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ECONOMICS

 

 

 

The word "Economics" comes from two Greek words, oikos and nomos - together meaning "household management".

So Economics deals with how we manage the household of humanity - our planet and its resources.

Today there is only one globalised economic system - an overgrown child of capitalism called consumerism. All other systems of economics have disappeared - even "communist" states like China and Viet Nam have become extreme and exploitative versions of capitalism. Marx and Lenin must be turning in their graves like helicopters.

So, in practice, if we are going to discuss economics, we are discussing the world-wide consumerist system.

If you listen to the latest news on the economy you will hear about the Dow-Jones stock market level; you will hear about the price of oil; you will hear about currencies' strength against the dollar - and so on and so on - you will hear no mention of human beings - no mention of their access to food and clean water, to health care, to education, to housing and to a life in peace and freedom.

Somehow this is not important when we talk about managing our household on this earth.

Why?

It is obvious that this means that the dollar, the stockmarket, oil etc. are more important than people.

 

 

 

 

If economics means household management on a planetary scale, then this is like judging the state of the family in its home by talking about the furniture, pots and pans and bedsheets without mentioning whether the family were happy or not. People are more important than things.

This is not recognized by the global consumerist system.

This is ridiculous - why has it come about?

In English Law there is a Latin phrase, "cui bono?", meaning "who profits?" (from the crime). If we ask this question about Economics the answer is obvious.

 

 

 It profits a rich minority worldwide and it profits developed countries. The gap between rich and poor is growing greater.

Do not ask me to believe that this is by mere chance and that the economy was not organized to enrich the people who run it.

Why is this wrong?

Because the dollar in my pocket is worth nothing unless somebody else wants it because they do not have a dollar in their pocket - it is just a piece of paper - in itself it has no value except for emergency personal hygiene.

It is wrong to run the world with money and goods as the value, rather than human beings who are valuable in themselves - they have an absolute value.

If you doubt this, consider the fact that both you and I, dear reader, are human beings - I think you would argue that your own welfare is important to you. The same applies to me and to the other billions of us living here.

 

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SOVIET COMMUNIST INSANITY

 

Anthony Atherton from Munich made the following comment: 

"What is needed is a discussion about the alternatives and their pros and cons, as well as why systems such as communism failed. The problem is less the system but human beings themselves."  

This raises a lot of problems.  

First - how many alternatives are there? Obviously Communism failed, but had an enormous effect on the world for many years. This needs discussing in depth. 

There are also the many forms of Socialism and Social Democracy, as practised in the various welfare states of Northern Europe and particularly Scandinavia, and though they are under serious threat from the unregulated market and privatisation, they are not dead yet.

There are other systems which have only been tried on a small scale, but could develop into something interesting. We have are own proposals. 

I agree that the problem is human beings themselves - they seem capable, by their greed and lust for power, of driving any economic system into the dust. 

All this requires a lot of thought, so I shall be back to you on this a bit later. 

For the time being, however, let's take note that what passed as Communism in Eastern Europe, Russia, China etc. was not Communism as its originator, Karl Marx, defined it.

He wrote, to paraphrase, that Socialism is an economic system where each citizen contributes according to their abilities, and each is rewarded according to their work; whereas in Communism it is from each according to their abilities and to each according to their needs.

Soviet "Communism" was in fact an authoritarian system of state capitalism ruled by an oligarchy - the Communist Party - and kept in power by state terror. The same applies to the other Communist states - the level of terror varied with time and place. It never worked - if "working" means fulfilling the needs of its citizens. The Soviet state kept going as long as Stalin was alive to scare the daylights out of everyone. Five years in Siberia for being late at work three times does keep people in order. As the terror lessened under his successors, the system collapsed in on itself like a dynamited skyscraper in slow motion.

  

 

Maybe the failure of Communism has something to do with scale - like many other social phenomena.  

For example, there is what is called the "rule of five". This states that the number of people who can have one conversation cannot be more than five - with six or more people, it breaks down into two conversations or into confusion.  

 

There is another rule which states that the ideal and indeed the actual average number of people in a village or tribe or band is about two hundred, known as Dunbar's number - more than that and we cannot know the members of the group personally face-to-face and social cohesion diminishes.   

 

Now, the definition of communism above - from each according to his abilities and to each according to his needs - is a pretty good system in theory. It means that the social group looks after all of those who cannot work enough to provide for their own needs - children, the sick and aged. No one can complain that this is an unjust system. 

Then why did it not work?

 

The smallest human group - the family - is communist, according to the definition above.

The band of hunter gatherers,  always less than two hundred people, is also communistic - no one is allowed to go hungry as the meat and gathered vegetable foods are shared - if you share your meat when you are lucky at the hunt, then tomorrow when you are unlucky you can count on being fed by the successful hunter. 

 

Perhaps communism is only possible in small groups.

By communism we mean the ideal of an economy based upon "from each according to his abilities - to each according to his needs" 

NOT any Soviet or imitation Soviet political system.

We have more to say about this when we come to possible small-scale economic systems. 

Now more on the fall of Soviet "communism".

I am no expert but I think there are a few factors which led to the collapse which are evident:

There is a principle that affects all authoritarian systems - if you are frightened of your boss, you don't tell him the truth. Under Stalin - until 1953, when he died - terror of the boss was absolute, and only got relatively milder - instead of being shot or getting twenty-five years in Siberia you got 10 years or internment in a psychiatric hospital. So making any suggestion that things were not going for the best in the best of all possible worlds was still not a good idea.

The Soviet economy was planned to such a degree that, as late as 1989, the multi-million-dollar salmon catch in Kamchatka rotted in the nets because the trawler captains had to wait for orders from Moscow (6800 km away) to haul the catch aboard. (See Remnick, "Lenin's Tomb" - an excellent picture of the end of the Soviet Union.)

Every decision about the economy had to be taken by the Communist Party "Apparat" the enormous bureaucracy which ruled the country. This bureaucracy was universally corrupt; it was also appointed from above - ultimately by Stalin himself - and thus accountable to no one except the Boss and his bullyboys and executioners, the secret police.

All industry had been nationalized, and was thus ruled by bureaucrats. Even more disastrously, so had all of agriculture, where the peasants had been deprived of their land and moved into gigantic communes, run by the same bureaucracy.

 

 

This lead to insanity like tractor drivers being paid by the mile rather than by crops planted or harvested. Agricultural workers were paid by the day, with no relation to productivity - they were paid a pittance, anyway, like everyone else, leading to the proverb, "They pretend to pay us, we pretend to work". The farm bureaucrat would report bumper harvests to the ministry in Moscow and would be rewarded with medals and privileges. The peasants were eventually granted tiny plots on which they could grow their own food - and worked very hard, producing lots of food which was sold on the black market. The communally-owned land produced almost nothing. It made no difference to anybody, anyway, they still pretended to pay them.

So record harvests would be reported all the way up the line; everyone was promoted and rewarded for "over-fulfilling the norm" (the production target set by the central plan). Inspectors supposed to check up on this were bribed to keep quiet.

 

This surreal situation really got going after Stalin's death when people stopped being terrified of death or Siberia and corruption had no restraint.

So, all statistics were false, and all plans made on the basis of the false information received became more and more divorced from reality and thus further plans became more and more unreal. The Soviet system ground itself slowly into the ground until even the bureaucracy realized that change was needed. The final collapse was rapid.

What can be learned from this?

1) The citizens must profit if the economic system works well and peoples' needs are satisfied. They must lose if it does not work well.

2) An economy is a self-correcting cybernetic system - there must be constant feedback of information and correction of malfunctions at all levels of responsibility - from the government to the citizen and back again.

3) Large economic systems are too complex to be centralized. Decision-making must be shared between the grass-roots level of individual factories and local government and the highest levels where whole industries are managed.

  

These are just tentative ideas about the decay of Soviet "Communism" - they may need to be changed and certainly added to.

Any questions, suggestions or criticisms?

 

 

A GENERAL STATEMENT ABOUT ECONOMICS

There is a subtle dialectical relationship which must be respected - the relationship between the good of each individual and the good of the economy as a whole. A balance must be preserved where neither good is favoured over the other.

 

 

 

NOW, AS YOU PROBABLY REALIZE, I AM NOT A COMPETENT ECONOMIST AND CANNOT EXPLAIN THE MECHANICS OF ECONOMICS AS THEY EXIST TODAY.

IF YOU ARE INTERESTED, READ BELOW WHAT ANTHONY ATHERTON, OUR WEBSITE I.T. EDITOR HAS PRODUCED:

 

Rolesia.com includes a free, fun and strategic economy web simulation for all who enjoy strategy economy games or simulations, and for all wishing to discover and understand the policy tools on offer to Governments and Central Banks around the world. The purpose of the software is to help the world-wide population understand the complexity of the world economy, and also to understand the power behind governments’ fiscal and the central banks’ economic monetary policies. Helping to improve the world population’s knowledge is a small contribution towards empowering the people of this planet and strengthening democracy. The simulation can be perceived as an economy game based on a virtual economy. 

Anthony Atherton

URL: www.rolesia.com

 

 

NOW, AN EXAMPLE OF CONSUMERIST INSANITY

 

FROM THE GUARDIAN:

Half of all US food produce is thrown away, new research suggests

 

 

The demand for ‘perfect’ fruit and veg means much is discarded, damaging the climate and leaving people hungry 

Americans throw away almost as much food as they eat because of a “cult of perfection”, deepening hunger and poverty, and inflicting a heavy toll on the environment. 

Vast quantities of fresh produce grown in the US are left in the field to rot, fed to livestock or hauled directly from the field to landfill, because of unrealistic and unyielding cosmetic standards, according to official data and interviews with dozens of farmers, packers, truckers, researchers, campaigners and government officials. 

From the fields and orchards of California to the population centres of the east coast, farmers and others on the food distribution chain say high-value and nutritious food is being sacrificed to retailers’ demand for unattainable perfection. 

“It’s all about blemish-free produce,” says Jay Johnson, who ships fresh fruit and vegetables from North Carolina and central Florida. “What happens in our business today is that it is either perfect, or it gets rejected. It is perfect to them, or they turn it down. And then you are stuck.” 

Globally, about one-third of food is wasted: 1.6bn tonnes of produce a year, with a value of about $1tn. If this wasted food were stacked in 20-cubic metre skips, it would fill 80m of them, enough to reach all the way to the moon, and encircle it once.

 

Most modern, large scale economies - that is to say the economies of nation-states - are somewhere between full socialism and free-market capitalism. Here are a couple of diagrams that are more or less correct and interesting.

 

 

 

  

 

SOME MORE ON GLOBALIZED ECONOMICS

 

Anthony Atherton from Munich made the following comment: 

"What is needed is a discussion about the alternatives and their pros and cons, as well as why systems such as communism failed. The problem is less the system but human beings themselves."  

This raises a lot of problems.  

 First - how many alternatives are there? Obviously Communism failed, but had an enormous effect on the world for many years.This needs discussing in depth. 

 There are also the many forms of Socialism and Social Democracy, as practised in the various welfare states of Northern Europe and particularly Scandinavia, and though they are under serious threat from the unregulated market and privatisation, they are not dead yet.

There are other systems which have only been tried on a small scale, but could develop into something interesting. We have are own proposals. 

I agree that the problem is human beings themselves - they seem capable, by their greed and lust for power, of driving any economic system into the dust. 

 All this requires a lot of thought, so I shall be back to you on this a bit later. 

 For the time being, however, let's take note that what passed as Communism in Eastern Europe, Russia, China etc. was not Communism as its originator, Karl Marx, defined it. 

He wrote, to paraphrase: Socialism is an economic system where each citizen contributes according to their abilities, and each is rewarded according to their work; whereas Communism is from each according to their abilities and to each according to their needs.

 

Soviet "Communism" was in fact an authoritarian system of state capitalism ruled by an oligarchy - the Communist Party - and kept in power by state terror. The same applies to the other Communist states - the level of terror varied with time and place. It never worked - if "working" means fulfilling the needs of its citizens. The Soviet state kept going as long as Stalin was alive to scare the daylights out of everyone. Five years in Siberia for being late at work does keep people in order. As the terror lessened under his successors, the system collapsed in on itself like a dynamited skyscraper in slow motion.

 

More later.

 

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ALTERNATIVE SYSTEMS

 

There are four primary types of economic systems in the world: traditional, command, market and mixed.

 

Economic Anthropology: Systems of Exchange Reciprocity, Redistribution, Market Transactions

Distribution-exchange relations: once produced, goods and services must be distributed

Three ways by which goods are distributed:

  1. Reciprocity: direct exchange of goods and services
  2. Redistribution: a flow of goods and services to central authority, which are then returned in a different form
  3. Market exchange: buying and selling through a price mechanism

 

 

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From the Guardian, JULY 21, 2016

 

By Martin Jaques

 

The western financial crisis of 2007-8 was the worst since 1931, yet its immediate repercussions were surprisingly modest. The crisis challenged the foundation stones of the long-dominant neoliberal ideology but it seemed to emerge largely unscathed. The banks were bailed out; hardly any bankers on either side of the Atlantic were prosecuted for their crimes; and the price of their behaviour was duly paid by the taxpayer. Subsequent economic policy, especially in the Anglo-Saxon world, has relied overwhelmingly on monetary policy, especially quantitative easing. It has failed. The western economy has stagnated and is now approaching its lost decade, with no end in sight.

 

After almost nine years, we are finally beginning to reap the political whirlwind of the financial crisis. But how did neoliberalism manage to survive virtually unscathed for so long? Although it failed the test of the real world, bequeathing the worst economic disaster for seven decades, politically and intellectually it remained the only show in town. Parties of the right, centre and left had all bought into its philosophy, New Labour a classic in point. They knew no other way of thinking or doing: it had become the common sense. It was, as Antonio Gramsci put it, hegemonic. But that hegemony cannot and will not survive the test of the real world.

 

The first inkling of the wider political consequences was evident in the turn in public opinion against the banks, bankers and business leaders. For decades, they could do no wrong: they were feted as the role models of our age, the default troubleshooters of choice in education, health and seemingly everything else. Now, though, their star was in steep descent, along with that of the political class. The effect of the financial crisis was to undermine faith and trust in the competence of the governing elites. It marked the beginnings of a wider political crisis.

 

But the causes of this political crisis, glaringly evident on both sides of the Atlantic, are much deeper than simply the financial crisis and the virtually stillborn recovery of the last decade. They go to the heart of the neoliberal project that dates from the late 70s and the political rise of Reagan and Thatcher, and embraced at its core the idea of a global free market in goods, services and capital. The depression-era system of bank regulation was dismantled, in the US in the 1990s and in Britain in 1986, thereby creating the conditions for the 2008 crisis. Equality was scorned, the idea of trickle-down economics lauded, government condemned as a fetter on the market and duly downsized, immigration encouraged, regulation cut to a minimum, taxes reduced and a blind eye turned to corporate evasion.

 

It should be noted that, by historical standards, the neoliberal era has not had a particularly good track record. The most dynamic period of postwar western growth was that between the end of the war and the early 70s, the era of welfare capitalism and Keynesianism, when the growth rate was double that of the neoliberal period from 1980 to the present.

 

But by far the most disastrous feature of the neoliberal period has been the huge growth in inequality. Until very recently, this had been virtually ignored. With extraordinary speed, however, it has emerged as one of, if not the most important political issue on both sides of the Atlantic, most dramatically in the US. It is, bar none, the issue that is driving the political discontent that is now engulfing the west. Given the statistical evidence, it is puzzling, shocking even, that it has been disregarded for so long; the explanation can only lie in the sheer extent of the hegemony of neoliberalism and its values.

 

But now reality has upset the doctrinal apple cart. In the period 1948-1972, every section of the American population experienced very similar and sizable increases in their standard of living; between 1972-2013, the bottom 10% experienced falling real income while the top 10% did far better than everyone else. In the US, the median real income for full-time male workers is now lower than it was four decades ago: the income of the bottom 90% of the population has stagnated for over 30 years.

 

A not so dissimilar picture is true of the UK. And the problem has grown more serious since the financial crisis. On average, between 65-70% of households in 25 high-income economies experienced stagnant or falling real incomes between 2005 and 2014.

 

Large sections of the population in both the US and the UK are now in revolt against their lot

 

The reasons are not difficult to explain. The hyper-globalisation era has been systematically stacked in favour of capital against labour: international trading agreements, drawn up in great secrecy, with business on the inside and the unions and citizens excluded, the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) being but the latest examples; the politico-legal attack on the unions; the encouragement of large-scale immigration in both the US and Europe that helped to undermine the bargaining power of the domestic workforce; and the failure to retrain displaced workers in any meaningful way.

 

As Thomas Piketty has shown, in the absence of countervailing pressures, capitalism naturally gravitates towards increasing inequality. In the period between 1945 and the late 70s, Cold War competition was arguably the biggest such constraint. Since the collapse of the Soviet Union, there have been none. As the popular backlash grows increasingly irresistible, however, such a winner-takes-all regime becomes politically unsustainable.

 

Large sections of the population in both the US and the UK are now in revolt against their lot, as graphically illustrated by the support for Trump and Sanders in the US and the Brexit vote in the UK. This popular revolt is often described, in a somewhat denigratory and dismissive fashion, as populism. Or, as Francis Fukuyama writes in a recent excellent essay in Foreign Affairs: “‘Populism’ is the label that political elites attach to policies supported by ordinary citizens that they don’t like.” Populism is a movement against the status quo. It represents the beginnings of something new, though it is generally much clearer about what it is against than what it is for. It can be progressive or reactionary, but more usually both.

 

Brexit is a classic example of such populism. It has overturned a fundamental cornerstone of UK policy since the early 1970s. Though ostensibly about Europe, it was in fact about much more: a cri de coeur from those who feel they have lost out and been left behind, whose living standards have stagnated or worse since the 1980s, who feel dislocated by large-scale immigration over which they have no control and who face an increasingly insecure and casualised labour market. Their revolt has paralysed the governing elite, already claimed one prime minister, and left the latest one fumbling around in the dark looking for divine inspiration.

 

The wave of populism marks the return of class as a central agency in politics, both in the UK and the US. This is particularly remarkable in the US. For many decades, the idea of the “working class” was marginal to American political discourse. Most Americans described themselves as middle class, a reflection of the aspirational pulse at the heart of American society. According to a Gallup poll, in 2000 only 33% of Americans called themselves working class; by 2015 the figure was 48%, almost half the population.

 

Brexit, too, was primarily a working-class revolt. Hitherto, on both sides of the Atlantic, the agency of class has been in retreat in the face of the emergence of a new range of identities and issues from gender and race to sexual orientation and the environment. The return of class, because of its sheer reach, has the potential, like no other issue, to redefine the political landscape.

 

The working class belongs to no one: its orientation, far from predetermined, is a function of politics

 

The re-emergence of class should not be confused with the labour movement. They are not synonymous: this is obvious in the US and increasingly the case in the UK. Indeed, over the last half-century, there has been a growing separation between the two in Britain. The re-emergence of the working class as a political voice in Britain, most notably in the Brexit vote, can best be described as an inchoate expression of resentment and protest, with only a very weak sense of belonging to the labour movement.

 

Indeed, Ukip has been as important – in the form of immigration and Europe – in shaping its current attitudes as the Labour party. In the United States, both Trump and Sanders have given expression to the working-class revolt, the latter almost as much as the former. The working class belongs to no one: its orientation, far from predetermined, as the left liked to think, is a function of politics.

 

The neoliberal era is being undermined from two directions. First, if its record of economic growth has never been particularly strong, it is now dismal. Europe is barely larger than it was on the eve of the financial crisis in 2007; the United States has done better but even its growth has been anaemic. Economists such as Larry Summers believe that the prospect for the future is most likely one of secular stagnation.

 

Worse, because the recovery has been so weak and fragile, there is a widespread belief that another financial crisis may well beckon. In other words, the neoliberal era has delivered the west back into the kind of crisis-ridden world that we last experienced in the 1930s. With this background, it is hardly surprising that a majority in the west now believe their children will be worse off than they were. Second, those who have lost out in the neoliberal era are no longer prepared to acquiesce in their fate – they are increasingly in open revolt. We are witnessing the end of the neoliberal era. It is not dead, but it is in its early death throes, just as the social-democratic era was during the 1970s.

 

A sure sign of the declining influence of neoliberalism is the rising chorus of intellectual voices raised against it. From the mid-70s through the 80s, the economic debate was increasingly dominated by monetarists and free marketeers. But since the western financial crisis, the centre of gravity of the intellectual debate has shifted profoundly. This is most obvious in the United States, with economists such as Joseph Stiglitz, Paul Krugman, Dani Rodrik and Jeffrey Sachs becoming increasingly influential. Thomas Piketty’s Capital in the Twenty-First Century has been a massive seller. His work and that of Tony Atkinson and Angus Deaton have pushed the question of the inequality to the top of the political agenda. In the UK, Ha-Joon Chang, for long isolated within the economics profession, has gained a following far greater than those who think economics is a branch of mathematics.

 

Meanwhile, some of those who were previously strong advocates of a neoliberal approach, such as Larry Summers and the Financial Times’s Martin Wolf, have become extremely critical. The wind is in the sails of the critics of neoliberalism; the neoliberals and monetarists are in retreat. In the UK, the media and political worlds are well behind the curve. Few recognise that we are at the end of an era. Old attitudes and assumptions still predominate, whether on the BBC’s Today programme, in the rightwing press or the parliamentary Labour party.

 

....................

 

Dramatic as events have been in the UK, they cannot compare with those in the United States. Almost from nowhere, Donald Trump rose to capture the Republican nomination and confound virtually all the pundits and not least his own party. His message was straightforwardly anti-globalisation. He believes that the interests of the working class have been sacrificed in favour of the big corporations that have been encouraged to invest around the world and thereby deprive American workers of their jobs. Further, he argues that large-scale immigration has weakened the bargaining power of American workers and served to lower their wages.

 

He proposes that US corporations should be required to invest their cash reserves in the US. He believes that the North American Free Trade Agreement (Nafta) has had the effect of exporting American jobs to Mexico. On similar grounds, he is opposed to the TPP and the TTIP. And he also accuses China of stealing American jobs, threatening to impose a 45% tariff on Chinese imports.

 

To globalisation Trump counterposes economic nationalism: “Put America first”. His appeal, above all, is to the white working class who, until Trump’s (and Bernie Sander’s) arrival on the political scene, had been ignored and largely unrepresented since the 1980s. Given that their wages have been falling for most of the last 40 years, it is extraordinary how their interests have been neglected by the political class. Increasingly, they have voted Republican, but the Republicans have long been captured by the super-rich and Wall Street, whose interests, as hyper-globalisers, have run directly counter to those of the white working class. With the arrival of Trump they finally found a representative: they won Trump the Republican nomination.

 

Trump believes that America’s pursuit of great power status has squandered the nation’s resources

 

The economic nationalist argument has also been vigorously pursued by Bernie Sanders, who ran Hillary Clinton extremely close for the Democratic nomination and would probably have won but for more than 700 so-called super-delegates, who were effectively chosen by the Democratic machine and overwhelmingly supported Clinton. As in the case of the Republicans, the Democrats have long supported a neoliberal, pro-globalisation strategy, notwithstanding the concerns of its trade union base. Both the Republicans and the Democrats now find themselves deeply polarised between the pro- and anti-globalisers, an entirely new development not witnessed  since the shift towards neoliberalism under Reagan almost 40 years ago.

 

Another plank of Trump’s nationalist appeal – “Make America great again” – is his position on foreign policy. He believes that America’s pursuit of great power status has squandered the nation’s resources. He argues that the country’s alliance system is unfair, with America bearing most of the cost and its allies contributing far too little. He points to Japan and South Korea, and Nato’s European members as prime examples.He seeks to rebalance these relationships and, failing that, to exit from them.

 

As a country in decline, he argues that America can no longer afford to carry this kind of financial burden. Rather than putting the world to rights, he believes the money should be invested at home, pointing to the dilapidated state of America’s infrastructure. Trump’s position represents a major critique of America as the world’s hegemon. His arguments mark a radical break with the neoliberal, hyper-globalisation ideology that has reigned since the early 1980s and with the foreign policy orthodoxy of most of the postwar period. These arguments must be taken seriously. They should not be lightly dismissed just because of their authorship. But Trump is no man of the left. He is a populist of the right. He has launched a racist and xenophobic attack on Muslims and on Mexicans. Trump’s appeal is to a white working class that feels it has been cheated by the big corporations, undermined by Hispanic immigration, and often resentful towards African-Americans who for long too many have viewed as their inferior.

 

A Trump America would mark a descent into authoritarianism characterised by abuse, scapegoating, discrimination, racism, arbitrariness and violence; America would become a deeply polarised and divided society. His threat to impose 45% tariffs on China, if implemented, would certainly provoke retaliation by the Chinese and herald the beginnings of a new era of protectionism.

 

Trump may well lose the presidential election just as Sanders failed in his bid for the Democrat nomination. But this does not mean that the forces opposed to hyper-globalisation – unrestricted immigration, TPP and TTIP, the free movement of capital and much else – will have lost the argument and are set to decline. In little more than 12 months, Trump and Sanders have transformed the nature and terms of the argument. Far from being on the wane, the arguments of the critics of hyper-globalisation are steadily gaining ground. Roughly two-thirds of Americans agree that “we should not think so much in international terms but concentrate more on our own national problems”. And, above all else, what will continue to drive opposition to the hyper-globalisers is inequality.

 

 

SOME ALTERNATIVE ECONOMIC SYSTEMS

 

We have already mentioned how the idea of scale seems to be important when we discuss economics: on the one hand, some ideas, like communism, only seem to work on a small scale; on the other hand the world globalized economic system is too large to be dealt with by the governments of nation states which only regulate the economy within their limited borders, rather than across the whole planet. More on this later.

The globalized capitalist or post-capitalist is the only one now in existence on a large scale.

On a small scale, however, we have many examples of different ways of managing an economy, most of them drawn from non-Western societies. We shall try and describe a few in a very sketchy way, just so as to open our eyes to the different ways you can do it.

 

FROM THE GUARDIAN

 I think that strength comes only from admitting defeat, or the full extent of the crisis in which we're in. We have to become aware, finally, that the 20th century is over. All 20th century answers to capitalism no longer really work. With regard to Stalinist communism, it's a supreme ironic fact that where today communists still in power, they are the most efficient ruthless managers of capitalism. The ideal place to be a capitalist is China: they control trade unions and guarantee workers will not rebel.

Unfortunately I think the era of social democratic welfare state is over - it is only possible in strong nation states. But today with the free global flow of capital, it's almost impossible for a nation state to guarantee the condition for universal welfare. Then as I already said, I think the appeals to grassroots democracy don't work.

 

But this is not all the truth. There are multiple signs that something new is possible. Let me conclude with one example. Free downloading. Aren't we almost entering communism there? Even DVDs are disappearing. I think capitalism will not be able to integrate so-called intellectual property. Intellectual achievements are in their very nature communists, able to circulate freely. And this free availability of products is already opening up a non-capitalist space, even if it is the product of the most advanced capitalism. Again, just look for the signs. There are signs of an alternative. We just have to be patient and wait. We should act, but not in the old Marxist way that we are instruments of higher historical necessity. We should fight all our struggles, against sexism here, racism there, and so on. But we should nonetheless keep open a sense of risk. There is always a mystery in political activity. You think you are engaged in a big project and nothing comes out of it. But often you make just a small demand, and if you insist on it, everything changes. We cannot master in advance the consequences of our acts. We should act and keep our mind open.

 

So let me finish with a militaristic phrase from Napoleon: on attack, then we shall see. That should be our motto.

 

 

REDISTRIBUTION IN SWAT

In Swat, now part of Pakistan, we had one of the few examples of a Muslim caste society. In each village there were landowners, Muslim clergy, artisans such as blacksmiths, leather workers etc. and a large majority of agricultural labourers.

This was not a money-based economy - no-one was paid for their services - the cart-maker made carts; the blacksmith made tools; the peasants worked the land - either their own and that of the landlords and so on.

The measure of wealth was not money but wheat - the staple food. (Of course money was used to some extent - particularly for purchasing goods not available locally).

What happened was, after the wheat harvest there was a harvest festival and all the villagers assembled in a huge circle around the piles of wheat that had been harvested.

Then, one by one, all the wheat producers would go to their heap of grain and distribute measures of grain to the other villagers: so many measures to the landlord as rent; so many measures to the blacksmith; so many to the midwife, to the cloth-weaver, etc. In this way everyone received enough to live - even if they were not producing wealth (wheat) directly.


Whether this was fair or not is not the point - it is an interesting system, we think.

 

 

 TRADITIONAL BURMESE REDISTRIBUTION

In Myanmar (ex-Burma), before the British Empire took over, there was a system based upon fairly isolated villages with an economy based on wet-rice production, which produces, in a good year, a large surplus of grain.

It was - and is - a predominately Buddhist society, based upon the sangha, or monastic order of celibate monks who lived by begging. Every village or group of villages would have a Buddhist temple or shrine served by the monks. These shrines played a central role in the economic and social system.

All young men spent one year as a monk; some of them remained monks all their lives. As they were celibate, this helped to prevent rapid population growth.

Rich men, in order to gain religious merit, would contribute to the village temple; sometimes sacks of rice, sometimes gold leaf which would gild the dome of the temple or the statue of the Buddha.

The monks would provide schooling to the village children.

They would provide for the old and infirm from the donations to the temple.

The monks owned no possessions themselves, except a bedding mat, a staff and a begging bowl.

When there was a bad harvest the gold leaf could be scraped off the dome or the Buddha statue to buy rice.

This could also be used to pay off the central government when necessary.

 

Both of these descriptions are sketchy and idealized - they are just meant to stimulate the imagination and make us realize that there are many alternative ways of managing an economy.