What I mean by system change is system replacement, rather than system tweaking (aka ‘prolonging the agony’). This raises (not begs – please, not begs) three questions:
- Is it feasible that the current system might be replaced?
- Do we really need to replace this system – can’t we just change our consumption habits a bit, make sure we recycle properly, and rely on governments to do the right thing?
- If you agree that the system needs to be replaced, does that make you ‘anti-capitalist’?
To answer the first question: yes, it will be replaced – systems come and go, which is why we’re not living under feudalism, absolute monarchy, the Roman Empire or in hunter-gatherer tribes any more.
So, you can guess my answer to question two. I want to show that system change is not only necessary, but achievable, and that we have to do it quickly. However, when communicating with people about system change, you never know how it’s going to land. It depends on a huge raft of factors – including the social circles that people move in, their upbringing, the newspapers they read, their job, ambitions, social media bubble and inner prejudices. Many people are ready for communication about system change, others aren’t, because it might challenge a lot of the narrative that they’ve held dear for a long time, with the potential to damage their career. I guess that if you’ve started to read an article about system change, I can at least hope that my communication with you is not going to crash-land. At the very least, it might plant a few seeds.
I’m assuming that you understand the dangerous nature of the path we’re on, and that recycling or installing low-energy light bulbs isn’t going to get us off it – not when we have an economic system that’s all about maximising consumption, which is not only irrational, but contradicts all religious teaching. The organisation that I work for (Lowimpact.org) has been promoting and assisting lifestyle change since 2001. Lifestyle change is essential, but not enough. Within the current economic system, lifestyle change without system change is cosmetic – like anti-racism or organic food on the Titanic. Both those things are good in themselves, but on the Titanic, they’d have no long-term effect without turning the steering wheel to avoid the iceberg.
Now on to question 3 – does advocating system change mean anti-capitalism? For me, it depends – but I’m not sure that kind of labelling is useful, as it’s divisive and confusing for most people. Socialists used to bristle when people criticised socialism by pointing at the Soviet Union. ‘But that’s not socialism’ they’d say, quite rightly. ‘It’s a dictatorship. Socialism has to be democratic, or it can’t be socialism, whatever you call it’. Capitalists would have a valid point if they said much the same thing to anyone criticising this system. ‘It’s not capitalism’, they might say. ‘Capitalism is fundamentally about a free market, and we absolutely don’t have a free market. Whatever you call it, if it’s not built around a free market, it’s not capitalism’.
This is why I find it difficult to criticise ‘capitalism’, because although it may be worth criticising as a theory, it seems strange to oppose something that we don’t actually have (and in fact, I don’t think it’s possible to have a system in which power concentrates in the hands of the owners of capital without massive state intervention on behalf of the owners of capital). What we have is some sort of strange bastardisation of capitalism, without the free market, but with an enormous, corporate-friendly state, and annual Davos schmooze-fests (i.e. socialism for the rich). This is what I oppose – what we have now – regardless of what we call it. I’d like to replace what we have now with something built around a non-extractive, free market. If you don’t understand how that’s possible, bear with me.
We don’t have a free market, because in this system (whatever we call it), the state intervenes massively on behalf of multinational corporations. Not ‘accidentally to the advantage of’, but ‘on behalf of’. Corporations have enormous leverage over governments – some would say to the point of ‘corporate capture’ of the political system – and I’d agree with them. They don’t pay the proper amount of tax (but small businesses have to); they get all the subsidies and government contracts; they have politicians on their boards; they get bailed out when they fail, and much, much more.
One morning last week on Radio 4, I heard several corporate CEOs demanding that:
- the government take money from ordinary people,
- to give to giant corporations,
- so that they can give it to other giant corporations,
- for fossil fuels,
- for them to burn,
- to keep their plants running,
- so that they can continue delivering profits to their shareholders.
This is seriously what they were asking for. And they’ll probably get it, because they’re ‘too big to fail’ (this may have happened already – I don’t tend to follow the news too closely). This prevents market entry by smaller, leaner competitors (which is exactly what the giant corporations want), and destroys any notion of a ‘free market’.
Consequently, the corporate sector is hoovering up the entire economy, and establishing monopolies like Amazon, Google, Microsoft, Facebook and Über, or cartels like the banks and supermarkets. They suck money out of communities and concentrate it, which damages democracy, as well as communities.
A (truly) free market would allow small businesses, sole traders, community-based enterprises and co-ops to compete with corporations. At the moment, they’re being wiped out. If we can stop the state from intervening, let’s see what kinds of ‘economies of scale‘ the corporate sector really has. The fact that there are still independent shops, small businesses, restaurants and coffee shops, community pubs, farms, craft producers or market stalls left at all in the face of corporate competition shows that people are prepared to support them, even when they’re more expensive. There’s something valuable about them, that people recognise. We’re pushing at an open door with most people.
But how do we kick-start system change? What do we actually do in the world? Certainly not violent overthrow – the idea is absurd and undesirable; and not by voting – which you won’t see as an option if you understand the amount of leverage that the corporate sector has. I believe that we’ll do it by transcending. We build a new infrastructure within this one, by absorbing its resources, around a new exchange medium – a new money system if you like, although that may not be an accurate label. Mutual credit is a tool that can help decentralise the economy, boost small businesses at the expense of multinational corporations, build community and reduce the need for banks. Together with various associated ideas, it can form the basis for a new kind of economy. It’s something that we can unite behind. It should be attractive to both the anti-corporate left and the free-market right – but also to greens (because shorter supply chains are more sustainable), and to libertarians (because it involves a reduction in the role of the state).
Nothing we do to try to move to a sustainable, healthy and democratic society will work as long as we have the current money system. Here’s the key point: the problem is that conventional money has two conflicting functions – it’s an exchange medium and it’s a store of value. In other words, it’s used to buy and sell things, and it’s used to store, hoard, accumulate and become wealthy with. As long as that’s the case, money will gravitate towards stored wealth, because money attracts money and gives access to the political system. This continues until so much money is concentrated, and so little is circulating that the economy crashes – as it has many times – and will continue to do so until those two functions are separated. During crashes, communities are devastated and ordinary people suffer. During booms, nature is destroyed. So there’s never a ‘good’ part of the boom and bust business cycle.
Groups all over the world are building the infrastructure and the technology to decentralise and mutualise the economy, including, crucially, to separate the exchange and store of wealth functions of money. I call this approach ‘Edgeonomics’, because it’s about assembling and connecting this infrastructure ‘from the edges’, in communities, and federating to the global level – rather than trying to change things from the centre. It all works – we only have to use it. I believe that mutual credit is the core of it, the life-blood. It’s a 19th century idea (or rather, a ‘family’ of ideas), whose time has come now that we have the internet, the software to federate from communities to the global level, a growing awareness of what’s happening to nature, and a Covid-lockdown-induced economic slump.
After mutual credit networks are in place, a job will no longer have to be something that you’re ‘given’ by a company that won’t pay you the full value of your work (where would be the profit in that?), and that you’ll be grateful for – even if it involves running around a warehouse all day, unable to talk with your colleagues, and with restricted toilet breaks. A job will be something you create, alone or in combination with equals – that you enjoy, and in which you keep the entire value that you create (not to mention choosing when to go to the toilet).
We’ll be blogging more over the coming weeks and months about the ideas mentioned in the article, which will be featured more prominently on our new website. We’ll be making the connection much more clearly between lifestyle change and system change (each essential but impossible without the other). There will be much more of a ‘call to action’ (for people like you at least; for the majority, we’ll be looking at ways to provide tools that bring immediate benefits, and that draw people away from the corporate world).
13 Comments
Resonates with me, @Dave. Nice article. I support this direction of travel and are contributing ourselves with the promotion of our new, not for profit, social enterprise, called growing real food for nutrition (Grffn).
Grffn are learning how to measure food quality based on the concept of nutrient density, an indicator of a well grown plant, that’s totally ressiliant to pests and diseases. A concept of total health.
This has potential to move past labels and empower growers and food citizens to determine food quality for themselves. This we believe is part of ‘waking up’ to realise how humans are inextricably linked to nature – A central message, we hope to articulate as we build the evidence is that when you look after nature, nature looks after you.(symbiosis).
Best wishes,
Matthew
Great piece of work, Dave. Now how to get it across as widely as possible.
Matthew, Gordon – thanks. There will be developments over the coming year that will allow us to help disseminate these ideas, and provide ways that people can get involved in building a new kind of (non-extractive and sustainable) system.
Dave: a couple of questions really…In my mind’s eye I see public sector job guarrantee (caring for people and environment); basic living income and universal public services as the ideal social contract and maybe as a transition to post capitalism. My problem with your thinking around people-creating jobs alone or with equals is fine for people like me – people with social capital if you like. I have connections, networks access to information and expeience o draw on. What if you come from a third generation of people not knowing employment? So, in summary – how does your thinking work in relation to people who are socially and economically disadvantaged and how does or doesnt your thinking mesh with UBS/a job guarantee and living wge combo?
Judy – good questions.
You talk about ‘post-capitalism’, so I guess we’re on the same page when it comes to system change. So I have to ask you whether you believe that the state is somehow a counterbalance to corporate power – with the aim of ‘reining it in’ somehow. My position is that it isn’t. I see the corporate sector and the state as having a symbiotic relationship, geared towards perpetual growth, and maintenance of the status quo. I talk more about that here – https://www.lowimpact.org/our-response-to-why-dont-you-start-a-political-party/
If you read that article, you’ll understand why I feel that the state can never be part of a transition to post-capitalism – which I agree we desperately need (although, as per the article above, this system may be capitalism in name, but without the free market, as the state rigs it so much in favour of the corporate sector) – otherwise the state / corporate obsession with growth will continue to destroy global ecology, and we’ll have no future. Then, as mentioned above, any kind of social benefits mean nothing ‘on the Titanic’.
There are other ways that we can look after ourselves. Every town used to have a ‘Friendly Society’. Locals would contribute to a pot of money every payday, which was used to care for people who were sick, out of work, or unable to work for any reason. It wasn’t just money. Locals would visit people to see if they needed food cooked, cleaning or shopping done, kids looked after etc. This system lasted until the 1920s, when the state started to provide care, but for compulsory taxes rather than voluntary contributions – for an inferior product. People were unable to pay both the taxes and the Friendly Society contributions, and so they died out. I interview Graham Mitchell here, about plans to ‘replicate and federate’ a new generation of social care co-ops, in the spirit of the Friendly Societies.
https://www.lowimpact.org/why-we-need-social-care-co-ops-graham-mitchell-part-1/
and
https://www.lowimpact.org/national-network-social-care-co-ops-graham-mitchell-part-2/
In the kind of decentralised, mutually-owned economy I’m advocating, there would be no need for minimum wage legislation, or state provision of UBS. Imagine what life could be like without the enormous amounts of money siphoned out of a community by Uber, Amazon, McDonalds et al. Think what could be done with that money. Every community could have a Friendly Society, Social Care Co-op etc., as well as full employment, closer social ties, healthy food and environment – all the things that reduce the need for social care / security in the first place.
And this kind of corporate-free community would create more and better jobs – including for people who have never been employed. Small businesses create more jobs, and keep money in the community so that we can get onto an upward spiral, and create more jobs for everyone, however disadvantaged currently. If we continue to build this decentralised, mutually-owned economy at the expense of state and corporations, then we should only talk about bringing social care / benefits into community ownership when we have robust systems in place. Until then, of course I support state provision.
Another point – it doesn’t really mean much if there’s a minimum wage (say) in this country, but the products we’re buying from the corporate sector are produced by virtual slave labour in sweatshops and plantations in poorer parts of the world.
But the main point is that the status quo defended by the corporate / state alliance is too destructive to continue with, but corporates and the state will I believe fight to keep it. We have to find ways to build something new, and sideline the current destructive system.
“I’d like to replace what we have now with something built around a non-extractive, free market.”
Does the free market extend to health care, education, care for elderly and disabled, emergency services, defence, large infrastructure projects (e.g. electricity distribution, internet), etc?
Anthony – what I’m talking about is a direction, not a destination. You’re looking way into the future, and I don’t believe in blueprints. The first thing we can do is to decentralise and mutualise anything that can easily be done by co-ops, small businesses, sole traders and community-based businesses and organisations – to take that business away from corporations where we can. Housing (housing co-ops, cohousing, community land trusts), energy (community energy schemes), taxis, buses, food (community-supported agriculture, bakeries, fisheries etc.), phone and broadband (phone co-op), software and OS (open source, Linux etc.), care (friendly societies, social care co-ops etc.).
Then we can think about next steps.
Municipalities can take over most of the state’s roles (Luxembourg is a fully-functioning state, but it’s smaller than most British counties; Liechtenstein is smaller than most British towns).
Large infrastructure projects – let’s shrink them or scrap most of them (HS2, third runway at Heathrow, new motorways etc.), and yes, they can be developed by communities – https://www.lowimpact.org/saving-investment-mutual-credit-world/
I’d like to believe that one day we can live in a way that doesn’t require ‘defence’; and it’s the state (mainly the US state today, but China is gaining) that maintains the war machines. Can you imagine aliens landing to find that the dominant species on this planet needs to allocate a large proportion of its economy to protecting themselves from their own kind?
If you agree that we need system change, then states will dig in to try to prevent it. Centralised power will always be seized or bought by the most powerful. Today, it’s been bought, but violence is used where their power is challenged.
PS currently, states are giving away the sectors you mentioned to the corporates. We can and should do much better than that.
@anthonyhay and @DaveDarby
“You’re looking way into the future, and I don’t believe in blueprints” First of all any person with a vision of the world should be able to give a vague definition of how certain things will work. Also things that need scale (internet, armies, emergency services, nation states, etc…) can be federated. Technologies like mutual credit and open source software, organizations like co-operatives and business’s can be federated to bigger and bigger groups. The largest groups could decide on things such as armies and taxes. These systems will still be the most democratic and (hopefully) sustainable. Capitalism is not a bad guy, just needs a few things changed.
Oh how I would love there to be a free market, the only rule being the consent of both parties. Make sure nobody suffers because of the transaction, then update the mutual credit register. Wouldn’t that be something to work towards?
Chrissie – a free market without extraction would be a v good thing imo. Everyone would get the full value of the work they’ve done, instead of having some (and in the case of sweatshops, almost all) of it creamed off for corporate investors.
Dave, how would you define capitalism? For me ‘capitalism is about a free market’ is too vague and, as you say, not representative of reality. That said, if I were to give my own definition in the very simplest terms, perhaps mine would be too vague? I’d call it ‘any system in which wealth concentrates’, i.e. regardless of who, where or how.
On this basis, I disagree with your view that ‘I don’t think it’s possible to have a system in which power concentrates in the hands of the owners of capital without massive state intervention on behalf of the owners of capital’. My understanding is that power cannot be uncoupled from wealth, and in fact that states, most indebted, have far less power than wealth pools have, so they do not in fact make massive interventions but simply, unavoidably, acquiesce. (They do this via international trade treaties, which are immense loci of power, being at the nexus of all corporate wealth pools. If corporations are the slave-owners, then these international treaties are the iron shackles, while national legislation is ‘mere’ rope. And the carbon of the shackles and rope? That’s debt, of course.)
So this dynamic – like growth – is all locked in by the debt-money locking system. And where you and I converge is here: positive monetary systems are the key to freeing individuals and the market (*from* capitalism, as I define it).
And the next question for me then is: is inverting the monetary system (from negative to positive currency creation) sufficient for creating a society with a market instead of a market society (Varoufakis)? I *think* the answer is ‘yes, as long as we want that, because a debt-based monetary system subsumes everything, where a positive monetary system does not’ – so things that suffer from economies of scale (health, education, art, craft, agriculture, governance… does the list ever end?!) can be left in peace to operate on a more sustainable (steady state) economics.
And the final question for me is: so this means that modest, truly sustainable, subsistence livelihoods (rural voluntary simplicity) are possible in a society with a market where they are not in a market society, right? The market can be entered by choice or for surplus only, not inevitably or as primary focus.
Phew, that sounds like paradise compared to where we are now! Thank god for the people making it happen, Dave 🙂
Hi Eloise
Funnily enough, I’ve been thinking about this recently. Our next south London ‘philosophy club’ is about whether capitalism is the best way forward, so as usual, the first task is to define the terms.
But I do think the term itself is a red herring. What I’m talking about is what currently exists, whatever we call it. And we’ve already gone way past what Adam Smith or Karl Marx would have recognised as capitalism. It’s now a weird sort of ‘financialism’ that exists only to concentrate wealth, whatever the consequences.
What we have is an M-C-M’ economy (have money, invest in commodities, to make more money), rather than a C-M-C economy (produce commodities, receive some money / exchange medium for them, buy commodities produced by other people). The former allows people to gain wealth from other people’s work (therefore wealth will concentrate), the latter doesn’t.
When I say ‘interventions’, I guess that includes passive interventions too, like not collecting taxes properly from multinational corporations.
Yes – the Centre for a Stateless Society – https://c4ss.org/ – use the term ‘freed market’ (as an aspiration) rather than free market, to make it clear that the current economy doesn’t involve a free market at all.
Their position (which I agree with) is that wealth wouldn’t concentrate in the first place without state assistance for the corporate sector, because small businesses would out-compete them. When you think that independent coffee shops still exist even though Starbucks pay virtually no tax, then how would Starbucks compete if they did? Plus all the other benefits that the state provides to giant businesses – giving them contracts, bailing them out, building infrastructure for them, sitting on their boards, and even regulations – even if they’re good regulations – provide a barrier to entry for small businesses, because they’re so expensive to comply with. Their point is that economies of scale for giant corporations are actually an illusion – only possible with the help of the state. Plus people don’t tend to like being told what to do all day. Personal autonomy and meaningful work are key components of mental health imo.
‘a society with a market instead of a market society’ – yes, I like that. Otherwise how do we allocate resources? The state again? God, no.