Public debate on capitalism: what happened and what I learnt
You may remember that I was invited to take part in a public debate in London recently (see here) about whether capitalism is ‘the best system for a sustainable future’. I was asked to deliver the ‘no’ position.
The event was organised by Transition Town Tooting, who had lined up Oli Griffiths to speak in favour of capitalism. I think they want to set up a series of debates upstairs in pubs in Tooting, and this was the first – a big subject to get things going. I guess there were 50-ish people in the room when the debate started. Oli and I both had 7 minutes to state our cases, and then 5 minutes to refute the points that our opponent had made. Then it was questions from the audience, then summing up, and then to the bar. At the end, there was a vote and the majority supported my position. That didn’t mean that I won, however. The winner was the one who had persuaded more people to change their mind. Unfortunately, the organisers forgot to take a vote before the debate, so we’ll never know the answer to that one.
Below is my (completely biased) account of what happened. The main points for me were that we had a very different opinion on economic growth and on the speed at which an alternative economy can be built. Oli believes that economic growth can be disconnected from the material world, and I don’t; and he believes that it will be more fruitful to regulate and reform capitalism than to build alternatives, and I don’t. But it became clear that Oli doesn’t oppose the kind of alternatives I have in mind, and so ultimately, I don’t consider him to be in opposition to my position. Our differences were only in the details.
I also want to say that I think these kinds of public debates are a great idea, and we should have more of them. The debate continued in the bar afterwards, and most people were buzzing. I learnt some very interesting things, met some great people and had a very stimulating evening.
Can capitalists be effectively regulated?
Oli’s position was very familiar – effectively, ‘look at all the goodies that capitalism has given us’. He understood that we’ve now come to a position where we’re damaging ecology so much that we should start to be worried and to talk seriously about what we’re going to do about it.
However, his idea of talking seriously about it was that we can regulate capitalism so that it doesn’t damage ecology any more. That to me demonstrates a profound ignorance of where power lies in capitalism. I’ve talked with many scientists, actually, who although really intelligent, seem to believe that there are institutions that can effectively regulate multinational corporations. If your country’s government doesn’t roll out the red carpet for multinational corporations, your country will suffer financially. Do it too vehemently and your country will be invaded. If you’re too engrossed in science to understand that, then maybe you should concentrate on science, rather than political philosophy.
I was disappointed – I thought the debate would be on a deeper level than it turned out. I assumed that he’d understand the dangers associated with the damage we are causing to nature, and he did. But I also assumed that he’d understand that if we’re going to stop that damage, we can’t have an economy that has to grow forever – but I assumed wrongly. He didn’t see this at all. I was looking forward to debating whether capitalism could be stabilised, but he didn’t see the need for it, and this is his crucial mistake. Oli, and all other ‘eco-modernists’ or ‘techno-utopians’ are very, very, dangerously wrong in this respect.
Can capitalism be stabilised?
I opened by stressing that I’m not a communist. Lots of people only see one alternative to capitalism. I then thanked capitalism for the things that it’s brought us – but that’s no reason to keep it. The British Raj gave India railways, and India sensibly kept the railways but dumped the Raj.
When I pointed out that economic growth always generates extra spending power, and there is no mechanism to ring-fence that additional spending power so that it’s not spent on material things, and increasing consumption of material things is what’s going to kill us, his response was that people won’t necessarily use their extra growth-fuelled spending power to buy material things – they’re more likely to spend it on experiences.
This I think was his weakest point, for three reasons:
- In his future scenario, the income of people working in ‘experiences’ industries will increase hugely; then they too will have to avoid purchasing material things, and spend it on experiences themselves, and so on. Really?
- If we look at the lifestyles of sports stars, celebrities, lottery winners etc, we can see that they involve mansions, second and third homes, swimming pools, several cars, huge wardrobes, and, if wealthy enough, private jets, helicopters etc. How many young people aspire to the lifestyles of the rich and famous? I don’t know – 60%? 70? 80?
- Even if all the extra spending power brought about by growth is spent on experiences, can those experiences be delivered without electricity, offices, computers, cars, flights, fuel etc?
Growth in the real world always, always, increases material consumption. It’s unavoidable, and that’s the real killer. We have to stabilise the global economy, otherwise all our attempts to combat environmental destruction will come to nothing.
Can this economy be made sustainable? Of course not – it has to grow cancerously, and anyone who thinks our growth can somehow avoid the material world is fooling themselves, for various reasons. I can’t speak for Oli, but the options are:
- they’re scared of what happened in the 20th century with planned economies – in which case I share their concerns;
- they have a vested financial interest in this system – certainly the UK has many people who fit that description;
- they’re really unimaginative;
- they don’t understand the question.
My argument is really simple: capitalism can never be sustainable because it has to grow forever – investors always want a return on their investments; we’re bombarded with advertising persuading us to consume more; plus all governments implement policies intended to stimulate more growth. Unless we stabilise the economy, we’re finished as a species; but stabilisation isn’t possible in capitalism.
Can capitalism be democratic? The way you answer this question will depend on where you think power is. If you think it’s with governments, then you’ll think it can. If you think it’s with money, then you won’t think it can.
I’ve had this conversation with bankers and with teenagers on Midands council estates, and almost everyone understands that power is with money. It’s always been the same. Those who have the most wealth in any society will find some way to buy power. In the past it’s been via the ownership and control of enough land to feed the biggest army. Today, it’s via political donations, jobs for politicians, the lobby industry and ownership of the media – amongst other things, but those are probably the most significant.
Capitalism concentrates wealth, and this wealth flows into the political system, which puts the corporate sector in control and destroys democracy.
A new economy?
Some businesses just exist to provide a service and pay wages – and that’s it, rather than extracting profit for owners. So that’s self-employed people, worker co-ops, credit unions, community energy and community-supported food schemes, housing co-ops, building societies, community land trusts, and throw in some free and open source stuff like Linux, commons things like Wikipedia, and soon-to-arrive platform co-ops, and we have the beginnings of a new economy. We can also include small, for-profit businesses, as preferable to the corporate sector, because they keep wealth in communities more – but they’d be encouraged to co-operativise, because otherwise they’ll be looking to open new branches, take on more people, and before you know it, you’ve got another corporation.
Is this another form of capitalism? No it isn’t, because its constituent institutions are democratic – totally unlike capitalism. And it doesn’t have to constantly grow, as there are no external shareholders demanding a return on their investments. Community shares exist, but the percentage that you can own is limited, interest is limited and they’re not tradable – they’re redeemable for the same price that was paid for them. So the non-corporate economy doesn’t concentrate wealth. Therefore, if we could grow this non-corporate economy until it replaces capitalism (which is exactly what I’m advocating), that would be a very good thing, imho.
This non-corporate economy, that shuns multinational corporations, is sometimes called the Solidarity Economy. This is the term I used consistently in the debate, but I’m not so sure how well it works. Several times I’ve had a negative reaction to it – and the usual objection is that it sounds extreme left (as well as eastern European). So I don’t know – but in the meantime, I’ll use the term ‘non-corporate economy’.
Now here’s the interesting thing – Oli has been, and possibly still is, involved with community energy and community-supported agriculture schemes. He’s in no way an opponent when it comes to the non-corporate economy.
I ended up talking with a group of ex-derivatives traders and city boys in the bar afterwards, who had come specifically to barrack me. They were surprised when I wasn’t a statist. One said he was a libertarian, and he got the feeling I was too. I said maybe I was a step further than the kind of libertarianism he was talking about, where it’s not ok to be told what to do by the state, but it’s ok to be told what to do by a boss. He asked if I was an anarchist, and I said probably. He said he was attracted to anarchist philosophy and was looking into it. They certainly weren’t opposed to the non-corporate economy, but questioned whether it was a different system (it is – see above).
What I learnt: don’t mention the ‘C’ word
So capitalism has to go. But the bad news is that saying this isn’t in the Overton Window (yet), in the same way that anarchism isn’t. However, the good news is that we don’t have to say it (and possibly make enemies), because if we keep promoting the non-corporate economy (with no limit to its size – after all, when would the people working in the non-corporate economy want it to stop growing?), and keep making the case that perpetual growth is impossible on a finite planet, then it becomes pretty clear that we’re ultimately looking for alternatives to capitalism.
So here are the most important things I learnt from this experience:
- Pro-capitalists genuinely believe that we can grow the economy forever; they don’t begin to understand that it can only end in disaster; the question is never addressed within economics or technology, and ecologists seem to be sidelined, as their message threatens both profits and the status quo.
- We can’t build a sustainable, democratic economy until and unless its components are themselves sustainable (i.e. don’t have to perpetually grow) and democratic.
- This can all be said without being ‘anti’ anything. If the economy can’t grow forever, then we have to find something that doesn’t have to constantly grow, to replace it with; and this is the non-corporate economy.
- Never assume anything. I thought the debate would be on a different level, and I was wrong. Oli sent an email later, about HSBC promising to end its financing of coal-fired power stations; yes, that sort of thing can buy us time – but ultimately the big question is whether capitalism can be stablilised (and it can’t).
Can it actually happen? Well, capitalism grew in the cracks in feudalism – the first money-lenders and itinerant merchants were not the most respected members of society, and any suggestion that they would rise to take power from monarchs and the church would have been met with ridicule. Now the non-corporate economy is growing in the cracks in capitalism. Let’s see.
If Oli et al want to try to regulate capitalism, then let them go for it. Oli believes that trying to build the non-corporate economy will be too slow, whereas I think trying to regulate / reform capitalism is a slower task (impossible if I’m really honest) than trying to build the non-corporate economy. And as he is a member of community energy and CSA schemes, let’s just do it anyway and see what happens. I now in no way see Oli as an opponent. If it looks as though the non-corporate economy might save us, then yay. And if capitalism looks like it can be reined in, then at the very least, that will buy us time.
The views expressed in our blog are those of the author and not necessarily lowimpact.org's
1veganollie May 22nd, 2018
Interesting idea. I’ve not heard of the non corporate economy before. I can’t imagine how it could reduce the damage of capitalism. I don’t think I understand it. Grateful for any other info you have on it. I like your suggestion that it could grow in the cracks and save us.
2Dave Darby May 22nd, 2018
Hi – it reduces ecological damage because it doesn’t have to constantly grow to satisfy shareholders. That’s the key thing. More info here – https://www.lowimpact.org/next-system-will-solidarity-economy-mutual-credit-exchange-system/. Plus (just between you and me), we’re converting to a co-op (a classic non-corporate business model) and launching a sister site soon (as in, hopefully this week) that will help you switch. We’ll blog about it when it launches, but here’s a sneak preview – https://www.noncorporate.org/
3Steve Gwynne May 22nd, 2018
Great stuff and very clear ?.
You might be interested to know that there is a growing body of economists who now see capitalism within advanced economies as being at peak prosperity or post growth in that it is only cheap credit and QE that is currently sustaining advanced capitalism. As such there is no real or organic growth hence prosperity for the many is now receding and also we are rapidly heading for the great financial crash 2.0. Currently these economists see central banks as being the most significant actors at present since it is their actions that is stopping the capitalist system from crashing.
See reference within
Also see his most recent blog.
Also these are saying pretty much the same thing regarding peak prosperity https://www.peakprosperity.com/crashcourse
This I found interesting regarding a more nuanced take on the need for attitudinal changes for the great transition to take place.
Where Are We Going? The 40 Shades of Gray.
The Human Predicament
Lastly Voluntary Simplicity: Strongly Backed by All Three Main Ethical-Normative Traditions’ has just been published in the peer-reviewed journal, Ethical Perspectives. Authored by Samuel Alexander, Jacob Garrett and Rupert Read, the essay is available below:
Look forward to more of the same. Perhaps with a politician. Cheers.
4Dave Darby May 22nd, 2018
Fascinating stuff – thank you
5Peter Sharp May 22nd, 2018
The key to controlling the excesses of capitalism is to remove the incentives for unlimited capital accumulation (greed). One way to do that is to limit personal incomes to a multiple of the median income — perhaps 10 times the median — by passing an Income and Assets Amendment to the Constitution. (The median personal income in the US is about $36,000 at present, so the maximum annual income would be $360,000.) Plus, personal assets would be limited to some reasonable amount — perhaps $10 million — so as to limit the excessive accumulation of property and possessions while insuring an adequate retirement income. Any amount beyond those limits would be taxed at 100%.
That puts everybody into the same boat. It turns the entire country into a new kind of national cooperative. The wealthy people then have a huge incentive to raise the median income because it benefits them 10 times as much for each dollar increase in the median income. Solving the problems of poverty, education, crime, etc. become high priorities for the wealthy as ways to increase the median income. At the same time, the wealthy are motivated to reduce excessive material consumption because they can no longer afford it, and to substitute affordable forms of luxury to broadcast their social status, such as support of the arts and civic improvements.
Corporations would no longer be motivated to pursue unlimited growth because stockholders — most stocks are owned by the wealthy — would not benefit. Excess personal profits from owning or trading stocks would simply go to the government. Stockholders would then prefer investments that were low risk instead of high gain.
A second, Personal Responsibility Amendment to the Constitution would address the issue of corporations damaging the environment. Stockholders currently are not motivated to protect the environment because corporate law exempts them from liability — other than the loss of the value of their stock. So this Amendment would be a “deep pockets” rule to hold stockholders liable — without any financial limit, or any protection from criminal prosecution — for any and all environmental damage done by the corporations in which they have invested.
We would immediately see a huge shift away from investments in fossil fuels and into renewable energy, and into clean manufacturing and recycling. Investors would support only new ventures that carefully considered how to protect and preserve the environment because those would be the least risky investments to make. At present, investors look for the highest returns in the shortest time because they assume that, if they can become rich, they will be able to protect themselves from whatever calamities may befall the rest of us. They seek to make themselves invulnerable to those calamities, and in the process of doing so they move us closer toward those calamities.
Capitalism should not be confused with Corporate Capitalism like ours, or State Capitalism like what existed in the USSR, or a mixed State and Corporate Capitalism as currently exists in China. Capitalism can be constructed in a multitude of ways. Even if all businesses were organized as cooperatives, they would still need sources of capital, and people would still need to borrow money (capital) to buy homes. The rules for lending money are determined by the wealthy for the benefit of the wealthy. But when we are all in the same boat, the motivation for usury is greatly reduced.
Our current Corporate Democracy is not sustainable. The gains in productivity go almost completely to the richest stockholders, who then finance elections and lobbying to further increase their own power over the rest of us. They are not motivated to care about us or the environment. We are becoming increasingly powerless.
If we wish to recover and preserve democracy and the environment, we must do one thing first: DELETE THE RICH. That can be done by amending the Constitution as described above.
Note that corporations are currently defined as having the rights of “persons”, which includes free speech, and free speech has been defined by the Supreme Court as including the spending of money in support of political candidates.. Under the Income and Assets Amendment described above, corporations would then be limited to an income (profits) and assets the same as real persons. So the first thing that corporations would do would be to get themselves redefined as “non-persons” or face extinction. A third Amendment might require that no corporation may donate to a political cause as a way to partially remove them from promoting the politics of the rich.
These proposed amendments would need to be thoroughly explored in order to anticipate the economic upheaval they would bring about so as to find ways to minimize the detrimental effects that could occur during the transition to a true Democratic Capitalism.
6Dave Darby May 23rd, 2018
How would you get this implemented? Which political party would endorse it? How would they then get elected? How would you stop the enormous capital flight from any country that tried to implement it? How could it be implemented anywhere, in a world without barriers for capital? (Already, there are laws in place to tax the rich properly – but they ignore them, and move their wealth offshore.)
7james bate May 24th, 2018
Sounds an interesting event , like the idea of you discussing anarchy with derivative traders. Have you seen Monbiots lame takea on taming capitalism in today’s graun ?
I’m all with your suggestions but can’t quite see how we can get from here to there, Mondragon ,Semler and closer to home John Lewis prove that large coops work but how to transition.
8Dave Darby May 24th, 2018
We’ll be blogging more on this soon James, and launching a new site that (maybe) answers that question.
I like a lot of Monbiot’s ideas, but I’d say the same as I said to Peter Sharp above – how to implement them? They’d cause capital flight – politicians know it, voters know it, and that’s why they don’t happen. That’s if a party that actually cares about these things is electable in the West any more.
9Grandfather Michael May 26th, 2018
Homo Sapiens Sapiens is an evolutionary process. Man the hunter gatherer. There was an observation from a professor at Princetown University, whose name escapes me who said the human brain has not evolved since neolithic times. So is there a design fault to overcome, the fault being the anthropocentric view of life.
We have been given the consciousness to make the evolutionary leap so it is our choice to make this happen. We have to manage our views and actions accordingly and make it happen. A colony of ants or bees can do it, why not us? Evolution doesn’t have to be on a physical plane in Darwinian terms.