In this Al Jazeera piece, Dan Hind asks probably the most important question for the human race in the 21st century:
David Cameron like all mainstream politicians is obsessed with efficiency, but in an economy where each worker is highly productive, more efficiency is not necessarily what we need. There is a limit to how much stuff we can consume - we just don't have the time to use or consume more stuff. What we really need to make our lives better is meaningful quality experiences. Markets are not necessarily the best way to provide these. As the saying goes, the best things in life are free. If we start measuring outputs in human welfare terms, instead of money income growth, we can change the whole process of production. How do you measure non-monetary 'growth'? Simple, ask people to measure the benefit themselves and put that into our national statistics. Also by bringing back the 'commons' - ie public, freely available goods - we can return to the comonwealth those things that have been privatised and monetised by capitalism, including money itself. GDP obsession is less than a century old yet it's treated like some kind of talismanic power over us. Once we change what we measure to something more meaningful, it will change how we view our society and how we see ourselves.
New technologies have radically increased the amount that a single worker can produce in a working week. Manufacturing productivity in the United States has quadrupled since the early seventies, for example. American factory workers are astonishingly industrious, but throughout the world the story is the same. Fewer people can create more value. Yet this triumph of productivity has perverse consequences. New technology makes more and more people economically unnecessary. As Richard Sennett puts it, the global workforce is "haunted by the spectre of uselessness".
Much of the world is still poor. Hundreds of millions of people barely survive. But even if we bring everyone, without exception, into the circuits of global production and consumption, the number of workers needed to feed, clothe, house and transport the global population will remain a small percentage of that population.The question then is this: what do we do now that we have almost solved the problem of scarcity? Who should benefit from these vast increases in productive power?
There may well be some levelling going on in the world economy, as the advanced economies slow down compared to previous decades, while growth in the developing world speeds ahead. The outcome could mean a massive expansion of middle to high income countries over the next few decades. Asia, Africa and Latin America have experienced a decade of unprecedented growth. Given global instability, this may not continue indefinitely, but even with setbacks, we are likely to see a global income and production boom, currently led by China. While the world population continues to grow at the current pace, commodity prices will rise (including energy) and environmental stress will increase. Extreme poverty will stay with us and remain a pressing issue. But even if the Triad (US, Europe and Japan) remain mired in stagnation, many millions are joining the consumer classes. As productivity continues to increase exponentially, the problem of surplus labour will increase.
A new economic model is needed to find useful activity for those who need it - but that does not necessarily mean traditional wage labour. It is a blinkered fallacy that assumes all we need is to resume the capitalist growth cycle in the way it has operated until now. Capitalism has no effective mechanism to efficiently distribute assets, income or work. It's great at producing and distributing goods in a society where enough people are affluent. It is hit and miss in providing some things that are essential - like housing, health and education, but brilliant at producing huge quantities of inessentials. In agriculture and food, markets have generally worked to feed a growing population, so much so that over a billion are now obese. A billion or more go hungry - even though food is abundant.
For markets to work well they need rules and controls that prevent predatory behaviour gaming the system for insiders at the expense of everyone else. As Adam Smith once wrote: 'Whenever two or more merchants gather together...it ends up in a conspiracy against the public.' For a period of development from agrarian to urban society, it worked in north America, Europe and north Asia at creating prosperous mostly well run societies.
In countries where 80% of the world lived, capitalism of the crony variety dominated. Colonialism, post colonial dictatorship and other kinds of dictatorship, including Stalinist socialism, reproduced poverty and corruption. But even where the market economy brought rising living standards, capitalism runs into endemic problems. What is efficient for a firm - to employ the optimum number of productive workers, is not efficient for society, particularly in a slump. Unemployment and stagnant wages restrict general consumption, while the 1% capital rich concentrate wealth in their hands but then struggle to find useful ways of investing it. They end up spending stupid amounts on art, wine and Facebook shares.
Asset bubbles are a direct consequence of maldistributed income in a capitalist economy. Each boom is followed by a bust. The growth of the financial sector exacerbates this tendency. A democratically planned economy in which actors are impelled to maximise human welfare, rather than just profits, must be a central part of our future political economy. In China, a planned market economy - mixed with markets - has produced 33 years of unprecedented growth, although China's inequality is now destabilising the system. State-led capitalism in Japan and Korea produced similar results.
But what works in a developing economy may well not work in a developed one. For democrats, social ownership and planning, combined with ever growing computer and internet power, could create a kind of network - rather than bureaucratic - socialism. It's a question of will and imagination. The wonderful thing about labour saving technology is that it frees us to do something else. But that something else does not need to be everyone working in a call centre trying to sell stuff to the minority of people with money. Manufacturing is going the way of agriculture - employing a smaller and smaller number of people as productivity rises and rises. Human services assisted by new technology is the way of the future. Crucially, never have there been so much opportunity for us to spend our energies doing the things that fulfil us, rather than make us miserable. That may even mean bringing back human labour in things like private food production, to remove alienation from the food chain, currently dominated by supermarkets and food giants, and bring us back to nature.
For markets to work well they need rules and controls that prevent predatory behaviour gaming the system for insiders at the expense of everyone else. As Adam Smith once wrote: 'Whenever two or more merchants gather together...it ends up in a conspiracy against the public.' For a period of development from agrarian to urban society, it worked in north America, Europe and north Asia at creating prosperous mostly well run societies.
In countries where 80% of the world lived, capitalism of the crony variety dominated. Colonialism, post colonial dictatorship and other kinds of dictatorship, including Stalinist socialism, reproduced poverty and corruption. But even where the market economy brought rising living standards, capitalism runs into endemic problems. What is efficient for a firm - to employ the optimum number of productive workers, is not efficient for society, particularly in a slump. Unemployment and stagnant wages restrict general consumption, while the 1% capital rich concentrate wealth in their hands but then struggle to find useful ways of investing it. They end up spending stupid amounts on art, wine and Facebook shares.
Asset bubbles are a direct consequence of maldistributed income in a capitalist economy. Each boom is followed by a bust. The growth of the financial sector exacerbates this tendency. A democratically planned economy in which actors are impelled to maximise human welfare, rather than just profits, must be a central part of our future political economy. In China, a planned market economy - mixed with markets - has produced 33 years of unprecedented growth, although China's inequality is now destabilising the system. State-led capitalism in Japan and Korea produced similar results.
But what works in a developing economy may well not work in a developed one. For democrats, social ownership and planning, combined with ever growing computer and internet power, could create a kind of network - rather than bureaucratic - socialism. It's a question of will and imagination. The wonderful thing about labour saving technology is that it frees us to do something else. But that something else does not need to be everyone working in a call centre trying to sell stuff to the minority of people with money. Manufacturing is going the way of agriculture - employing a smaller and smaller number of people as productivity rises and rises. Human services assisted by new technology is the way of the future. Crucially, never have there been so much opportunity for us to spend our energies doing the things that fulfil us, rather than make us miserable. That may even mean bringing back human labour in things like private food production, to remove alienation from the food chain, currently dominated by supermarkets and food giants, and bring us back to nature.
David Cameron like all mainstream politicians is obsessed with efficiency, but in an economy where each worker is highly productive, more efficiency is not necessarily what we need. There is a limit to how much stuff we can consume - we just don't have the time to use or consume more stuff. What we really need to make our lives better is meaningful quality experiences. Markets are not necessarily the best way to provide these. As the saying goes, the best things in life are free. If we start measuring outputs in human welfare terms, instead of money income growth, we can change the whole process of production. How do you measure non-monetary 'growth'? Simple, ask people to measure the benefit themselves and put that into our national statistics. Also by bringing back the 'commons' - ie public, freely available goods - we can return to the comonwealth those things that have been privatised and monetised by capitalism, including money itself. GDP obsession is less than a century old yet it's treated like some kind of talismanic power over us. Once we change what we measure to something more meaningful, it will change how we view our society and how we see ourselves.
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