The left vs right battle: 5. how ‘new economy’ thinking can unite left & right

In the run-up to Christmas (or for non-Christians, the winter holiday period, if you prefer) I’ve been trying to spread a little love with a series of articles looking at the growing polarisation of society along the left-right spectrum. I want to persuade as many of you as possible that positioning yourself on this spectrum is damaging to interpersonal relations, to communities, to political progress, probably to your mental health and definitely to the ambience of family gatherings – and to invite you to step off it.

In this series I cover:

• The meaning of the terms left and right
• The roots of left and right thinking
• Why the left vs right battle isn’t helpful
• Why left and right have more in common than you think
• How ‘new economy’ thinking can unite left and right

We’ve put this last one out on Boxing Day, when you’re full of goodwill and mince pies (with a bit of luck), so that by the new year, you’ll be ready to embrace your left/right (delete as appropriate) work colleagues and family members in a new spirit of understanding of the underlying irrelevance of those terms. Then on Jan 2 I’ll post an article with ideas about how we can build a new kind of economy that will work for you, whether you consider yourself left or right, and that, handily, won’t contribute to ecological destruction or creating zillionaires who don’t allow proper toilet breaks for their workforces.

So – how can we unite left and right with a new way of looking at the economy?

It’s not as simple as the left supporting the state and the right capital any more. There’s a fusion between state and capital that’s taking us in the wrong direction – destroying ecology, community and democracy. We have a top-heavy society, and it’s not possible to fight it, or to vote to get rid of it. But we don’t have to give in to it – we can step away from it if the infrastructure is there. And that infrastructure is being built. However, we also have to remember that most people don’t understand or care – so when it comes to consciously side-stepping, that’s for a small minority – maybe up to 5%. But that’s enough to build the foundations, after which the new economy will grow when its component parts bring immediate benefits to the mainstream, in terms of price and ease of use. It might also include community benefits, or lifestyle benefits, not just financial benefits – but whether someone considers themselves left or right won’t matter at all.

First, let’s talk about the libertarians of left and right. Having seen enough debates between left and right libertarians, I believe that ‘new economy’ thinking, and especially mutual credit, can provide a third way that will work for both – markets and property regimes that are free but non-exploitative and that don’t extract wealth from communities and concentrate it. As we’ll see as they develop next year, local mutual credit clubs can incorporate existing independent businesses, and generate new ones, to dilute the power of Amazon, McDonalds and Über. It’s pointless attacking them at the centre, if alternatives don’t exist in communities. Locals will have more employment options as we change the economy from the edges.

Of the three ways that wealth can be extracted from communities and given to people with no connection with those communities and who do nothing useful – i.e. interest, returns to shareholders and rent – mutual credit can mitigate the first directly, as it’s a system that involves no interest; the second indirectly, as it benefits community-based work; and the third one – well, possibly. We’ll see what happens if and when communities are strengthened to the point that they can do something about it. There are options – for example, ‘use-credit obligations’ for local investment. But whatever happens, mutual credit only rewards work. Surely that’s a good thing? We want to stress to libertarians that we’re only suggesting voluntary and democratic ways to achieve this.

With the mainstream left and right, it’s simpler still. Mutual credit is the basis for a non-extractive but free market. Non-extraction means that we don’t have to tax and redistribute (because wealth isn’t concentrated in the first place), and markets mean some local competition, which is necessary to provide choice between producers. Otherwise, we could be stuck with bakers or brewers who aren’t very good at making bread or beer – and who wants that? The opposite of competition isn’t co-operation, it’s monopoly. Why would anyone of any political persuasion prefer multinational corporations over small, local businesses? I’ve had conversations with our local Tory parliamentary candidate, who says that he’d like to see a Tooting High Street full of small, independent businesses, rather than corporate branches – and he seems genuine. I don’t see why Conservatives would oppose small businesses or strong communities. I want to make it clear that this isn’t about expediency though – mutual credit genuinely doesn’t have any ideological baggage. This is confusing for many people, who have to pigeonhole ideas before they can address them. Mutual credit is just a tool, albeit a powerful one.

During an interview with Tom Greco, he suggested that mutual credit can be a bridge between left and right: “It definitely is a bridge, because we’re not getting into ideological arguments which go nowhere. I’m not concerned about ideology, I’m concerned about practicality – what works, what’s going to make things better. I don’t think we can reform the existing system, so it means we have to reinvent it, rebuild it from the bottom up.” This makes absolute sense to me, although I’d say ‘from the outside in’, as communities aren’t ‘at the bottom’. The outcomes of a mutual credit exchange system should be attractive to almost everyone. Wealth is retained within communities – including black communities. The Kanye West approach to ‘success’ for black people is for a select few to become extractors. The use of mutual credit among networks of black-owned businesses will retain wealth in those networks, improving the quality of life for everyone, not just a few super-wealthy individuals. The same applies to communities in poor countries, reducing the incentives for economic migration, draining entrepreneurial spirit from parts of the world that need it most.

Theories of value tend to divide people along ideological lines more, or at least as much as any other economic topic. Value is complicated, but the waters get muddied, I think, by the confusion between determining and creating value. The right tend to focus on the subjective nature of value – how much you’re prepared to pay for something depends on how much you want it, regardless of how much work went into it. If you like potatoes, you’ll be willing to pay more for them than someone who hates potatoes; and someone with several sacks of potatoes in their cellar will be harder to sell potatoes to than someone who has no potatoes. Your subjective view determines the value of something, but it doesn’t create it. Only work produces any value in society. We’d all starve if all we had was money, and no-one worked to do useful things. Nature provides things for free – wild food, fresh water, minerals etc. – but you still have to go out and collect them, which involves work. Other costs are ultimately down to the amount of work inherent in them too (other people built factories, machines, tools etc.).

We can organise community safety nets for people who can’t work, but to have people who could work taking some of the reward for work they didn’t do, although they’re already many times wealthier than the people doing it is absurd and unjust. We’re better than that, and we can organise ourselves in ways that prevent it. Bill Gates is not worth a million times more than you because he had an idea. Although he should be paid for his ideas of course, there’s no reason that he should siphon off a portion of the value created by millions of people, to become a multi-billionaire. It makes no sense for millions of people to work long hours in grinding poverty, for their total reward to be less than the amount accrued by just one person. Bill Gates at least worked for some of his wealth, rather than inheriting everything; but as John Stuart Mill wrote back in 1848 (in Principles of Political Economy): “If some of us grow rich in our sleep, where do we think this wealth is coming from? It doesn’t materialise out of thin air. It doesn’t come without costing someone, another human being. It comes from the fruits of others’ labours, which they don’t receive.”

Ultimately, what does it matter how the price of something is determined? The more interesting question is – who gets whatever is paid for it? Who wouldn’t believe that contribution and reward should be connected? Mutual credit goes a long way to delivering the full value of contributions to production to the contributors – i.e. ordinary working people. Sure, big supermarkets could take payments and pay wages in mutual credit if they want to, but will their shareholders want it? They can’t dump it in tax havens, there are credit limits, and they won’t want to accumulate too much of it anyway as it won’t be gathering interest. It’s not a store of value, and there’s no foothold for banks. What’s in it for people who do no work? Not much, compared to conventional money.

But again, Covid has thrown us a curve ball. There’s a growing narrative from the left that paints Western governments as proto-fascists who are only implementing anti-Covid policies due to pressure from the left; and one from the right that claims those same Western governments are infiltrated by communists who are controlling us all under the pretence of fighting a virus that either doesn’t exist or isn’t particularly dangerous. You don’t have to subscribe to either of these narratives. You can choose which policies or life choices you agree with from a range of options, rather than deciding what to believe from the backlash to certain ideas on social media from the particular cultural tribe you belong to.

Mutual credit isn’t tribal, because it’s not something that can be controlled by big players in the market or by the state, and it fits nicely into the Overton Window. It’s in some ways very radical in terms of turning the institutional view of money upside down, but in other ways it brings the money system back to basics. Some on both left and right think that the current system is either the best possible way forward, or they can’t see any alternative. We don’t want to argue with anyone or to attack markets or the state. We just want to build something better, that generates trust in resilient communities – something that benefits everyone, regardless of their political leanings. Covid has made this more feasible.

Next week: our new website, and our plans for helping build the new economy.

Happy new year.