Res Communes – the rise of citizen-led, fair-market, alternatives to capitalism
October 12th, 2012 by Jules
Its been interesting lately to hear voices from the mainstream questioning our growth-obsessed capitalist economics and calling up Karl Marx from his grave.
They include Stephanie Flanders from BBC Newsnight in her recent Masters Of Money documentary on Marx, Martin Wolf in the FT with his piece last week ‘Is unlimited growth a thing of the past?’ , UBS’s Chief Economist George Magnus writing a piece titled ‘Give Karl Marx a chance to save the world economy’, and similar statements from Joseph Stiglitz and Nouriel Roubini, to name just a few I’ve spotted.
It seems that all of a sudden Marx was right all along, certainly in his analysis of capitalism’s failings, if not also in his prognosis of its fall. Not so long ago this analysis was thought of as extremist. Now mainstreamers are thinking back to University lectures on Marx and how his writings rang true in their youth.
This is new and interesting, and whilst few of them are willing to admit that there are actually alternatives to capitalism, that surely will be their next great leap.
Alternatives already exist….
As our current economics continues to unravel, with the pain of real austerity hitting Greek citizens, and with the Red Cross giving out food parcels in Spain, where there are now 2.3m ‘vulnerable’ people, many are asking ‘are we next?’
Despite mainstream denial there are many alternatives to capitalism. Marx himself did not just ask all the right questions and make predictions about the fall of capitalism, he also described the shape of its replacement.
There are of course alternatives to pure free-market capitalism. Red-in-tooth-and-claw Anglo-Saxon capitalism has always been the most extreme version. Variants such as European Social Democracy and Asian mixed economy and Keiretsu capitalism have always been fairer and nicer to people and planet. But no form of capitalism has ever been able to be quite as nice as was needed to provide ‘good lives’ for all.
More radical alternatives range from beyond-capitalism revolutionary-socialism and eco-socialism to reformist market-socialism and natural-capitalism. The great and sadly missed Eric Hobsbawm, who died last week, was one of many whose work inspired these and other alternatives.
These are not new alternatives. Many have been around for a long, long time. They have just been ignored by the mainstream and its denial. That denial worked in the good times but the good times are over.
Bumping up against limits to growth
We know we can no longer safely continue to grow the global economy. To do so would push us into climate meltdown and commit our children to unthinkable trauma. The implications for us in the rich world call for significant change. For the poor world to develop in material terms, the rich world needs to find a reverse gear.
As Professor Tim Jackson’s IPAT calculations have shown, if we wanted 3% growth rates globally, even to reach a liberal 450ppm CO2 target by 2050 (100ppm too high to be safe) we would need to reduce the carbon intensity of every global $ of economic output by 11%p.a. every year from now till 2050.
And yet the very best we have managed during the height of capitalist ‘efficiency’ 1990-2007 was 0.9% p.a. carbon intensity reductions. The difference between 0.9% and 11% is huge. It would require a 130 fold improvement – no mere incremental improvements in technology – more like something akin to a perpetual motion machine – to achieve these efficiencies. And we need those levels of absolute (not relative) decoupling to start today and go every year till 2050 on every global $ of output, be it in Germany or India. This is just not possible.
This is why the IPCC’s Professor Kevin Anderson has now said that ‘we either deal with climate change or have a growth economy – not both.”
And climate change is only one of the many key planetary boundaries the Stockholm Resilience Institute shows we are now hitting up against. As Professor Kenneth Boulding has said, and finance brokers Tullet Prebon are now repeating, “to believe in infinite growth on a finite planet you have to either be an economist or a madman.”
Capitalism can’t survive without growth
Capitalism has played an important role, along with other forms of market and non-market socio-economics, in the improvements in material and non-material wellbeing we have seen over the last 200 years. But at the same time the built-in dynamics which Marx pointed to have led to innumerable ‘externalities’ and inequities which society could well do without.
It is becoming clear to many that the new economics this will require may not be compatible with capitalism. This is because capitalism is, by default, reliant on economic growth to support the dynamic of profit maximisation and accumulation.
So sooner or later we will have to give up on capitalism. Maybe very soon or maybe in five, ten, or twenty years time. Capitalism has got us as far as it could but for todays full-world challenges a new system will be needed.
The need to move beyond incremental reform
These challenges call for radical change not incrementalism. Sadly, attempts at reform of capitalism – ‘market ecology’, ‘natural capitalism’ and ‘capitalism-as-if-the-earth-matters’ have failed. Some will say they were always doomed to fail as they ignored hard truths about capitalisms requirement for growth in a finite world. Others that they might have worked if given more time. But time is something we are running out of. As NASAs James Hansen has now said ‘we may already be too late.’
If we had had the sense to have started an effort to decouple growth from material throughput and environmental impacts perhaps 30 years ago we might have found technological ways to continue growth immaterially. But today, with runaway, unstoppable climate change upon us, its just too late for anything but an end to global growth in the scale of the economy.
Res Communes – an alternative vision of economics for, by and of the people
Work in progressive circles such as the Transition Towns movement and the New Economics Foundation (nef) is starting to take shape around a new vision of progress and a new form of Sustainable Wellbeing Economics which champions a shift from privatisation to propertisation of the global commons.
This economics takes inspiration from the work of Nobel laureates such as Ostrom, Stiglitz, Sen and Kahneman, updating our understanding of socio-economic relations, co-operation, reciprocity and wellbeing.
Taking inspiration partly from ancient Rome’s legal system, and moving us on from the tired, left-right dialectic of state-versus-market, this new economics puts the citizen centre stage with an emphasis on a predominant Res Communes commons sector run for, by and of the people.
This economics will be based on a socio-economic transition to a mutualised, co-operative, communitarian, localised, participatory democracy and a radical shrinking away of the private, Res Privita and state, Res Publica sectors.
Such a system may have a role for markets but this role will be as servant not master to the overarching goal of delivering ‘good lives which do not cost the earth’.
This will have wide ranging implications including for social relations; for changing cultural values from extrinsic to intrinsic wellbeing satisfying values, for new visions and narratives of ‘prosperity’, for commercial, national and international accounting, for the balance between use and exchange values, for a new era beyond ‘worker’ and ‘boss’, for a radically different and smaller finance sector and changes to many other aspects of our current system.
But already there are many new and old forms of alternatives to shareholder owned enterprises which are showing the way forward. Take the countless mutual, employee, community and cooperatively owned enterprises.
One of many examples is Spain’s £4.3bn Mondragon Co-operatives Group, employing 53,000 stakeholder-owners. The World Bank has said that consistently, for over twenty years, Mondragon group co-ops have been “more efficient than many private enterprises…. there can be no doubt that the co-operatives have been more profitable than capitalist enterprises.”
These sort of successes are showing that the idea that shareholder-owned capitalist enterprises are far from the only alternative. Maybe some day soon we will all work for, own and buy from similar enterprises.
We live in exciting times
The good news is that an end to growth need not stop us delivering high employment, high wellbeing and fiscal balance. This is shown by the emerging macro-economic modelling work of Nef and Professors Peter Victor and Tim Jackson. We in the rich world can well afford to find a reverse gear so that, within global stasis, the poor world can continue to develop.
There is reason to be optimistic. Growth long since has failed to deliver increases in life satisfaction. We need not fear the end of growth and a new post-capitalist economics. Its an exciting time to be alive – truly revolutionary things are afoot.
A call to action
Over the next year a group of us will be publishing a draft Res Communes manifesto for post-growth, post-capitalist change. We will be open-sourcing this for anyone who wants to help us produce our final vision and manifesto for change. Watch this space and get involved………
This blog is dedicated to Eric Hobsbawm, an inspiration to Jules and father of his friends Andy and Julia.