion to the trade deficit.
But, equally,
if a country’s exports exceed its imports, it is also charged the levy. Another
levy is charged to a country’s Kosmos account whenever too much money moves too
quickly out of, or into, the country – a surge levy of sorts that taxes the
speculative money movements that do such damage to developing countries. All
these levies end up as direct green investments in the global south. But it is the granting
of a single non-tradeable share to each employee-partner that holds the key to
this economy. By granting employee-partners the right to vote in the
corporation’s general assemblies, an idea proposed by the early
anarcho-syndicalists, the distinction between wages and profits is terminated
and democracy, at last, enters the workplace.
From a firm’s senior
engineers and key strategic thinkers to its secretaries and janitors, everyone
receives a basic wage plus a bonus that is decided collectively. Since the
one-employee-one-vote ruleSince the one-employee-one-vote rule favours smaller
decision-making units, corpo-syndicalism causes conglomerates voluntarily to
break up into smaller companies, thus reviving market competition. Even more
strikingly, share markets vanish completely since shares, like IDs and library
cards, are now non-tradeable. Once share markets have disappeared, the need for
gargantuan debt to fund mergers and acquisitions evaporates – along with
commercial finance. And given that the Central Bank provides everyone with a
free bank account, private banking shrinks into utter insignificance.
Some of the thornier
issues I had to address in writing Another Now, to ensure its
consistency with a fully democratised society, included: the fear that powerful
people will manipulate elections even under market socialism; the stubborn
refusal of patriarchy to die; gender and sexual politics; the funding of the
green transition; borders and migration; a bill of digital rights and so on.
Writing this as a
manual would have been unbearable. It would have forced me to pretend that I
have taken sides in arguments that remain unresolved in my head – often in my
heart. I, therefore, owe an immense debt of gratitude to my spirited characters
Iris, Eva and Costa. Above all else, they allowed me seriously to ponder the
hardest of questions: once we have conceived of a feasible socialism that
blasts Thatcher’s Tina out of the water, what must we do, and how far are we
willing to go, to bring it about?
https://www.theguardian.com/books/2020/sep/04/yanis-varoufakis-capitalism-isnt-working-heres-an-alternative
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