What is the lesson to be learned from the highly invigorating referendum in Scotland? It is fair to say that ordinary people now feel they can express their points of view as never before. The internet has awakened the participation of millions in the political process. They want to make their country a better place in which to live. It also is evident that the exposure of the media is bringing about great challenges for political accountability.
It is obvious that enormous energy is being exercised in favor of change. Voters not only want to improve their living standards, they also want their thoughts for a better Scotland (Wales and England) to be heard. Aside from the complexities of devolution, how can the much desired improvements take place? How can hope be restored to the people?
The charge is often made that politics in the UK are “too clubby.” Instead of using primaries to select candidates for parliamentary seats, for example, the elite of the upper echelons of the Labour and Conservative parties select prospective members from individuals who have worked for them in Westminster. There needs to be far more competition and choice for the democratic process to succeed, for fresh ideas and innovation to be introduced into policy formulation.
Since coming to power in 2010, the Conservative-Liberal Democrat coalition has pushed ”Austerity” on the people and offered ‘Quantitative Easing’ to the banks, the Treasury, and the City. This kind of innovation does not enhance the social harmony of a nation.
What needs to happen now is a shift in direction. This should be focused on greater economic fairness, mutuality, social awareness and cooperation (given by creating co-operatives like the John Lewis Partnership). It also will demand halting the steadily increasing economic division between the wealthier south and the poorer north as well as calling for a stop to the furtherance of the privatization of energy, transport, health, education and even prisons! The wide ranging reductions in welfare benefits — from cuts in legal aid to follies like “the Bedroom Tax” — also will have to be reversed. Altogether that is one gigantic challenge amounting to a social revolution.
Such basic reforms will require politicians and civil servants to rethink in ways which would be sensitively responsive to public opinion. The Tory writer, Roger Scruton, has written that “Conservatives are exposed to the complaint that they have no positive vision, and nothing to offer us, save the status quo — with all its entrenched occupation.” But then he wryly admits that “Thinking is an unusual and precarious exercise for Conservatives.”1
The opposition may “think” more deeply but have yet to light a spark in the electorate. The mass of voters — in both the United States and much of the European Community — have become singularly disaffected by the failures of the traditional political parties. In the United States the Republican strategy of bringing the Congress into a state of gridlock, and its politically driven refusal to cooperate with the executive branch, has resulted in public disaffection with the whole system. Alas, except for their goal of reducing the size of government, the Republicans lack a coherent outlook for the future. Like the Tories in England, they are deeply attached to preserving a way of life — which, in effect, is a Hollywood-style interpretation of the past.
Class solidarity, a modern version of tribalism, was important in the UK until Margaret Thatcher broke both the mining industry and the power of the unions. She replaced the public good with private greed, social justice with corporate capitalism, and society (whose very existence she denied) with a “me first” version of individualism in a toll-booth economy. Rather than halt this anti-social trend, the Labor party under Tony Blair simply furthered the power of the banks, the City and the private sector. This resulted in a dangerously unbalanced enrichment of a small sector of the population. When the Tories then returned in coalition with the Liberal-Democrats, they continued with the privatization of almost everything from the post office to transportation, energy, prisons and even children’s homes — all at the unwanted expense of the taxpayers.
The younger generation has become disaffected and deeply disillusioned by the “politics as usual practice” of both parties. They have been offered no solution to their job crisis and continuing housing shortage. The older generation is more vocal in expressing their weariness and disappointment with politicians, bankers, economists and even the police. Some have described the reaction as part of the “post-democracy” phenomenon.2 Both these groups sense that in combination with globalization and the amazing technological advances, their world is being swiftly transformed into a dislocating, if not an alien, planet.
Language itself reflects the rapid and camouflaged changes in socioeconomic perspective: “reform” now means privatization, “partnership” means selling out to big business, greater “efficiency” means cutting the workforce while “downsizing” generally means replacing workers with automation. “Rationalizing” suggests following the strictures of market fundamentalism. All reveal a degree of embarrassment with the harsh realities of capitalism.
There are groups in both the US and the UK, like the Social Economy Alliance, which are looking at how the best ideas from left and right could be joined together to provide a social alternative in economics. They are asking questions such as, how can social-based economics reduce unemployment and how can it work to create a more responsible economic sector? This Alliance is being launched amid evidence that not-for-profit companies and co-operatives are outperforming their profit-making counterparts.
A decade ago I spelled out at considerable length the ways our faltering economy could be changed. I proposed the end of money as we have known it, the transformation of corporations into cooperatives, and the introduction of universal “credits” for all citizens. You can find the prescriptions for in-depth reform in my book, Dollars or Democracy,3 which I plan to place on the internet in the near future. I have selected a short section of the concluding chapter to whet your desire for more!
1Roger Scruton, How to Be a Conservative, (2014)
2John Harris, “…politics as usual is finished,” The Guardian, September 12, 2014
3Yorick Blumenfeld, Dollars or Democracy,(2004)
DOLLARS OR DEMOCRACY?
12 CONCLUSION: COMPETITION OR COOPERATION?
Faced with an untenable world economy, I have tried to imagine and project a plausible scenario for a workable alternative. The revolutionary ideas I have outlined present an enormous challenge, but then, risk-taking always has been at the core of our present system. I believe that the incentive economy is based on such long-term principles as are most likely to effect human well-being and happiness.
We are not the captives of capitalism. We do have a democratic choice. We have it within our power to change the economy to suit our needs without resorting to violence or coercion. But this demands careful thinking, vigorous discussion and debate, followed by planning and decision-making. This book has offered you choices, not destiny.
There is no doubt that we are, in every way, living beyond our means. Not only is capitalism driving us head over heels into personal and national debts, but we are destroying the very carrying capacity of the Earth. The U.S. Academy of Sciences estimates that ever since the 1980s, human beings have been taking more natural resources from the living planet than the Earth can replenish.* In the very short term all of us are going to face up to the situation where capitalism’s so-called positive-sum game of growth gives way to the zero-sum game of dwindling spoils, deflation, and stagnation; where brother fights brother over limited water, air, dwindling oil supplies, and land. We are talking here about the survival of the human race on this planet—a provocative subject which laissez-faire market capitalists desperately try to avoid. The environment concerns each and every one of us. “Climate change is no respecter of national boundaries,” writes David King, the British government’s chief scientific adviser. Most of the important aspects of the environment are public goods. No one individual can enjoy a cleaner or healthier environment unless others do. The exclusion principle cannot be applied here. “What we do unto others, we do to ourselves.”
Theorizing about economics is one way of eventually making the seemingly impossible economically plausible. It can be a way of presenting economic configurations, which the experts do not want to take into account and which challenge the given truths of an era. The failings of the economics profession has been a recurrent theme in this book. Dishonest economic drivel, such as the “trickle-down theory,” “the Laffer curve,” and “Fedspeak” as practiced in Washington, have tended to give economics itself a foul name.
Yes, some economists have had good ideas for reform: the Brandt Commission in the 1970s proposed a global armaments tax the revenues from which would go to help the development of third world countries. Such a tax would also have cut down the murderous and steadily expanding trade in small arms. In the eighties, the Brundtland Commission proposed a tax on pollution both to save the environment and to promote third world education. In the 1990s James Tobin, a Yale economist and Nobel laureate, promoted the idea of a minimal tax on speculative financial transactions, like derivatives. Even a tax of a tenth of 1 percent would raise hundreds of billions of dollars a year for use in the underdeveloped world. But not one of these hopeful ideas has come into being, and no new reformist plan is likely to be more successful in the near future.
Despite strong opposition by John Maynard Keynes, the Bretton Woods economic conference some sixty years ago framed the victory of corporate and commercial property over human rights. For example, it was determined that foreign exchange reserves of other nations will be held in dollars. Instead of the poverty trap of debts which was being foisted on the less developed nations by the United States, Keynes tried to outline the possibilities of a world without debt which would depend on an international clearing union. But Keynes was blocked by Washington and damned the fundamental hypocrisy of capitalism writing: “We must go on pretending that fair is foul and foul is fair; for foul is useful and fair is not.” Governance rules were rigged against the poor countries. Washington used the dollar as a weapon to control the world’s weaker economies. This modern version of dollar diplomacy was described almost a century earlier by President William Howard Taft as “substituting dollars for bullets.”
Apart from the incertitudes of globalization, among the multitude of fundamental questions that most economists of the past generation have refused to ask are: Where is our economic world headed? What is economic life all about? Is “growth” truly the only way to create jobs? Do we really want to increase the GDP in order to convert the planet into a man-made environment of cars, roads, housing estates, industrial sites, favelas, and shopping malls? Can we be both economically fair and efficient? Is any kind of stability possible in a capitalist world? When will economic success be measured in terms of leisure time, environmental quality, and economic security? Could we stop using up our real capital—such as timber, oil and top soil—in such a way that future generations also have a chance? What will we have to pass on to our children? I should like the answer to that last question to be: a cleaner, greener, more secure, more cooperative, and generally more mutually satisfying world.
Personally, I reject an unjust world divided between a few billionaires living in guarded communities and billions of people living in deprivation. Money, banks, multinationals, shares, and even capitalism are all our collective creations, and we have both the ability and the duty to change these if they do not serve us well. The moral aspects of providing fairness and better distribution (particularly of food and water) are as important as those of technical advance. In giving the vast brushstrokes for a new economy, I believe the credit system and the incentive economy present the chance for marked improvements all around—particularly in ways to keep a society vibrant, spiritual, creative, and consciously aware of its desired direction.
* Due, in part, to industrial farming and the burning of tropical forests, more than 24 billion tons of top soil, or the equivalent of 4 tons for every human being on the planet, is now washed off into the sea every year.